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20.28.2 Investigation of Redemption Issues

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Compensation Delegates are to investigate the possibility of redemptions where weekly payments are under the prescribed redemption ceiling. This should include advising 'former employees' if they have a Section 137 entitlement and advising them of their right to request the payment of the redemption lump sum. 'Former employees' should also be advised that payment of a lump sum may affect any entitlement they may have to the benefits which are available from Centrelink. They should therefore be advised to seek information from Centrelink or other DVA areas administering VEA benefits before requesting a lump sum redemption under Section 137 of the SRCA.

In assessing whether the employee has an entitlement to a lump sum redemption, Delegates should obtain/investigate/consider the following issues:

  • whether the degree of incapacity is likely to increase, thereby reducing the amount the employee is able to earn and resulting in the employee's weekly compensation benefits increasing to more than the prescribed redemption ceiling
  • whether the degree of incapacity is likely to decrease, thereby increasing the amount the employee may be able to earn and resulting in a reduction or cessation of the weekly compensation benefit
  • the length of time which the employee has been receiving the same level of weekly payments which could provide an indication as to whether the degree of incapacity is relatively stable. A period of stability of less than 6 months would generally indicate that a redemption would not be appropriate
  • any historical record of intermittent periods of incapacity which suggests that the level of incapacity may change
  • an assessment of the goals (or proposed outcomes) of any rehabilitation plan the employee may be undertaking and particularly whether any potential change in level of incapacity is likely once the rehabilitation program is completed
  • if no rehabilitation plan is currently underway a Section 36 assessment should be considered to determine whether the employee is capable of undertaking a rehabilitation program with the aim of reducing the level of incapacity and subsequent effect on the employee's ability to earn
  • contemporary medical evidence as to whether the level of incapacity is likely to change
  • if the period of incapacity is within the first 45 weeks then no redemption should be calculated because the level of incapacity is likely to change, and
  • if the employee is still serving, then no redemption should be calculated since the level of incapacity can be considered to be likely to change.