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30.4.1 The 1971 Act - General Summary


Part 11.7 contains an index to the 1971 Act's provisions about payments for incapacity, including those subsections that prescribe how the amount payable is to be calculated.

However in summary:

  • The 1971 Act distinguishes between total (S45) and partial (S46) incapacity.
  • Note: 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 client who has received a lump sum under S39 of the 1971 Act. (See below).
  • 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 client, 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.
  • If the client receives a superannuation pension, the compensation payable is:
    (AWE – pension).
  • However the client funded portion of the pension (notionally 20%) is excluded from this equation. This deduction is made once-only and is not to be repeated at each adjustment for pension rate increases.
  • 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.
  • Ref S45(9) and S46(5) of the 1971 Act for the form of this prohibition.
  • Ref S47 of the 1971 Act for an exception to the above, i.e. where the 'incapacity' is only to allow the client to undergo medical treatment.
  • Ref S50 of the 1971 Act for the only other exception, i.e. where the client becomes totally incapacitated 'indefinitely' (i.e. permanently) and (note) 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.