Deductibility of awards of damages from social welfare benefits.
Social welfare benefits that compensate for loss of earnings are deductible at common law. This also applies to occupational injuries payments. However, the 1964 Act amends this position.
The Civil Liability (Amendment) Act 1964 provided that in assessing damages, in an action for a wrongful act, resulting in personal injury not causing death, account is not to be taken of any sum payable in respect of an injury under any contract of insurance or any pension, gratuity or like benefits payable under statute or otherwise in consequence of the injury. This reaffirms the general principle that the award of damages is made without reference to so-called collateral benefits.
Prior to the 2013 Act, it has been provided that
- Injury benefit and disablement benefit are deductible respectively against damages for personal injuries in relation to loss of earnings or profits for a period of five years;
- Illness benefit, invalidity pension is deductible against damages for personal injuries, five years and in all cases in road traffic accidents;
The Social Welfare Consolidation Act had provided that in an action for damages for personal injury, in assessing damages, there shall be taken into account against any loss of earnings or profit which has accrued or may accrue in the future from the injuries, the value of any rights which have accrued or are likely accrue in respect of injury benefit (disregarding any right in respect of injury benefit payable after the death of the person or disablement benefit are disregarding any increase of that benefit for constant attendance element for five years beginning on the date the claim arose. This was repealed and a new system applies from 2013.
Te Social Welfare Consolidation Act had also provided that notwithstanding the 1964 Act, in assessing damages in respect of liability for personal injury not causing death relating to the use of a mechanically propelled vehicle, there is to be taken into account the value of any rights arising from such injuries, which accrue or are likely to accrue to the injured person in respect of illness benefit or invalidity pension. This was repealed and a new system applies from 2013.
In case of fatal injuries, the Civil Liability Act provides that in assessing damages for fatal injuries, account is not to be taken of any sum payable on the death of the deceased under a contract of insurance or any pension, gratuity or like benefit payable under statute or otherwise in consequence of the death of the deceased.
The 2013 Act provided for the recovery of the value of certain illness-related social welfare payments from compensation awards made to persons as a consequence of personal injuries claims. The 2015 Act amends the 2013 legislation.
Where a compensator intends making a compensation payment to a person as a consequence of a non-fatal personal injury, the compensator must pay the Minister for Social Protection an amount equal to the illness-related social welfare payments that have also been paid as a consequence of that personal injury.
2013 legislation provides that where a compensator intends making a compensation payment to a person as a consequence of a nonfatal personal injury, the person must pay the Department of Social Protection an amount equal to the illness related social welfare benefits that have been paid in consequence of the injury. The amount can be partially or fully offset-able against the compensation payable for loss of earnings or profits.
The 2013 Act provided for the discontinuation of—
- the higher personal weekly rate of Invalidity Pension (€230.30) payable where the pensioner attains 65 years of age on or after 2 January 2014, and
- the higher weekly rate of increase for a qualified adult (€206.30) payable where the qualified adult attains 66 years of age on or after 2 January 2014.
Depending on the circumstances, this amount can be partially or fully offset by the compensator against any compensation for loss of earnings or profits.
The provisions apply where—
- a compensation payment is made by a compensator in respect of a non-fatal personal injury,
- the injured person has received an illness-related social welfare payment as result of that personal injury,
However, these provisions do not apply—
- to compensation payments made on or after the commencement of the provisions, where that compensation payment is made pursuant to a court order or an order of the Personal Injuries Assessment Board (PIAB), where the settlement has been made before the commencement of these provisions, and
- to compensation payments made by certain compensation tribunals, redress boards or other compensation schemes, such as the Hepatitis C and HIV Compensation Tribunal, the Residential Institutions Redress Board and the Criminal Injuries Compensation Tribunal.
The 2013 Act specifies y the social welfare payments, and the periods over which they have been paid, that are to be recovered by the Minister for Social Protection. The payments to be recovered are
- Illness Benefit,
- Partial Capacity Benefit,
- Injury Benefit,
- Incapacity Supplement,
- Invalidity Pension and
- Disability Allowance.
The period of recovery is the period of 5 years beginning on the date on which the injured person first becomes entitled to any such social welfare payment as a result of a personal injury or the period up to the date the compensation payment is made or the date an agreement is made between the compensator and the injured person under which an earlier compensation payment is treated as having been made in final discharge of the claim, whichever is the shorter period.
A compensator must apply to the Minister for Social Protection for a statement of recoverable benefits before making a compensation payment to an injured person and that the PIAB must also apply for such a statement before issuing an order to pay under the terms of the Personal Injuries Assessment Board Act. The Minister must issue that statement to the compensator or PIAB within 4 weeks from the date of receipt of the application. At the same time, the Minister must issue a copy of that statement to the injured person.
The statement of recoverable benefits issued by the Minister will remain valid for 3 months after its issue. Any person to whom a statement of recoverable benefits is issued may request details of the manner in which the amount of recoverable benefits has been calculated. The Minister must furnish such details within 4 weeks of receipt of such request.
There s an obligation on a compensator to pay the amount specified in the statement of recoverable benefits to the Minister before making the compensation payment to the injured
person. In the case of a compensation payment arising from a court order or a PIAB assessment, the obligation to repay the recoverable benefits is limited to the total amount of damages assessed in relation to loss of earnings or profits.
A compensator may offset the amount of recoverable benefits paid to the Minister against the amount of compensation paid in respect of loss of earnings or profits, but not against any other elements of the compensation payment. Where an amount of compensation
payable to an injured person in respect of loss of earnings or profit is reduced, the loss of earnings or profits claim is treated as discharged to the extent of the value of any benefits recovered.
Where a compensator pays the Minister an amount in respect of the recoverable benefits and it subsequently transpires that this amount is in excess of the amount of social welfare payment actually paid to the injured person, such overpayment will be repaid by the Minister.
Where an appeal against a decision as to the amount of recoverable benefits results in that amount being varied—
- in the case where the original amount of recoverable benefits is reduced, the Minister will refund the excess paid to the compensator, and
- in the case where the original amount of recoverable benefits is increased, the compensator will be liable to pay the Minister the difference.
There are provisions for where there are 2 or more compensators.
A decision in relation to whether a specified benefit is a recoverable benefit is appealable to the Social Welfare Appeals Office. However, an appeal in this case can only be made after the compensator has paid the recoverable benefits to the Minister.
Under the pre-existing legislative provisions certain social welfare payments could be offset against awards of compensation in the case of work-related accidents and road traffic accidents. In this case, the benefits that are offset are not recoverable by the Minister.
As a consequence of the above , these legislative provisions
The 2015 amended the procedures for the issuing of statements for the purposes of the recovery of social welfare benefits from compensation in personal injury cases, extended the period of validity of these statements.
The compensator must apply to the Department of Social Protection for a statement of recoverable benefits before making a compensation payment to an injured person. The PIAB must also apply for a statement before issuing an order under the Personal Injuries Assessment Board legislation.
The statement of recoverable benefits issued remains valid for three months. The compensator is obliged to pay the amount specified in the statement of recoverable benefits to the Minister before paying their compensation payable to the injured person.
Provision is made for
- the issue of statements of recoverable benefits directly by the Minister for Social Protection in certain cases;
- the issuing of revised statements of recoverable benefits in certain cases;
- extending the period of validity of statements of recoverable benefits, in certain cases,
- consequential amendments.
The Department/Minister may issue a statement of recoverable benefits directly to a compensator in cases where a compensator applies for such statement before making a compensation payment. Similarly, the Department may issue a statement to the Personal Injuries Assessment Board.
Provision is made for the issuing of a copy of the statement or revised statement to the in injured person. Regulations may be made enabling the Minister to prescribe any necessary information to be provided by a compensator or injured person for the purpose of the statement being issued.
There is provision for an extension of the period of validity of statements. Previously, the period was three months. Where there are no recoverable benefits identified at the time of issuing the statement or revised statement of recoverable benefits, statements will remain valid for 12 months or until such time as the decision is made to award a social welfare benefit that is recoverable, if earlier.
Where recoverable benefits are identified, but that the time of the issuing of the statement or revised statement, no such benefits are in payment, the statement remains valid for 12 months or until such time as a decision is made to vary the rate of such social welfare benefit or to award another social benefit that is recoverable, if earlier.
Where recoverable benefits have been identified and such benefits are being paid at the time of issuing a statement or revised statements, the statements remain valid for three months or until such time as a decision is made to vary the rate, if earlier.
Presiding officers determine whether a benefit is a recoverable benefit to be specified in a statement of recoverable benefits. The decision may be appealed to an appeals officer.
The 2019 Act provided for the inclusion of Supplementary Welfare Allowance in the list of specified benefits which may be recovered by the Minister where a compensator is also paying compensation in respect of the same injury, accident or disease that gave rise to the claim for a social welfare payment. It also provides for the adjustment of the period within which the Minister must respond to a request to provide a statement of recoverable benefits to the compensator from 4 weeks to 25 working days.
Important Notice! This website is provided for informational purposes only! It is a fundamental condition of the use of this website that no liability is accepted for any loss or damage caused by reason of any error, omission, or misstatement in its contents.
Draft Articles; The articles on this website are in draft form and are subject to further review for typographical errors and, in some cases, updating and correction. It is intended to include references to the sources of materials and acknowledgements in the final version. The content of articles with [EU] in the title and some of the articles in the section on Agriculture are a reproduction of or are based on European or Irish public sector information.