Overview
How this affects your claim in practice
Do not assume an insurer's overpayment figure is correct, but do not ignore it. Ask for an itemised calculation showing each payment period, the weekly entitlement said to apply, earnings or capacity information used, amounts paid and the legal basis for recovery. The response depends on why the overpayment allegedly occurred. SIRA treats an insurer-error payment differently from an adjustment after a return to work or an allegation of fraud. Informed written consent, a Personal Injury Commission order or another lawful recovery route may be required; there is no single rule that makes every alleged overpayment immediately repayable.
- Request a pay-period calculation, not just a total balance.
- Separate insurer error, changed current earnings, duplicate payment and alleged false information.
- Do not sign a deduction or repayment authority before understanding the figures and effect on current payments.
- Keep evidence of financial hardship if a repayment proposal is being discussed.
- This guide covers ordinary, non-exempt NSW workers and not exempt workers or specialist schemes.
First identify why the insurer says there was an overpayment
Different causes can involve different evidence and recovery powers. This table identifies questions, not automatic outcomes.
| Alleged cause | What to ask for | Records to compare |
|---|---|---|
| Insurer or payroll error | The error date, incorrect input or duplication, corrected calculation and why the error was not detected earlier. | Payment statements, bank records, insurer calculations and earlier decisions. |
| Return to work or changed earnings | The current weekly earnings used for each period and the weekly-payment formula applied. | Payslips, rosters, timesheets, employer payroll reports and disclosure emails. |
| Capacity or entitlement change | The effective date and notice or decision relied on, including any retrospective calculation. | Certificates of Capacity, work capacity decisions and payment notices. |
| Duplicate or overlapping benefit | The two payments said to overlap and the statutory basis for adjustment or recovery. | Workers compensation, leave, Centrelink or other payment records relevant to the stated overlap. |
| False information or fraud allegation | The precise representation, date, evidence and statutory allegation. | Original forms, earnings disclosures, communications and source payroll records. |
Recalculate the entitlement one pay period at a time
A reliable calculation should match the weekly-payment entitlement to the same dates as the alleged payments. Check the PIAWE figure, entitlement period, certified capacity, current weekly earnings, hours worked, statutory maximum and any valid decision affecting the rate. A single total can hide a wrong start date or earnings figure.
Do not average several jobs or pay periods together without checking the applicable calculation. If hours or earnings changed, record the date of each change. If the worker disclosed earnings promptly, keep that proof because it may be relevant to both the arithmetic and the insurer's proposed recovery response.
Payments caused by insurer error require fair and transparent handling
SIRA Standard of Practice S23 requires an insurer seeking recovery of a payment made in error to explain the payments, the error and the potential impact. The insurer is to consider the individual circumstances and whether recovery is appropriate. If a repayment arrangement is negotiated, financial hardship must be considered.
SIRA states that an insurer-error overpayment is only to be recovered with the worker's informed written consent. Do not confuse a request for consent with an existing power to make deductions. Ask the insurer to identify any Commission or court order, statutory adjustment provision or other authority if it proposes deductions without consent.
Changed earnings after returning to work are a different issue
Weekly payments can change when a worker earns income after returning to work. Section 58 of the Workers Compensation Act 1987 permits the Personal Injury Commission, in specified circumstances, to adjust weekly payments to account for overpayments in an earlier period. The existence and amount of any recoverable overpayment still need evidence.
Compare what the worker earned, what was disclosed, when the insurer received it and the formula applied. Starting work does not by itself prove the insurer's total. Equally, failing to report earnings can create a serious factual dispute. Keep complete payslips and written notifications rather than relying on telephone conversations.
An arithmetic disagreement is not automatically fraud
The 1998 Act contains separate false-claim and fraud provisions. A worker should not be labelled dishonest merely because payroll information was delayed, inconsistent or misunderstood. Conversely, a formal allegation should not be answered casually. Identify exactly what information is said to be false, who supplied it, when it was supplied and whether it was knowingly false.
Preserve the original forms and messages. Do not alter records or create a reconstructed document that looks contemporaneous. Legal advice may be important before providing a detailed statement where fraud or prosecution is mentioned.
Check any repayment or deduction proposal before agreeing
- Does the agreement state the verified amount and the periods covered?
- Does it authorise deductions from current weekly payments, bank payments or both?
- What happens if the underlying entitlement decision is later changed?
- Has the insurer considered rent, dependants, treatment costs and other hardship evidence?
- Is the proposed rate affordable without undermining recovery or basic living expenses?
- Does the document release any claim or dispute beyond repayment of the stated amount?
Complaint, review and dispute options serve different purposes
Ask the insurer to review the calculation and provide the source data. IRO can assist with a complaint about claims handling, unexplained deductions or failure to follow the applicable standard. A complaint does not replace a binding decision on disputed weekly-payment entitlement.
A dispute about weekly payments, a work capacity decision or an insurer application for adjustment may involve the Personal Injury Commission. The correct pathway depends on the document and orders sought. ILARS funding may be available for eligible legal work, but an IRO Approved Lawyer must assess the matter and IRO must approve the grant.
Illustrative calculation review
An insurer alleges that a worker was overpaid for eight weeks after resuming part-time duties. The worker obtains the insurer's weekly table and finds that two payslips were counted twice and one week used gross earnings from the wrong job. The worker sends the source payslips and asks for a corrected decision before discussing repayment. This example shows why the calculation must be checked; it does not decide whether any balance is recoverable.
Official sources
Sources are listed for transparency. This guide is general information only and is not legal advice.
- Workers Compensation Act 1987 (NSW), section 58
- Workplace Injury Management and Workers Compensation Act 1998 (NSW), false-claim, fraud and recovery provisions
- SIRA Standard of Practice S23: recovery of payments due to insurer error
- Independent Review Office: complaints and enquiries
- Personal Injury Commission: workers compensation legal pathways
Frequently asked questions
Can the insurer deduct an alleged overpayment from my weekly payments?
Not merely because it has stated a balance. Ask for the legal authority, calculation and any consent or order relied on. SIRA says insurer-error overpayments require informed written consent for recovery; other circumstances may involve a Commission or court order.
Should I sign a repayment plan?
Only after the amount, cause, authority, deduction terms and financial effect are understood. Signing may authorise deductions. Independent advice can be useful where the calculation or entitlement is disputed.
What if the overpayment happened because I returned to work?
Compare each period's actual earnings and disclosure record with the weekly-payment formula. Return-to-work earnings can affect entitlement, but they do not prove that the insurer's dates or amount are correct.
Can I complain to IRO about the insurer's recovery conduct?
Yes. IRO can address claims-management complaints. It does not replace the Personal Injury Commission where a binding determination of weekly-payment entitlement or recovery is required.
Has the insurer asked you to repay weekly payments?
Provide the itemised calculation, payment notices, payslips, earnings disclosures, Certificates of Capacity and proposed repayment terms. We can review the arithmetic and identify the applicable complaint or dispute pathway.