30.4.8 1971 Act - client was incapacitated but had received S39 lump sum

Section 45(9) of the 1971 Act says:

45(9) Subject to s — e — ctions 47 and 50, where a determination is made that an amount of compensation is payable to the employee under Section 3 — 9 in respect of an injury that resulted in a loss referred to in that section or a determination is made that the liability of the Commonwealth to make further payments to the employee under Section 46 in respect of an injury is to be redeemed, compensation is not payable to the employee under this section in respect of a period of incapacity for work resulting from that injury, being a period occurring after the date of the making of the determination.

The above provision at 45(9) is also repeated virtually word-for-word (with the omission only of the reference 'subject to... S50'), at S46(5).

• S45 relates to clients who are wholly incapacitated.
• S46 relates to clients who are partly incapacitated.

Therefore, in practice the provision at S45(9) and S46(5) applies to all persons incapacitated for a period during the 1971 Act.

Meaning of Ss45(9) and 46(5)

The above subsections of the 1971 Act provide that where a client has received a lump sum for permanent impairment under S39 of the 1971 Act, incapacity payments may not be made in respect to any period after the date of that S39 determination.

• These subsections also prevent incapacity payments after the date of a redemption of entitlement.

Exceptions to Ss45(9) and 46(5)

Incapacity payments may only be made to those clients who have received a S39 permanent impairment lump sum in cases where:

• S47 applies, i.e. the client's period of incapacity under the 1971 Act is in relation to his/her receipt of treatment for the compensable injury.
• S50 applies, i.e. the client's incapacity has become total and permanent (in which case the entitlement is reduced by a formula to account for the lump sum).

Ss45(9) and 46(5) do not relate to periods after 1 December 1988

Note that Ss45(9) and 46(5) are subsections of a repealed Act, and currently only have force through the action of the SRCA's transitional provisions under Part X of that Act. In particular, S124 provides that the amount payable in respect to a period of incapacity which occurred prior to the SRCA's commencement, is that which would have been payable if the old Act in force at that time had not been repealed.

However this 'transitional' provision does not apply to incapacity which occurs after 1 December 1988 (i.e. regardless of when the injury occurred). Those periods of incapacity that occurred under the SRCA, are to be determined only by the SRCA provisions. Furthermore, and unlike the 1971 Act, the SRCA does not cease liability to pay incapacity compensation following a permanent impairment lump sum. Thus, the above subsections do not bar weekly incapacity payments for clients who:

• previously accepted lump sums under S39 of the 1971 Act, but
• the period of incapacity follows 1/12/88, i.e. the commencement of the SRCA.

S50 of 1971Act – payments but at reduced rate for TPI clients following lump sum

Section 50 of the 1971 Act provides an exception to the general rule, that compensation is not payable for pre-1988 incapacity, following a S39 lump sum for permanent impairment.

S50 provides that where:

• the client has received a lump sum under S39 of the 1971 Act, but
• following receipt of that permanent impairment lump sum, becomes totally incapacitated 'indefinitely' (i.e. totally and permanently incapacitated for all work).

Compensation is payable in respect of that enduring incapacity, from the date of its permanence up to the date of the commencement of the SRCA and is to be calculated:

Where:

a =the amount of the S39 lump sum.

b =the sum of all S46 incapacity payments which would have been payable between the date of the S39 determination and the date of this S50 determination i.e. the total of the weekly amounts which would otherwise be payable if the lump sum had not been determined.

c =the clients remaining expectation of life, in years (from date of S50 determination).

Note that the expression 'totally and permanently incapacitated' which is frequently used by some delegates in this and similar contexts, is not an expression recognised by the 1971 Act. The grant of a Special Rate pension under the Veterans Entitlement Act 1986 (i.e. for qualifying as 'TPI' for the purposes of that Act) does not automatically grant an equivalent status as 'totally incapacitated for all work' and 'indefinitely', under the 1971 Act. Delegates are expected to judge the applicability of S50 on the merits of the cases presented, and not employ tests and assumptions that are applicable to other unrelated legislation.