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6.5.17 Assessing Claims for Arrears of Incapacity Payments

Incapacity for work may first occur many years after discharge.  This is to be expected, as many injuries although originally moderate in effect will deteriorate naturally and gradually over the years. For instance, injuries to joints and vertebrae will commonly result in osteoarthritis, a progressive disease.  However for compensation to be payable, the delegate must be satisfied by the medical certification process, that the compensable injury still produces effects and is still the cause of incapacity for work. A person should be required to disclose their work history, sporting activities, accidents and illnesses since discharge.  They should also be required to declare all civilian (State) compensation or common law settlements for their post-discharge injuries.  Medical certification should be from a legally qualified medical practitioner.


For incapacity to be payable there must be medical evidence of a reduced capacity for work and evidence of a monetary loss as a result.


Consider a case where a person has had liability admitted for an in-service aggravation of a pre-existing degenerative back condition.  Liability for this condition was accepted over five years ago. Subsequently, the member discharged to become an agricultural labourer and has had no further contact with us until he recently lodged this first ever request for incapacity payments.  He alleges that his current, severe back condition is linked to the aggravation five years ago.  Also that his currently incapacitating leg condition is a consequence of his back condition.  He presents only a GP certificate to support his assertions of incapacity.


In such circumstances, it is obvious that the connection between the accepted back injury, the current back complaint and the new leg complaint are critical to the case for incapacity payments.  However, judging the nexus between injury and the current (alleged) incapacity lies within the expertise of a medical specialist (i.e. orthopaedic surgeon, rheumatologist, etc.) not a GP.  In this example, the delegate should not make any determination about incapacity payments – even one purporting to be an 'interim' payment – unless or until an appropriate specialist confirms that incapacity for work is attributable to the compensable injury.


In another example, a person has an accepted claim for compensation for a knee injury which he sustained many years ago.  He is to have knee replacement surgery however he has stated that he has been incapacitated for several years.  He voluntarily left the work force to take care of his invalid wife and has been in receipt of Centrelink benefits.  In this case the person voluntarily left suitable employment as a courier driver to care for his invalid wife therefore he has not suffered a financial loss.  Any loss was caused by his decision to cease work to care for his wife.  The person is now due to have surgery to treat his accepted knee condition.  He was not a workforce participant or wage earner prior to the treatment so he has no monetary loss to compensate.


Each claim for arrears incapacity must be investigated and assessed on its own merits.  The question should therefore be, would the person have been incapacitated for work but for the effect of the accepted injury.  Some other issues you may wish to consider are:

  • when exactly did the claimant leave the workforce and for what reasons;
  • is there any contemporary medical evidence that the person was actually incapacitated for work at that time;
  • if in receipt of payments from Centrelink, what was/were the stated cause(s) of the incapacity for work according to Centrelink records;
  • is there any indication that the claimant might have earned, or might have been able to earn, an income during the period; and
  • why did the claimant not claim weekly compensation benefits at the time of his initial incapacity.


In cases such as these, a comprehensive medical review by a qualified specialist or occupational physician is recommended.   Retirements to prevent further injury

Occasionally, a person may contend that a decision to retire was taken on medical advice i.e. to pre-empt a future development of an incapacity for work, had he/she remained in the same work environment.  A voluntary retirement however reasonable in terms of halting the progress of a medical condition, nevertheless does not constitute incapacity for work.


Whilst an AAT decision is not binding on other decisions, delegates can be guided by their deliberations and in ‘Re Cobern and Comcare’ the Tribunal said:


“18 In my view the evidence that I have referred to clearly establishes that, at the time of his retirement, the applicant was neither incapacitated from engaging in any work at all, nor incapacitated from engaging at work at ASO5 level.  He was approaching the point where he would become so incapacitated.  It was reasonable, even wise, for him to retire early before his psychiatric condition deteriorated to such an extent that he reached that point.  But he was still fit for work at ASO5 level when he retired and therefore was not then incapacitated for the purposes of the Act.  It may be that the Act has operated unfairly in this case, given the prudence of the applicant’s decision to retire before irretrievable psychiatric damage occurred, but I have no discretion in this matter.”


Naturally, this decision does not effect cases where an actual compensable injury spontaneously deteriorates or is aggravated after retirement, thus causing incapacity.  The ‘Cobern’ case establishes only, that incapacity must be directly caused by an actual injury and a voluntary cessation of work, taken with a view to preventing or limiting future injury, does not of itself constitute incapacity for work.