---
title: "Check the NSW preconditions before a workers compensation commutation"
url: "https://ailawframework.com/practice/personal-injury-and-compensation/advise-the-worker-on-a-commutation-or-a-statutory-lump-sum-election/new-south-wales"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A21-WC20261023-9-NSW"
practice_area: "Personal Injury & Compensation (workers compensation, CTP/TAC, medical negligence)"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["NSW"]
last_reviewed: "2026-10-25"
---

# Check the NSW preconditions before a workers compensation commutation

> From the assessment, the payment history and the proposed amount, mark each section 87EA precondition as met, unmet or unknown. Do not advise the worker to accept a commutation, and do not write the agreement.

Canonical page: https://ailawframework.com/practice/personal-injury-and-compensation/advise-the-worker-on-a-commutation-or-a-statutory-lump-sum-election/new-south-wales  
Last reviewed: 2026-10-25

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Personal Injury & Compensation (workers compensation, CTP/TAC, medical negligence)](https://ailawframework.com/practice/personal-injury-and-compensation.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | From the assessment, the payment history and the proposed amount, mark each section 87EA precondition as met, unmet or unknown. Do not advise the worker to accept a commutation, and do not write the agreement. |
| What the lawyer must review | Decide whether the worker should commute, and write any advice. The President must be satisfied of each precondition in section 87EA(1), unless subsection (2) applies. No lump-sum election section was opened. Do not add one. Keep medical details in the firm's system. Apply ASCR rule 9, APP 11, and the Privacy Act notifiable-breach test. |
| Written for | New South Wales |
| Applies to | [Advise the worker on a commutation or a statutory lump-sum election](https://ailawframework.com/practice/personal-injury-and-compensation/advise-the-worker-on-a-commutation-or-a-statutory-lump-sum-election.md) |

## Checking plan

**Verify against sources**

The lawyer checks every section 87EA precondition before any commutation is considered.

- What the AI does: From the assessment, the payment history and the proposed amount, mark each section 87EA precondition as met, unmet or unknown. Do not advise the worker to accept a commutation, and do not write the agreement.
- What the lawyer does: Decide whether the worker should give up the liability, and write the advice and any agreement.
- Who reviews: Lawyer competent in this practice area
- Basis: Checked against the linked sources on 23 October 2026. Confirm the current instrument before reliance.

## Checks the lawyer makes

1. Section 87EA(1) requires the President to be satisfied of permanent impairment of at least 15 per cent, assessed under Part 6 or under Chapter 7, Part 7 of the 1998 Act.
2. Permanent impairment compensation must have been paid. At least 2 years must have elapsed since the first claim for weekly payments. Injury management and return to work must have been fully exhausted.
3. Weekly payments must have been received regularly and periodically throughout the preceding 6 months, and an existing and continuing entitlement must remain. Payments must not have been terminated under section 48A of the 1998 Act.
4. Subsection (2) allows a commutation in a prescribed class if the regulations' requirements are met and, unless the regulations provide otherwise, the lump sum is not inadequate and not excessive. Those regulations were not opened.

## Notes

- Section 151A, as opened, deals with the effect of recovering damages. It is not a precondition to commutation and it is not used here. No separate lump-sum election section was opened.

## Practical guide

Jurisdiction: Workers Compensation Act 1987 (NSW) section 87EA

**Deliverable**: A precondition table marked met, unmet or unknown. No advice to accept and no agreement.

**Inputs**

- Permanent impairment assessment
- Date of the first weekly-payments claim
- Payment history for the preceding 6 months
- Whether section 48A of the 1998 Act has been applied

**Example**: Illustrative example: Impairment is 18 per cent and compensation for it has been paid, but the first weekly claim was 14 months ago. The tool marks the 2-year precondition unmet. It does not draft a commutation agreement.

**Stop and escalate when**

- A precondition is unknown.
- The tool is asked to recommend that the worker accept.

Checked 2026-10-23.

## Sources

- [Workers Compensation Act 1987 (NSW) section 87EA](https://classic.austlii.edu.au/au/legis/nsw/consol_act/wca1987255/s87ea.html) (checked 2026-10-23)
- [Workers Compensation Act 1987 (NSW) section 151A](https://classic.austlii.edu.au/au/legis/nsw/consol_act/wca1987255/s151a.html) (checked 2026-10-23)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*