28th August 2014 Michael J Horan

Recoverable Benefits and Assistance

The provisions regarding the recoverability of certain social welfare benefits took effect from 1st August 2014. These provide for the repayment to the Department of Social Protection by a compensator of payments made to a claimant as a result of the offending actions of a wrongdoer.
A compensator (usually an insurance company or the Injuries Board), must apply to the Department of Social Protection for a statement of recoverable benefits prior to making any compensation payment. An application form is available from the Department of Social Protection.
The statement of recoverable benefits will contain the total amount of recoverable benefits and is valid for 3 months from the date that it is issued. The compensator’s duty will be treated as discharged if he pays the amount stated in the statement.
Settlements / Multiple Defendants
There are situations where liability is apportioned or where a claim for loss of earnings is in dispute. If a loss of earnings claim is in dispute the Compensator will also dispute their liability to reimburse the Department of Social Protection for recoverable benefits. However unless there is a Court Order indicating that there was a split on liability or on the validity of a loss of earnings claim, the Department of Social Protection will expect full reimbursement of any benefit paid.
Where co-Defendants are liable for the compensation payment to the injured party, each Defendant is jointly and severally responsible for the payment, but the Department will accept each Defendant’s separate payment.
Practical Implications
These provisions will lead to increased insurance costs as the insurer is now responsible for reimbursing the Department in respect of social welfare payments made to claimants.
A reduction in the number of nuisance value settlements is likely where there are significant recoverable benefits as it will not make economic sense for insurers to settle these claims.
Similarly, where co-Defendants are jointly and severally liable for the compensation payment to the Department of Social Protection, there will be added difficulties where one of the Defendants is uninsured and does not have the funds to repay the Department of Social Protection. The insured Defendant will bear the full cost of the reimbursement of social welfare payments.
In addition each file will have to have a valid statement of recoverable benefits which will lead to additional work in processing claims.
For further information, please contact Michael J. Horan, Solicitor.
E: info@michaeljhoran.ie
T: +353 (0)71 9140774

MICHAEL J. HORAN, B.C.L. T.E.P. Solicitor