We act on behalf of a number of clients who may be in receipt of Social Welfare payments where they may be forced out of work as a result of injury. It is generally the case that they may be unaware of the effect of The Social Welfare and Pensions Act 2013 and how this will impact on their case.
Since 1 August 2014, the Social Welfare and Pensions Act 2013 and Recoverable Benefits and Assistance Scheme, came into effect.
Before the Act, personal injury pay outs from insurance companies were reduced to take into account the payment of social welfare benefits arising out of the accident. The rationale was that claimants should not be doubly compensated. However it meant that the Department of Social Protection was effectively subsidising insurance companies in their pay outs.
Under the new Act, insurance companies have to refund certain welfare payments made prior to compensation in non-fatal PI cases. They will have to apply to the Department of Social Protection for a Recoverable Benefits Certificate detailing relevant welfare payments (limited to 6 categories: illness, partial capacity, and injury benefits, incapacity supplements, invalidity pensions, and disability allowances). They will be provided with this within 28 days after which the insurance company will have to refund them. Only then can they pay out compensation.
Essentially, a defendant (employer, insurer, driver, occupier or company) or the Injuries Board will be obliged to apply for a statement of recoverable benefits from the Department of Social Protection and this must be provided within 28 days. do the following before making a compensatory payment to an injured party;
The defendant or the Injuries Board shall make payment to the Department of Social Protection in respect of the recoverable benefits before making any compensatory payment to the injured party.
The scheme ensures against double compensation.
The scheme should be an incentive for a defendant to settle a claim as early as possible if there is no issue in relation to liability, as the defendant is only liable for the recoverable benefit from the date of the accident up to the settlement of the claim.
The Injuries Board in examining a claim will apply for the benefits certificate in its assessment of damages, and separately both direct the insurance company to make the due refund to the Department and to pay general damages and other compensation to the injured party. The Defendant can offset the refund against the amount of compensation for loss of earnings but not general damages.
If a payment is not made to the Department of Social Protection for the amount of the recoverable benefits, the Minister may demand such payment within a five year period from the date of the compensatory award.
If you require any further information in relation to this, please do not hesitate to contact us.
Katie Nugent and Patrick McNestry