Payment of Lump Sum Compensation to a Solicitor's Trust Account

The information provided below is intended for insurers, workers, and legal professionals.

When a worker undergoes an assessment resulting in a determination of a degree of permanent impairment (DPI) due to a compensable work-related injury, they are eligible for a lump sum compensation payment or an offer for such compensation for the permanent impairment.

Section 110(3) of The Workers' Compensation and Rehabilitation Act 2003 states:

Compensation cannot be assigned, charged, taken in execution, or attached, and a worker’s entitlement to compensation cannot pass to another person by operation of law or otherwise, and no claim can be set off against the amount.

This provision was introduced to prevent employers from garnishing compensation payments as a reimbursement for wages paid to the worker.However, if the worker provides written authorization, an insurer may deposit lump sum compensation into a solicitor's trust account.

In this scenario, the payment into the trust account is being held by the solicitor on behalf of the worker or, in the case of a dependency payment, the individual entitled to the compensation. The act of making a payment into a trust account, under these circumstances, does not constitute the assignment, charging, execution, or attachment of compensation to another person.

This stance has received endorsement from the Queensland Law Society.