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Social Security Act 2018

Factors affecting benefits - Factors affecting benefits - Factors reducing benefits: compensation or damages

197: Effect of compensation or damages on application for benefit

You could also call this:

“How getting money for an injury or unfair dismissal affects your benefit application”

If you apply for a benefit, and you’ve been paid or can claim compensation or damages for a disability caused by accident or disease, or for being unfairly dismissed from your job, this is what happens:

If you’ve already received compensation or damages, the government might not give you the benefit, or they might give you less. This is for the time that the compensation or damages cover.

If you haven’t received compensation or damages yet, but you’re claiming them, the government might give you the benefit. However, they might ask you to pay back some or all of it when you get your compensation or damages.

If the government gives you a benefit that you might need to pay back, they can take the money from your compensation or damages when you get them. This is like a debt you owe to the government.

When we talk about compensation or damages, we mean any money you get because of your claim, even if it’s just a goodwill payment. But it doesn’t include lump sum payments for impairment under the Accident Compensation Act 2001.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6783518.

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Part 4 Factors affecting benefits
Factors affecting benefits: Factors reducing benefits: compensation or damages

197Effect of compensation or damages on application for benefit

  1. This section applies if—

  2. a person (P) applies for a benefit; and
    1. P has been paid or has a claim for compensation or damages from any other person in respect of—
      1. any disability caused by accident or disease; or
        1. wrongful or unjustifiable dismissal.

        2. If P has been paid compensation or damages, MSD may refuse the benefit or grant a reduced benefit for the period of disability or loss of expectation of employment for which the compensation or damages have been paid or deemed by MSD to have been paid.

        3. If P has a claim for compensation or damages, MSD may grant the benefit on the condition that MSD may require P to repay MSD all or part of the benefit out of the compensation or damages that are paid to P as a result of the claim.

        4. If a benefit or part of a benefit is granted on the condition set out in subsection (3), the benefit or the part of it—

        5. constitutes a charge on the compensation or damages; and
          1. is a debt due to the Crown under regulations made under section 444 from the beneficiary or any person liable for the payment of the compensation or damages; and
            1. is subject to recovery under regulations made under section 444 from the beneficiary or any person liable for the payment of the compensation or damages.

              1. In this section, compensation or damages—

              2. includes any ex gratia payment made in settlement or on account of a claim for compensation or damages; but
                1. does not include any impairment lump sum received under Schedule 1 of the Accident Compensation Act 2001.

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