The following impairment policy affects accidents which occurred before 1 September 2003.

When is a client assessed for impairment benefits?

An impairment determination cannot be made until:

• 18 months after the date of the accident; or
• when the injuries stabilise, whichever occurs last.

If a client is a "minor " at the date of the accident, the TAC will determine the client's degree of impairment:

• 18 months after the accident; or
• when the injuries stabilise; or
• when the minor attains the age of 18; whichever last occurs

Also refer to guideline question, "When are injuries considered to be stable, not stable or substantially stable?"

How is the lump-sum benefit calculated?

Once a client's impairment has been determined at 11% or more they are entitled to receive a lump-sum benefit which is calculated in accordance with the applicable formula under section 47 of the TAA (1986). This example illustrates how a lump-sum benefit is calculated.

Example

A client's permanent impairment is determined at 45%. Therefore the client's lump-sum entitlement would be assessed as follows:

45%-10% x $120,110 (1 July 2022) = $46,709.44 lump-sum payable 90

Is a client entitled to annuity benefits?

Yes, a client who has an impairment of 11% or more is entitled to weekly annuity benefits under section 48 of the TAA (1986). The weekly annuity benefit is compensation payable to a client who is not in receipt of loss of earning capacity benefits.

How long are annuity benefits payable and when do they cease?

Weekly annuity benefits are payable:

• for 78 weeks, if the impairment is less than 50%; or
• until the client reaches the age of 75, if the impairment is 50% or more; or
• until a claim for common law damages settles.

Note, weekly annuity benefits are not payable for any period that loss of earning capacity benefits are paid.

Also refer to the policies for loss of earnings capacity benefits and the repayment of benefits - common law.

Are annuity benefits subject to review?

Yes , reviews are conducted on claims where the impairment is determined at 50% or more. The TAC reviews a client's entitlement to weekly annuity benefits once in every five year period or at any time if the client requests a review. The first review may take place after the first 18 months that a client starts receiving weekly annuity benefits.

How is the review conducted?

In conducting the review, the TAC uses the Guides to the Evaluation of Permanent Impairment, second or fourth edition, depending on when the accident had occurred. The same edition of the Guides that was used in determining a client's initial degree of impairment will be used in determining the client's degree of impairment for the purposes of the review.

What will happen after the review is completed?

The TAC will increase, decrease, cease or maintain a client's weekly annuity benefits once the review is completed. The client will receive a letter from the TAC advising of this.

What is an interim payment?

This is an advance payment in relation to a client's injuries, which may result in a permanent impairment of 11% or more. The degree of impairment used to calculate the interim payment does not determine a client's entitlement to LOEC benefits, annuity benefits or access to common law damages as it is not a permanent impairment determination.

When is an interim lump-sum payable?

The following part of this policy affects accidents which occurred before 16 June 2003.

• An interim payment is not payable, if a client has been or may be charged with a relevant offence in relation to the accident. Refer to the guidelines, "drivers who are convicted and drivers with charges pending".
• An interim payment may be paid 18 months after the accident, if the injuries are stable or substantially stable and the degree of permanent impairment is likely to be determined at 11% or more. In this circumstance the payment to be made is based on a degree of impairment of at least 11%.
• The interim impairment will be deducted from the final impairment when it is determined.
• Where an overpayment occurs because the final impairment is determined at below the interim impairment, the TAC will not recover any overpayment from a client.

The following policy applies from 16 December 2004. This affects accidents on or after 16 June 2003.

• An interim payment is not payable, if a client has been or may be charged with a relevant offence in relation to the accident. Refer to the Guidelines, "drivers who are convicted and drivers with charges pending".
• An interim payment may be paid at any time after the accident and usually this may occur at three months after the accident, if the TAC is satisfied that:
  • the client's permanent impairment is likely to be at least 30%; or
  • the injuries are stable or substantially stable and the permanent impairment is likely to be 11% or more.

In either circumstance, the payment to be made is based on a degree of impairment of at least 11%.

• The interim impairment will be deducted from the final impairment when it is determined.
• Where an overpayment occurs because the final impairment is below the interim impairment, the TAC will not recover any overpayment from a client.

Are annuity benefits payable when an interim lump-sum is paid?

No. Weekly annuity benefits are not payable. Weekly annuity benefits become payable once the final impairment is determined.

Will the TAC redeem annuity payments?

Yes, the TAC may pay out a client's future entitlement to annuity benefits in advance if the periodic payment falls below 5% of the Victorian Average Weekly Earnings (AWE).  The practice of paying a single lump-sum payment in lieu of future weekly payments is known as redeeming.  The formula which calculates the amount of the redemption is found in the Transport Accident (Impairment) Regulations 2020.  A client who has their weekly annuity payments redeemed under this formula is not entitled to claim LOEC payments.   The TAC therefore can only redeem a client's annuity where evidence indicates there is no likelihood that loss of earning capacity benefits are or will be payable.

What payment options are available?

Under the Act, a client may elect to receive the impairment benefit as:

• one lump-sum; or
• a combination of a lump-sum and the remainder as weekly payments. These options are not available for interim lump-sums.