Asbestos Diseases Foundation of Australia president Barry Robson has slammed James Hardie Industries as "morally bankrupt" after the company's asbestos compensation fund moved to pay victims in instalments to cover a funding shortfall.
The Asbestos Injuries Compensation Fund receives up to 35 per cent of James Hardie's operating cash flow every year, but on Monday the fund said it was heading for a cash shortfall of $184 million in 2017.
Last week BusinessDay reported on the potential funding gap, which follows an unexpected spike in the number of men and women sick with mesothelioma – the most expensive claims category.
The fund said the $184 million shortfall was "expected to grow in subsequent years" and excluded any potential drawdowns on its $320 million loan facility with the NSW government.
James Hardie said it had been advised of the shortfall and that the AICF "would like to enter discussions with the company [James Hardie] and the NSW government concerning an Approved Payment Scheme".The Approved Payment Scheme, scheduled to come into effect from July 1, 2015, will see some proven claims paid to victims in instalments rather than as a lump sum and some other liabilities will be deferred.
Mr Robson was outraged by the proposal. "Victims don't die by instalments. They need lump sum payments to pay medical bills and for carers and to look after themselves and their families," he said.
The average mesothelioma victim dies within 155 days of diagnosis. Mr Robson said it was immoral to cut payments when victims were already out of the workforce.
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