The Federal Government has introduced another measure in its strategy to clean up some insurance-related problems brought to light by the public liability crisis.

Assistant Treasurer Helen Coonan said the Taxation Laws Amendment (Structured Settlements) Bill 2002, which was introduced into Parliament last Thursday, will encourage the payment of compensation to severely injured victims in regular periodic payments rather than lump sums. In other words, structured settlements.

“The Government recognises the importance of encouraging structured settlements, as one of a range of measures to address difficulties associated with the availability and affordability of public liability insurance,” she said.

The legislation is intended to bring an end to cases of severely injured people spending their payouts too quickly. The change is expected to cost the Government $12.1 million over four years. It will mainly affect out-of-court settlements, because in most states court awards are paid in lump sums.

The proposed law follows reforms suggested at the two previous ministerial meetings on public liability insurance held in the last few months.

“Many people who receive large lump sums as damages for personal injury may be unable to properly manage the investment of the lump sums,” Senator Coonan said. “This can result in the early dissipation of compensation payments, leaving an injured person unable to provide for his or her future needs. Regular periodic payments avoid these problems.”