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20.28.1 Redemptions

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Sections 30 and 137 of the SRCA 1988 allow for a determination to be made redeeming further weekly incapacity payments by way of a lump sum. The intention of the redemption provisions is to reduce the cost to the Commonwealth of administering small weekly payments and to provide the injured employee with the benefit of access to a lump sum rather than a relatively small weekly benefit.

A redemption has the effect of 'buying out' liability to make future weekly compensation payments. It does not affect liability to pay any other compensation benefits under the SRCA or under the Defence Act 1903 (e.g. 'Severe Injury Adjustment' and 'Additional Death Benefit').

The delegation for Section 30 and 137 redemptions is held at the APS6 level.

Subsection 30 (1) of the SRCA requires that a determination shall be made redeeming further weekly payments by the payment of a lump sum, where there is liability to make weekly compensation payments under Section 19, 20, 21 or 21A if the Delegate is satisfied that the employee's degree of incapacity is unlikely to change i.e. will not deteriorate or improve. Redemption's are only to be calculated after the first 45 weeks of incapacity. Any weekly compensation benefits for 'partial' incapacity for duty which might be payable to serving members (for example, for loss of salary caused by a medically necessitated redeployment) are NOT to be redeemed since their level of incapacity for duty can be considered to be likely to change in the future.

Subsection 137(1) of the SRCA requires that a determination must, on written request by a 'former employee', be made redeeming further weekly payments by the payment of a lump sum, where there is liability to make weekly payments if the Delegate is satisfied that the employee's degree of incapacity for work is unlikely to change (i.e. will not deteriorate or improve).

* This redemption 'ceiling' amount is adjusted annually with effect from 1 July in accordance with Section 13 of the SRCA. Adjusted rates are published in
CLIK.

The redemption amount should be calculated using the Incapacity Calculator and selecting reason for assessment as 'Redemption'.

A lump sum payment under Section 30 is mandatory once the criteria of Section 30 (1)(a), (b) and (c) are met. A lump sum payment under Section 137 is made once the criteria of Section 137 (1) (a), (b) and (c) are met AND after a written request for the redemption is made by the former employee. There are also some differences in the treatment of taxation, which are discussed later.