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44.5 Amount of Weekly Compensation - Age 65
The amount of weekly compensation that the client received immediately before turning Age Pension Age is relevant to the operation of s 134, which freezes the weekly compensation entitlements of former employees (at a reduced rate) when they turn Age Pension Age.
The frozen weekly rate of compensation under s 134 applies only to former employees. Non-former employees (current employees) have no entitlement to weekly incapacity compensation after Age Pension Age by operation of s 23(1).
A formula set out in s 134(1) reduces the amount of compensation payable to former employees, when the former employee turns Age Pension Age, by 5% for each year since the commencement of the SRC Act on 1 December 1988. This formula ensures that, after 2008, former employees will not receive compensation once they turn Age Pension Age, and will be in the same position as those who were injured after 1 December 1988. Former employees who turn Age Pension Age before 2008 continue to receive the appropriate reduced rate of compensation until their incapacity ceases or until their death.
Section 134(1) states:
134(1) When a former employee to whom section 131, 132 or 132A applies reaches Age Pension Age, the amount of compensation payable per week to the former employee but for this section shall be reduced by an amount calculated under the formula:
5 x (65 - A) X C
A is the age of the former employee, expressed in completed years, as at the commencing day; and
C is that amount of compensation payable per week to the former employee.
The definition of "C" is the source of this question in the Incapacity Calculator. Note that "C" is the amount of weekly compensation payable on the day that the former employee turns Age Pension Age.
A new s 134(2), which was inserted into the SRC Act by the Industrial Relations and other Legislation Amendment Act 1995 with effect from 15 January 1996, makes it clear that the reduced rate of weekly compensation paid under s134(1) remains frozen. Neither s 8 (normal weekly earnings) nor s 13 (CPI indexation of compensation benefits) apply to the reduced amount of compensation calculated in accordance with s 134.
- Comcare Operations Manual vol 14, pt 2 : Incapacity - transitional cases