Can You Get A Loan Against Workers Compensation Claims?

Few events are as disruptive and life-changing as sustaining a serious injury at work. First, your injury robs you of the ability to work, then you are faced with a challenging journey through medical treatments, injury claim paperwork, and legal procedures. Meanwhile, your day-to-day responsibilities of bills, living expenses, and family obligations continue. With so much financial pressure and the uncertainty of how your injury will affect your ability to work in the future, loans or advances on your compensation claim can provide much-needed relief.

In this article, we’ll discuss the process of workers’ compensation and whether obtaining an advance on your workers’ compensation claim is an option.

The Statutory Phase of Workers’ Compensation

In Australia, most injured employees are entitled to workers’ compensation, regardless of who is at fault. This initial stage, known as the statutory phase/claim (or a no-fault claim) begins once you file a workers' comp claim with your employer or the workers' compensation insurer (such as WorkCover Queensland). Even if you intend to file a common law claim for damages, you'll often start with a statutory claim.

During the statutory phase, if your injury claim is approved by the workers' compensation insurer, you will receive regular weekly or fortnightly payments. As you probably already know, these payments won’t be as much as your salary. Your workers’ compensation will also cover medical expenses, however, you may still be liable for some out-of-pocket medical costs. At this stage of the process, both you and your employer likely share a common goal: to get you well and back to work. Sometimes, though, that’s easier said than done, and an extended stay on workers’ compensation increases the likelihood of falling behind on your bills.

During the statutory phase, true settlement funding is almost impossible to secure. Statutory phase workers’ compensation payments go straight to you and can stop with minimal warning for any number of reasons, leaving specialist settlement lenders with no reliable source of repayment or security. While a handful of traditional lenders might treat those payments as income, they still assess your credit history and insist on repayment in normal instalments. Crucially, these are personal loans — not settlement advances — so their balances remain even if your benefits pause (for instance, when you begin a common-law claim). Missed repayments can quickly dent your credit score, creating a frustrating Catch-22 for injured workers trying to stay afloat during the statutory phase of workers' compensation.

Common Law Workplace Injury Claims

In contrast to a statutory claims, you can choose to sue your employer or a third party if they contributed to your injury through negligence. A common law work injury claim for damages (often called a common law workers' compensation claim) allows you to seek compensation for exactly this.

Work injury common law claims are complex and usually take a year or more to resolve, particularly for serious injuries or when multiple third parties are involved. Crucially - you don't receive regular payments during the claim, instead compensation is in the form of a single lump sum at the end of your claim, which may leave you in a difficult financial position while your workplace injury claim is ongoing.

Pre-Settlement Loans - Workplace Injury Claims

Workplace injury compensation advances, also called compensation loans, settlement loans or settlement advances, are different from typical personal loans. With settlement advances, you're able to gain access to a small portion of your common law claim's payout while it is still in progress. Approval is based solely on the merits of your workplace injury claim.

This means you could still be approved, even if you don't have any regular income or if your credit history has taken a hit due to your workplace injury. You won’t have to make any repayments on your workers' compensation loan until you receive your compensation.

It's important to note that you can’t get a settlement advance during the statutory phase of a workers’ comp claim, even if you plan to pursue a common law injury claim. However, a compensation loan can help you manage the financial strain of a long work injury claim process.

Post-Settlement Loans - Workplace Injury Claims

Finally, reaching a settlement on your workplace injury claim is cause for a big sigh of relief. However, it usually takes one to three months to actually receive your compensation funds. Fortunately, you may be able to borrow against your settlement with a post-settlement advance. These are compensation claim loans that you get after formal settlement acceptance. These post-settlement loans will also have a lower interest rate than pre-settlement loans due to the fact that your settlement amount is now a known quantity.

A post-settlement advance on your workers' compensation claim can help you get access to the funds you know are coming to you within months, to get caught up financially and finally put your injury claim behind you.

Choosing the Right Workers’ Compensation Lender

There are many litigation lending companies offering workers’ compensation advances. Comparing them can feel overwhelming, so take time to examine fee structures, flexibility, and service before you apply.

Multiple smaller advances lower the cost — with the right fee structure

Instead of taking one large advance to cover everything until settlement, you’ll usually pay less by drawing smaller amounts only when you need them. Look for a lender whose fee structure supports staged borrowing and doesn’t penalise you for multiple drawdowns.

This approach reduces your total interest and fees if:

1. Up-front fees (establishment, bridging, registration, etc.) are calculated as a percentage of the amount borrowed for each advance.
2. There are no ongoing charges other than interest (no weekly, monthly, or annual account fees).

Watch for hidden or deceptive fees

Always examine fees before taking out any loan. Some litigation lending companies charge high setup fees and ongoing monthly fees as well as interest. Most importantly, ensure your workers’ compensation claim loan doesn’t have an early repayment penalty fee.

Red flags to watch out for:

• Repayment fees, limits to when you can repay your loan, discharge fees or early repayment fees
• Regular monthly fees or ongoing administration/account fees in addition to interest
• Any fees that are not clearly explained or that are difficult to understand (such as third party registration fees, caveat fees or regulatory fees).

Choose your lender carefully before your first advance

Once you take an advance from one settlement lender, other lenders will generally not fund the same claim until that advance is repaid — much like how a bank won’t approve a second mortgage while the first is in place with another bank.

Switching later often means discharging the first advance and paying new establishment fees. Compare lenders upfront and confirm they allow multiple drawdowns so you can borrow in stages if needed.

Prioritise personalised flexible service

You can tell a lot about a litigation lending company by the way it treats its applicants. Taking out a loan against your workplace injury claim's compensation is a big decision, and you deserve to be able to speak to real people who will answer your questions.

The process should be fast and efficient, and you should have the option of being able to apply online or use a paper version of the application. Your funds should arrive quickly after approval or, if you choose, be paid directly to your service provider, such as a medical service provider or a real-estate agent. It’s always a good idea to seek out borrower reviews and testimonials, reading not just the 5 star reviews, but also the 1 - 4 star reviews.

Is a Loan Against Your Work Injury Compensation Claim Right for You?

Sustaining a serious injury at work can be a traumatic experience. In addition to navigating workers’ compensation and other legal processes, you also have to face rising financial pressure as your income stops.

When you start a common law workplace injury claim, you may qualify for an advance from your compensation claim. Taking out a settlement advance or loan, however, is a big decision, so take your time and always examine potential lenders closely.

At Brisbane Capital, we do things differently. We provide multiple, smaller loans with only one fee per loan and a fixed interest rate for the life of the loan. We cultivate relationships with our clients and find solutions to help them navigate their financial challenges during the stress of dealing with an injury, rather than add to them.

Ready to explore your options? Read more about our workplace injury settlement loans or you can apply for an advance on your compensation within 10 minutes.

If you still have questions or just want to discuss compensation advances with a real person, you can always call us on 07 3726 6888, because the last thing you need right now is more pressure.

---

This information is general in nature and every personal injury claim is unique. At Brisbane Capital we don't provide legal advice and we're not a law firm. For advice tailored to your situation, consult with your lawyer.