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12. SRCA only - Compensation Under the 1930 or 1971 Act

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Injuries prior to the commencement of the SRCA may result in periods of incapacity for work, both prior to and following, the advent of that Act (i.e. on 1 December 1988).

In practice, delegates will only rarely be required to calculate compensation for pre-1988 periods of incapacity. Nevertheless, it is still open for a person to claim compensation for such a period and from time to time a person may demonstrate a retrospective entitlement under an old Act.

Where a period of incapacity occurs prior to the commencement of the SRCA, S124(7) of the SRCA requires that the amount payable under the SRCA be the same as would be payable had the old Act not been repealed. In other words, periods of incapacity are paid in accordance with the requirements of that Act which was in force during the period of incapacity.

12.1 The 1971 Act

12.1.1 General Summary

Total and partial incapacity

The 1971 Act distinguishes between total (S45) and partial (S46) incapacity. Neither 'total' nor 'partial' incapacity implies permanency. Unlike the VEA, permanency of incapacity is not an issue except where determining weekly payments in respect of a person who has received a lump sum under S39 of the 1971 Act (see below).

Statutory weekly rates

Both total and partial incapacity periods are compensated by statutory weekly rates (which were indexed from time to time during the currency of that Act) rather than by reference to prior earnings. Nevertheless the 1971 Act does take account of prior earnings in the form of Average Weekly Earnings (AWE). That measure is very similar to NWE under the SRCA, however AWE is used primarily as a maximum limit, i.e. compensation may not exceed AWE.

To the 'standard' weekly statutory rate payable in respect to the person, are added amounts in respect of 'prescribed persons' and others in respect of dependent children.

The identity of 'prescribed' persons and children are virtually identical to those current under S19(12) and S4(1) of the SRCA.

Effect of a superannuation pension

If the person receives a superannuation pension, the compensation payable is:
(AWE – pension).  However the portion of the pension that was self-funded (notionally 20% in the DFRB/DFRDB schemes) is excluded from this equation. This deduction is made once-only and is not to be repeated at each adjustment for pension rate increases.

Effect of receiving a permanent impairment lump sum

Award of a lump sum for permanent impairment made under S39 of the 1971 Act, prohibits subsequent Incapacity payments for the same injury. Weekly incapacity payments may not be made under the 1971 Act in respect of any period of incapacity between the date of that lump sum determination and 1 December 1988.  Reference S45(9) and S46(5) of the 1971 Act for the form of this prohibition.  Reference S47 of the 1971 Act for an exception to the above, i.e. where the 'incapacity' is only to allow the person to undergo medical treatment.  Reference S50 of the 1971 Act for the only other exception, i.e. where the person becomes totally incapacitated 'indefinitely' (i.e. permanently) the amount payable is then decreased by a formula contained in this subsection.

Note that this cessation of entitlement to incapacity payments consequent upon lump sum payment does not extend beyond the start date of the SRCA. After 1/12/88 only the SRCA has force, and incapacity is thereafter payable only on SRCA rules.

12.1.2 Average Weekly Earnings (AWE)

AWE relates to the person's pre-injury earnings, but has a more limited role under the 1971 Act than does NWE under the SRCA. In practice, delegates only need to establish an AWE where:

  • the rate of specified compensation is likely to exceed pre-injury remuneration

  • the person was receiving Commonwealth superannuation whilst incapacitated

  • the person is 'partially incapacitated' but has some earnings

Section 25 of the 1971 Act specifies how AWE is to be calculated. Although quite different in form from S8 of the SRCA, the principles involved in calculating AWE are very similar to those for determination of Normal Weekly Earnings (NWE) under the SRCA. The construction of AWE admits the use of both civilian and military income in the case of reservists, for example. The main difference between the pre-injury earnings used by each of these two Acts is that, S25 (1971 Act) does not specify the pre-injury period (from which the average is to be taken) with the same rigour as that imposed by Ss9 and 8 of the SRCA. Other provisions are however very similar, or the same.

For this reason, delegates should treat AWE under the 71 Act as identical to NWE under the SRCA for all practical purposes. Delegates needing to establish AWE during the calculation of pre-88 incapacity should simply apply the method and principles relating to NWE.

12.1.3 Prescribed persons and children for S45 and 46 purposes

The 1971 Act's identification of 'prescribed persons' and children to whom Ss45 and 46 of that Act applies, is virtually identical in content to the scheme used by the SRCA.

  • i.e. the defining provisions from the 1971 Act were re-used by the SRCA for the purposes of S19 (minimum payments at statutory rates) and S17 (death benefits) of that Act.

Therefore, in determining the identity and number of prescribed persons/children for the purposes of the 1971 Act, delegates should adopt the guidance (although relating primarily to SRCA minimum payments cases) in Chapter 4.

12.1.4 Person is wholly incapacitated and had no superannuation

Where the person was 'totally incapacitated for work' during a period while the 1971 Act was current, S45 of that Act has effect.

S45(2),(3) and (4) together, provide that in those circumstances, the entitlement is, whichever is the lesser of:

  • the weekly amount prescribed under S45(2) for that period; plus

  • the amount prescribed under S45(3) for each 'prescribed person'; plus

  • the amount prescribed under S45(4) for each child; OR

  • the person's AWE.

12.1.5 Person is wholly incapacitated and received superannuation pension

Where the person was 'totally incapacitated for work' during a period while the 1971 Act was current, S45 of that Act has effect.

S45(7) applies when the person was in receipt of a superannuation pension, during the same period of incapacity for work, for which compensation is now being claimed.

S45(7) says:

45(7) If the employee:

(a) is retired from his employment as a result of the incapacity for work, and

(b) as a result of the retirement is in receipt of a pension under a superannuation or provident scheme established or maintained by the Commonwealth or by a prescribed authority of the Commonwealth.

The compensation payable to the employee in respect of each week during the period of the incapacity shall not exceed the amount, if any, by which the average weekly earnings of the employee before the injury exceed:

(c) if a part of the pension is, under the scheme, attributable to contributions for the pension paid by the employee – the part of the pension paid or payable to the employee in respect of that week that is not attributable to those contributions

(d)if the employee has paid contributions under the scheme, the scheme does not identify a part of the pension as being attributable to those contributions and the Commissioner has determined that it is reasonable that a part of the pension should be treated as if it were attributable to those contributions – the part of the pension paid or payable to the employee in respect of that week that is determined by the Commissioner to be the part that is to be treated as not attributable to contributions for the pension paid by the employee, or

(e) in any other case – the pension paid or payable to the employee in respect of that week.

Note, that for the purposes of S45(7)(d) the benefits paid by the military superannuation schemes are deemed to include a self-funded component of 20%. This 20% is the amount to be disregarded when calculating compensation under S45(7).

Note: This 20% is to be deducted initially, but once only. It does not apply to subsequent indexation pension rises.

Where a person was receiving superannuation at the time of the incapacity claimed under the 1971 Act, the amount payable can be represented as:

Compensation per Week = AWE – employer funded portion of weekly super pension

12.1.6 Person is partly incapacitated and was not in receipt of super

Where a person was partly incapacitated for work during the currency of the 1971 Act, S46 of that Act applies.

S46(2) provides that the amount payable to the person is:

The lesser of:

  • the prescribed amount in respect of that period.

  • AWE less the amount the person is able to earn in suitable employment or business.

OR

The difference between:

  • what his/her entitlement would be under S45 if he/she was totally incapacitated (but ignoring the S45 provisions re: superannuation), and

  • the amount he/she is able to earn in suitable employment or business,

whichever is the greater.

12.1.6.1 'able to earn in suitable employment or business'

The phrase 'able to earn' etc. used by the 1971 Act is essentially the same as the quantity 'AE' defined and used by the SRCA for the purposes of S19 of that Act.

Delegates should also note, that in common with S19(4) of the SRCA, S46(4A) of the 1971 Act discusses matters which the decision maker must 'have regard to' in deciding how much the person is able to earn in suitable employment. In fact, these subsections are counterparts and virtually identical.

Delegates should therefore follow the guidance in Chapter 8 in relation to AE, when establishing this value for the purposes of the 1971 Act also.

12.1.7 Person partly incapacitated and was in receipt of superannuation

Where a person was partly incapacitated for work during the currency of the 1971 Act, S46 of that Act applies. Subsection 46(3) provides that where a partly incapacitated person was also receiving a superannuation pension during that same period, the compensation payable is:

AWE – (amount able to earn + employer portion of the super pension)

Attribution of super pension to person or employer contributions

S46(3)(d) distinguishes between amounts of superannuation pension which may be directly attributed to the person's contributions to the scheme, and that portion of the pension which is employer funded.

Note, that for the purposes of S46(3)(d) the benefits paid by the military superannuation schemes are deemed to include a self-funded component of 20%. This 20% is the amount to be disregarded when calculating compensation under S46(3).

Note: This 20% is to be deducted initially, but once only. It does not apply to subsequent indexation pension increases.

12.1.7.1 'able to earn in suitable employment or business'

The phrase 'able to earn' etc. used by the 1971 Act is essentially the same as the quantity 'AE' defined and used by the SRCA for the purposes of S19 of that Act. Delegates should also note, that in common with S19(4) of the SRCA, S46(4A) of the 1971 Act discusses matters which the decision maker must 'have regard to' in deciding how much the person is able to earn in suitable employment. In fact, these subsections are direct counterparts and virtually identical.

Therefore, in determining the amount per week the person is 'able to earn...' for the purposes of Ss45 and 46 of the 1971 Act, delegates should apply the guidance in Chapter 8.

12.1.8 Person was incapacitated but had received S39 lump sum

Section 45(9) of the 1971 Act says:

45(9) Subject to sections 47 and 50, where a determination is made that an amount of compensation is payable to the employee under Section 3 — 9 in respect of an injury that resulted in a loss referred to in that section or a determination is made that the liability of the Commonwealth to make further payments to the employee under Section 46 in respect of an injury is to be redeemed, compensation is not payable to the employee under this section in respect of a period of incapacity for work resulting from that injury, being a period occurring after the date of the making of the determination.

The above provision at 45(9) is also repeated virtually word-for-word (with the omission only of the reference 'subject to... S50'), at S46(5).

  • S45 relates to a person who is wholly incapacitated.

  • S46 relates to a person who is partly incapacitated.

Therefore, in practice the provision at S45(9) and S46(5) applies to all persons incapacitated for a period during the 1971 Act.

12.1.8.1 Meaning of Ss45(9) and 46(5)

The above subsections of the 1971 Act provide that where a person has received a lump sum for permanent impairment under S39 of the 1971 Act, incapacity payments may not be made in respect to any period after the date of that S39 determination.

These subsections also prevent incapacity payments after the date of a redemption of entitlement.

12.1.8.2 Exceptions to Ss45(9) and 46(5)

Incapacity payments may only be made to those people who have received a S39 permanent impairment lump sum in cases where:

  • S47 applies, i.e. the person's period of incapacity under the 1971 Act is in relation to his/her receipt of treatment for the compensable injury.

  • S50 applies, i.e. the person's incapacity has become total and permanent (in which case the entitlement is reduced by a formula to account for the lump sum).

12.1.8.3 Ss45(9) and 46(5) do not relate to periods after 1 December 1988

Note that Ss45(9) and 46(5) are subsections of a repealed Act, and currently only have force through the action of the SRCA's transitional provisions under Part X of that Act. In particular, S124 provides that the amount payable in respect to a period of incapacity which occurred prior to the SRCA's commencement, is that which would have been payable if the old Act in force at that time had not been repealed.

However this 'transitional' provision does not apply to incapacity which occurs after 1 December 1988 (i.e. regardless of when the injury occurred). Those periods of incapacity that occurred under the SRCA, are to be determined only by the SRCA provisions. Furthermore, and unlike the 1971 Act, the SRCA does not cease liability to pay incapacity compensation following a permanent impairment lump sum. Thus, the above subsections do not bar weekly incapacity payments to those who:

  • previously accepted lump sums under S39 of the 1971 Act, but

  • the period of incapacity follows 1/12/88, i.e. the commencement of the SRCA.

12.1.8.4 S50 of 1971Act – payments but at reduced rate for a person who is TPI following lump sum

Section 50 of the 1971 Act provides an exception to the general rule, that compensation is not payable for pre-1988 incapacity, following a S39 lump sum for permanent impairment.

S50 provides that where:

  • the person has received a lump sum under S39 of the 1971 Act, but

  • following receipt of that permanent impairment lump sum, becomes totally incapacitated 'indefinitely' (i.e. totally and permanently incapacitated for all work).

Compensation is payable in respect of that enduring incapacity, from the date of its permanence up to the date of the commencement of the SRCA and is to be calculated:

a-b/52c

Where:

= the amount of the S39 lump sum.

= the sum of all S46 incapacity payments which would have been payable between the date of the S39 determination and the date of this S50 determination i.e. the total of the weekly amounts which would otherwise be payable if the lump sum had not been determined.

= the persons remaining expectation of life, in years (from date of S50 determination).

Note that the expression 'totally and permanently incapacitated' which is frequently used by some delegates in this and similar contexts, is not an expression recognised by the 1971 Act. The grant of a Special Rate pension under the Veterans Entitlement Act 1986 (i.e. for qualifying as 'TPI' for the purposes of that Act) does not automatically grant an equivalent status as 'totally incapacitated for all work' and 'indefinitely', under the 1971 Act. Delegates are expected to judge the applicability of S50 on the merits of the cases presented, and not employ tests and assumptions that are applicable to other unrelated legislation.

12.1.9 Amount payable to incapacitated person

Date (applicable from)

Amount

1 September 1971

35.00

2 November 1972

43.00

16 November 1974

57.00

1 September 1976

80.00

1 September 1979

90.00

1 September 1980

105.00

1 September 1981

114.00

1 November 1982

129.45

1 May 1983

134.85

1 November 1983

141.30

1 May 1984

149.00

1 November 1984

159.60

1 May 1985

160.60

1 November 1985

164.80

1 May 1986

170.20

13 December 1986

175.50

13 June 1987

182.20

13 December 1987

185.70

13 June 1988

192.80

 12.1.10 Amount payable to 'prescribed persons'

Date (applicable from)

Amount

1 September 1971

8.50

2 November 1972

11.00

16 November 1974

15.00

1 September 1976

21.00

1 September 1979

23.60

1 September 1980

27.50

1 September 1981

29.85

1 May 1982

31.25

1 November 1982

33.90

1 May 1983

35.30

1 November 1983

37.00

1 May 1984

39.00

1 May 1985

42.10

1 November 1985

43.20

1 May 1986

44.60

13 December 1986

46.00

13 June 1987

47.70

13 December 1987

48.60

13 June 1988

50.50

 12.1.11 Amounts payable to children 'to whom this Act applies'

Date (applicable from)

Amount

1 September 1971

5.00

2 November 1972

5.00

16 November 1974

7.00

1 September 1976

10.00

1 September 1979

11.25

1 September 1980

13.10

1 September 1981

14.20

1 May 1982

14.85

1 November 1982

16.15

1 November 1983

17.60

1 May 1984

18.60

1 November 1984

19.90

1 May 1985

20.00

1 November 1985

20.50

1 May 1986

21.20

13 December 1986

21.90

13 June 1987

22.70

13 December 1987

23.10

13 June 1988

24.00

12.1.12 Incapacity periods of less than a week

The statutory rate payable under the 1971 Act is expressed by those tables in terms of amounts per week. Where the period of incapacity is less than a week that amount must, of course, be paid in proportion to the percentage of the week the person was incapacitated.

Note: There is no intent that the weekly rate be the minimum payment, even for lesser periods.

For instance:

  • if a person worked only half of his/her normal weekly hours in that week he/she would be entitled to half of the weekly rate(s) for that week

  • if a person who normally (pre injury) worked five days per week was incapacitated for one day in a particular week, he/she is entitled to 1/5th of the compensation rate(s) for that week.

12.2 Index to the 1971 Act's provisions about Incapacity

The following sections of the Compensation (Commonwealth Government Employees) Act 1971 are relevant to compensation for 'incapacity':

S25

Average weekly earnings

S26

Partially incapacitated and unable to obtain suitable employment

S38(5)(b)

Weekly payments during rehabilitation to be at S45 rates

S45

Entitlement to weekly payments whilst totally incapacitated

S46

Entitlement to weekly payments whilst partly incapacitated

S47

Entitlement to weekly payments whilst undergoing treatment

S48(2)

Entitlement while maintained in hospital or nursing home

S49

Redemption of weekly payments made for partial incapacity

S50

Entitlement to weekly payments following a permanent impairment lump sum

S52

Reduction of weekly payments where salary or sick leave etc. is also payable

S98

Compensation not payable to persons entitled to receive repatriation benefit

S98A

Clients also entitled under VEA may request cessation of 1971 Act payments

S99

Entitlement where damages recovered (common law actions)

S104–108

Transitional – injuries, claims, payments under previous Acts

S116

Payments in respect of persons under a legal disability

S118

Payments may not be assigned to another

S119

Recovery of overpayments

S119A

Deduction of overpaid VEA pensions from 1971 Act entitlements

12.3 The 1930 Act - Superannuation is not taken into account

The 1930 Act makes no provision for limitation of compensation where a person receives Commonwealth superannuation in addition to an incapacity payment under that Act.

Sections 14, 17 and S17A of the 1930 Act make provision for limitation where the person recovers damages from a common law claim or by receipt of a pension under the VEA, but no provision in respect to a superannuation pension.

12.3.1 Amount of weekly compensation

The amount of the weekly payment made under the 1930 Act is determined by the 'The First Schedule' to that Act, which says:

1 The amount of compensation shall be:

c) where the employee is totally incapacitated for work by the injury – a weekly payment during his incapacity of the sum of $31.80 and in addition, the sum of:

(i) $7.70 in respect of –

1.the wife of the employee, if she was married to the employee at the date of the injury and is wholly or mainly dependent upon his earnings, or

2.if he has no wife, or if compensation is not payable in respect of his wife – one female, over the age of sixteen years, who is wholly or mainly dependent upon the earnings of the employee and was, at the date of the injury, a member of the employee's family or caring for a child who was at that date, and is, under the age of sixteen years and wholly or mainly dependent upon the earnings of the employee, and

(ii) $2.80 in respect of each child, born before or after the date of the injury, who, not being a child of the marriage contracted, or an ex-nuptial relationship formed, after the date of the injury, is under the age of sixteen years and is wholly or mainly dependent upon the earnings of the employee, and

d) where the employee is partially incapacitated for work by the injury, a weekly payment during his incapacity –

(i) of the amount (if any) by which the weekly amount that he is earning or is able to earn in some suitable employment or business, after the injury is less than his weekly pay at the date of injury, or of the amount of Thirty-one dollars eighty cents, whichever is the less, or

(ii) of the amount (if any) by which the weekly amount that he is earning or is able to earn in some suitable employment or business, after the injury is less than the weekly amount that would have been payable to him under sub-paragraph (b) of this paragraph, if he had been totally incapacitated, whichever is greater.

12.3.1.1 Indexation of values

The statutory rates contained in the above quotation from the Act were indexed and updated in line with contemporary cost price and salary movements. The table of historical values is reproduced section 12.3.2

12.3.1.2 Interpretation of Schedule 1 provisions – total incapacity

For those who were 'totally incapacitated' (i.e. worked 0 hrs in that week) for a period under the 1930 Act, the amount payable is:

  • the scheduled amount for a person for that period; plus

  • the scheduled amount in respect of person's spouse for that period; plus

  • the scheduled amount in respect of each child of the person.

12.3.1.3 Interpretation of Schedule 1 provisions – partial incapacity

For a person who is able to work at least part of the week in question (under the 1930 Act), the amount payable is the greater of the following (1) and (2):

1. the lesser of (pre injury 'pay' – able to earn), or
(weekly statutory amount for the person only) excluding spouse and child amounts

2. the (weekly statutory amount if totally incapacitated – able to earn)
It is to be expected that option (2) will be the amount payable in most cases.

12.3.1.4 Pre injury 'Pay' and 'able to earn in some suitable employment or business'

While the 1930 Act uses terminology which varies from that used by the 1971 Act and the SRCA. However the identity of the amounts referred to is essentially the same i.e.:

  • 'Pay' means 'NWE' under the SRCA for all practical purposes.

  • 'Able to earn in suitable employment etc.' means 'AE' under the SRCA for practical purposes.

Delegates should therefore adopt the principles outlined at chapter 5 (re: NWE) and chapter 8 (re: AE) when determining the 1930 Act counterparts of these quantities.

12.3.2 Amount payable

Date (applicable from)

Amount (person)

Amount (spouse)

Amount (each child)

3 January 1949

8.00

2.50

1.00

14 December 1951

12.00

3.50

1.50

1 January 1954

17.50

4.50

2.00

4 December 1959

20.00

5.00

2.25

20 November 1964

23.10

5.45

2.25

9 November 1967

25.35

6.00

2.45

3 December 1968

28.15

6.80

2.50

21 June 1970

31.80

7.70

2.80

25 May 1971

35.00

8.50

5.00

12.3.3 Index to the 1930 Act's provisions about Incapacity

The following sections of the Commonwealth Employees Compensation Act 1930 are relevant to compensation for 'incapacity':

S6(4)

Delegates power to determine degree of incapacity and entitlement

S9(1)

Personal injury gives entitlement to compensation under 'Schedule 1'

S12(1A)

Payment of lump sum ends all entitlement to weekly payment

S13(1)

Payment ceiling – i.e. max amount of compensation for any one injury

S13(2)

Where total and permanent incapacity – S13(1) not to apply

S14(2)

DVA repatriation and Defence Act payments not payable

S17 & 17A

Recovery of damages (common law actions)

1 — st Schedule

(1)(b) weekly amounts payable for total incapacity

1 — st Schedule

(1)(c) weekly amounts payable for partial incapacity

1 — st Schedule

(1A)(b) maximum benefits, also consider social security benefits

1 — st Schedule

(2) child endowment payments also to be taken into account

1 — st Schedule

(3) meaning of 'pay' (i.e. NWE for 1930 Act)

1 — st Schedule

(12) weekly payments to cease upon client leaving Australia

1 — st Schedule

(13) weekly payments not to be assigned to another