12.7.8 Permanent Impairment Compensation Threshold

Last amended: 12 December 2014

Section 69 of the MRCA requires that a claimant is not eligible for PI compensation unless the claimant’s initial total impairment rating constitutes 10 impairment points. Where additional compensation is claimed, section 71 requires an increase in the overall impairment rating of at least 5 points for additional PI compensation to be payable.  In either case, impairment points from more than one accepted condition can be combined to meet the relevant impairment point requirement, including impairment points resulting from VEA and/or DRCA conditions which were accepted at the time of the client’s MRCA PI claim. See the following table:

Note:  ‘Below threshold’ includes zero MRCA impairment points.

The methodology for calculating the amount of PI payable in Chapter 25 of GARP requires an additional threshold to be met which does not allow points from VEA/DRCA conditions to be taken into account.

Although a client may meet the relevant threshold for eligibility for PI (and other entitlements as noted in Chapter 12.7.2) under the MRCA based on the inclusion of VEA and/or DRCA conditions in the impairment points, the additional threshold requirement in step 2 of the methodology for calculating the amount payable under Chapter 25 of GARP, may mean that no PI is payable. Please see the Compensation Claims Procedures manual for more information.  For PI to be payable step 2 requires the new MRCA condition/s alone to contribute at least 5 impairment points to the whole person impairment (WPI).

The following calculations are required to determine whether the requirements of step 2 are met:

Initial PI claim (section 68 claim)

Where the PI claim is being determined in response to a client’s first PI claim the calculation is very simple.  The contribution of the MRCA condition/s in such cases equals the number of MRCA impairment points determined in the assessment of that first claim.

Reassessment PI claim (section 71 claim)

Where the PI claim is being determined in response to a subsequent claim the calculation is as follows:

Total number of impairment points under the MRCA following the new assessment LESS

the total number of impairment points under the MRCA following the previous assessment.

This additional threshold means that for compensation to be payable in transitional reassessment claims, an increase in 5 points must be met by all conditions (MRCA, DRCA and VEA) under section 71, alongside an increase in 5 points from MRCA conditions only, as required by GARP M.

Example

John Smith makes his first MRCA claim in July 2013.  Following that claim he is determined as having 25 MRCA impairment points.  He also has VEA and DRCA conditions which together with his MRCA conditions result in an overall impairment rating under the MRCA of 55 points.

For the purpose of determining whether he meets step 2 of the methodology the number of points that his MRCA conditions are contributing to the overall impairment rating are his total number of MRCA points – that is, 25 points.

He makes a second MRCA claim in September 2013.  As a result of that claim he now has 36 MRCA points and his overall impairment rating has increased to 77 (one of his non-MRCA conditions has worsened).  The contribution of his MRCA conditions to the overall impairment rating from this second claim is calculated as follows:

36 MRCA points from current assessment LESS 25 MRCA points following the previous assessment.

His MRCA contribution to the overall impairment rating is now 11 points.

Mr Smith is eligible to be paid additional compensation as his overall impairment rating has increased by at least 5 points (from 55 to 77), and his MRCA condition have also contributed at least 5 additional impairment points (11 points).

He makes a third MRCA claim in January 2014.  Following this claim he has 48 MRCA points and his overall impairment rating is now 80.  The contribution of his MRCA conditions to the overall impairment rating from this third claim is calculated as follows:

48 MRCA points from current assessment LESS 36 MRCA points following the previous assessment.

His MRCA contribution to the overall impairment rating is now 12 points.  

Whilst Mr Smith's MRCA conditions have contributed an additional 5 impairment points, his overall impairment (from 77 to 80 points) has not increased by at least 5 impairment points. In this instance, Mr Smith is not entitled to be paid additional compensation and his claim should be disallowed.