How is payment distributed if claims exceed the limits of the claims account?

When claims exceed the limits of the claims account, payment is distributed on a pro-rata basis among claimants. This means that each claimant receives a percentage of their claim based on the total amount requested and the available funds. By using a pro-rata distribution method, the system ensures that all claimants receive some compensation, albeit possibly less than their total claimed amount. This approach is equitable because it allocates limited resources fairly relative to the claims submitted, rather than favoring certain claimants based on timing or the size of their claims.

The other options would not provide a fair distribution in the event of insufficient funds. Distributing payment on a first-come, first-served basis could leave some claimants without any compensation if they are later in the queue. An equal distribution among all claims would not take into account the varying amounts owed to each claimant, potentially leading to significant inequities. Prioritizing by claim amount could favor those with larger claims, leaving smaller claims unpaid or with minimal compensation, which would be inconsistent with principles of fairness and equity in claims handling.