Operational Guideline Compensation Recovery of NDIS Amounts Action has not Been Commenced to Recover Compensation

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1 Operational Guideline Compensation Recovery of NDIS Amounts Action has not Been Commenced to Recover Compensation Legislation 1. Read ss.104, 105 and 105A of the National Disability Insurance Scheme Act 2013 (NDIS Act). 2. This Operational Guideline is consistent with the law as in effect on 9 December General principles 3. People with disability and their families and carers should have certainty that people with disability will receive the care and support they need over their lifetime. See s.4(3) of the NDIS Act. 4. People with disability should be supported to receive reasonable and necessary supports, including early intervention supports. See s.4(5) of the NDIS Act. 5. People with disability should be supported to receive supports outside the National Disability Insurance Scheme (NDIS), and be assisted to coordinate these supports with the supports provided under the NDIS. 6. The financial sustainability of the NDIS should be ensured. Background See s.4(14) of the NDIS Act. See s.4(17)(b) of the NDIS Act. 7. This Operational Guideline deals with the recovery of money by the National Disability Insurance Agency (NDIA) when a participant, or prospective participant, is entitled to compensation in respect of a personal injury but has not taken action (or not taken reasonable action) to claim or obtain compensation. In those circumstances, a delegate may require a participant, or prospective participant, to take certain required action to recover compensation. The criteria a delegate is to apply in determining whether to require a participant, or prospective participant, to take action are set out in Table Failure to take required action to recover compensation may have the following consequences for the participant, or prospective participant: a. if the required action relates to compensation under a Commonwealth, state or territory scheme, a delegate is to apply the criteria set out in Table 2 to determine whether certain specified consequences apply; or Page 1 of 8

2 b. if the required action relates to compensation under a scheme other than a Commonwealth, state or territory scheme, a delegate is to apply the criteria set out in Table 3 to determine whether certain specified consequences apply, generally action in the courts. 9. Each of the decisions to require action (s.104), take action in the name of a participant or prospective participant (s.105(4)(a)) or take over the conduct of an existing claim (s.105(4)(b)) is discretionary and is reviewable internally, and then potentially by the Administrative Appeals Tribunal (AAT). A statement of reasons is to be drafted when making each of these decisions. Page 2 of 8

3 Table 1: When a delegate can require a person to take action to obtain compensation - s.104 Requirements A delegate may, by issuing written notice (notice), require a participant or prospective participant (the person) to take action specified in the notice within a specified period if Criteria 1, 2, 3 and 4 are met: Criterion 1 The person is, or may be, entitled to compensation in respect of a personal injury. Criterion 2 The person: 1. Has taken no action to claim or obtain compensation, or 2. Has taken no reasonable action to claim or obtain compensation. te: If the person has entered into an agreement to give up his or her right to compensation, you may nevertheless form the opinion that the person may be entitled to compensation if you are satisfied that the agreement is void, ineffective or unenforceable. This consideration is different (but related) to Operational Guideline Compensation Revise the Plan and Reduce the Supports Agreement to Give Up Compensation. Criterion 3 The action specified in the notice is reasonable to enable the person to claim or obtain the compensation, taking into account: 1. The disability of the person 2. The circumstances that gave rise to the entitlement or possible entitlement to compensation 3. Any impediments the person may face in recovering compensation 4. Any reasons given by the person as to why he or she has not claimed or obtained compensation 5. The financial circumstances of the person, and 6. The impact of the requirement to take the Page 3 of 8

4 Requirements action on the person and his or her family. Criterion 4 The person has reasonable prospects of success in claiming or obtaining compensation. te: Unless you have information that allows you to be satisfied that the person has reasonable prospects of success in claiming or obtaining the compensation, you must not issue a notice. What constitutes reasonable prospects of success depends on the circumstances of the matter. As a general rule, however, it would usually require the person to have a better than even chance of succeeding in the claim. Were all of Criteria 1, 2, 3 and 4 met? If yes, an officer may give a notice to the person to take the required action in the notice within the period specified in the notice. A delegate can require any of a range of actions to be taken to recover compensation, and the action is not restricted to commencing or taking legal action. Examples of some of these actions are 1. Seeking advice from a lawyer about their entitlement to compensation 2. Contacting an insurer directly to claim compensation, or 3. Applying to relevant state/territory accident compensation bodies. The period specified in the notice must be at least 28 days after the day on which the notice is given. This period may be extended on application by the person (s.104(5a)) and is reviewable by the AAT. A statement of reasons is to be drafted when making a decision to refuse to extend time. A decision to require action to be taken is a discretionary decision and the NDIS Act does not require action to be taken in every case. Delegates should consider NDIA policy and consult their supervisor who may wish to consult the Legal Services Branch when considering whether to make a decision to require a person to take action. A person who is given a notice requiring them to take action must take the required action within the specified period, otherwise: 1. The consequences set out in Table 2 may apply if the required action relates to compensation under a Commonwealth, state or territory scheme, or 2. The consequences set out in Table 3 may apply if the required action relates to compensation under a scheme other than a Commonwealth, state or territory scheme. Page 4 of 8

5 Table 2: Consequences if required action not taken to obtain compensation under a Commonwealth, state or territory scheme ss.105(2) and 105(3) Requirements Certain consequences apply to a participant, or prospective participant (the person), if Criteria 1, 2 and 3 are met: Criterion 1 The person is given a written notice requiring them to take required action to claim or obtain compensation within a period specified in the notice. Criterion 2 The person does not take the required action within the period specified in the notice. Criterion 3 The required action related to enabling the person to claim or obtain compensation under a scheme of compensation under a Commonwealth, state or territory law. Were all of Criteria 1, 2 and 3 met? If yes, the following consequences apply: 1. If the participant has a plan in effect the plan is suspended from the end of the period specified in the notice until the participant takes the required action (s.105(2)(a)). 2. If the participant has a plan that is not yet in effect the NDIA is still required to finalise the preparation of the participant s plan, but the plan does not come into effect until the participant takes the required action (s.105(2)(b)). 3. If they are a prospective participant the NDIA is not prevented from deciding whether or not the prospective participant meets the access criteria and from commencing the facilitation of the preparation of their plan, however the plan does not come into effect until the participant takes the required action (s.105(3)). Page 5 of 8

6 Table 3: Consequences if required action not taken to obtain compensation under a scheme other than a Commonwealth, state or territory scheme ss.105, 105A and 105B Requirements Certain action may be taken by a delegate in relation to a participant, or prospective participant (the person), if Criteria 1, 2, 3, 4, 5 and 6 are met: Criterion 1 The person is given a written notice requiring them to take certain action to claim or obtain compensation within a period specified in the notice. Criterion 2 The person does not take the required action within the period specified in the notice. Criterion 3 The required action related to enabling the person to claim or obtain compensation otherwise than under a scheme of compensation under a Commonwealth, state or territory law. Criterion 4 Consideration has been given to each of the following matters: 1. The disability of the person 2. The circumstances that gave rise to the entitlement or possible entitlement to compensation 3. Any impediments the person may face in recovering compensation 4. Any reasons given by the person as to why he or she has not claimed or obtained compensation 5. The financial circumstances of the person, and 6. The impact of the requirement to take the action on the person and his or her family. Page 6 of 8

7 Requirements Criterion 5 The person has been notified, in writing, that certain action is being considered. Criterion 6 28 days have passed since the written notice required by Criterion 5 was given Were all of Criteria 1, 2, 3, 4, 5 and 6 met? If yes, the delegate may either: 1. Take action to claim or obtain compensation in the name of the person (s.105(4)(a)), or 2. Take over the conduct of any existing claim (s.105(4)(b)). In deciding whether to take either of these actions, a delegate should have regard to the matters set out below If the delegate takes action under Table 3 to take action to claim or obtain compensation in the name of the person, or take over the conduct of an existing claim, it should be noted that: 1. The NDIA Legal Services Branch will arrange for the administration of the claim, with the matter to be briefed out to external lawyers because the NDIA cannot conduct litigation itself under the Commonwealth Legal Services Directions The NDIA will be liable to pay all costs of and incidental to that claim that would otherwise be payable by the person who originally made the claim, or the person in whose name the claim was made, other than costs unreasonably incurred by that person (s.105a(1)). 3. The delegate may (s.105a(2)): a. Take whatever steps are appropriate to bring the claim to a conclusion b. If the claim is before a court settle the proceedings either with or without obtaining judgement, and c. If the claim is before a court and judgement has been obtained in favour of the plaintiff take such steps as are necessary to enforce the judgement. 4. The person is required to sign any document relevant to a claim made or taken over by the delegate (including the settlement of the claim or of any proceedings arising out of the claim), being a document that the delegate requires the person to sign (s.105a(3)). 5. If the person does not sign a document in accordance with point 4 (s.105a(4)): a. If the claim is not before a court or tribunal at the time of the failure the Federal Court of Australia may, on the application of the delegate, direct that the document be signed on behalf of the person by another person appointed by the delegate, or Page 7 of 8

8 b. Otherwise the court or tribunal in which proceedings relating to the claim are being heard may, on the application of the delegate, so direct. 6. If the delegate proposes to make an application under point 5 (s.105a(5)): a. The delegate must notify the person of that fact, and b. The person has a right of representation in the hearing of that application. 7. Any amount obtained as a result of a claim made or taken over by the delegate must be paid to the NDIA, deducting the following amounts from the award of damages (s.105b): a. An amount equal to the total of NDIS amounts payable to, or for the benefit of, the person before the amount was paid to the NDIA, and b. The amount of any costs incidental to the claim paid by the NDIA. 8. The balance of the amount obtained as a result of a claim made or taken over by the delegate must be paid to the person (s.105b). Page 8 of 8

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