Recoverable Benefits by the State in Personal Injury Claims
Since the 1st August 2014, the Recoverable Benefits and Assistance Scheme has been in force in Ireland. The Scheme was enacted by Sections 13 and 14 of the Social Welfare and Pensions Act 2013. It has now been in place for over four and half years. Using this Scheme, the State is reported to have successfully recovered over €80 Million as of late 2018.
The Scheme provides that if a claimant successfully brings a personal injury claim which included a claim for loss of earnings or loss of profit for the injured person, then the Department of Social Protection (on behalf of the State) will recover certain illness-related social welfare payments from the wrongdoers (Defendant(s)).
Compensation can arise as a result of a Court Order, a PIAB Order or as a result of an agreement/settlement between the parties.
The State can recover Illness Benefit, Partial Capacity Benefit, Injury Benefit, Incapacity Supplement, Invalidity Pension and Disability Allowance relating to the personal injury. The recovery is limited to a maximum period of five years from the date of the first entitlement. Notable absentees include Jobseeker’s Allowance, Jobseeker’s Benefit, Carer’s Allowances, Maternity Benefit and Paternity Benefit, which are not recoverable.
The Scheme 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). It only applies where a claim for loss of earnings is made by the injured person. If, for example, a claim is made by a spouse or parent for loss of earnings to care for the injured person, then any relevant benefits paid to the person other than the injured person, are not recoverable.
In practice, it means that before paying out any compensation, the compensator (i.e. the Defendant or insurer) must apply to the Department for a Statement of Recoverable Benefits and Assistance (RBA). The Statement will be issued, within four weeks, to the compensator and a copy will be sent to the injured person (and their Solicitor). The Statement is valid for three months, after which the compensator should reapply for a new Statement. The compensator then has an obligation to reimburse the Minister for Social Protection directly, the full amount of benefits and assistance specified in the RBA Statement.
The compensator will then usually offset that amount repaid to the Department 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.
For a claimant, there is no obligation for them (or their Solicitor) to do anything. The obligation is upon the Defendant (or their Solicitor). For a claimant, there should be no change to the amount of final compensation received. The award received is the final amount of compensation.
However a claimant should bear in mind that:
- If a claim settles without an admission of liability or where a claimant is deemed to have been guilty of contributory negligence (i.e. partly at fault), 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 settles on the basis that you were 50% at fault in causing your injuries, then the compensator will have to apply to the Court for an Order stating that only 50% of the amount of benefits owing to the State will be paid by the compensator. The remaining 50% is not repaid by you. However, the application to the Court may mean that your award is made known in Court and it may delay settlement.
- It should be remembered that if you bring a personal injuries claim, details of benefits received will be made known to the compensator and any compensation for loss of earnings will reflect the relevant Benefits already received relating to your injury. Put simply, you will not be compensated twice for the loss of income.
The benefit of the Scheme is that the wrongdoer, instead of the taxpayer, pays the cost of the benefits paid to injured parties. The State thereby recovers a substantial amount of money which can be put to good use.
Contact us at Cantillons Solicitors at +353 (0)21 -4275673 or firstname.lastname@example.org 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.