32Offence to make payment before discharging liability to the Commonwealth

#### 32 Offence to make payment before discharging liability to the Commonwealth (1) If a judgment or settlement has been made in respect of an amount of compensation, a compensation payer or insurer must not pay to the compensable person any part of the compensation before the Chief Executive Medicare has issued a notice under section 24 unless: (a) the time within which the Chief Executive Medicare must issue such a notice has expired; and (b) if the Chief Executive Medicare had given a notice under section 21, in respect of the claim for compensation, during the 6 months preceding the day on which an amount of compensation was fixed under the judgment or settlement—the insurer or compensation payer withholds from the compensable person an amount of compensation equal to the amount set out in the notice under paragraph 21(2)(b). Penalty: Imprisonment for 12 months. (1A) Subsection (1) does not apply if the compensation payer or insurer makes an advance payment in respect of the compensation. (2) If a compensation payer is liable under section 28 to pay an amount to the Commonwealth in respect of an amount of compensation, the compensation payer must not pay to the compensable person any part of the compensation unless: (a) the Commonwealth has been paid the amount specified in the notice referred to in that section (whether or not it is paid by the compensation payer); or (b) the 28 day period for complying with that section has expired, and a part of the amount of compensation equal to the amount specified in the notice has been withheld from the compensable person. Penalty: Imprisonment for 12 months. (3) If the compensation payer is a member of a body that is a representative organisation in relation to the claim for compensation that gave rise to the amount of compensation becoming payable: (a) the representative organisation; and (b) any insurers of the representative organisation; are subject to the same obligations under subsections (1) and (2) as the compensation payer. (4) If an insurer is liable under section 28 to pay an amount to the Commonwealth in respect of an amount of compensation, the insurer must not pay to the compensable person any part of the compensation unless: (a) the Commonwealth has been paid the amount specified in the notice referred to in that section (whether or not it is paid by the insurer); or (b) the 28 day period for complying with that section has expired, and a part of the amount of compensation equal to the amount specified in the notice has been withheld from the compensable person. Penalty: Imprisonment for 12 months. > Note: Under subsection 4D(1) of the Crimes Act 1914, these penalties are only maximum penalties for the offences. Subsection 4B(2) of that Act allows a court to impose an appropriate fine instead of, or in addition to, a term of imprisonment. If a body corporate is convicted of one of these offences, subsection 4B(3) of that Act allows a court to impose a fine of an amount not greater than 5 times the maximum fine that the court could impose on an individual convicted of the same offence. (5) A compensation payer’s or insurer’s liability to pay to the Commonwealth amounts owing to the Commonwealth in respect of the amount of compensation is not affected by: (a) payment of an amount of compensation prior to the making of a judgment, settlement or reimbursement arrangement in respect of the claim for compensation; or (b) payment of an amount of compensation in contravention of this section. (6) If a compensable person receives from a compensation payer or insurer a payment of an amount of compensation in contravention of this section, the compensation payer or insurer is not entitled to recover the amount from the compensable person.