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11.3 Ceasing payments when a person is imprisoned after conviction of an offence

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Last amended 
11 August 2017

Section 23(2) of the SRCA and Section 122 of the MRCA states the Commonwealth is not liable to pay compensation for a week to a person who is incapacitated for work if the person is imprisoned for the week in connection with his or her conviction of an offence.

MRCA only - Section 208 of the MRCA also states that the Commonwealth is not liable to pay Special Rate Disability Pension (SRDP) for any period during which the person is imprisoned in connection with an offence.

Section 23(2) of the SRCA, Section 122 or section 208 of the MRCA are triggered only if the person is:

  • convicted,

  • imprisoned in connection with that conviction.

It should be noted that only weekly incapacity payments (or SRDP payments under the MRCA) are affected. The person continues to be entitled to claim other compensation benefits that may be appropriate.

Compensation under section 31 of the SRCA or section 139 of the MRCA (incapacity payments after a redemption/conversion of weekly amounts to a lump sum) is also affected as the rate payable under that section is derived from the amount of incapacity payment.

SRCA only - the exclusion applies only to 'current' employees. Payments to former employees under Ss131 – 136 in Part X are unaffected by imprisonment.

11.3.1 Meaning of ‘imprisoned’

Situations where a person is imprisoned include:

  • in custody in a correctional centre (adult prison) of any grading, including a prison farm;

  • detention in a juvenile detention centre;

  • admission to a prison hospital; or

  • admission to a public hospital after transfer from prison under guard because of a medical emergency.

The following situations do not constitute imprisonment for the purposes of section 23(2), section 122 or section 208:

  • community service orders;

  • detention in a remand centre or police cells;

  • home detention (e.g. under the Home Detention Act 1996 (NSW)); or

  • Court-ordered residence in an alcohol and drug rehabilitation centre.

11.3.2 Status of periodic detention as ‘imprisonment’

Periodic detention programs may involve incarceration of the offender for only part of the week, usually Friday evening to Sunday evening. At other times the offender lives at home and attends work, without supervision but possibly with some Court-imposed conditions.

As a matter of policy, periodic detention will not be regarded as ‘imprisonment’ for the purposes of section 122 or section 208. Although the section could be seen as authorising a partial reduction in compensation each week (equating to the ‘period’ of imprisonment), this is not desirable as the person continues to face almost the full financial costs of living (e.g. rent, support of dependants, bills, loan repayments, etc.).

11.3.3 Status of work release programs as ‘imprisonment’

Work release programs are operated by most State Corrective Services Departments. They usually involve release of a prisoner during the day to undertake employment or training activities. In some cases, the prisoner may live, with some supervision, in a half-way house run by the Department or a non-Government agency.

Cases involving work release programs must be decided on their particular facts, including consideration of

  • the nature of the accommodation;

  • the level of supervision;

  • the degree of self-responsibility accorded the person; and

  • financial responsibilities of the person for their board and lodging.

11.3.4 Imprisonment to be in connection with conviction of an offence

While an offender may be ‘imprisoned’, this imprisonment is not always ‘in connection with conviction of an offence’. Where there is no conviction of an offence, compensation entitlements are unaffected.  

Examples where compensation is NOT affected include:

  • on remand awaiting trial;

  • detention in police custody after arrest;

  • detention in police custody for the person’s own protection (drunkenness, psychiatric disorder); or

  • detention in an Immigration Detention Centre.

‘In connection with’, although clearly not requiring a causal relationship, does require some real relevance of the conviction to the detention, there must be more than just a temporal coincidence.

11.3.5 Evidence of conviction is required

Documentary evidence should be obtained from the relevant authorities to confirm:

  • the fact of conviction;

  • the date of conviction;

  • the sentence, and

  • the earliest date of parole.

11.3.6 Date of effect

The date of effect of any cessation of benefits is the date of imprisonment as imposed by the Court.

11.3.7 Status of imprisonment on remand

If a person is in prison on remand while awaiting trial, subsection 23(2) of the SRCA or section 122 (or section 208) of the MRCA should not be applied because the imprisonment at that stage is not ‘in connection with his or her conviction of an offence’.

However, if a conviction is later recorded against the person, subsection 23 (2) of the SRCA or section 122 (or section 208) of the MRCA should be applied retrospectively from the date first detained on remand for that offence. In many cases, this will result in an overpayment of compensation.

Note the following special cases where subsection 23(2) of the SRCA or section 122 or 208 of the MRCA:

  • Subsection 23(2) of the SRCA and sections 122 or 208 of the MRCA would not apply during any period on remand when the person was released from prison.

  • Subsection 23(2) of the SRCA and section 122 or 208 of the MRCA should still be applied and backdated to the date of first imprisonment on remand in cases where the Court records a conviction but does not impose any term of imprisonment.

  • Subsection 23(2) of the SRCA and section 122 or 208 of the MRCA should be applied and backdated to the date of first imprisonment on remand in cases where the Court orders a term of imprisonment corresponding to the period in detention with the result that the offender is immediately released from the dock having already served their sentence of imprisonment.

  • The charges giving rise to the imprisonment on remand must be related to the offences for which the person is convicted. While it is not necessary for convictions to be recorded in respect of all of the charges, at least one charge must result in a conviction.

11.3.8 Status of detention in a psychiatric institution

Where a person is detained in a closed psychiatric institution, careful investigation of the situation is required. In most cases, it is likely that subsection 23(2) of the SRCA and section 122 or 208 of MRCA will not apply for one of several reasons:

  • the person is not ‘imprisoned’, as the institution is a hospital not a correctional centre;

  • the person was not convicted of an offence because he or she was found to be unfit to plead to the offence; or

  • the person’s detention in the psychiatric institution is a result of a medical condition and has no ‘connection’ with offences for which they had previously been convicted and imprisoned.

11.3.9 Contact with the person

Where a person is imprisoned on remand and this fact is known, the person should be advised that subsection 23(2) of the SRCA or section 122 or 208 of the MRCA (as the case may be) may apply if they are convicted of an offence. Such notification may assist a person to rearrange his/her financial affairs and thus limit the impact of any possible overpayment of compensation arising from a subsequent conviction.

When compensation is cancelled because of the operation of section 23(2) of the SRCA or section 122 or 208 of the MRCA, it is important to write to the person attaching a copy of the relevant determination and advising them that:

  • entitlement to compensation benefits may be restored upon release from imprisonment if liability to pay compensation for incapacity for work still exists; and

  • other compensation entitlements (e.g. permanent impairment etc.) continue during the period of imprisonment.