What is a structured settlement in a QLD public liability claim?

Published 09 May 2018

Practice Area: Slip & Fall Public Liability Claims

When claiming for compensation in a public liability case, a structured settlement is an alternative means of repaying debt to an injured person. Instead of receiving a lump compensation payment, claimants may instead be paid out all or part of their debt over a period of time in instalments.

What are the components of a structured settlement?
Compensation payments made to injured people through a structured settlement are considered non-assessable capital, meaning they aren't considered as part of your income when completing your tax returns. However, in order for your settlement to be tax-exempt, compensation needs to satisfy certain legal conditions, such as having these components:

Compulsory component
A structured settlement must include periodic payments that will provide the injured person with a minimum level of monthly payments over the lifetime. These payments have to be equal to the victim's equivalent basic age pension and pension supplement, and will usually be used to cover ongoing medical treatment and other care expenses.

Optional components

• Immediate cash component - This is common in many public liability claim structured settlements as a lump sum allows the injured person to cover the immediate costs of their injury such as medical bills and purchasing equipment.
• Other periodic personal injury payments - These provide victims with a monthly fund under more flexible conditions than the compulsory minimum payments.
• Other lump sum compensation - These are tax-free payments to be made at a pre-agreed future date to cover expected expenses.

What types of public liability claims are affected?
There are certain limits on the kinds of cases that can be settled with structured compensation payments. In order to qualify, the claim must:

• Be made by a person - or their legal representative - who has suffered a proven personal injury.
• Not be made against an employer or as part of a workers' compensation claim.
• Not be made on cases that are already settled, inside or outside of court.

Similarly, only cases over a certain financial threshold can be structured because Queensland legislation specifies a minimum level of monthly payments. If the defendant or their insurer don't have enough compensation money to cover the injured person's equivalent age pension for the rest of their life, another form of compensation will have to be considered.

Am I eligible?

You may be wondering if you are eligible for structured settlement compensation in public liability cases, the best option is to consult with a solicitor expert in compensation law to make sure you are able to claim for these payments.

For more information or help, please contact Gerard Malouf & Partners Compensation, Medical Negligence & Will Dispute Lawyers for a free consultation.