Personal Injury Claims and Reimbursement to the Department of Social and Family Affairs.

Under the Social Welfare and Pensions Act 2013 the Social Welfare Department can reclaim from Personal Injury claims the value of certain illness related Social Welfare payments made to injured Claimants which previously were not recoverable.

The Social Welfare payments involved are as follows:
1. Illness Benefit
2. Partial Capacity Benefit
3. Injury Benefit
4. Incapacity Supplement
5. Invalidity Pension
6. Disability Allowance

In circumstances where any payments have been made under the above headings to a Claimant arising out of the injury sustained in the accident then they can reclaim it from the Defendant Insurance Company.

The Act puts the onus on the Insurance Company to apply to the Department for a Statement of Recoverable Benefits. It also obliges the Insurer to pay to the Department the amount specified on that Statement before making a compensation payment to the Claimant. The Insurance Company can offset the amount of recoverable benefits paid to the Department against the amount of compensation to be paid in respect of any claim for loss of earnings or profit. The critical point is that the payment of the “recoverable benefit” to the Department must be made by the Insurer before compensation is paid to injured person. It appears the full amount due to the Department must be paid by the Insurer unless there is a Court Order in place in which case the obligation to repay the recoverable benefit to the Department is limited to the total amount of compensation assessed by the Court relating to loss of earnings or profits by the injured person.

This will all be fairly straightforward in cases where liability is not in issue and the claim is readily assessable. It should be readily apparent how much has to be repaid to the Department and whether or not it is paid before the settlement by the Insurance Company or following the settlement by the Solicitor makes little or no difference.

Where it gets interesting is if liability is in dispute then this obligation by the Insurer to pay the money directly to the Department will cause considerable difficulties in settling the case. Theoretically it may become necessary to obtain formal detailed Court orders for the purpose of clarifying what has to be paid back to the Department. Otherwise the Insurance Company will have to pay twice in respect of the same claim. They will have to make the payment to the Department and also settle the case directly with the Claimant who will undoubtedly exclude the portion of the claim relating to the reimbursement to the Department. Where this will be of particular significance is in all-in settlements.

Certain personal injury claims are excluded from these new provisions but it appears that certain types of settlements currently available may no longer be possible under the new regime. These new provisions were to have taken effect from the 12th of May 2014.