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Medical Negligence Impacts On Income Protection, Private Health and NDIS

In our most recent article, How Medicare And Centrelink Benefits Affect Medical Negligence Claimswe identify how Medicare and Centrelink benefits impact upon medical negligence claims.

However, it is important to note that there are other benefits that have an impact on medical negligence claims.

OTHER BENEFITS THAT HAVE AN IMPACT ON MEDICAL NEGLIGENCE CLAIMS: -

  1. Income protection benefits
  2. Private health benefits
  3. NDIS benefits 

Do income protection benefits have an impact on medical negligence claims?

YES, those injured in the course of medical negligence may be eligible to obtain income protection benefits through their super fund or other held income protection insurance.

If an injured person is unable to work due to medical negligence, it is likely that their medical negligence claim will include a head of damage for “past economic loss”, which is a figure representing the past loss of income and past loss of superannuation.

If a claim is made for past economic loss and that compensation is paid out at settlement, the injured party may be required to pay back the income protection benefits received in the past in accordance with the income protection policy.

Generally, unless the injured party has purchased income protection insurance (i.e. not through a super fund), most policies will require a pay-back of the income benefits in circumstances where an injured person has been compensated for economic loss sustained during the same period income protection payments were received.

How to calculate the income protection refund?

Generally, income protection will pay a percentage of an injured person’s wage (e.g. 80%). When a past economic loss claim is made for medical negligence, the claim is made for the entire value of the loss.

Therefore, it is expected that after any income protection refund is made, the injured party will retain some compensation for past economic loss and loss of superannuation.

To find out how much is required to be reimbursed for income protection payments, the injured person should: -

- Speak to the income protection insurer to clarify whether they need to pay back the income protection benefits if they obtain compensation for past loss of income

- Obtain a statement from the income protection insurer detailing all income protection payments made under the policy

In some circumstances, the injured party may have obtained income protection from two separate insurers. This can make calculating the reimbursement amount difficult.

Therefore, it is important to be open and upfront about any income protection benefits obtained so any potential reimbursements can be factored into the medical negligence claim when negotiating a resolution.

Do private health insurance benefits have an impact on my medical negligence claim? 

YES, if treatment has been obtained for injuries sustained as a result of medical negligence, these expenses will form part of the medical negligence claim as a head of damage called “past medical expenses”.

The compensation received at settlement for past medical expenses cannot be kept by the injured party as this would constitute a double-up of compensation. This means that any expenses paid by the private health insurer in relation to injuries sustained as a consequence of medical negligence must be paid back to the private health insurer.

Upon request, the private health insurer will provide a benefit history statement detailing all benefits received during the injury period that is required to be reimbursed.

If an injured party has received compensation for future treatment expenses, the compensation may affect an injured person’s ongoing entitlements to claim future private health benefits in relation to that injury.

For example, under most private health policies, if compensation is received by the injured person for future surgery at $20,000.00, the injured person would be precluded from obtaining private health benefits in relation to that surgery, as if they received compensation from the medical negligence claim and from the private health insurer this would constitute a double up of compensation.

Do NDIS benefits have an impact on my medical negligence claim?

YES, if NDIS benefits are obtained for injuries sustained as a result of medical negligence, these expenses will form part of the medical negligence claim as a head of damage called “past medical expenses”.

NDIS will provide a statement of benefits detailing expenses that will need to be reimbursed if compensation is obtained for past medical expenses.

If you are in receipt of NDIS benefits as a lifetime scheme member, your solicitor will need to weigh up whether claiming future medical expenses in your medical negligence claim is appropriate in the circumstances.

This is because, if compensation is received for future care and assistance, NDIS cover may cease along with any entitlements to the lifetime scheme membership program as obtain future NDIS benefits would constitute a double up in compensation.

It is therefore vitally important to disclose all information in relation to income protection, private health, and NDIS benefits as these benefits have significant and, in some circumstances, ongoing implications for the injured person.

To read more about medical negligence damages, see our recent blog post: THE 4 MOST COMMON DAMAGED CLAIMED IN MEDICAL NEGLIGENCE MATTERS


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