33.3.1 Overview

In the definition of 'incapacity' in S4(9), there is no indication that a total absence from work (paragraph (a)) or a reduced capacity while at work (paragraph (b)) should be treated any differently. Accordingly, when determining an entitlement to compensation under S19, S19(2) and (3) of the Act should be interpreted as read. That is, the appropriate percentage of normal weekly earnings less the amount the employee is able to earn will equal the compensation payable to the employee (or will be the 'AC' component of a calculation performed under Ss20, 21 or 21A) for a given week.

When a week should commence is not defined by the Act and is therefore open to interpretation. As a matter of policy, a week should be considered to be:

'A period of seven consecutive days commencing on the first day the period of incapacity commences.'

Once the commencement of a week has been determined, the week should remain constant for that episode of incapacity.

The Incapacity Calculator establishes a weekly entitlement and can calculate a pro-rata amount for payment of arrears. This can only be achieved when the input data is the same for the entire period.

If there is a change to some of the input data during a week then two (or more) weekly rates should be calculated and applied pro-rata to give a weekly figure. Circumstances which may cause a change in input data are discussed above.

If a client has an ability to earn in a week (i.e. is only incapacitated for part of a week), there is potential for an incorrect result to be obtained unless the part week date range has been entered. into the Incapacity Calculator.

To ensure the entitlement for a part week is calculated correctly, the assessment date range must be entered equal to the part week (i.e. 2 days) but the remaining data (i.e. AE) must be entered for the whole week. The Calculator will not pro-rata the weekly entitlement for a part week unless the assessment date range is also equal to a part week. The calculation of a part week is only applicable to finite of incapacity.

To satisfy the legislative formula (NWE – AE), the whole period of a week(s) must be assessed when considering the NWE and AE of the client even though the client may have been incapacitated for less than one whole week. This can be achieved by:

• conducting one assessment using the part week as the assessment date range but the AE and NWE for the whole week;
• conducting two assessments, where the first uses a date range spanning the whole week/s and the second uses a date range spanning a part week (but uses the AE and NWE for the whole week); 
• conducting two or more assessments using consecutive date ranges that span a complete week or weeks (for an indefinite incapacity period).

The following examples illustrate the use of date ranges to assess a full week or weeks where changes to a client's circumstances have occurred.

Example 1 – client incapacitated for 1 day

Client is incapacitated for one day on Thursday 9 May 2013.

Client is within the first 45 weeks.

Client has no superannuation.

Client is a current employee.

For this calculation the period of assessment needs to be one day but the client's AE figure is based on the whole week ('a period of seven consecutive days commencing on the first day the period of incapacity begins').

Section 19(2):

Compensation Payable = NWE – AE

$1000.00 – $600.00 = $400.00

The rate of $400.00 applies for 1 day

1/5 x $400.00 = $80.00

Total compensation payable = $80.00

Example 2 – client incapacitated for 8 days

Client is incapacitated for a period of one week and one day from Monday, 6 May 2013 to Monday 13 May 2013.

Client is within the first 45 weeks.

Client has no superannuation.

Client is a current employee.

This period of incapacity requires two calculations which together span the full period of incapacity. As in the example above the AE figure is based on the client's earnings for the whole week.  

Section 19(2):

Calculation 1 (6-12/5/13)

Compensation Payable = NWE – AE

$1000.00 – 'Nil'  = $1000.00

Calculation 2 (13/5/13)

Compensation Payable = NWE – AE

$1000.00 – $600.00 = $400.00

The rate of $400.00 applies for 1 day

1/5 x $400.00 = $80.00

Total compensation payable is $1000.00 + $80.00 = $1080.00

Example 3 – client indefinitely incapacitated

Client is certified unfit for work indefinitely from Monday 6 May 2013.

Client is to commence on a new ongoing pay rate on the period commencing Thursday 23 May 2013.  

Client is within the first 45 weeks.

Client has no superannuation.

Client is a current employee.

In this calculation the beginning of the period being assessed is the first day of the incapacity (we can consider that the week for incapacity purposes has commenced on that day). The end day of the period being assessed is the cut off date prior to the client going on to a new ongoing rate. As the client will be paid on a new ongoing amount from that date, the remainder of the last week (Thursday to Sunday) is included in the new ongoing amount. The ongoing weekly amount is presented in the incapacity report as the 'Weekly Rate'. The arrears payable will be presented in the incapacity report as 'Total Entitlement'. Again the important thing to remember is that the whole week or weeks during which the client is incapacitated has been assessed.

Section 19(2):

Calculation 1 (6-22/5/97)

Compensation Payable = NWE – AE

$1000.00 – 'Nil' = $1000.00

As no 'input data' has changed during the period, the compensation payable can be used as a weekly rate and simply multiplied by 2.6 weeks.

 2.6 x $1000.00 = $2600.00

Calculation 2 (New Basic)

New Ongoing Pay Rate = 2 times the weekly rate

2 x $1100.00 = $2200.00

Example 4 – client reaches 45 weeks of incapacity

Client is incapacitated from Thursday 20 June 2013 to Wednesday 3 July 2013.

Client's first 45 weeks expire on Tuesday 26 June 2013.

The Wage Price Index of 3.5% is applied to the NWE from 1 July 2013.

Client has no superannuation.

Client is a current employee.

For this calculation you will need to work out three 'weekly rates' payable for the period, as 'input data' changes during the overall period. The rates will need to be pro-rated to give the amount of the total entitlement payable for the overall period.

Calculation 1 (20-24/6/13)

Section 19(2):

Compensation Payable = NWE – AE

$1000.00 – $0.00  = $1000.00

The rate of $1000.00 applies for 3 days:

3/5 x $1000.00 = $600.00

Calculation 2 (25 -30/6/13)

Section 19(3)(a):

Compensation Payable = 75% of NWE – AE

75% of $1000.00– $0.00  = $750.00

The rate of $750.00 applies for 4 days:

4/5 x $750.00 = $600.00

Calculation 3 (1 - 3/7/13)

Section 19(3)(a)

Compensation Payable = 75% of NWE – AE

75% of $1035.00 – $0.00 = $776.25

The rate of $776.25 applies for 3 days:

3/5 x $776.25 = $465.75

Total Compensation payable is $600.00 + $600.00 + $465.75 = $1,665.75

References

Payments During 'Maximum Rate Compensation Weeks' – S19(2),(2A): Chapter 33

• JPA 2001/14 : Definition of 'Week' for the purposes of Ss19(2)
• Comcare Operations Manual vol.10, pt.3 : Calculation of 45 weeks
• Comcare Operations Manual vol.10, pt 8 : Leave entitlements and the 45 weeks