Safe as houses? Lump sum dissipation and housing

Lump sum damages payments for personal injury claimants who suffer serious and catastrophic injury are common across Australia. One of the benefits of lump sum compensation for personal injury is argued to be the ability of claimants to purchase housing with their lump sum. In this chapter, we focus on whether the expenditure of significant amount of lump sum compensation payment on the purchase or payment for housing is desirable for personal injury compensation recipients, particularly considering the complex interaction between Australian compensation systems, the Australian social security support system And lifetime care and support schemes such as the National Disability Insurance Scheme (NDIS) and the National Injury Insurance (NIIS) schemes. We discuss out content analysis of the Australian Administrative Appeal Tribunal (AAT) social security preclusion appeals between 2013 and 2017 to illuminate the potential consequences of compensation recipients expending compensation lump sums on housing. We argue that purchase of housing can contribute to compensation recipients prematurely dissipating lump sum funds meant to provide economic support for loss of earnings and lifetime care and support costs. This may result in preclusion from income and other support from the social security system for lengthy periods of time, with injured people then left in a precarious financial position. It may also result in poor health outcomes for compensation recipients, who may also be unable to access enough lifetime care and support through the NDIS or through a state or territory NIIS scheme. The use of lump sum compensation funds on purchase of property may not, in fact, be ‘safe as houses’.