A commutation is a lump sum settlement made to a worker. It needs to be agreed between the insurer and the worker. Accepting a commutation usually concludes any liability an insurer may have regarding the injuries sustained.

Commutations are only available under the following circumstances:

• the worker must have sustained injuries resulting in whole person impairment of 15% or more, as assessed under the WorkCover Guides for the Evaluation of Permanent Impairment
• a commutation cannot be made during the first two years after the initial workers compensation claim was made
• all processes regarding the management and rehabilitation of the worker’s injury must have been pursued and exhausted
• the worker must have an entitlement to ongoing weekly benefits and have received weekly benefits regularly and periodically during the previous six months
• weekly benefits have not been stopped or reduced by the insurer as a result of the worker not cooperating in return-to-work processes, or other limited reasons. This does not include a reduction resulting from the worker becoming entitled to different benefits, as a result of timeframes or other legislative provisions
• the insurer must be satisfied that the worker has received independent legal and financial advice on the consequences of accepting a commutation
• WorkCover must certify that any proposed commutation meets all the criteria set out in the legislation.

Workers contemplating a commutation should seek legal advice. Information regarding solicitors experienced in workers compensation can be obtained from the Law Society of NSW – tel: (02) 9926 0333.