New South Wales Consolidated Acts
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WORKERS COMPENSATION ACT 1987 - SECT 87F
Commutation by agreement
87F Commutation by agreement
(1) A liability may be commuted to a lump sum with the agreement of the
(2) A commutation agreement must not be entered into unless (before
the agreement is entered into)--
(a) a legal practitioner instructed
independently of the insurer and the employer has certified in writing that
the legal practitioner has advised the worker--
(i) on the full legal
implications of the agreement, including implications with respect to any
entitlement of the worker to compensation under this Act or to benefits under
any other law (including a law of the Commonwealth), and
(ii) on the
desirability of the worker obtaining independent financial advice, before the
worker enters into the agreement, as to the financial consequences of the
(b) the worker has confirmed in writing that the worker has
been given and understands the advice referred to in paragraph (a).
commutation agreement (including an agreement purporting to be a commutation
agreement) is not subject to review or challenge in proceedings before the
Commission or a court.
(4) The worker has 14 days after entering into a
commutation agreement in which to withdraw from the agreement by giving notice
in writing to the insurer. Withdrawal from the agreement by the worker makes
the agreement a nullity.
(5) A liability cannot be commuted under this
section if the worker is legally incapacitated because of the worker's age or
Note : Section 87G provides for the commutation of a
liability when the worker is legally incapacitated.
(6) A commutation
agreement is of no effect unless and until it is registered as provided by
this Part. Registration of the agreement removes the liability to which the
(7) The amount payable under an agreement is payable
within 7 days after the agreement is registered or within such longer period
as the agreement may provide. Interest calculated at the rate prescribed by
the regulations is payable on any amount due and unpaid. The amount payable
under a commutation agreement and any interest payable on that amount is
recoverable as a debt in a court of competent jurisdiction.
(8) As part of a
commutation agreement, a worker may agree that payment of a lump sum removes
any liability to make a payment under Division 4 of Part 3 (or section 16 of
the former Act) in respect of the injury concerned. This Division applies to
the agreement for payment of that lump sum as if it were an agreement to
commute the liability to pay that compensation to a lump sum. Payment of the
lump sum removes any liability to which the agreement of the worker relates.
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