State recovery of benefits in PI claims

16/07/2014

The Recoverable Benefits and Assistance Scheme will come into effect on 1 August 2014.

It is provided for in section 13 of the Social Welfare and Pensions Act 2013.

The Act places onerous duties on defendants and therefore litigation practitioners should ensure they are familiar with them and the Scheme.  

Broadly speaking, the Act provides that certain social welfare payments, which are normally deductible from a claimant’s personal injury claim for loss of earnings, are now recoverable by the State. In summary:

  1. The payments to be recovered are Illness Benefit, Partial Capacity Benefit, Injury Benefit, Disablement Pension (incapacity supplement), Invalidity pension and Disability Allowance relating to the personal injury.  They are limited to a maximum period of five years from the date of first entitlement to the benefit.
  2. The obligation is on the “compensator” to reimburse the Minister for Social Protection directly for any “recoverable benefits” received by the claimant from the State.
  3. The “compensator” must apply to the Minister for a Statement of Recoverable Benefits before making any compensation payment.
  4. The Minister must within 4 weeks from receipt of the request, issue a statement which will remain valid for a 3-month-period and must at the same time, issue a copy to the injured person/claimant. The compensator must discharge the amount specified in the statement.
  5. If a compensator fails to pay the Minister the amount of recoverable benefits in advance of making a compensation payment, the compensator remains liable to pay on demand the full amount due to the Minister.
  6. If there are 2 or more compensators, they are jointly and severally liable to the Minister.
  7. The Act does not apply to fatal injuries claims or to specified compensation schemes.
  8. The compensator may reduce the compensation for loss of earnings or profits payable to the claimant by the amount the compensator has paid to the Minister in respect of the total recoverable benefits in the matter. The compensator must notify the claimant accordingly and cannot reduce any other element of the compensation, e.g. general damages, on these grounds.

Special care needs to be taken in the following circumstances:

  • Settlement talks on short notice. While it is possible to seek expedition, the Act envisages a 4-week period from the request of the statement of recoverable benefit to the delivery of the statement.
  • Where there is apportionment of liability (e.g. contributory negligence). The Scheme does not allow for a pro-rata reduction in the recoverable benefits payable to the State except on foot of a court order confirming the apportionment of liability.
  • Where no loss of earnings claim is pleaded by the Plaintiff.
  • Where there are un-insured co-defendants.

Update on 25 July 2014

The Department of Social Protection has published a general guide to the Recoverable Benefits and Assistance Scheme

Visit the Department’s website for more information including: