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Spinal Cord Injuries Australia (SCIA) Accord magazine about investing compensation payments

The day you might be so lucky as to receive a compensation settlement is the day the government turns its back on you.

You become precluded from most government benefits, both financial and non-financial dependent upon your unique circumstances, for up to 96 years (on average 25–30 years).
The following are precluded benefits:

  • Disability Support Pension;
  • Carer Payment;
  • Rent Assistance; and
  • Program of Appliances for People with Disabilities (aids and equipment).

However, regardless of income and assets, the Mobility Allowance is available to a person with a disability who meets the eligibility criteria of either studying, training or working a minimum of 32 hours per month.

There are two rates of Mobility Allowance—the standard rate of $74.30 per fortnight and a higher rate of $104.00 per fortnight (September 2007 rates). These tax free payments also entitle the recipient to a Health Care Card that enables discounted prescription medication to be purchased through the Pharmaceutical Benefits Scheme.Also, in most cases prior to receiving a lump sum compensation payment, there are deductions from the payment for related expenses incurred such as:

  • Medicare benefits—for medical services used;
  • Hospital expenses—up to $1,500/day for acute care;
  • Rehabilitation costs—up to $850/day for specialised care;
  • Equipment costs—wheelchairs, hoists etc;
  • Advance payments—in some rare cases, insurance companies will provide the claimant with upfront payments for essential items like equipment or an accessible motor vehicle; and
  • Legal costs—quite substantial in most cases.

Before receiving compensation most people usually live on credit cards, loans from parents and friends and even bank loans (where the bank allows). All these liabilities need to be re-paid from settlement funds.

Also, some feel obliged to make payments to family members for the pain and suffering they endured and also for personal care provided.

So a settlement (in or out of court) can suddenly become halved in the hand of the recipient.

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