New South Wales Consolidated Acts

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Commutation by agreement

87F Commutation by agreement

(1) A liability may be commuted to a lump sum with the agreement of the worker.
(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 agreement, and
(b) the worker has confirmed in writing that the worker has been given and understands the advice referred to in paragraph (a).
(3) 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 mental capacity.
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 agreement relates.
(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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