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7.2.1 Payments for NEL - Schlenert
Under the 1971 Act and the 1930 Act, compensation was paid for the physical effect of certain impairments (maims) however there was no entitlement to compensation for non-economic loss (NEL) such as pain, suffering, effect on social relationships, etc.
Accordingly, in the early days of the 1988 Act, when a pre-1/12/1988 impairment was compensated for permanent impairment, a payment was made under S24 (calculated on the basis of the 1971/1930 entitlement) but no payment was made under S27 for NEL.
In Schlenert v Australian and Overseas Telecommunications Corporation (1994), the Full Federal Court held that an impairment which became permanent under the 1971 Act or the 1930 Act must be compensated both under S24 for the physical effect of the impairment (with the quantum calculated under the previous Acts) and under S27 for non-economic loss (NEL). The decision was based on a particular statutory interpretation of Ss24, 27 and 124 of the 1988 Act by the Court and resulted in pre-1/12/1988 clients receiving NEL compensation even though NEL was not compensated under the 1971 or 1930 Acts.
The Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 introduced a new subsectin 27(3), which effectively reversed the Schlenert decision, stating that no entitlement to a NEL payment for pre-1/12/1988 impairment arises where the claim for NEL was made on or after 7 December 2000.
Therefore, from 1 October 2001, NEL amounts are excluded from 1971 Act or 1930 Act impairments where the application is made on or after 7 December 2000 as a result of legislative amendments discussed below.