After a birth injury settlement, payment may depend on signed releases, approvals and clearance of government recovery amounts. Legal costs and disbursements are then deducted. Funds for children or people lacking capacity are often protected. Timing varies, and specialist financial advice is separate.
Conditions before payment
A settlement usually depends on several steps. Parties may sign a deed of release, and, where the claimant is a child or lacks capacity, approval may be needed before the agreement binds anyone. The paying insurer or health service will then process payment. No fixed payment date can be assumed; delays can arise from paperwork, approvals or recovery notices.
Government recoveries
Some government programs can recover amounts they paid because of an injury that later becomes the subject of compensation. Medicare may need to be notified, and a recovery amount confirmed, before funds are released. The NDIS has its own compensation rules, including possible effects on future support, and guidance is being updated for new legislation. Centrelink payments involve separate rules.
These recoveries can significantly affect the net amount, so they should be investigated before settlement, not after.
- Medicare compensation recovery notices
- NDIS compensation reduction considerations
- Any Centrelink or other agency notices
- Private health insurer reimbursement claims, if applicable
Legal costs and disbursements
The settlement figure is usually not the amount the family receives. Legal costs, disbursements and recoveries are normally deducted. Families are entitled to an itemised account and can ask how the final figure was calculated. In children's matters, costs may already have been reviewed during approval.
Children and people lacking capacity
Money for a child is commonly held by a public trustee, court fund or appointed manager rather than paid directly to parents. Similar protections may apply to adults with impaired decision-making capacity. Families can ask how funds are invested, what fees apply and how to request money for the person's needs.
Ongoing support and planning
Settlement money often needs to last a lifetime. Families may wish to seek independent, licensed financial and possibly tax advice, as this page cannot provide financial planning recommendations. Emotional support also matters; the end of a long claim can bring relief, grief or uncertainty. Parents can seek support from their GP or perinatal mental health services.
For your next conversation
- Obtain a copy of the signed deed of release and understand its terms
- Request the Medicare recovery notice and any NDIS advice
- Ask for an itemised statement of costs, disbursements and net amount
- Confirm who will hold the funds and how to apply for withdrawals
- Ask whether the settlement affects future NDIS supports
Common questions
Why is the amount we receive lower than the settlement figure?
Settlement figures usually include amounts that pay legal costs, disbursements and government recoveries such as Medicare. The remaining sum is the net amount. Ask your solicitor for a written breakdown showing each deduction and its basis, ideally before you agree to settle.
Can the settlement affect our child's NDIS plan?
It can. The NDIS has compensation rules that may affect reasonable and necessary supports where a participant receives compensation for the same disability. Its guidance is being updated for new legislation, so obtain current advice before settlement about the likely effect.
Sources & further reading
- NDIS: compensation calculator (opens in a new tab)
- Services Australia: Medicare compensation recovery (opens in a new tab)
These references support the topic’s starting points. They do not determine the facts, standard of care or law applicable to an individual matter.