Procedural Direction WC1 – Compensation payable on death

1. If death results from an injury, certain entitlements may arise under the workers compensation legislation. This Procedural Direction concerns the Commission’s functions where compensation is payable on death, and sets out:

   (a) steps that must be taken by an applicant before commencing proceedings in the Commission;

   (b) the practice and procedure of death claims in the Commission;

   (c)  the process and procedure for the lodgement of settlement agreements in respect of lump sum death benefits for deaths occurring on or after 1 July 2026, and

   (d) the payment of compensation under the Workers Compensation Act 1987 (the 1987 Act).

Preliminary

2. This Procedural Direction is made by the President under section 21 of the Personal Injury Commission Act 2020 (the PIC Act).
3. The President or a member before whom a matter is listed may excuse a party from complying with any aspect of this Procedural Direction before or after the time for compliance with any action required.
4. Nothing in this Procedural Direction prevents the President or a member directing a party to take any appropriate step in proceedings.
5. This Procedural Direction is to be read with and subject to any provision of the PIC Act, the enabling legislation, and the Personal Injury Commission Rules2021 (the PIC Rules).

Applicable legislation and rules

6. Parties should be familiar with the following provisions:

   (a) Part 3, Div 1 and 1A of the 1987 Act, and

   (b) Rule 81 and 85B of the PIC Rules.

Steps taken prior to commencing proceedings

7. Prior to commencing proceedings in the Commission (whether or not liability has been accepted by the insurer) the applicant should take certain steps to ensure that all potential dependants have been informed of the claim, their rights, and the impending proceedings in the Commission.

Contacting potential dependants

8. It is imperative that all potential dependants be informed of the claim and their potential dependency on the deceased at the date of death, regardless of the views of any other dependants.
9. The definition of dependant includes “such of the members of the worker’s family as were wholly or in part dependent for support on the worker at the time of the worker’s death, or would but for the incapacity due to the injury have been so dependent, and includes —

(a) a person so dependent to whom the worker stands in the place of a parent or a person so dependent who stands in the place of a parent to the worker, and

(b) a divorced spouse of the worker so dependent, and

(c) a person so dependent who —

(d) in relation to an injury received before the commencement of Schedule 7 to the Workers Compensation Legislation Amendment (Dust Diseases and Other Matters) Act 1998—although not legally married to the worker, lived with the worker as the worker’s husband or wife on a permanent and genuine domestic basis, or

(e) in relation to an injury received after that commencement—is the de facto partner of the worker.

Member of a family means spouse (including wife or husband), father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister.

10. The above persons should be contacted prior to commencing proceedings. It is not enough to allege in a statement or statutory declaration that those persons were not dependent.
11. The Application should include evidence about attempts to contact any potential dependants.
12. Ultimately, the Commission must be able to make a factual finding that there are certain persons dependent, and no other persons dependent, at the date of death, before it makes orders for payment. It is in the interests of all parties if notice is given to any persons who may be dependent at an early stage.
13. Potential dependants should be contacted in writing, informing them of the death of the worker and that they may have an entitlement to claim in relation to the lump sum death benefit. There is no prescribed form for what is required when informing a potentially interested party, however correspondence should include matters such as information identifying the deceased; the potential to claim dependency for support; the nature of proceedings in the Commission; and the availability of legal advice.
14. Where a party, other than a legal personal representative, does not wish to claim that they are dependent for support on the deceased, they should provide formal acknowledgement in the form of a statutory declaration or statement that reflects their position.

Representation

15. As far as is practicable, all parties should be separately represented.
16. Depending on the circumstances, this can include separate legal representatives or the same legal representatives instructing separate counsel to provide advice and submissions as to apportionment.
17. Where parties have adverse interests or are in dispute as to any aspect of the claim, separate legal representatives must be obtained. The applicant and the insurer should assist all parties to obtain appropriate representation.
18. The Independent Review Office (IRO) should be able to assist in providing the contact details for an approved lawyer. The Independent Legal Assistance and Review Service (ILARS) may provide funding, including for counsel, in relation to legal costs associated with the claim.

Commencing proceedings

19. Proceedings are commenced by lodging an Application in Respect of Death of Worker in the Commission. The Application must specify the compensation claimed. The compensation payable to dependants or the legal personal representative of the deceased worker consists of:

    (a) lump sum compensation, apportioned between dependants or payable to the legal personal representative (sections 25(1)(a), 29 and 31 of the 1987 Act);

    (b) additional weekly payments in respect of dependent children (section 25(1)(b) of the 1987 Act), and

    (c) funeral and associated expenses (sections 26 and 28 of the 1987 Act).

Compensation payable

20. The Application must specify the amount of compensation claimed correctly in accordance with the Workers compensation benefits guide published by the State Insurance Regulatory Authority.
21. The amounts provided for in section 25 for lump sum compensation and weekly payments in respect of dependent children are adjustable in accordance with Div 6 of Pt 3 of the 1987 Act. For a full table of compensation entitlements, including periods prior to 24 October 2007, see the Workers compensation benefits guide.
22. The Application must also specify if any interest is claimed on the amount.
23. If the lump sum death benefit is paid to the NSW Trustee for the benefit of a dependant after 16 December 2022, the employer must pay additional compensation fees to the NSW Trustee for investing or otherwise managing the lump sum death benefit (section 25(1A) of the 1987 Act). The formula for the fee is set out in clause 177 of the Workers Compensation Regulation 2016.
24. If compensation is claimed for a period prior to the death of a worker, such as weekly benefits compensation and medical, hospital or related expenses, either an Application for Expedited Assessment or an Application to Resolve a Dispute should also be completed.

Parties to proceedings

25. Proceedings may be commenced by the legal personal representative of the deceased, the insurer of the deceased’s employer (including the nominal insurer), or a person claiming to be dependent on the deceased at the date of death.
26. All other parties should be named as respondents.
27. Where the proceedings are commenced by a party other than the insurer, the employer should be named as the first respondent.
28. All potential dependants should be named as respondents. If the applicant has obtained evidence that a potential dependant was not dependent at the deceased on the date of death and does not wish to make a claim for apportionment of the lump sum compensation payable, that party does not need to be named as a respondent.

Evidence in support

29. Depending on the nature of the Application before the Commission, certain documents should be attached in support. All documents must relate to the resolution of the real issues in the proceedings and be attached in a single document bundle and:

    (a) be indexed;

    (b) be sorted by document category;

    (c) be paginated, with consecutively numbered pages;

    (d) not contain any duplicate material, and

    (e) not exceed 500 pages.

30. Parties wishing to lodge documents in excess of 500 pages in their application, must lodge an Application to Lodge Additional Documents (see rule 67B, 67C, and PD PIC 12).
31. Supporting documents may include:

(a) death certificate;

(b) authority as the appointed legal personal representative of the deceased worker;

(c) financial records;

(d) invoice/account of funeral expenses;

(e) invoice/account of transportation expenses;

(f) marriage certificates;

(g) birth certificates;

(h) last will and testament, grant of probate and/or grant of letters of administration;

(i) evidence as to the efforts made by a party to contact potential dependants;

(j) statutory declarations from potential dependants who do not wish to make a claim;

(k) statements from dependants and/or guardians or legal personal representatives addressing issues of the nature and extent of dependency and knowledge of persons who may be dependent, and

(l) investigation reports into the cause of the injury and death and the issue of dependency.

Service and reply

32. The applicant is to serve a sealed copy of the Application, and any attachments, on all respondents within 7 days of the Commission registering the Application. If the applicant is a dependant, the employer and insurer(s)/scheme agents(s) for the nominal insurer must be served.
33. The respondents have 21 days from the date of registration of the Application to respond by lodging a Reply, attaching all relevant documents in support, with the Commission. A sealed copy of the Reply must also be served on each other party. The Commission may still progress the application in the absence of a Reply. The documents in support must not have already been lodged, must be lodged as a single document bundle and:

(a) be indexed;

(b) be sorted by document category;

(c) be paginated, with consecutively numbered pages;

(d) not contain any duplicate material, and

(e) not exceed 500 pages.

34. Parties wishing to lodge documents in excess of 500 pages in their reply, must lodge an Application to Lodge Additional Documents (see rule 67B, 67C, and PD PIC 12).

Dispute resolution

35. Once registered, the Application will be reviewed by a member of staff to ensure the matter is ready to proceed. This will occur regardless of whether liability is accepted or declined. The Commission does not determine disputes in a piecemeal fashion (i.e. determining liability before considering which parties may or may not be dependent) and all parties should be afforded the opportunity of addressing the issues in dispute.
36. Once reviewed, the matter will be allocated depending on any issues that need to be resolved.

Initial review

37. If the matter is not procedurally ready to be referred to a member, it will be allocated to a delegate of the President for review and resolution of procedural issues. Depending on the circumstances the delegate may take one or more of the following actions:

    (a) issue a direction on the applicant and/or the respondents;

    (b) convene one or more procedural online conferences (via audio or audio-visual link), or

    (c) refer the matter to a member.

38. The matter may be subject to further review and actions as above as replies and further documents are lodged in the Commission.

Direction

39. Where necessary, the delegate will issue a direction concerning procedural compliance. Matters that may be covered in such directions include:

    (a) informing all potential dependants of the claim and proceedings in the Commission;

    (b) obtaining statutory declarations from said dependants, should they not wish to make a claim;

    (c) joining parties to proceedings, and

    (d) ensuring all parties are appropriately represented.

40. The delegate may list the matter for a preliminary conference in the direction, or upon receipt of appropriate evidence addressing the issues raised in the direction. It will not be necessary in all matters that a direction be issued.

Procedural online conference

41. In addition to or as an alternative to the above, the delegate may convene one or more procedural online conferences (to be held via audio or audio-visual link).
42. The purpose of the online conference is to discuss and address any procedural issues arising out of the application, including informing potential dependants, joining appropriate parties, and ensuring all parties are appropriately represented.
43. Legal representatives must attend procedural online conferences. It is not necessary that dependants attend, but they may do so if they desire. If a dependant wishes to be joined to the online conference, he or she should inform the Commission prior to the listing. One or more claims officers may also attend the procedural online conference.
44. Following the online conference, the delegate may issue a direction on the parties requiring certain steps to be taken. The delegate will then monitor the matter to ensure that the proceedings are ready for the next listing, whether before a member or a further procedural online conference.

Listing before a member

45. Once all procedural issues have been resolved, the matter will be listed before a member for a preliminary conference.
46. If the issues are not complex, (for example, the apportionment of a lump sum benefit only, with no competing interests) the matter can be resolved at this stage. In such circumstances, parties should be prepared to provide oral submissions concerning the appropriate orders to be made. The member may also require written submissions to be filed following the preliminary conference.
47. The member may also take any of the usual steps in proceedings, including issuing directions and listing the matter for a conciliation/arbitration hearing.
48. In rare circumstances, the Commission may write to a party where previous attempts at contact have been unsuccessful.

Awards of compensation

49. It is important that all potential dependants are identified, including their full name, date of birth and relationship to the deceased worker. This includes circumstances where the applicant is unsure who is eligible to make a claim, or intends to make a claim. The Commission determines who was dependent on the deceased at the time of death.
50. The question of whether a dependant is wholly dependent for support on a deceased worker for the purposes of section 25 of the 1987 Act can include reference to past acts and future probabilities. Past acts and future probabilities are highly relevant to the quantification of an award made to a dependant.

Apportionment

51. The lump sum death benefit may be apportioned among dependants of the deceased worker.
52. Apportionment is provided for by section 29 of the 1987 Act, and will be required where there is more than one person dependent for support upon the deceased worker at the time of the worker’s death, regardless of whether those persons are wholly or partially dependent.
53. Factors relevant for consideration in apportionment include, but are not limited to:

(a) the extent of past dependence;

(b) the anticipated future dependence;

(c) the ages of the dependants;

(d) their health;

(e) special needs, and

(f) lifestyle.

54. The Commission may vary any previous apportionment among the dependants of a deceased worker due to circumstances of the dependants changing or for any other sufficient cause (section 30(1) of the 1987 Act). An Application to vary a previous apportionment may be made by a person entitled to compensation (section 30(2) of the 1987 Act).
55. The Commission may have regard to any agreement reached as to apportionment, however, such agreement may not be determinative.

Payment of compensation

56. Section 85 of the 1987 Act provides that compensation in respect of the death of a worker shall be paid to the NSW Trustee & Guardian. If the deceased worker’s widow or widower (over 18 years of age and not mentally ill) is the only person entitled to compensation paid to the NSW Trustee & Guardian in respect of the worker’s death, the NSW Trustee & Guardian is required to pay out the compensation to the widow or widower. The same applies with respect to de facto partners.
57. Despite section 85, section 85A of the 1987 Act provides that the Commission may authorise payment of compensation to the person entitled to it, or to such other person for the benefit of the person entitled to it. It is usual for the Commission, when ordering and apportioning lump sum compensation, to order that the insurer pay the apportioned amount directly to the widow, widower or de facto and any other dependants who have reached their majority. It is also usual for the Commission to order payment of apportioned amounts in respect of children to the NSW Trustee & Guardian.

Settlement of lump sum death benefits

58. For deaths occurring on or after 1 July 2026, parties to a dispute about liability for a lump sum death benefit that has been referred for determination by the Commission may lodge a proposed settlement agreement for approval by the Commission, under Division 1A of the 1987 Act. If the Commission determines to give effect to an agreement, the insurer is taken to have accepted liability for death benefit compensation payable for the death (section 32AC(7)).
59. All dependants who are minors must have an appointed tutor to enter into an agreement. The Commission may order the appointment of a tutor under section 43A of the PIC Act,and in accordance with Procedural Direction PIC 14 – Persons under legal incapacity.

Proposed settlement agreement

60. A proposed settlement agreement cannot be lodged unless proceedings have commenced at the Commission in respect of the ‘death benefit dispute’. A ‘death benefit dispute’ is defined under section 32AA of the 1987 Act as a dispute about liability for a lump sum death benefit that has been referred for determination by the Commission.
61. To approve a settlement agreement, the Commission must be satisfied that:

(a)  there is a reasonable basis to dispute liability on the facts provable on the material available to the Commission and a reasonably arguable view of the law (section 32AC(4)(a) and (5));

(b)  the amount of compensation proposed to be paid in settlement is ‘reasonable in the circumstances’ (section 32AC(4)(b)), and

(c)  each dependant is a party to the agreement (section 32AC(4)(C).

62. Accordingly, regardless of a party’s intention to lodge a settlement agreement, all parties must still file an Application in Respect of Death of Worker and/or Reply, and comply with the relevant procedural requirements, such as the provision of supporting evidence in respect of liability and dependency as outlined in this Procedural Direction.
63. A party may lodge a proposed settlement agreement at any point during the proceedings (e.g. at the time of filing an Application in Respect of Death of Worker and/or a Reply, or during a preliminary conference or hearing before a Member).
64. The proposed settlement agreement and accompanying documents should be lodged under the Application to Settle Death Benefits form, unless otherwise directed by the Commission.
65. The proposed settlement agreement must include the following information:

(a)    the details of the deceased worker and death;

(b)    the matter/proceedings it relates to before the Commission;

(c)    the date of the dispute notice issued by the insurer;

(d)    the details of each dependant, their legal representatives and/or appointed tutors;

(e)    the lump sum compensation amount proposed to be settled; and,

(f)     certification/agreement from the parties that:

i. all parties agree to the settlement amount proposed;

ii. all parties have received independent legal advice (unless otherwise directed by the Commission);

iii. all dependants are a party to the agreement;

iv. they understand that any approval by the Commission of the settlement means that the insurer has accepted liability for the death benefit compensation payable for the death, and that the death benefit compensation under s 25 of the 1987 Act is payable as if the death resulted from an injury, in the amount provided by the agreement as executed.

66. The proposed settlement agreement must be executed by each party with the date of signature. Each party to the proposed settlement agreement must have legal representation, unless ordered otherwise by the Commission.

Evidence in support of proposed settlement agreement

67. To enable the Commission to consider the matters it must be satisfied of under section 32AC(4) to give effect to a proposed settlement agreement, the party lodging a proposed settlement agreement must, in lodging the Application to Settle Death Benefits, refer to any relevant evidence attached to the Application in Respect of Death of Worker and Replies, and their page numbers. This may include:

    (a)    the section 78 dispute notice and evidence regarding the cause of the injury and death which provide the basis of the liability dispute, and the issue of dependency;

    (b)    statutory declarations from potential dependants who do not wish to make a claim; and

    (c)    statements from dependants and/or tutors or legal personal representatives addressing issues of the nature and extent of dependency and knowledge of persons who may be dependent.

68. In addition, each party to the settlement agreement should provide a statement and/or statutory declaration confirming that they understand the terms of the agreement, have obtained legal advice and that they consider the settlement amount is ‘reasonable in the circumstances’. This may include submissions a dependant may wish to draw to the Commission’s attention as to why their circumstances (personal, financial or otherwise) have led them to consider resolving the matter.
69. In some circumstances, a party may wish to provide the member determining the settlement agreement with confidential advice. The confidential advice may address additional information they believe will assist in the settlement of the matter under section 32AC but which they do not want to disclose to the other parties in the event the settlement agreement is not approved and the matter requires determination. The confidential advice will be considered by the member allocated the settlement agreement for determination but not by any other person, including any other parties to the proceedings or the member hearing the substantive proceedings .

Initial review

70. Once lodged, the proposed settlement agreement will be initially reviewed by the Commission to consider whether it is ready to proceed to a determination to give effect to the proposed settlement agreement, or whether there are any outstanding issues that need to be addressed.
71. Depending on the circumstances, before the proposed settlement agreement proceeds for determination, the Commission may:

(a)    issue a direction on the applicant and/or respondents;

(b)    make orders in respect of the appropriate next steps, or

(c)    determine all other outstanding issues before consideration of the settlement agreement, such as deciding a dispute as to dependency (noting that all dependants must be party to any agreement).

Settlement Hearing

72. Once the Commission is satisfied that the proposed settlement agreement is ready to proceed, the matter will be allocated to another member for determination of the settlement agreement. The member who will determine the settlement agreement will be different to the member hearing the substantive proceedings.
73. A settlement hearing will be scheduled to determine the settlement agreement. All parties (including legal representatives and tutors) must attend the settlement hearing.
74. The member allocated the settlement agreement for determination may issue directions to the parties prior to the settlement hearing date. This may include a direction to a party, or parties, to provide the Commission with a confidential advice addressing any information or issues outlined by the member.
75. During the settlement hearing, the member may require oral submissions from the parties (or their legal representatives) as to their understanding of the agreement, including that it is a full and final settlement of the lump sum death benefit entitlement, their interest in settling the claim, and potential apportionment of the proposed settlement sum.
76. The member will make orders, by way of a Certificate of Determination, determining whether to give effect to the settlement agreement, and apportionment if necessary.
77. If the settlement agreement is not approved, the matter will be referred to the original member hearing the substantive proceedings (Application in Respect of Death of Worker) for determination of the dispute.