Compensation to relatives claims

Commonly asked questions about compensation to relatives claims

The Compensation to Relatives Act determines who can bring a claim in respect of a wrongful death of a relative. The parties may include the spouse, children and any other close relatives of the deceased, or anyone who was financially dependent on the person at the time of their death. Only one action is permitted. Once damages are determined, the amount will be divided among the parties to the action, in amounts to be decided by the court.

If your claim is unsuccessful, however, you may still be required in certain circumstances to pay the professional fees and disbursements incurred by your opponent. We will not pass on to you the costs we incurred running the case.

If you decide to stop your claim or move your claim to another law firm, you may need to pay the costs of running your claim up to that point.

Compensation to relatives claims can cover economic losses, such as lost wages or earnings (including pensions) and superannuation, as well as losses incurred through medical and funeral expenses. The principle behind the loss of financial support is that the relative would have expected to derive a benefit from the deceased, had the accident not occurred and had the deceased lived.

This loss of income and financial benefit can be claimed into the future, and does not need to be based on a legal entitlement, but merely that the claimant had an expectation of voluntary contribution from the deceased.

Compensation claims can cover domestic services claims, for example, household chores or services that had been provided by the deceased. It can also cover nervous shock claims, which are for psychological injuries sustained by family members as a result of their relative’s death. Claims for nervous shock can similarly cover economic and non-economic losses, for your own medical expenses and lost earnings as a result of your relative’s death.

Establishing dependency claims can be complicated, as there are a number of methodologies used by the court to determine dependency claims. The courts have noted on numerous occasions that an assessment of dependency claims cannot be made by any meaningful arithmetical or actuarial calculation. However, some reasonable inferences and assessments must be made in order to reach a reasonable assessment of damages.

The first step is to calculate the probable earnings of the deceased. This is calculated in a similar way to economic loss in any personal injury matter. The second step is to establish the dependency of the claimants on the deceased relative’s income, taking into account children under the age of 18 and the length of time they will require support.

One of the most common methods used by the court is to rely upon the average expenditure of all groups in the Household Expenditure Survey performed by the Australian Bureau of Statistics. However, where the deceased’s income is significantly higher or lower than average, an alternative method could be considered, such as referencing payments made from the deceased’s estate following the death, or by providing an established history of expenditure, supported by loan or mortgage repayments and bank statements, for example.

Stacks lawyers can help you to determine the best method for calculating dependency claims, based on your relevant circumstances.

Claims can also be made by relatives for domestic services that were previously provided by the deceased, such as for household maintenance, babysitting and handyman tasks. If the deceased had trade qualifications, the commercial value of those services could be claimed on the basis that those services would have been carried out by the deceased at no cost to the relatives, if not for the accident.

In taking into account the loss of financial benefits you have suffered, it will be necessary to offset any “benefits” that you have obtained as a result of the death. This most often includes any amounts recovered in relation to the deceased’s estate.

By way of basic example, if your dependency claim equates to $400,000, but you received $300,000 from the estate, your dependency claim will be reduced by the amount of this benefit to $100,000.

Similarly, if you receive financial support from a third person, such as a new spouse, this financial benefit must be offset against the amount of the loss you claim arising from the death.

While ordinarily benefits received by dependents following a death must be taken into account when calculating the dependency claim, this excludes insurance policies and superannuation payouts, whether they are the form of a life insurance policy, income protection, life assurance or payment from a superannuation fund.

These payments are not treated as estate benefits or third party payments. In other words, receipt of these payments will not reduce the claimable damages.

In accordance with a number of court decisions, including the High Court in Parker v Commonwealth and other similar authorities, the general rule is that no deduction to a spouse’s damages is made in relation to the passage of a matrimonial home owned by the deceased. This is because the remaining spouse merely continues to enjoy as an owner what he or she previously enjoyed as a spouse.

There are some exceptions to this rule, and it is important to seek legal advice in relation to your particular circumstances before a claim is made.

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