Since the 1st August 2014, the Recoverable Benefits and Assistance Scheme has been in force in Ireland.¹
What it means?
Briefly this provides that in personal injury claims*, the State (in particular the Department of Social Protection) will recover certain illness-related social welfare payments from the wrongdoers.
The State can recover Illness Benefit, Partial Capacity Benefit, Injury Benefit, Incapacity Supplement, Invalidity Pension and Disability Allowance relating to the personal injury*. The State is limited to a maximum period of five years from the date of the first entitlement.
Compensation can arise as a result of a court order, an Injuries Board order or as a result of an agreement/settlement between the parties.
It does not apply to fatal injury claims or to certain specified compensation schemes. It does not apply if the injured person is under 16 years of age (on the date compensation is made).
Unusually, this scheme has retrospective effect, which means that it applies to benefits paid in the last five years.
How does it operate?
Before paying out any compensation, the compensator (i.e. the defendant or insurer) has an obligation to reimburse the Minister for Social Protection directly, the amount of benefits and assistance specified in what is called a Statement of Recoverable Benefits and Assistance.
Therefore before making any payment to a claimant (i.e. an injured person or their representative) the compensator must apply to the Minister for this statement. The Minister will then, within four weeks, issue the statement to the compensator and send a copy to the injured person. The statement is valid for three months from the date of issue. After that, the compensator should apply for a new statement.
Before paying out compensation, the compensator must repay the Minister the full amount on the statement. The compensator will then usually offset that amount paid to the Minister against the amount of compensation for loss of earnings/profit to be paid to the injured person. The compensator must clearly notify the claimant of this. The compensator cannot reduce any other element of the compensation such as general damages.
Where the compensation arises from a court order or an Injuries Board assessment, the compensator can pay the smaller of either the total amount of compensation assessed in relation to loss of earnings/profit or the amount of Recoverable Benefits and Assistance specified.
If there is more than one compensator, each compensator is liable to pay the full amount.
What if the Injuries Board is involved?
The Injuries Board must also apply for a statement before making an order to pay an award. The order to pay will state the amount of Recoverable Benefits and Assistance. The compensator must then pay that amount.
Does it mean anything for a claimant?
There is no change to the amount of final compensation received. The previous system meant that social welfare payments were deducted from compensation received for loss of earnings. The new system means that the social welfare payments are recovered by the State in advance of compensation.
There is no obligation for the claimant (or the claimant’s solicitor) to do anything. The obligation is upon the Defendant (or their solicitor).
However it should be borne in mind that:
Details of Benefits received relating to your injury will be made known to the compensator and any compensation for loss of earnings made will reflect the benefits received. Put simply, as before, you will not be compensated twice.
Settlement talks may not now take place at short notice, as it can take approx. 4 weeks for a compensator to receive the statement from the Minister. Unfortunately this may mean delays in injured persons receiving the compensation to which they are entitled.
Where there is a dispute about liability or where a claimant is deemed to have been guilty of contributory negligence, the compensator is still liable to repay the full amount, set out in the statement, unless there is a court order to the contrary. Thus, if a case is settled and it is proposed to make a deduction from the amount specified in the statement (because of e.g. contributory negligence), the settlement should be approved by the Court.
We await the effect this new scheme will have in practice.
¹ Enacted by sections 13 and 14 of the Social Welfare and Pensions Act 2013
Contact us at Cantillons Solicitors at +353 (0)21 -4275673 or [email protected] if you would like more information.
* In contentious business, a solicitor may not calculate fees or other charges as a percentage of any award or settlement.