Section 17 commences: '17(1) This section applies where an injury to an employee results in death...', and Section 17 is in fact the main source of entitlements for a work related death.

Note that the Section 17 entitlement relates to 'an injury' which results in death. As defined by Section 4, 'an injury' means a compensable condition, i.e. one that arose out of or in the course of Commonwealth employment or a disease to which that employment had made a material contribution (or, for a disease with a deemed date of injury on or after 13 April 2007, to which that employment had made a significant contribution). The required nexus between employment and death, is therefore exactly the same as that which applies in all other initial liability cases.

The words 'injury' and 'results in' should not be taken to mean that the section relates only to physical injuries which only prove fatal at a later time. Section 17 in fact applies to all deaths, i.e. whether the death was the end-result of a long disease process, the short-term consequence of severe injuries or from an instantaneous accidental death etc.

Section 17 death benefits represent compensation specifically for the death and are payable only to specified 'dependant(s)' or a dependant's guardian. The purpose of these payments is to recompense specified persons formerly financially dependent upon the deceased, notionally for the loss of that economic support. Note that it is the dependant who is entitled, not the deceased employee. S17 monies do not form part of the deceased's estate.

However, for clarification, on the rare occasion when a dependant dies soon after the death of the deceased employee, should a dependant who is entitled to S17 benefits die prior to their claim being submitted it is permissible under S55 and S111 for a claim to be submitted after the dependant's death by their representative or executor on behalf of the dependant's estate. See also http://clik.dva.gov.au/military-compensation-srca-manuals-and-resources-library/liability-handbook/ch-6-claims-compensation/64-claims-made-after-death-claimant

Section 17 provides for:

• A lump sum

Subsection — s 17(3) and (4) prescribe the maximum $ amount which applies. However that amount is updated annually (on 1 July) in line with the Wage P — rice I — ndex, pursuant to Section 13 (which provides for the update of all SRCA rates).

• Compensation payable to a 'prescribed child' up to age 16 (or 25 if full-time student)

The quantum of this weekly payment is (as for the lump sum, above) updated annually on 1 July. The meaning of 'prescribed child' is defined by S4 and discussed at 1.18.  The review and cessation of this weekly payment is discussed at 4.11.

The only other SRCA benefits specific to Death are provided by S16 and S18 (reimbursement of medical expenses and compensation for funeral expenses respectively). However these represent reimbursements of costs associated with the death, rather than as compensation for loss of the deceased's financial support. Reimbursements under S16 and 18 may be paid to persons other than a dependant (i.e. it is to be paid to whoever actually bore the expense).

Rates payable under the SRCA

All current SRCA rates are in CLIK and can be accessed via the following link     

The Additional Death Benefit ('ADB') was initiated by the 'Inquiry into Military Compensation arrangements for the Australian Defence Force' in 1997.  The ADB is provided through Defence Determination 2009/70 under the Defence Act 1903 and not by the SRCA. However, Military, Rehabilitation and Compensation Commission (MRCC) delegates have also been formally declared as Defence delegates for the purposes of the Determination.

The ADB applies only to those compensable deaths that occurred after 10 June 1997. It is a supplementary benefit and is only payable where money is also payable under S17 of the SRCA.

The ADB provides:

• An additional lump sum (i.e. supplementary to that provided under the SRCA)

This supplementary lump sum has two components. The first is a lump sum which is paid to the spouse of the deceased member, while the second is a lump sum payable for each dependent child.  Both lump sums are indexed annually.

Where the dependent child is under 18, both of these Defence Act lump sum components are payable to the deceased member's 'spouse' (unless the spouse does not have primary responsibility for the care of the child). If a dependent child is 18 or over, the dependent child ADB is payable to that child.  If there are dependent children but no spouse, only the Defence Act's 'child's portion' is payable. Where in such a case a child is under 18 the 'child's portion' is paid directly to the child's guardian for the immediate use for the child's welfare or alternatively paid to the child itself (if a student over 18).

If there is neither spouse nor dependent children, the ADB is not payable This is the case even if the S17 SRCA lump sum is payable to some other category of dependant.

There is no time limit in which the Defence Act Additional Death Benefit can be claimed by an eligible person, nor is there a one-off election or choice in relation to this entitlement. 

• Changes to SRCA death compensation arrangements from 13 May 2008

The Employment and Workplace Relations Act 2009, which received Royal Assent on 3 June 2009, increased the amount of SRCA dependant payments for deaths occurring on or after 13 May 2008 and changed the method for indexing these payments.

As a result, the total lump sums payable under section 17 of the SRCA were increased.

Periodic payments to the children of deceased members and former members were also increased.

Example calculation of Spouse benefits for death occurring prior to 13 May 2008 (no dependent children).

Spouse receives:

$219,023.62 (maximum s17 payment as at 1 July 2007)

plus

$263,184.20 (ADB as at 1 July 2007) minus $219,023.62 (maximum s17 payment as at 1 July 2007) = $44,160.58

=

$219,023.62 (s17 of SRCA) + $44,160.58 (ADB) = $263,184.20

• Changes to the ADB payment arrangements with effect from 13 May 2008

In November 2009, a subsequent Businessline (TRIM reference 09210765E) was issued in response to Defence Determination 2009/70, which changed the amount of ADB compensation under the Defence Act.  The changes were necessary due to the fact that the increased death benefits from 13 May 2008 (as per section 17 of the SRCA) exceeded the maximum ADB amount payable under the Defence Act.

The effect of Determination 2009/70 was that ADB payments would be made as fixed lump sum amounts in addition to the SRCA payment, rather than the previous arrangement of paying the difference between the SRCA amount and the ADB amount.

Example calculation of Spouse benefits for death occurring after 1 July 2009 (no dependent children).

Spouse receives:

$429,304 (maximum s17 payment as at 1 July 2009)

plus

$47,395.78 (ADB as at 1 July 2009)

=

$476,699.78

Any dependent child would recieve a proportion of the lump sum under section 17 of the SRCA (this may be a zero share), a periodic payment and the ADB dependent child lump sum.

• Reimbursement of costs of obtaining financial advice regarding investment of ADB

The purpose of this provision is to facilitate the spouse/guardian's access to professional financial adviser(s) regarding the investment of the lump sum.

These costs can be reimbursed up to a maximum figure, which is indexed on 1 July each year.

• Access by any 'dependent children' to the Veterans' Children Education Scheme (VCES)

This is a service established under the Veterans' Entitlements Act 1986 (VEA) and administered/funded by DVA. Guidance and counselling services within the VCES are available by way of a determination made under subsection 118(2) of the VEA. However, the funding of educational services is not part of the assistance.

The Death benefits payable under both the SRCA and the Defence Act are indexed annually, whereas. the r — ates of death benefit — s payable in respect of deaths under former Acts are not indexed (t — hey cannot be indexed as the Acts are now repealed.)

The date of the death of the member or former member therefore determines the maximum amount which is payable, irrespective of when the claim was determined.

The same principle applies to case — s of protracted illness leading to death – that the critical date for determination of a death benefit under S17 is the date of death itself. As mentioned in sub — section 1.2, the ADB is only payable in cases where the death occurred after 10 June 1997.

For example:

Suppose a client had contact with asbestos during service under the 1930 Act, was diagnosed with asbestos related lung disease in 1987 (under the 1971 Act), liability was admitted in 1989 (under the SRCA), there was eventual emergence of mesothelioma in 1996 and death from that disease in March 1998. There is then no claim by the family for the death until 2002. This client's dependant(s), at the date of death, are entitled to be paid for his death at those rates current in March 1998 under S17 of the SRCA. Neither Schedule 1 of the 1930 Act nor S43 of the 1971 Act are relevant to the death. In addition, as the death had occurred after 10 June 1997, the ADB would also be payable.

Section 111 of the SRCA provides that where an amount of compensation for injury or disease has been assessed and determined but not paid prior to the death (for instance, a permanent impairment lump sum, a back-payment of incapacity benefits or treatment costs, etc) this entitlement is not cancelled by the death. The money must still be paid and forms part of the estate of that deceased person.

Delegates should pay any amounts of compensation still outstanding (i.e. for the injury or disease only) to the client's designated executor or legally appointed administrator of the estate and not to any other person including dependants (unless they are the executor or administrator of the estate) and those purporting to have a claim on the deceased's estate.

If there is outstanding compensation for injury or disease owing to a person who dies intestate and there is no other person entitled to claim the deceased's estate, the money would be repaid to the Commonwealth. Alternatively, a delegate may reverse the original determination that compensation was payable, by means of a 'reconsideration on own motion' under S62 of the SRCA.

Sub-section 55(1) provides that:

“Where a person who is entitled to make a claim for compensation under this Act dies without making a claim, a claim may be made by the person's personal representative.”

In this context, the reference to a claim for compensation can be read as either a claim for a particular benefit or a claim for 'initial liability' leading to claims for various forms of compensation.  These claims may relate to the injury that caused the death or to another service-related injury.

T — he deceased may have been entitled to but not have claimed compensation for medical expenses, incapacity or permanent impairment payments.  For details of how to manage such claims, refer to the Medical Treatment, Incapacity and Permanent Impairment Handbooks

Sub-section 55(2) provides that:

“A claim is not affected by the death of the claimant after the claim was served.”

Thus, a claim that has been submitted before a person's death is still to be processed.  The person's death does not negate the claim.

Whether the claim is made by the person's legal representative following the death or is still to be determined after the death, to the extent possible, the claim should be handled in a similar fashion to other claims.  There may of course be complications arising because the claimant is no longer alive e.g. it is no longer possible for the claimant to attend a medical examination.  However, every effort should be made to reach a decision on the basis of the information available.

If it is not possible to do so, for example because the medical specialist does not have sufficient information about the injury to provide information necessary to make a determination, the claim will need to be rejected.

Where the claim is accepted, section 111 applies – see 1.4 for further information.

Section 18 provides that in cases of a compensable death, the Commonwealth is liable to pay or contribute to the cost of the funeral.

The amount payable is, '..as Comcare considers reasonable..' but up to a maximum amount which is also indexed on 1 July each year.

Funeral costs are driven by the personal preferences – and the cultural or religious orientation – of the deceased employee's family. In practice, delegates should therefore avoid judging whether the costs of the funeral are 'reasonable' or not. The delegate's only action should be to pay 100% of the costs of any funeral where those costs are less than the maximum allowance, and pay only that maximum $ figure for any funeral which exceeded those limits.

The S18 reimbursement of funeral costs is paid 'to the person who paid the cost of the funeral or, if that cost has not been paid, to the person who carried out the funeral'. Thus, the S18 payment is made independently of any payment made under S17 and may be made to a different person, i.e. depending on who paid for the funeral. The S18 payment does not need to be incorporated into the same Determination as that which establishes the entitlements under S17. However, a determination that the deceased's accepted condition resulted in their death must be made before any funeral b — enefits can be paid.

The “Claim for compensation for Funeral expenses and/or Death Benefits for Dependants of deceased members and former members of the Australian Defence Force” form (D9182 in the forms section of the intranet and DVA internet site) is to be used for claiming funeral expenses.

What constitutes a 'funeral'?

"Funeral" is not defined in the Act. Therefore, any range of genuine memorialisation acitivies are compensable, provided that the Department is not paying more than the maximum amount across the actiivities or ceremonies in totality.

Multiple Claimants

A payment will generally be payable only once for each accepted death.  However, this payment can be split between multiple claimants if more than one person incurred a cost connected with the funeral, as long as the maximum payment is not exceeded.

Eligibility under more than one Act

Where a person has dual eligibility under the VEA and SRCA, there is nothing in the SRCA that precludes payment of a funeral benefit under both Acts.  However, subsection 18(2)(b) of the SRCA requires the delegate, in determining the amount payable, to have regard to the amount paid for the cost of the funeral under any other Commonwealth legislation.  This being the case, t — he delegate should reduce the amount payable for the funeral by the amount of VEA compensation paid, unless the cost of the funeral exceeds the statutory limit for compensation payable under s18 of the SRCA (in which case up to the maximum amount may be paid).

Subsection 15(5) of the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 states that if a person has dual eligibility for funeral benefit u — nder either the VEA or SRCA, as well as the MRCA, then the benefit is to be paid under the MRCA only.

Note that funerals of persons who were full time serving members at the time of death, are conducted at the ADF's expense. This is a condition of service and delegates should not be involved in making a determination under S18 in those cases.

Subsection 16(9)(b) allows reimbursement of the costs of transport of the body of an employee who died in compensable circumstances to 'a hospital or suitable place, or a mortuary'.

Generally, this subsection should be interpreted liberally. There may be more than one journey involved prior to delivery to an undertaker for the funeral/burial. Delegates should approve payment for any reasonable sequence of moves.

Deaths overseas

Since WW2, the bodies of serving ADF members who died whilst serving overseas have been repatriated to Australia by the ADF at the ADF's expense. This is not expected to change.

However Subsection 16(9)(b) has been used at least once in the past, to assist the relatives of a client to repatriate the body of a discharged ADF member who died of a compensable disease whilst overseas on holiday. This precedent can be followed in the very rare instances in which it may recur, however it should not be applied to the cases of clients who were in fact permanent or long term residents overseas. Nor should proposals involving exhumations of existing overseas burials be contemplated.

This item refers to actual DEATHS which OCCURRED DURING the currency of the 1971 Act.

On the rare occasions that a claim for a death before 1988 is received, the provisions of the 1971 Act are (except for the $ amounts payable) very similar to those of the SRCA:

• Section 43 of the 1971 Act is the analogue of S17 of the SRCA and provides compensation for the death in similar terms;
• lump sum compensation [S43(3)(a)] is payable only where there are 'dependants' [S43(2)] who were also 'dependent' on the deceased for economic support all of which is defined [S5(1)] in terms identical to those used in S17 of the SRCA;
• there is a similar distinction between dependants who are wholly and those partly dependent [S43(3) and 43(4)]. Those wholly dependent are the principle beneficiaries [S43(3)(a)] but those partly dependent may, at the delegates discretion, share in the lump sum according to their losses in those cases where there are none wholly dependent [S43(4)(a)];
• children who were wholly or partly dependent receive weekly compensation
  
  [S43(5) to 43(8)];
• if the child's payments cease before the total amount paid is less than a certain specified amount, the child is paid a small lump sum to top-up the total benefit to that specified level;
• Medical costs associated with the fatal injury are payable under S37 of the 1971 Act and may be made to the person incurring the costs or the provider;
• Funeral costs are payable under S44 of the 1971 Act and may be paid to the person incurring the cost or the provider.

The 1971 Act has of course been repealed but S124 of the SRCA requires that the deaths that occurred during its currency continue to be governed by its provisions. While the 1971 Act was current, it updated the maximum amounts payable in respect of death etc. annually, in line with the consumer price index. However the 1971 Act benefits have not been capable of update since that Act was repealed in 1988.

Late claims for those deaths that occurred during the currency of the SRCA are of course paid the SRCA benefit which applied in the year in which the death occurred.

However for 1971 Act deaths claimed under the SRCA, the current policy is to pay all such claims at the last rate declared under the 1971 Act (i.e. the rate current on 30 November 1988), regardless of the year of death.

This means that all 'late' 1971 Act deaths are now paid at the same maximum rate i.e.

Details of how these or some lesser amounts are to be determined and divided between those entitled, are set out at Chapter 5 of this Handbook.

This item refers to actual DEATHS which OCCURRED DURING the currency of the 1930 Act rather than injurious events or initiation of diseases which eventually resulted in death during the currency of a later Act.

On the very rare occasions that a claim is received, the 1930 Act provided benefits in respect of accidental injuries (S9), 'travel' injuries (S9A) and diseases (S10) as set out in 'The First Schedule' to that Act.

This 'First Schedule' provided for deaths (as a special subset of 'injuries') as follows:

• In the case where there are 'wholly dependent' dependants, a lump sum of $12,000.
• In the case where there are no wholly dependent persons but there are partly dependent dependants, a lesser lump sum of an amount at the delegate's discretion, upon consideration of what is 'reasonable' and 'proportionate to the loss' but not to exceed $12,000.
• A weekly payment to each dependant child, of $2.80 per week up to the age of 16.

Note that these amounts represent the final indexation of entitlement i.e. that amount which was current at the time of the repeal of the 1930 Act in September 1971. It is current policy to pay only the above amounts, i.e. most beneficial amount possible under that repealed Act, rather than the amount actually current at the time of a death i.e. if in a year prior to 1971.

S17(2) of the SRCA provides that:

'Subject to this section and Sections 16 and 18, if the employee dies without leaving dependants, compensation is not payable in respect of the injury'

• 'Subject to....Sections 16 and 18..' means that these sections are exempt from S17(2)'s requirement that payment not be made other than to a 'dependant'. Reimbursement of medical expenses associated with the death (S16) and reimbursement of funeral costs (S18) are of course payable directly to the person who incurred the costs or performed the service, and does not require existence of a dependant.

The definition of 'dependant' is discussed below at 1.11

• The scheme of the Act is to provide compensation for the notional, 'deemed' economic loss that the death represents to a defined 'dependant'. Persons who are either not defined 'dependants' and/or who wish to pursue compensation for emotional injury or for any non-economic inconveniences allegedly caused by the death, should be told to seek legal advice with respect to a legal action against the Commonwealth. (See 9.1 re: non-applicability of S44 in cases of Death.)

Section 4(1) defines 'dependant' as follows:

'Dependant' in relation to a deceased employee, means:

a)the spouse, parent, step-parent, father-in-law, mother-in-law, grandparent, child, stepchild, grandchild, sibling or half-sibling of the employee, or

b)a person in relation to whom the employee stood in the position of a parent or who stood in the position of a parent to the employee,

being a person who was wholly or partly dependent on the employee at the date of the employee's death.

And in respect to that last clause about a dependant necessarily being wholly or partly dependent on the employee:

'Dependent' means dependent for economic support.

In short, a dependant is an individual within a defined degree of kinship with the deceased, and who was also dependent (either wholly or partly) upon the deceased for financial support at the time of death.  That is, it is not sufficient for a person to have been in one of the relationships specified in the definition of 'dependant'.  In addition to being in one of those relationships, they must also have been wholly or partly dependent on the deceased for economic support on the date of death.

There is no provision for future dependency other than in those circumstances where there is an unborn child identified and accepted as belonging to the deceased employee.

Changes made to definition of' 'dependant' by Same-Sex Relationships (Equal Treatment in Commonwealth Laws-General Law Reform) Act 2008

This amending Act, which commenced on 10 December 2008, inserted definitions of the following terms into the SRCA, thereby changing the meaning of the term 'dependant':

• child and step-child (see 1.1 — 7);
• de facto partner (see 1.2 — 1.3);
• parent which is defined by reference to the definitions of 'child' as follows:

parent: without limiting who is a parent of a person for the purposes of this Act, someone is the parent of a person if the person is his or her child because of the definition of child in this section.

• step-parent which is defined as follows:

Step-parent: without limiting who is a step-parent of a person for the purposes of this Act, someone who is a de facto partner of a parent of the person is the step-parent of the person if he or she would be the person's step‑parent except that he or she is not legally married to the person's parent.

To the extent that t — he meanings of these terms have changed, they only apply to payments made under the SRCA on and from 10 December 2008, irrespective of when the death occurred and in respect of lump sum benefits only apply to deaths which occurred on or after that date.  See:1.21 in relation to dependent partners and 1.17 in relation to dependent children.

It will not be necessary for many of the persons listed as possible 'dependants' by Subsection 4(1) to actually demonstrate whole or partial dependency for economic support. That is because many dependants will be deemed to have been wholly depend — e — nt by virtue of their circumstances (s — ee 1.13). However, w — here the person is not deemed to be wholly dependent, they need to demonstrate either whole or partial dependency on the deceased for economic support.

In its simplest or basic form, economic support and maintenance would equate to the amount of financial assistance (money) needed to provide the necessities of life to the recipient.  The relevant amount would vary on the facts of the case because people have different standards of living.  A practical approach may be to consider the financial contribution provided consistently over a period of time towards the total cost of the dependant in maintaining the necessities of life at the standard of living enjoyed.  The simplest example is where a dependant relied on the deceased person for 100% of their economic support.  Whilst not determinative, this will be a persuasive indicator that the dependant was wholly dependent.

Economic considerations are one of many indicators of dependence, and will not constitute conclusive proof.  However, they may be taken into account to assist the decision-maker in obta — ining an overall vie — w of a claimant's circumstances and for determining the likelihood and degree of a claimant's dependence.

The fact that economic support and the extent of any such dependency is not something that can readily be codified was clearly enunciated by Chief Justice Barwick in Kauri Timber Co (Tas) Pty Ltd v Reeman 128 CLR 177, a High Court case, where he said:

"Somewhere between the extremes of the provision of bare necessities and the receipt by the wife of any advantage not provided by her husband there must be a line, no doubt vaguely defined and difficult of precise or even approximate definition or description, which marks off the difference between expenditure which denotes and expenditure which denies dependency."

The case of Kauri Timber Co is the authority that the dependent person may be independently employed but still qualify as wholly dependent, depending on how that income was used.  If independent income was not used for the dependant's own maintenance or support (ie it was disposable income or used merely to improve their quality of life), they are likely to remain wholly dependent.  The relevant question is whether or not the independent source of income made the dependant less than wholly dependent.  It is not relevant that the independent income could have lessened their dependence on the deceased person.

The importance of examining the facts of each case is emphasised by the following extract from the AAT decision in Lambroglou and Australian Telecommunications Commission [1989] AATA 713:

In attempting to determine for the purposes of this application whether the Applicant was a dependant and if so, whether she was wholly or partly dependent upon the deceased, no truer words have ever been spoken than were by Mason J in Aafjes v Kearney (1976) 8 ALR 455 at 463:

"As often happens in the field of workers' compensation where the questions are primarily questions of fact, the decisions are not notorious for their uniformity. Consequently it is not an illuminating experience to explore the cases in any detail."

Barwick CJ in Aafjes deals with the issue of dependency at page 456 by stating:

"... the question of dependence or no dependence, whole or partial, is a question of fact. It has been said to be so in many authorities by distinguished members of the House of Lords. It cannot be turned into a question of law by the citation of authorities."

In my view the numerous authorities dealing with the manner in which dependency is determined clearly demonstrate that a court or a tribunal should look at actual facts...”

Note that the economic link between two individuals must be in the nature of support and must be relied upon by the recipient. It is not sufficient that the deceased employee made sporadic gifts of money (or goods of value) that the recipient did not need for 'support' or were of such an irregular nature that the recipient could not rely on those gifts for continuous sustenance.

Subsection 4(5) of the SRCA says:

For the purposes of this Act, a person who, immediately before the date of an employee's death lived with the employee and was:

a)              the spouse of the employee (see 1.21), or

b)              a child of the employee, being a prescribed child (see 1.18),

shall be taken to be a person who was wholly dependent on the employee at that date.

This means – notwithstanding the usual meaning of 'dependant' – spouses and 'prescribed' children of the deceased are deemed to be 'wholly dependent' on the employee provided that the spouse or child was resident with the employee at the date of death.

That is, even if, for example, the partner was in receipt of earnings or other income which they used partly or wholly to support themselves economically, and even if this independent income exceed — ed that of the employee, the spouse would be considered to be wholly dependent.  Similarly, even if the prescribed child of the member had an independent source of income, the fact that they had been living with the deceased at the time of death automatically entitles them to the benefits that flow from being wholly dependent.

It should be noted that a child who is not living with a separated spouse but who is maintained in a boarding school at the employee's expense, should be deemed to be living with the employee, notwithstanding that child's long periods of absence from the employee's household.

In practice, a child living separately from an employee is usually one living with a spouse or former spouse separated from (and/or divorced from), that employee. Where there is joint custody/access arrangements such that the child spends 50% or more of his/her time with the employee, delegates should accept that the child still 'lives with' the employee for the purposes of S4(5).

It is important to distinguish in the case of this deeming provision between those to whom it applies i.e. to the partner and prescribed child of the deceased and those to whom it does not apply ie. to other dependants such as the deceased's mother or father or to other children within the member's household (see 1.14).

When applying 4(5), delegates should not exclude partners and children of serving ADF members posted to ships at sea for lengthy periods, deployed overseas or 'in the field' for major exercises etc. It is also common for ADF members to accept 'unaccompanied' postings to locations within Australia, for various reasons.

In cases where this 'residency' matter is in dispute in relation to a — n ADF member who was serving at the time of death, the delegate should take into consideration whether the ADF had accepted that a 'spousal' relationship existed for the purposes of housing arrangements, allowances, leave arrangements etc.

Whether or not dependants, other than the spouse or prescribed child of the member, were living with the deceased immediately before the death, those dependants are not deemed to have been wholly dependent on the basis that they had been living with the deceased.  They may, however, be deemed to have been so dependent under subsection 4(4) of the SRCA or may be found on the facts to be so dependent.

For example, c — hildren of the employee's household, other than children 'of the employee' (for example, where the employee stood in the position of parent to the child), are not 'deemed' by Ss4(5) and therefore, unless deemed by Ss4(4), need to establish their state of dependency separately i.e. on the facts. That is, whether they had been dependent upon the employee for economic support. Th — e proof of such a child's dependency is related, to a large degree, to the dependency of the child's guardian adult on the employee.

• For instance, if a male member had at the time of the death, been living with his spouse and infant daughter in the household of a divorced sister who herself had young children, his infant daughter would be a prescribed child who was also wholly dependent upon him. However, his sister's children, although meeting the bald definition of 'prescribed child' and also living with the member, would not be deemed to have been dependent for economic support upon him, and may or may not meet the definition of 'dependant' and may or may not share the lump sum benefit with other dependants.
• On the other hand, if the divorced sister had been living in the member's household and the member had been supporting his sister (or alternatively directly contributing to the upkeep of her children), and if the member had stood in the position of parent to the children, those 'prescribed children' would be at least partly dependent upon him and may be entitled to a share of the lump sum payment, .

Subsection 4(4) of the SRCA provides that:

For the purposes of this Act, a person shall be taken to have been wholly or partly dependent on an employee at the date of the employee's death if the person would have been so dependent but for an incapacity of the employee that resulted from an injury.

The provision at 4(4) would generally apply where the employee formerly – i.e. when in good health – supported one of the family members named in the definition of 'dependant' at S4(1) but had to cease that financial support due to loss of income or additional expenses occasioned by the effects of a compensable ailment (i.e. usually, but not necessarily, the condition which eventually proved fatal).

In such a case, that family member who had formerly been supported when the client was financially able, would be deemed to have remained wholly or partly dependent at the time of death.

This deeming provision, unlike the deeming provision described in 1.13 above, applies to all dependants to whom subsection 4(4) applies, not just to partners and prescribed children of the deceased.

Where the partner or prescribed child of the member was not living with the member at the time of death, it is quite likely that the partner or child was either partly dependent or not dependent at all.   However this is not necessarily the case and there may be cases where the partner or child had been relying either wholly or partly on financial support from the deceased for their living expenses.

In determining whether a partner or child who was not living with the member was wholly or partly dependent on the deceased, e — ach case has to be considered in light of the individual circumstances that applied at the date of the death (see 1.12).  The same applies to an “other” dependant, such as the deceased's father or mother, irrespective of whether they were living with the member or not.

In making the determination, delegates need to consider all relevant information such as bank statements or other records or proof of regular payments by the deceased for the economic support of the person or records of other financial support.  Alternatively, court orders etc which demonstrate the deceased's legal liability to make regular payments may provide some evidence of economic support.  Account also needs to be taken of any income received by the person claiming to have been economically dependent.

However, irrespective of payments having been made to a person by the deceased or income received by that person, care must be taken not to make any assumptions about the extent of dependency simply on the basis of those payments or that income.  In addition to the existence of such payments or income there would need to be indications that the person was actually relying on those payments or that income to support themselves economically, either wholly or partly - see 1.12.

This reliance might be evidenced, for example, by the fact that a person's rent or mortgage repayments and their grocery bills were paid for out of the account into which the deceased had been depositing money.

In determining the extent of a person's dependency on the deceased, no account can be taken of the fact that a person was in receipt of certain Commonwealth income support payments – see 4.4.

Until the commencement of the Same-Sex Relationships (Equal Treatment in Commonwealth Laws-General Law Reform) Act 2008 on 10 December 2008, the SRCA did not define the term “child of the employee”.  That Act inserted definitions of both 'child' and 'stepchild' into s — ection 4(1) of the SRCA.

Although those terms were not defined previously, and the terms 'son'/'daughter' and 'step-son'/step-daughter' were often used in their stead, both before and after 10 December 2008, t — he terms 'child' and 'step-child' as used in the SRCA were and are relational terms indicating that a person is, at law, the son/step-son or daughter/step-daughter of another person.  The person's age has no bearing on whether they are in the required relationship.  The person's age is only significant where they are required by the Act to be both the child/step-child of a member and a prescribed child (see 1.18)

Since 10 December 2008 the term 'c — hild' has been defined as follows:

child: without limiting who is a child of a person for the purposes of this Act, someone is the child of a person if he or she is a child of the person within the meaning of the Family Law Act 1975 (FLA).

The words “without limiting who is a child of a person for the purposes of this Act” in the definition of 'child' make it clear that the definition of that term in the FLA does not replace, but expands the generally understood meaning of that term which is:

• the biological son or daughter of the member provided that the person has not been adopted by another person.

On the basis of the definition of child in the FLA, the following are also, for the purposes of the SRCA, considered to be the child of a member or former member – note that this list is not ex — h — austive:

• a child adopted by the member and his or her spouse or de facto partner whether of the same or opposite sex.
• a child adopted by either the member or his or her spouse or de facto partner whether of the same or opposite sex with the consent of the other.
• a child declared by the Family Court to be the child of a member (the Family Law Court may under section 69VA of the FLA, decide the issue of parentage.  If the Court makes a declaration about parentage, that declaration is conclusive evidence of parentage for the purposes of all laws of the Commonwealth.)

The following may also, as outlined in the Family Law Act 1975 (FLA), in certain circumstances, be the child of a member:

• a child born as a result of artificial conception procedures (section 60H of the FLA);
• a child born under surrogacy arrangements (section 60HB of the FLA.

Where a delegate is considering a claim from a person claiming to be the child of a deceased member and the child is known to have been conceived using artificial conception procedures or under surrogacy arrangements, the matter should be referred to the discussion line for advice.

Since 10 December 2008, Section 4(1) of the SRCA has define — d 'stepchild' as:

stepchild: without limiting who is a stepchild of a person for the purposes of this Act, someone who is a child of a de facto partner of the person is the stepchild of the person if he or she would be the person's stepchild except that the person is not legally married to the partner.

The ordinary meaning of 'stepchild' is a 'child of a husband or wife by a former union'.  According to that meaning, the child of one member of a de facto couple (whether in a same-sex or opposite-sex relationship) could not be considered to be the stepchild of the other member of the couple.  However, the definition of 'stepchild' in the SRCA means that members of de facto couples whether of the same or opposite sex can now have stepchildren.

On the basis of the definition of step-child in the SRCA, the following are considered to be the step-child of a member or former member:

• the child of the member's de facto partner;
• the child of the member's husband or wife.

This means that it is possible for a person to be both the 'child' of one person and the 'step-child' of another person.  It also means that a person cannot be both the 'child' and 'step-child' of the one person; that is, the two terms are mutually exclusive.

Example

John and Mary have a daughter, Susan. John and Mary separate and John enters into a de facto relationship with Julia.  Susan becomes Julia's 'stepchild', but remains Mary's 'child'.

How the new definitions apply to children of members who died prior to 10 December 2008

Where a person would be the child/step-child of a member (or a variation of that term, such as grandchild) under the new definitions but would not have been considered to be in that relationship under the earlier legislation, the new definition may still be relevant even though the death occurred prior to 10 December 2008.  Where the deceased's child/step-child was wholly or mainly dependent on the deceased immediately before the death and on 10 December 2008 is a 'prescribed child' periodic payments will be payable while the child or step/child continues to be a prescribed child.  The change in the definition does not entitle such a person to any lump sum benefits.

Example

Stephen and Bruce were in a same-sex relationship from June 2003.  Bruce had previously been married and had a child, Derek who was born in January 2003.  Stephen was a member of the ADF and was killed in a defence-related accident in May 2004.  At the time Stephen was killed, the SRCA did not recognise either Bruce or Derek as dependants of Stephen.  Therefore, until the same-sex changes commenced on 10 December 2008 no death benefits were payable to either of them.

However on 10 December 2008, with the change in the definition of 'child' to include the child of a person's same-sex partner, Derek became a 'child of an employee' (of Stephen) for the purposes of the SRCA.  As a result, because Derek was wholly dependent on Stephen at the time of his death, he is now entitled to weekly payments under subsection 17(5) until he ceases to be a prescribed child.  However, as no lump sum death benefits are payable in relation to deaths which occurred prior to 10 December 2008, neither Derek nor Bruce are entitled to a lump sum benefit under subsection 17(3).

If there are any queries about how to apply these new definitions to death compensation claims in respect of deaths occurring prior to 10 December 2008 those questions should be referred to the discussion line for advice.

All children claiming dependant status must produce a copy of their birth certificate. In most cases, this will assist in proving parentage.  It also, in addition to proving the identity of the claimant, shows whether the person complies with the age requirements of the 'prescribed child' definition (see 1.18).

Section 4(1) of the SRCA defines a 'prescribed child', thus:

4(1) 'prescribed child' means:

a)a person under 16, or

b)a person who:

(i)is 16 or more but under 25

(ii)is receiving full time education at a school, college, university or other educational institution, and

(iii)is not ordinarily in employment or engaged in work on his or her own account.

Being a prescribed child has no significance of itself.  In the context of death benefits it is only relevant to whether the child of a deceased member is entitled to a weekly payment (see 4.10) and to whether a person's child can be deemed to be wholly dependent because they were living with the deceased immediately before the death (see 1.1 — 3).  Otherwise, it is sufficient to be entitled to death benefits if a person who was wholly or partly dependent on the deceased was their 'child'.

Note that:

• dependants under 16 remain 'prescribed children' regardless of their situation re: education or employment and a person over 25 can not be a 'prescribed child' under any circumstances
• between 16 and 25, 'prescribed child' status depends on the receipt of full time education at a recognised institution (on-the-job vocational traineeship with a potential employer would not be acceptable)
• a 'prescribed child' under 25 who had previously surrendered that status by leaving education, may subsequently re-qualify as 'prescribed' – i.e. by again leaving work and taking up a full-time tertiary course
• the phrase 'engaged in work on his or her own account' means that delegates should not exclude children who at the date of death ha — d part time employment during a period of full time study from receiving lump sum payments or the weekly payment under S17(5). This also includes working or helping out part time in the family business or who perform unpaid work on the family farm, etc. These individuals, although they may be considered to be working, are not earning on their own account.

Persons over the age of 16 who are alleged to be Prescribed Children must demonstrate:

a)That they are under the age of 25 – a copy of the birth certificate is required from all children claiming any sort of death benefit, but particularly Ss17(5).

b)That they are enrolled full-time at a school, college, university or other educational institution – a copy of the enrolment documents is required to substantiate this.

The Additional Death Benefit (ADB) provided under the Defence Act 1903, is regulated by Defence Determination 200 — 9/70. This Determination entitles 'dependent children' which it defines as follows:

Dependent child, for a member, means a child of the member who is wholly or partly dependent on the member for economic support and:

a)is under 16, or

b)is 16 or more but under 25, and

(i)is in full-time educ — a — tion at a school, college, university or other educational institution, and

(ii)is not ordinarily in employment or working on the child's own account.

It can be seen that this definition has been directly derived from the SRCA definition of a 'prescribed child', except that:

• The child must be a 'child of the member'
• The child may be either wholly or partly dependent on the member to receive the full ADB entitlement, i.e. there is no discretion to exclude or pay a lesser ADB amount in respect to a child who is only partly dependent. (For the division of the ADB between persons having charge of dependent children, see 4.15 and 4.12.)

Subsection 4(6) of the SRCA says:

4(6) For the purposes of this Act, other than Subsection 17(5), a child of a deceased employee who was born alive after the employe — e's death shall be treated as if he or she had been born immediately before the employee's death and was wholly dependent upon the employee at the date of the employee's death.

Where the posthumous child is also the child of the employee's bereaved partner, nothing as offensive as proof of paternity should be required. The relationship is to be held to prove paternity. However a birth certificate will still be required in the same way as it would be, for a child already living at the time of the death. That this certificate shows a live birth within nine months of the employee's death is all that is required.

However this provision needs to be read together with the following interpretations:

Both the SRCA and the Defence Act define 'spouse', but the SRCA's words at S4 take precedence.

In fact the effect of the Defence Act version is to clarify and somewhat restrict the reach of that SRCA definition, (see 1.22 for the ADB version).

Since 10 December 2008 the definition of 'spouse' in the SRCA has been:

'Spouse' includes:

a)in relation to an employee or a deceased employee – a person who is, or immediately before the employee's death was, a de facto partner of the employee; and

b)in relation to an employee or a deceased employee who is or was a member of the Aboriginal race of Australia or descendant of indigenous inhabitants of the Torres Strait Islands – a person who is or was recognised as the employee's husband or wife by the custom prevailing in the tribe or group to which the employee belongs or belonged.

Up to and including 9 December 2008 the definition read as follows:

'Spouse' includes:

a)in relation to an employee or a deceased employee – a person of the opposite sex to the employee who lives with, or immediately before the date of the employee's death lived with, the employee as the spouse of the employee on a bona fide domestic basis although not married to the employee, and

b)in relation to an employee or a deceased employee who is or was a member of the Aboriginal race of Australia or descendant of indigenous inhabitants of the Torres Strait Islands – a person who is or was recognised as the employee's husband or wife by the custom prevailing in the tribe or group to which the employee belongs or belonged.

The new definition is discussed at 1.21.3 and 1.21.4.  The primary import of the changes is that from 10 December 2008 on persons in same-sex relationships and their families (such as children and parents) are treated exactly the same as persons in opposite-sex relationships.  Determination of whether a person was the de facto partner of a deceased person will also be facilitated where a relationship has been registered under one of the prescribed Acts as a prescribed kind of relationship.

How the new definition of 'spouse' applies to partners of members who died prior to 10 December 2008

Although a person in a same-sex or other relationship not recognised by the SRCA prior to 10 December 2008 may have, from that date, become a 'spouse' for the purposes of the SRCA, they will not be entitled to any death benefits unless their partner's defence-related death occurred on or after that date.

The Defence Determination 200 — 9/70 s — tates:

'Spouse' has the same meaning as in the Safety, Rehabilitation and Compensation Act 1988.

Note: This meaning includes a de facto partner (whether of the same sex or a different sex).

Last amended: 21 March 2013

As related above, many deaths will (at least initially) be notified to the Department informally, for instance via a telephone call by a relative who may or may not be a dependant or by contact from ADF personnel. Telephone contact by a senior NCO from the deceased member's unit is the common method of initial notification where the death occurred in service.

Delegates should note that in death cases, the identity of persons entitled to a benefit or even entitled to claim is not always clear at the time of the death. Clarification of this point is one of the objects of any investigation. It is not always clear who to encourage to submit a claim, nor are such persons always in a state of mind which would permit them to submit a formal claim soon after the death.

With respect to late claims for compensation – i.e. those made years after the death – the guidance given at Parts 17, 18 and 19 of the Initial Liability chapter of this Handbook may be relevant, but delegates should not under any circumstances attempt to deny claims of the dependants of a person (particularly dependants of an employee who died after discharge) merely on the basis that the notification was late. The merits of the case must be judged on the basis of the evidence relating to relationship and economic dependency rather than compliance/non-compliance with the notification provisions of the Act.

Progression of compensation cases potentially involving payment of a death benefit represents the highest priority claim process. It is to be given the delegates full attention in preference to all other types of claim or requests for benefit. The reason for this status lies in the need to provide financial support to persons who have had income (and perhaps access to an ADF residence etc.) suddenly removed by the death.

Deaths for which compensation is only claimed years after that death are of course not in the same urgent category, unless the dependant can demonstrate that he/she is currently in dire need. Nevertheless, delegates should investigate all such claims as quickly as possible.

Nothing in the above Part 2.3 about the urgency of claims for recent deaths should be taken to imply that speed is preferred to accuracy in cases where there is a conflict between the two. In fact, the correctness of the final determination is absolutely vital to Death cases and should be regarded a — s paramount to all other considerations.

Subsection 17(10) of the SRCA says:

Ss17(10) Where claims for compensation under this section are made by or on behalf of 2 or more dependants of a deceased employee, Comcare shall make one determination in respect of those claims

Claims made by or on behalf of 2 or more dependants of a deceased employee may be made on 1 or more Claim for compensation of Funeral expenses and/or Death Benefits for Dependants of deceased members and former members of the Australian Defence Force Form — s but must all be determined at one time and in the same determination.

Section 56 of the SRCA also says:

S56 Where an amount is paid to, or in accordance with the directions of, a relevant authority under Subsection 17(3) or (4), for the benefit of a dependant of a deceased employee, by whom, or on whose behalf, a claim was made for compensation under Section 17, no other dependant of that employee is entitled to claim compensation under that section after the day on which that amount is so paid.

In fact the scheme of the Act is rather, that S17(3) and (4) provides a single lump sum only, and the delegate is constrained to make a single determination which makes a once-only division of that lump sum between all claimants.

However the reverse side of S56 is that, where the claim of a particular dependant with a good case for entitlement is not made known to the delegate before that once-only determination, there is no legislative basis to pay that person should they emerge at a later date. This situation has practical effect as instances have occurred in the past, particularly in relation to ex-nuptial dependent children.

Delegates should exercise particular care in determining who was financially dependent upon the deceased, to the extent of requiring details of persons to whom the deceased made pay allotments, or in respect of whom did the deceased contribute child support through the Child Support Agency etc.

In cases such as the above or in other cases involving the division of the SRCA lump sum between persons on the basis of claimed loss, delegates should guard against sacrificing the completeness of an investigation for the need to make an urgent determination. In cases of 'error' or where new claimants unexpectedly emerge, the only available corrective action is to withdraw and re-determine the original determination as a 'reconsideration on own motion' under S62. There is no prospect of awarding any more than the single maximum lump sum amount. Adjustments therefore inevitably require the recovery of funds from the earlier-known individuals who may have already spent that lump-sum share, thus causing a high degree of hardship and distress.

Deaths from accepted conditions are often the simplest to determine, because the nexus with the condition alleged to produce the death has already been tested and accepted. However delegates will still have to confirm on the basis of the death certificate or by means of other medical advice, that the condition (i.e. for which the Commonwealth had previously accepted liability) resulted in death.

A separate D2020 claim form is not required in respect of the death as liability has already been accepted in respect of the 'injury' which has now resulted in death. D — elegates are provided with a specific claim form for funeral expenses and death compensation (D9182), presented as one of the standard letters in the Defcare Standard Letter database. This claim form has been designed primarily to cope with the typical 'nuclear family' situation where the informant will be a spouse living with the client at the time of death. The form acknowledging entitlement and acceptance of payment at the end of the assessment process is deemed to be a sufficient application for the death lump sum.

The link between accepted condition and death is undertaken primarily by two means:

• scrutinising a copy of the death certificate, which needs to be obtained in all case — s, and
• direct communication with, and/or a written report by, the doctor treating the client during his/her last illness (this may only be necessary where the death certificate is not sufficiently specific).

In some cases, delegates may require further confirmation or explanation as to the relationship between the accepted condition and the official cause of death. This additional medical advice may be required when, for example:

1.the degree of contribution of the compensable condition to the cause of death on the death certificate is not clear, and

2.the doctor attending the death and signing the death certificate (who may not have been the treating specialist) has given an explanation of that nexus which is unsatisfactory and/or apparently beyond the scope of his/her expertise and specialty.

Having established that the accepted condition was the cause of death or a significant contributor thereto, the delegate then needs to investigate the identity of the 'dependants' in this case, and the degree to which each was 'dependent' upon the deceased employee

Virtually all claims for deaths after discharge will relate to a disease rather than a simple injury. For a death benefit to be payable in respect to a death certified to be from that disease, that disease must have been materially (or significantly where date of diagnosis is on/after 13 April 2007) contributed to by ADF employment.

In effect, the case has become one of 'initial liability' for the causative injury/disease. Delegates faced with these cases should apply the principles and procedures contained in this Handbook's chapter on 'Initial Liability'.

However, as S57 examinations have been precluded by the death, medical opinion on causation of those diseases not caught by S7(1) of the SRCA will be restricted to Service medical records (and, possibly, retrospective opinion by any relevant medical specialists who had treated the client since discharge).

Having established that the certified cause of death had the required nexus with ADF employment, no separate determination on 'initial liability' is necessary.

Deaths in service will in almost all circumstances be covered under the Military, Rehabilitation and Compensation Act 2004 (MRCA). However, in some circumstances a member may be suffering from a condition which is as a result of SRCA service, but dies during MRCA service.

For example, a member who suffers from cancer that has been materially or significantly contributed to by SRCA service pre 1 July 2004. Sometime later they die from cancer whilst on duty. At first the delegate should investigate whether the death can be accepted under the MRCA. Refer to the MRCA Death and Liability Chapters for further guidance. If the death cannot be accepted under the MRCA, the delegate should then look at a connection to SRCA service – that is the death was a result of a condition that can be accepted under the SRCA. Whilst the following comments will more often relate only to MRCA death cases, it is still important to bear them in mind for any death in service no matter which Act is covered.

'In service' deaths have some other distinguishing features which impact on the liability investigation process as follows:

As discuss — ed in subsection 1.1 of this handbook, the criteria for investigating whether a death occurred in compensable circumstances are essentially the same as for any other grade of injury or disease. That is, the death must be shown to have resulted from a compensable injury (including disease).

This means that in general, the procedures set out in this Handbook's chapter on 'initial liability' should also be applied to investigations of deaths.

Note that the SRCA, although primarily a 'no fault' Act, provides for a number of circumstances where the actions of the employee are deemed to have excluded him/her from compensation. These exclusions are summarised at Parts 82 to 98 of the Initial Liability chapter of this Handbook. In brief, deaths arising from a reaction to reasonable disciplinary action, failure to obtain promotion transfer or benefit from employment, a condition concealed at enlistment or from a self inflicted injury are non-compensable and do NOT attract the Death benefit.

ALSO

There are also similar exclusions from compensation (re: S14(3) and S6(3) of SRCA) for:

• injuries arising from 'serious and wilful misconduct', and
• 'voluntary and unreasonable submission to abnormal risk',

but these particular exclusions are waived by the Act where 'the injury results in death, or serious and permanent impairment'.

Note: This concession does not apply to the other exclusions listed above (discipline, self inflicted etc.).

Example

Note that by virtue of the definition of 'injury' at S4(1), those injuries contributed to by alcohol are deemed to have arisen from serious and wilful misconduct. Thus:

• a member who drove home from a compulsory ADF mess function with a blood alcohol reading over 0.05 and suffered a broken leg from the resulting MVA would not be entitled to compensation
• however if that member died in that MVA, the death benefit would be payable.

Section 17 of the DRCA (Compensation for injuries resulting in death) sets out the circumstances in which the Commonwealth is liable to pay compensation for ‘an injury to an employee [that] results in death’.

When considering whether the Commonwealth is liable to pay compensation under s 17(1) in relation to a veteran’s suicide, it will be necessary to determine whether the injury that resulted in the veteran’s death is excluded under s 14(2) of the DRCA.

Subsection 14(2) of the DRCA says:

Compensation is not payable in respect of an injury that is intentionally self‑inflicted

Note that, unlike the MRCA, the DRCA contains no waiver of this exclusion if the intentionally self-inflicted injury results in death or serious and permanent impairment.

However, this does not mean that an injury that resulted in a veteran’s death by suicide or attempted suicide should always be excluded under s 14(2). In some circumstances an injury resulting in death may not have been ‘self-inflicted’ for the purposes of s 14(2), and in others, the individual may have lost volition such that the injury cannot be taken to have been ‘intentionally’ self-inflicted for the purposes of s 14(2).

Overview

In order for subsection 14(2) to apply, three requirements must be met:

1. The condition in question must meet the definition of an ‘injury’.
2. The injury must be self-inflicted.
3. The infliction of the injury must be intentional.

If any of these requirements are not met, the exclusion set out in s 14(2) does not apply to the claim. 

1. Injury

In order for the Commonwealth to be liable to pay compensation under s 17(1) in respect of a veteran’s suicide, the death must have resulted from an ‘injury’ as defined in s 5A of the DRCA. This includes “a physical or mental injury arising out of, or in the course of,” a veteran’s service, except where it arose “as a result of reasonable administrative action taken in a reasonable manner”.

When considering whether an injury was present, it is important to take into account all injuries of this kind which were present at the time of death by suicide and which may have contributed to the death by suicide. 

If the injury has not been accepted under the DRCA prior to the death, a service related injury contributing to the death may potentially be established via the posthumous mental health diagnosis policy, see CM6267 Guideline for Operation of Posthumous Psychiatric Diagnosis Panel | Compensation and Support Reference Library, Commission Guidelines (dva.gov.au).

If a veteran’s death did not result from an ‘injury’ as defined in s 5A of the DRCA then s 14(2) will not apply to the claim.  However, the veteran will also not be entitled to compensation under s 17 of the DRCA due to the absence of an ‘injury’. 

However, if the death did result from an ‘injury’ as defined in 5A, the next step is to consider whether all contributing injuries were self-inflicted.

2. Self-inflicted

When considering whether a contributing injury was self-inflicted, it is important to remember that the injury in question is the service-related injury or injuries identified in step 1.  Even though other injuries may be present which contributed to the death by suicide, only those which meet the definition under 5A are considered in relation to s 14(2).

It is important to remember that while a death by suicide clearly involves a self-inflicted injury, it is possible that a veteran:

• suffered a previous injury that was accepted (or can be posthumously accepted) as service-related under the DRCA, and
• this injury was not self-inflicted, and
• this injury resulted in the veteran taking their own life.

Ultimately, it is possible that an injury can have resulted in a veteran’s death even in the presence of another fatal self-inflicted injury, so long as there is a sufficient connection between this previous injury and the veteran’s death.

For example, a veteran could have incurred a significant depressive disorder injury that arose from, or in the course of their service. This depressive disorder injury was not self-inflicted and is not excluded under s 14(2) of the DRCA.  If this injury materially or significantly contributed to the death of the veteran then both the self-inflicted injury that directly ended the veteran’s life and the depressive disorder injury could be taken to have resulted in the veteran’s death.  While the self-inflicted injury may be excluded under s 14(2), the depressive disorder injury is not excluded and, should the depressive disorder have contributed to the death then the Commonwealth may then be liable to pay compensation under s 17 of the DRCA in respect of a death arising from this depressive injury.

This was, essentially, the factual circumstance in the Administrative Appeals Tribunal (Tribunal) matter of Sadlo and Comcare [2005] AATA 1006 (Sadlo). In Sadlo, the Tribunal found that a work related depressive disorder injury caused the employee’s death, for the purposes of s 17 of the DRCA, notwithstanding that the employee had committed suicide.

A common-sense approach should be taken to considering the causal chain and the question of whether a particular injury resulted in a veteran’s death.  Delegates should be aware that the presence of intervening links in the chain or other contributory causes of death does not necessarily preclude a finding that a previous service-related injury contributed to and resulted in the veteran’s death.

Taking into account all of the above, if the injury (or one of the injuries) contributing to the death was not self-inflicted then it is not excluded under s 14(2).  If it was self-inflicted, it needs to then be considered whether this was intentional.

3.  Intentional

Whether the injury was intentionally self-inflicted only becomes a consideration in relation to s 14(2) if it has already been established that:

1. an ‘injury’ is present which meets the definition in s 5A
2. the injury is self-inflicted. 

If either of those facts have not been established, s 14(2) already does not apply and the question of intentionality is irrelevant.

An injury may not be intentionally self-inflicted where there is a demonstrated loss of volition such that the veteran was unable to understand or appreciate the consequences of their actions.

In some circumstances an injury inflicted by the veteran's own hands may be deemed not to be intentional, by virtue of them having – due to a compensable mental disease – lost the power of volition (intention) i.e. the power to make a decision or exercise their will in relation to living or dying.  In such a case, the injury would not be excluded under s 14(2) and the Commonwealth may be liable to pay compensation for the death or injuries arising from suicide or attempted suicide

It is not the case that the fact of a suicide attempt or suicide demonstrates, of itself, a loss of power of volition. This circular argument cannot be admitted, even when presented by a medical practitioner.

In Re Pamela McLaren and Comcare [1992] AATA 202, the AAT found that the question was 'has the workman's mind become so unhinged as to dethrone his power of volition' (citing Church v Dugdale & Adams Ltd (1929) 22 BWCC 444). On the facts of this case, the Tribunal found that ‘the work related stress and major depressive illness [was such that] he was no longer able to choose whether he would or would not continue to live or whether he could or could not restrain the temptation to suicide' (at [17]).

The state of the veteran's mind is a question of fact.  Such factual findings can be made with reference to expert opinion, such as by a psychiatrist.  An expert opinion about the veteran’s state of mind including, specifically, an ability to form an intention, should (where possible) be based on a psychiatric examination conducted shortly before the death by suicide or suicide attempt to give the delegate an indication of the veteran's prior mental health. Where this is not available, there should be other evidence that can be assessed by an expert.

Provided all other steps have indicated the injuries or disease(s) resulting in death was an injury and self-inflicted and intentional, in the absence of an informed expert opinion about the veteran's state of mind and loss of volition, the delegate should find that the suicide or attempted suicide was the result of an intentional, self-inflicted injury that is excluded under s 14(2).

No determination about liability or compensation for Death may be made unless the delegate has been provided with a copy of the death certificate. It must be considered mandatory for death claims.

Death certificates are essential for two reasons:

• To validate the actual fact of the employee's death and provide the legal underpinning to any determination on compensation.
• In respect of its status as the official medical opinion on the cause of death (which of course must be demonstrated to determine whether a death is employment-related).

Provision of death certificates to validate a claim is analogous to the provision of a medical certificate demonstrating an injury for other classes of claim. It is the claimant's responsibility to provide that death certificate. Delegates should however provide reasonable assistance particularly where the dependant/claimant is either distressed or under some disability (i.e. is a child).

The term 'prescribed child' is defined in section 4(1) of the SRCA.  It broadly means a person under 16, or a person aged 16 and up to 25 years, in full time education and not generally in employment.  Refer to Part 1.18 for explanation of the 'prescribed child'.

A prescribed child under the age of 16 remains a prescribed child regardless of that child's continued attendance at school etc. Weekly payments should continue to be made throughout the year, i.e. even where the child undertakes casual employment during school holidays.

For guidance on the application of 17(5)(b) refer to 1.20.

However, after the child attains the age of 16, the delegate must have regard to whether:

'Prescribed child'

4(1)(b)(ii)is receiving full-time education at a school, college, university or other educational institution, and

  (iii)is not ordinarily in employment or engaged in work on his or her own account'

Thus the entitlement to S17(5) payments for a dependent child between the ages of 16 and 25 is dependent on whether that person is engaged in full time study. Therefore, for those engaged in university or college courses etc. it is reasonable that the delegate be informed of the course undertaken and the expected date of completion. If the delegate is not provided with this basic information, that delegate should NOT authorise S17(5) payments.

Furthermore, delegates are also required to check periodically that the child is still engaged in that course of study. (See 4.11 for this review process.)

The S4(1) definition of 'prescribed child' sets a maximum age of 25 years regardless of subsequent educational courses. Subsection 17(5) payments may not, therefore, be made to a person over the age of 25, even if the course of study continues after that 25 — th birthday.

The qualifying course(s) of education can be commenced before, or at any time between the ages of 16 and 25. There is no requirement that the period of education should be continuous. It can start and stop and restart during that period as the child's circumstances and preferences dictate (in which case for a person over 16 the S17(5) benefit would stop and start coincident with the conduct of the course.) However, note that any particular period of study must be full time. Part-time attendance at university etc. does not qualify the child for S17(5). Note that payment is not dependent upon the child's academic standard of performance.

Note also that it is current policy to continue to pay S17(5) over term holidays and semester breaks, providing that the overall course of study continues uninterrupted after that break.

S17(5) excludes children who are 'ordinarily' in employment or who are engaged in work 'on his/her own account'. However it is current policy to interpret 'ordinarily' so as not to exclude students who take casual or part time jobs.

Furthermore, students who continue to work in or assist with a family owned business without pay during the period of education (for instance, a family farm or a shopkeeping business) would not be excluded either, as they are not earning 'on his/her own account'.

On some occasions the deceased ADF employee will have dependants other than a spouse or children. For example, the employee may have been providing the sole support of an aged parent. The apportionment principles outlined in 4.6 are also applicable to these dependants.

Note: No Additional Death Benefit (ADB) lump sum is payable under the Defence Act if the deceased only has 'other' dependants. The ADB lump sum is payable only where there is a spouse or dependent children of the deceased. See 4.12.

Subsection 17(2) is quite clear:

' ...if the employee dies without leaving dependants, compensation is not payable in respect of this injury'

Refer to Part 1.11 for explanation of the meaning of 'dependants'.

Note that a 'dependant' as defined by S4(1) of the SRCA must be 'dependent' upon the employee for economic support.

It may be the case that a person is held not to be wholly dependent for economic support on an employee if that person is also, in addition to that employee's support, in receipt of:

• a form of State or Commonwealth income support by way of unemployment benefit or job search allowance or education allowance etc.
• Centrelink sickness or invalidity payments
• State or Commonwealth workers compensation payments for incapacity for work, and/or
• any other Government or charity income replacement scheme.

This would be the case if that person was at least partly relying on that payment for their economic support.

However, as indicated in 1.16, the receipt by the person of such a payment does not of itself preclude a determination that the person was wholly dependent for economic support on the deceased.  Further, some Government benefits are excluded by the Act – or by Defence Determination – from consideration when a delegate is determining the state of economic dependency (on the employee) of a particular dependant.

Subsection 4(7) of the SRCA says:

In ascertaining, for the purposes of this Act, other than Subsection 17(5), whether a child is or was dependent upon an employee, any amount of:

a)family tax benefit calculated under Part 2 or 3 of Schedule 1 to the A New Tax System (Family Assistance) Act 1999 (an individual's Part A rate), and

b)carer allowance under that Act, and

c)double orphan pension under that Act,

shall not be taken into account.

A similar limitation on taking account of Government benefits is in the Defence Determination.

Where an injury to an employee results in death, section 17 provides for the payment of lump sum compensation to the dependants of the employee, who were wholly or partly dependent on the employee at the date of the employee's death.

Determination of the amount of lump sum compensation payable under section 17 requires the delegate to establish whether the various 'dependants' – i.e. those who are candidates for sharing in the payment – were wholly or partially dependent (on the deceased employee) for economic support.

Subsection 17(3) and subsection 17(4) of the SRCA prescribe the two lump sum options (based on whole or partial dependence) that are to be paid out under the section in the circumstances of either whole or partial dependence, as follows:

• whole

• if at least one of the dependants was wholly dependent on the deceased employee at the date of death, the whole of the maximum sum prescribed in the Act must be paid to those dependants - ss17(3);
• There is no provision to divide up a lesser compensation amount;

• partial

• if none of the dependants were wholly dependent on the deceased employee at the date of death, but were partially dependent on the employee at date of death, an amount up to, but not exceeding the compensation maximum lump sum is payable to those dependatns- ss17(4).

This distinction between dependants as either wholly or partly is made only to quantify the total amount of compensation payable under subsection 17(3) and subsection 17(4).  Once that is determined, subsection 17(8) governs the relevant considerations for apportionment of the lump sum – that is 'losses suffered' irrespective of whether the dependant was wholly or partly dependent.  Read 1.12 of this chapter of the Handbook for guidance as to what constitutes partial dependency upon the deceased.

* Note: current death lump sum rates can be accessed via the following link     

Where there are no wholly dependent persons, the total amount disbursed may be less than the statutory maximum payable. Furthermore, the individual's share of that lesser total is for DVA to determine, 'having regard to any losses suffered' by that person.

• In Re: Ranck and Australian and Overseas Telecommunications Corporation (1993) the Tribunal held that 'losses' in S43(4) of the 1971 Act meant 'the actual and potential loss of income support suffered by the dependant consequent upon the cessation of the deceased's earnings'. Other losses (or gains) resulting from the employee's death were not relevant.

The amount of the loss is determined by the delegate with the total compensation amount disbursed to be no more than the total lump sum which would have been available to wholly dependent persons. Unlike Ss17(3) there is (depending on the extent of the loss) no requirement to disburse the whole amount available.

Summary

Where there is one or more wholly dependent 'dependants', the whole (maximum) S17 lump sum is paid and divided among all dependants, whether they were wholly or partly dependant, giving regard to any losses suffered by those dependants as a result of the cessation of the employee's earnings.

Where there are only partly dependent dependants, DVA may at its discretion pay a lesser total benefit, and divide that lesser total to reflect the relative loss of income suffered by each partly dependent person.

The total amount that is payable under either subsection 17(3) or subsection 17(4) is to be shared among all of the dependants, both wholly dependent and partially dependent. Where compensation is payable to two or more dependants, subsection 17(8) gives broad discretion to determine the percentages of compensation payable to those dependants, having regard to any losses suffered by those dependants as a result of the cessation of the employee's earnings.

Subsection 17(8) uses the phrase 'as Comcare thinks fit' which gives determining authorities (i.e. DVA) discretionary powers and allows them to give broad consideration on how that discretion should be exercised. This broad discretion should be exercised on reasonable grounds such that there are similar outcomes for people in similar situations.

The following principles are to be applied by determining authorities when apportioning the amount of death lump sum compensation payable:

Calculating the amount of economic loss can be tricky and each case will need to be determined on its own merits.

The delegate must consider the following factors and nothing else:

1. The financial loss suffered by the dependant as a result of the death

2. The length of time that the dependant would have been dependent on the deceased employee.

It is important to remember that the death lump sum is compensation for loss of economic support and does not compensate for emotional distress as a result of the death.

Things to consider when establishing economic loss:

• The income of the deceased employee
• The financial position of the deceased employee and their spouse i.e. if they have joint debts - mortgage, car loans etc, payment of bills
• Whether dependants will be left in the care of the spouse
• Age of dependants
• Amount of Child Support payments the deceased made to dependants plus any other additional  payments i.e. school fees, gifts etc.
• Length of time these payments to dependants would have continued
• Percentage of care of dependants and the costs associated with that care i.e. food, clothing, entertainment

Subsection 17(5) of the SRCA says:

17(5) If:

a)a prescribed child was, at the date of the injury or at the date of the employee's death, wholly or mainly dependent on the employee

b)a prescribed child, being a child of the employee, was born after the employee's death, or

c)a prescribed child would, if the employee had not died, have been wholly or mainly dependent on the employee

the MRCC is liable to pay compensation at the rate of [$40]* per week and that compensation is payable to the child, or in accordance with the directions of, the MRCC for the benefit of that child from the date of the employee's death or the date of the birth of the child, whichever is the later.

* [In 1988. See MCRI-2 for latest (updated) amount]

Note that for this benefit to be payable, the prescribed child must have been 'wholly or mainly' dependent upon the employee 'if the employee had not died'. This wording also covers children of the employee who are born after the employee's death.

The coverage of prescribed children 'wholly or mainly' dependent on the employee means that eligible children will include:

• children and step-children of the employee who are living with the employee – they are deemed to be wholly dependent (see 1.13)
• children of the employee living apart from the employee who are, nevertheless, considered to have been wholly or mainly dependent on that person.

Eligibility for Weekly Payments

Both wholly and 'mainly' dependent 'prescribed children' are equally eligible for weekly payments payable under section 17(5). Refer to Part 1.18 for explanation of the 'prescribed child'.

What constitutes 'Mainly' Dependent?

The Federal Court has made it clear, when discussing the similar phrase 'wholly or substantially', that the term 'mainly dependent' means something less than 'wholly' but more than merely 'insubstantial';  the phrase could be paraphrased as 'in the main dependent upon another person'. (SDSS v Wetter (1993) 40 FCR 22).

That is, there is a gradation from not dependent, to partly dependent to mainly and finally to wholly dependent.  Each of these terms must be given a meaning and each claim of dependency, where the claimant was not living with the deceased immediately before the death, must be considered against each before deciding which one applies.  As the existence or quantum of compensation may depend on this decision careful analysis is required in each case

When determining whether a prescribed child was wholly or mainly dependent on the deceased, the same basic principle as that outlined in 1.16 for determining whether a person was wholly or partly dependent applies.  That is, the significant question is the extent of the reliance by the child on the deceased immediately before the death, as opposed to the ability of the child or of a surviving parent to maintain the child.  Whether or not this is the case and to what extent will not always be readily apparent.  Thus, in Aafjes v Kearney (1976) 8 ALR 455, Mason J says:

The fact that at the date of death a daughter was being supplied with some of the necessities of life by some third person does not necessarily mean that she was not then wholly dependent for her support upon her father. Obviously enough if the assistance provided by the third person was only intermittent or casual, and unlikely to be continued in the future, it would not prevent the daughter from being wholly dependent on her father.  But even if the assistance was substantial and likely to be continued, it would not necessarily have the effect that the child had to be regarded as a partial dependant of her benefactor and therefore as not wholly dependent on her father. For example, a child whose home was in the country and who lived with her grandparents while attending a school in the city would not for that reason alone cease to be wholly dependent upon her father.

As previously indicated, the application of the law is not straightforward and each case has to be considered on its own facts.  However, the following examples may be of some assistance:

1. a member and his partner (Stephen and Melinda) have separated and their child lives with Melinda.  Stephen pays $500 per fortnight into a bank account for Melinda and the child.  Melinda is a senior public servant earning a substantial salary of her own.  Therefore she allows the money that Stephen pays her to accumulate so that every two years she and her daughter can go skiing.  Their living expenses are fully met from Melinda's salary.  In this case, following Stephen's death on service, the delegate might find that neither Melinda nor the child were even partly dependent on the member. 
2. a member and her partner (Margaret and Julie) are in a de facto relationship and Julie has a child from an earlier relationship.  Julie and Margaret subsequently separate.  Julie earns a good salary but Margaret, who still considers herself to be the child's step-parent and maintains contact with the child, pays $300 per week to ensure that the child is well looked after.  Julie has agreed to use that money specifically for that purpose and it is clear from bank statements that she has kept her word.  As a result she only has to use a small amount of her own income to support her child.
   
   A year later Margaret is killed on defence service.  Although Julie is earning a good salary and can easily afford to maintain her child, she was in fact only contributing a small amount of money towards the cost of maintaining her child.  In this case the child would be at least mainly dependent on Margaret immediately before her death.

Where a delegate and their team leader are unable to make a decision on a particular case the details of the case should be referred to the Compensation Advice Line for advice.

Delegates are required to obtain a copy of the birth certificate of any 'prescribed child' with a SRCA entitlement. This certificate is required as a condition of payment. Therefore the age of a person subject to Ss17(5) payments should be known to the case-managing delegate, and should be prominently displayed both on the payment file and also on the Defcare process screen.

Where the child is still under 16 years old, the entitlement to this benefit need not be formally reviewed (other than to annually update the weekly amount payable).

However delegates should still make contact at appropriate intervals to ensure the entitled child is still living with the adult to whom payment is made. Telephone contact would suffice in such cases (providing the delegate takes a comprehensive note of the conversation).

Delegates should also write to the child's parent or guardian 12 months before that child turns 16 to advise that adult:

a)Payment will cease either at the child's 16 — th birthday, or at the end of the academic year in which the child turns 16 (depending on whether the child continues at school to the end of that year), UNLESS continuing with full time education

b)Early advice of intentions will allow for continuity of payment after 16 — th birthday.

d)Any overpayments due to incorrect notification will be repayable to the Department.

There is a letter for this purpose available in the Defcare Standard Letter suite

Subsequently, annual checks should be undertaken at the end of each academic year. An annual review form is available in the Defcare Standard Letter Suite. At the end of the school year a review task will be generated for all children over 16 who are in payment. The annual review form should be sent (to the parent if the child is under 18 and to the child themselves if they are over 18) as soon as possible after this task appears. The form should be returned before the new school year starts to avoid any overpayment for children not continuing in full-time education (further discussion about what is considered to be full-time education can be found in chapter 36.3.4 of the Incapacity Handbook).

Where it is evident that the child may soon alter or defer or leave the course of education, the delegate should naturally maintain a closer liaison. At all contacts, delegates should remind the relevant parties that overpayments (i.e. payments which continue because the Department was not advised of the termination or suspension of education) will be recovered in full.

Where the child has availed his/her self of the assistance of the Veterans' Children's Education Service – and note this is a service available to dependent children where the employee's death is covered by the ADB – these details can be sought from the VCES delegates in that State Office.

Where the 'child's' program of education continues up to and beyond his/her 25 — th birthday, the Delegate should warn or remind that person that S17(5) payments will terminate on that 25 — th birthday. There is no discretion under the Act to continue payments to the end of the academic year in which that birthday falls. The payments must end no later than that birthday.

Delegates should give due warning/reminder of intent to cease payment at 12 months and then at 1 month before that deadline.

Where a 'prescribed child' is under 18, his/her share of the lump sum must be held in an interest bearing trust fund operated by the MRCC, until such time as the child turns 18. See 4.14 for discussion of the procedure for arranging a trust fund and 4.15 for the administration of that fund (including access by parents/guardians).

'Prescribed children' over 18 but under 25 are responsible for their own affairs and must be paid the lump sum directly i.e. not via a trust fund.

Last amended: 14 August 2013

During the time that the S17 lump sum portion (payable to a child under 18) is held in trust by DVA, the child's parent or guardian may be able to access these funds if it can be shown that this is to the benefit of the child. That parent or guardian may approach the Rehabilitation and Benefits section with a specific proposal for money to be paid from the fund for such things as clothes, school expenses, computers and other items.

The request must be in writing and demonstrate financial need/hardship, the reason the proposed item(s) are required or are to the benefit of the child, contain quotes (for any large expensive items) and as much other information as is required to demonstrate that the request is reasonable.

This submission is to be considered by the Rehabilitation and Benefits section and (if approved) the relevant amount of money will be released.

However, apart from advising parent/guardians of their potential access to these trust monies in the terms set out above, MRCC delegates do not have any role in this process. The money is in the control of the Department and MRCC delegates have no input into the consideration of any request for access to those funds, nor are MRCC delegates a conduit for the on-forwarding of any such request to the Rehabilitation and Benefits section.

Any request for access to funds by the parent/guardian should be made directly by that person to the Rehabilitation and Benefits section and not to or through MRCC delegates. Furthermore, delegates should not be drawn into commenting on the merits of any submission.

Requests can either be sent via email to the “SRCA Trust” mailbox address or via regular mail to the following address:

Director

Rehabilitation and Benefits

Department of Veterans' Affairs

PO Box 9998

BRISBANE QLD 4001

Last amended: 14 August 2013

Where a child of the employee is under 18 and shares in the SRCA S17 lump sum, that share is paid into a trust fund operated by MRCC, until the child attains the age of 18. (Refer to 4.13 for details.)

This SRCA amount is not paid to the surviving parent or to the legal guardian or to any other person who has responsibility for the child. However the guardian may in some circumstances and with the consent of the MRCC access that trust fund for the benefit of the child, See 4.14 and 4.15.

If the child is over 18 that SRCA share is of course payable directly to that 'child'.

Guardians and the Additional Death Benefit

Where the employee has no 'spouse' current at the time of that employee's death, the ADB amount is not payable at all, but the 'dependent child amount' in respect of each child is still payable i.e:

(Defence Det 2000/1, Clause 10.5.7)

1.The ADB is payable to the spouse.

2.However sub-clause (3) or (4) applies if the dependent child amount is payable for a child and:

a)the deceased member is not survived by a spouse, or

b)the spouse does not have primary responsibility for the daily care of the child.

3.If the child is under 18, the dependent child amount is payable to a person who has primary responsibility for the daily care of the child.

4.If a child is 18 or over, the dependent child amount is payable to the child.

Therefore, in the case where the employee's death leaves orphaned 'prescribed children', the ADB child amount in respect to each child is paid to the person who has care of that child. This may or may not be the person who is also the legally appointed guardian of that child.

S17(5) payments in respect of a 'prescribed child' under the age of 18, must be made to the child's parent or guardian, i.e. for use for, or to the benefit of, that child.

On occasion and in the presence of family discord, prescribed children have sometimes chosen to leave home and live with an adult who is not the court appointed, legal guardian. In that case, the delegate should react pragmatically and pay the S17(5) benefit to the adult who actually has the daily care and maintenance of that child.

In rare cases, a prescribed child who is under 18 years old may leave the care of all responsible adults and live as a homeless transient, i.e. as a 'street kid'. In that case, delegates should arrange to have the S17(5) paid into a MRCC trust fund till that child has turned 18.

Where prescribed children over the age of 18 are entitled to receive Ss17(5) payments, these weekly amounts should be paid directly to the 'child'. Persons over the age of 18 are legally adults and are not prevented from receiving a benefit in their own right.

Determination and payment of death benefits under Section 43 of the 1971 Act has been discussed briefly at 1.8 of this chapter of the Handbook. Essentially, the provisions of the 1971 Act with respect to death, resemble those of the SRCA and the procedures are very similar.

Delegates should therefore apply the procedures applicable to death payments under the SRCA (i.e. identification of dependants and of degree of dependency, calculation of shares etc.) with the exception of the following points specific to the 1971 Act:

• No Additional Death Benefit is payable (ADB commenced only on and from 10 June 1997).
• Those who will have been children under the 1971 Act will now be adults but the child weekly benefit payable for a death under that Act is payable retrospectively, i.e. consolidated into a lump sum.

Where:

A = Number of weeks between date of employees death and date when child ceased full time study

B = Specified payment per week under S43(5) of the 1971 Act

The amount now payable is to be calculated as:

(A x B)

or

minimum total child payment under S43(7)(b),

whichever is the greater.

• Naturally lump sum portions payable to children of the deceased are not to be placed into trust but paid direct to the entitled person. The 'child' is now an adult.
• Delegates should use the last rate of compensation payment issued by the Commission before repeal of the Act (i.e. disregarding the year in which the death occurred, all 1971 Act cases determined today are to be paid at the same rates, viz:

• Death lump sum for division               $59,980
• Dependent child payment              $24.00 per week
• Minimum level, total child payments              $2,400
• Maximum payment, funeral expenses              $1,550

Determination and payment of death benefits in accordance with the First Schedule of 1930 Act has been discussed briefly at 1.9 of this chapter of the Handbook. The provisions differ rather more from the SRCA than does the 1971 Act, nevertheless:

• Nothing is payable unless there are dependants wholly or partly dependent on the deceased.
• The identification of dependants (partial and wholly dependents) should follow the SRCA pattern, see 4.1.
• There is no fixed proportion of the lump sum which is payable to a child vs a spouse.
• The First Schedule does not give rules for division of the lump sum between those wholly dependent, and as for those partly dependent the 'Commissioner' is required only to have regard as to what is 'reasonable' and 'proportionate' to the economic loss suffered from cessation of the deceased's support. Due to the lack of firm guidelines specific to that Act, Delegates should apply the SRCA guidelines re: lump sum division at 4.8 to 4.14.
• As with the 1971 Act there is a child's pension to age 16 only, which naturally (and on proof of entitlement and duration of entitlement) would be paid as a consolidated lump sum. Unlike the 1971 Act (and like the SRCA) there is no minimum child payment.
• Delegates should use the last rate of compensation payment issued by the Commission before repeal of the Act (i.e. disregarding the year in which the death occurred, all 1930 Act cases determined today are to be paid at the same rates, viz:

• Lump sum for division               $12,000
• Child weekly payment              $2.80 per week

Subsection 16(9) of the SRCA provides for reimbursement of the cost of transporting the employee's body to a hospital, morgue etc. This matter is dealt with in more detail at 1.7 of this chapter of the Handbook.

There is no specific provision within the SRCA or either of its predecessors, in relation to the costs of return of a body from an overseas place of death for burial. However in certain circumstances the S16 provisions relating to the transport of an employee's body to a hospital, morgue, undertaker etc. can be held to apply to the costs of transport to a morgue etc in Australia. This matter is dealt with in more detail at 1.7 of this chapter of the Handbook.

Section 18 of the SRCA provides for reimbursement of the costs of the funeral of a deceased employee to the level of a certain maximum benefit. This matter is dealt with in more detail at 1.6 of this chapter of the Handbook.

Claims for lump sum compensation for permanent impairment may be made and paid after the death of the employee providing that the degree of permanent impairment can be properly assessed retrospectively, e.g. by the doctor who was treating the employee before the death. However with respect to posthumous permanent impairment assessments S55(4) also says:

55(4) This section does not apply in relation to a claim for compensation under Section 27.

This means that only the Section 24 amount can be paid to the estate of a deceased employee. The 'Non-Economic Loss' (i.e. the S27 component of a lump sum) is not payable in such cases.

Where an employee suffers a long and terminal illness, it is reasonable to pay a series of lump sums to reflect the increased impairment i.e. while the person is still living and enduring that impairment.

However Delegates should resist the proposition which is sometimes made, that the death of any employee from other than instantaneous (i.e. accidental) causes, demonstrates a maximum impairment on the appropriate table(s), i.e. even if this level was reached only moments before death. Delegates should not pay posthumous lump sums in such circumstances, but bear in mind that the purpose of Sections 24 and 27 is to compensate an injured employee for the effects of having to live with the impairment. It is not appropriate, for example, to pay a PI lump sum to a person involved in an ultimately fatal accident simply because that person did not die instantaneously but – for example – survived for an hour or perhaps for a week in hospital.

However it is not possible to be prescriptive regarding the circumstances in which it may be possible to award a permanent impairment lump sum. Each case must be considered on its own merits having regard to the effects of an injury on the individual.

Clearly, it is a matter for judgement of the delegate on the facts of each individual case, whether it would be reasonable to pay a permanent lump sum to the estate of a deceased employee. However, where such a case arises and a delegate is under pressure to award lump sum compensation, the matter should be discussed with the local Manager/Team Leader and where necessary, referred to Policy for consideration.

Where a payment of ADB is made to a spouse the claimant is also entitled to payment of fees for advice from a registered financial adviser. Such can be either a reimbursement of actual expenses as supported by receipts or the payment of a properly rendered tax invoice. There is a ceiling on the amount that can be paid. This ceiling is indexed each year (current rates are available in Clik).

Reimbursement of the costs of medical attention to the dying employee, transport of his/her body and the costs of a funeral are payable not to any particular dependant on the basis of relationship, but to the person who actually paid that cost. This may of course be a person other than a spouse or child or even someone other than a 'dependant' of any description. Furthermore where those S16/S18 services remain unpaid, the appropriate amount as allowed by the SRCA may be paid by directly to the provider (i.e. doctor, ambulance service, undertaker).

Ss17(10) requires a single determination only where the claim is for compensation under Section 17. Thus, there is no reason why S16 and S18 entitlements need to be dealt with in the same determination that awards the S17 lump sums. In fact, it is more efficient and convenient in most cases to determine such matters separately.

The existing Defcare standard letter/determination with respect to Section 17 death entitlements (i.e. a determination format which assumes a spouse and joint children as the only entitled persons) includes, as the 'default' entitlement, provision for S16 and S18 determinations. These may be retained if convenient but in most cases – and no matter who may be entitled under S17 – the service providers will be pressing for payment well before the S17 matter is ready for determination. In this case it is recommended that the delegate make a separate determination in respect to these reimbursements.

Where paying the service provider direct, it is not enough to simply pay the account via Defcare/Dolars. Delegates will also need to raise a formal determination under S16 or S18. This should take the form of a letter to the claimant/provider. Where the claimant is also the service provider, delegates should make a separate determination for each service, i.e. as many determinations as there are providers, in order to preserve privacy and the business confidentiality of those providers.

Occasions may arise when one of the persons eligible to receive compensation under S17 of the SRCA also has a potential entitlement under the Veterans' Entitlement — s Act (VEA). This may occur, for instance, if the ADF member dies while on declared Operational Service overseas.

Where a spouse or child may have a dual entitlement, offsetting provisions of the VEA may reduce or eliminate that VEA entitlement to pension, should the spouse or child accept a S17 lump sum under the SRCA. It is therefore the delegate's duty of care to ensure that a dependant with potential for establishment of a dual entitlement is aware that these offsetting provisions exist.

The 'death' section of the Defcare standard letter database contains in fact, two determination letters, both identifying only the employee's spouse (and their joint children) as a lump sum recipient. One of those alternative letters contains an additional section entitled 'Important Offsetting Provisions' which informs the spouse or guardian of the potential for SRCA lump sums to affect VEA pensions, and advises the spouse or guardian or guardian to contact the Department for more detail, if required. The letter tells the spouse or guardian that although the delegate has formally determined that compensation is payable, actual payment will not be made till the spouse or guardian completes and returns an enclosed form accepting the payment.

That method of providing advice may still suffice, but only in those specific circumstances i.e. where the dependant is the only claimant. Where several adult individuals are involved in a joint determination as required by S17(10) the matter of whether the spouse is to refuse payment should be resolved well before the joint determination is issued.

Delegates should therefore write to the spouse after the amounts payable are known but prior to issuing any determination. This advisory letter should list only those amounts which may be payable to that spouse (i.e. not include amounts payable to others) and it should be clearly stated that this is a preliminary advice of amounts which will become payable shortly, and it is not itself a determination. Note: Payments made under the Defence Act 1903 are not part of any offsetting arrangements hence this advice should relate only to payments made under S17 of the SRCA. The letter should then insert the form of words used under the heading 'important offsetting arrangements' in the current Defcare letter. This section advises the widow to seek financial advice prior to making any decision regarding compensation. The letter should also enclose the form 'Election to receive compensation under S17...'

The spouse should be given 14 days to return the election form. The letter should tell the spouse that if the entitlement is not declined by means of that form within 14 days, the amount indicated would be paid. Nevertheless, in practice no payment can be made until the spouse provides his/her bank account details so that the money can be deposited therein. This may well extend the 14 days.

Note: This section is only about the advice to be provided to persons inquiring about the possibility of taking legal action against the Commonwealth for the death. The actual interaction of S17 and S44 is dealt with in more detail at 9.1 to 9.12.

Section 44 of the SRCA prevents persons taking legal action against the Commonwealth in respect to any circumstance for which the SRCA provides compensation, EXCEPT that an employee's dependent does retain a residual right to sue the Commonwealth in the case of death only. The relevant court would determine the matter on the basis of the dependant's demonstrated financial losses due to the death. The court would also take the Commonwealth's negligence and the employee's contributory negligence into account.

Persons who claim to have been financially dependent upon the deceased but who are not entitled to S17 SRCA compensation may be advised to seek legal advice with respect to S44. Delegates should also advise persons who themselves initiate the matter, i.e. ask about alternatives to an SRCA claim. Delegates should state clearly that a common law case is possible under law but must refrain from expressing an opinion about the wisdom of such action or any perceived likely outcome. Clients should be advised to seek professional legal advice on such matters.

Delegates should always inform such an inquirer that, were such a legal action against the Commonwealth (or against a third party) to be successful, this would, with but for those exceptions outlined in 9.4.1 end the litigant's SRCA entitlements (if any). Any lump sum already paid would have to be repaid. These consequences are discussed at 9.3 and 9.4. Furthermore, under all circumstances inquirers should always be told to seek professional legal advice with respect to any legal action they may be contemplating.

Subsection 44(1) of the SRCA says:

44(1) Subject to Section 45, an action or other proceedings for damages does not lie against the Commonwealth, a Commonwealth authority, a licensed corporation or an employee in respect of:

a)an injury sustained by an employee in the course of his or her employment being an injury in respect of which the Commonwealth, Commonwealth authority or licensed corporation would, but for this subsection, be liable (whether vicariously or otherwise) for damages, or

b)the loss of, or damage to, property used by an employee resulting from such an injury

c)whether that injury, loss or damage occurred before or after the commencement of this section.

Essentially this means that where the SRCA has coverage, an employee may not substitute a legal action against the Commonwealth for a claim under the SRCA.

However, Section 44 makes a single exception, i.e. where the injury results in death:

44(3) If:

• an employee has suffered an injury in the course of his or her employment, and
• that injury results in that employee's death

Subsection (1) does not prevent a dependant of that employee bringing an action against the Commonwealth, a Commonwealth authority, a licensed corporation or another employer in respect of the death of the first-mentioned employee.

Thus, dependants of the deceased employee are not prevented from suing the Commonwealth for the death of that employee.

S48 and S119 of the SRCA ensure that the result of such an action for damages must impact on the SRCA entitlement. These sections of the SRCA serve to prevent double-dipping, i.e. a dependant can not both conclude an action for damages AND access full SRCA entitlements. This matter is dealt with in detail at 9.3 to 9.12.

Insurance on the life of the deceased employee is a private financial/commercial arrangement and an amount specified by an insurance policy and paid to a dependant does not have any effect on the compensation entitlement under any of the Commonwealth Acts administered by the Department.

Therefore:

No limitation should be made to compensation entitlements in respect of payments received by a dependant, as prescribed by an insurance policy.

However:

In cases where the insurance company subsequently institutes a legal action in the dependant's name – i.e. to recover damages either from a third party deemed liable for the death (or, indeed from the Commonwealth itself) – Delegates should take an interest in those proceedings. Section 48 requires that the Commonwealth recover:

a)the compensation entitlement OR

b)the amount of damages recovered at law,

whichever is the lesser. Read 9.3 and/or 9.4 below for further information relating to this circumstance.

While dependants of the deceased employee are permitted by the terms of S44(3) to bring an action for damages against the Commonwealth in respect of the employee's death, S48 acts to ensure there is no double dipping i.e. the dependant can not access both the court-awarded damages and the SRCA lump sum.

Section 48 says:

48(1) This section applies where:

a)...

b)damages are recovered by, or for the benefit of, a dependant of a deceased employee in respect of the death of the employee and compensation is payable under this Act in respect to the injury that resulted in that death.

This means that S48 operates to limit SRCA payments where dependents 'recover damages' for the death, i.e. by means of a legal action.

S48 also provides that:

48(4) Compensation is not payable under this Act to...or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, after the date on which the damages were recovered...for the benefit of the dependent, as the case may be.

This means that the SRCA entitlements under Sections 17, 16 and 18 are not payable to that dependent who initiated the action, after the date when the damages were paid.

Note that this cessation of entitlement is permanent.

This total cessation of entitlement also operates independently of the amount of money actually recovered i.e. even if the client recovered less money that he/she would have achieved under S17.

Furthermore S48 also provides that:

48(3) If, before the recovery of the damages by, or for the benefit of, the...dependant, any compensation under this Act was paid to...the dependant in respect of the injury that resulted in the death of the employee,...the...dependant is liable to pay Comcare an amount equal to:

a)the amount of that compensation

b)the amount of the damages,

whichever is less.

This means that whatever compensation was paid for the death to that dependant prior to the finalisation of the legal action, must afterwards be repaid. However where the dependant's action recovered less money than had been paid under the SRCA, only an amount equal to the amount recovered by the legal action is recoverable from the dependant.

With regard to that recovery of compensation already paid prior to settlement of damages (i.e. a recovery under S48(3)), S48(6) says:

48(6) A reference in Subsection (3) to compensation under this Act that was paid for the benefit of a dependant does not include a reference to compensation paid under Subsection 17(5).

This means that, where compensation is to be recovered, amounts paid under S17(5) – i.e. weekly payments in respect of a 'prescribed child' – are exempt, i.e. are to be excluded from that recovery. However S48(1) is framed in such a way that there is no further entitlement to S17(5) payments after settlement of the legal action. Thus, the guardian of the child gets to keep the weekly payments already made, but no more payments are to be made after that date.

Amounts paid by the Department under S16 and S18 in respect to a death, should only be recovered from a dependant if those amounts were paid to that dependant. In cases where the dependant, for example, incurred the costs of a funeral but the Department actually paid the undertaker directly (rather than paying the dependant by way of a reimbursement), that amount of compensation is not recoverable.

With the exception of a number of circumstances as outlined in 9.4.1, s — ection 48 operates regardless of whether the dependant's action is conducted against the Commonwealth as permitted by S44(3) or against a third party responsible for the death (e.g. a person involved in a motor vehicle accident in which the employee lost his/her life).

That is, generally the operation of S48 is not altered by who/what was sued by the dependant. See 9.3 above, for the effect of S48.

Subsection 50 of the SRCA applies where damages are recovered:

1. as a result of a claim, or fresh claim, made by Comcare under section 50 (whether or not that claim progressed to the formal institution of proceedings); or
2. as a result of Comcare's taking over the conduct of a claim under that section.

Thus, if the MRCC makes a claim or a fresh claim against a third party on behalf of a dependant or takes over the conduct of such a claim, double-dipping is prevented by calculating the amount payable under the SRCA to the dependant as follows:

• the amount of compensation paid or payable is to be deducted from the damages amount.  Any costs incidental to the claim that were paid by the Commonwealth in the prosecution of the claim are also deducted.
• If a positive balance remains then the balance has to be paid to the plaintiff.

Note that under sub-section 50(2), where the MRCC takes over a claim it is responsible for paying all costs of the claim.  Only the incidental costs are recoverable as indicated above.

Should the damages be less than the person would have received under the Act if there had been no third party action, an amount of compensation is payable under the SRCA so that the dependant receives the total amount to which they are entitled.  The amount payable is calculated as per the calculations set out above.

Subsection 48(7) of the SRCA says:

48(7) Where an employee, or a dependant of an employee, establishes to the satisfaction of Comcare that part of the damages referred to in Subsection (1) did not relate to an injury, loss or damage in respect of which compensation is payable under this Act, Subsection (3) applies in relation to that employee or dependant as if the amount of the damages were an amount equal to so much of the amount of the damages did relate to an injury, loss or damage in respect of which compensation is payable under this Act.

Courts of law, when deciding an action for damages due to death, are not constrained to award damages only under those headings (loss of income, support of children etc.) used by workers compensation legislation. Subsection 48(7) provides that if the damages awarded by the court lists as components of that award, compensation for matters that are not of a type which is provided for in the SRCA these parts of the damages award are not recoverable. As an example, an award of damages might include the cost of replacement of the vehicle in which the employee died, or the legal costs of bringing the action, or the costs of medical/psychological treatment of the dependant (rather than the employee). Those components should therefore be deducted from the total damages awarded prior to calculating how much of that award is recoverable by the Department.

Clause 10.5.13 of Defence Determination 2000/1 under the Defence Act says:

10.5.13 ADB not payable if damages are recovered

1.This clause applies if:

a)but for this clause, SIA or ADB would be payable to a member or a dependant in respect of an injury suffered by the member, and

b)the member or dependant recovered, or recovers, damages in respect of the injury.

The purpose of the clause is the same as for Section 48 of the SRCA i.e. to ensure a dependant does not draw double benefits for an employee's death.

2.If the member o — r dependant recovers damages after the commencement of this Determination, the member or dependant, as the case requires, must notify the Secretary in writing, within 28 days after the day the damages are recovered, of the recovery of the damages and the amount of damages.

This requirement to notify the Department of a damages settlement within 28 days of its finalisation, is essentially the same provision as for Subsection 48(2):

• except that the Defence Determination does not specify a penalty for failure to do so, i.e. as does Ss48(2). Since the ADB is not payable unless the SRCA S17 amount is also payable, the one penalty for non-disclosure does for both.

The Defence Act requirement that the dependant also notify the Department upon initiation of the action (rather than at the conclusion, as above) is contained in Clause 10.5.12. This Clause is analogous to Section 46 of the SRCA. Both the SRCA and the Defence Act require notification within 7 days.

3.If SIA or ADB was paid to the member o — r dependant before the damages are recovered, the member or dependant, as the case requires, must repay to the Commonwealth an amount equal to the amount (if any) of SIA or ADB that, when added to the amount of SRC compensation (if any) paid to the member or dependant, does not exceed the amount of the damages.

This subclause is directly analogous to the SRCA's Subsection 48(3) in that, amounts of compensation paid prior to the award of damages must be returned following settlement of the legal action.

4.SIA or ADB is not payable to the member or dependant after the day the member or dependant recovered, or recovers, the damages.

This subclause is directly analogous to Subsection 48(4) of the SRCA, i.e. ADB compensation is not payable after the date of the dependant's legal settlement. The loss of entitlement to ADB is absolute and permanent and does not depend on the amount of damages recovered.

5.Subclause (3) does not apply if the damages were recovered in proceedings instituted by the member under Section 45 of the SRCA, or by way of a settlement of the proceedings.

Subclause (3) relates to recovery of ADB paid, following settlement of a legal action.

Section 45 of the SRCA permits an employee to make a formal, irrevocable election to take legal action against the Commonwealth in lieu of accepting amounts under S24 and S27 (i.e. a permanent impairment lump sum). Subsection 44(1) does not prevent this limited action, which may be made on the basis of non-economic loss only, and is limited to a maximum of $110,000.

Subclause 10.5.13(5) of the Defence Determination is the counterpart of Subsection 48(4A) of the SRCA. The practical effect of both of them considered together, is that S45 actions have no effect on entitlements to compensation for death.

Thus, a S45 action (whether concluded before or only after the death), does not trigger a Subclause (3) recovery of whatever ADB compensation has already been paid to the dependant.

6.Subclause (4) does not apply if the damages were recovered:

a)as a result of proceedings begun by the member after making an election under Section 45 of the Act, or

b)as a result of proceedings begun or taken over by the Commonwealth against a person (other than the Commonwealth, a Commonwealth authority or an employee of the Commonwealth), or

c)in a settlement of those proceedings.

The effect of Subclause (6) is to negate the usual effect of Subclause (4) in certain circumstances. Subclause (4) removes the right to receive ADB once damages are received (from an action over the employee's death).

Therefore, ADB remains payable following:

a)A legal action under S45 of the SRCA i.e. in lieu of a lump sum payment:

–The nature of S45 actions and the special provisions made for them have been discussed in relation to Subclause (5) above.

b)Conclusion of a legal action originally open to the dependant but which has instead been taken over and concluded by DVA or the Department of Defence, i.e. in accordance with the powers granted at Section 50 of the SRCA.

–The operation of S50 is discussed elsewhere i.e. at 9.12 of this Handbook.

–Legal actions under S50, although formally in the dependant's name, are in fact an initiative of the Department.

7.If a member or a dependant satisfies the Secretary that a part of the damages recovered by the member or dependant was not in respect to death, permanent impairment or non-economic loss as a result of the injury, this clause has effect in relation to that member or dependant, as the case requires, as if the amount of the damages recovered by the member or dependant were an amount equal to so much (if any) of the damages as was in respect of death, permanent impairment or non-economic loss as a result of the injury.

Courts of law, when deciding an action for damages due to death, are not confined to award damages only under those heading — s (loss of income, support of children etc.) used by workers compensation legislation. Subclause (7) provides that if the damages awarded by the court lists as components of that award, compensation for matters that are not of a type which is provided for in the ADB or SRCA these parts of the damages award are not recoverable. As an example, an award of damages might include the cost of replacement of the vehicle in which the employee died, or the legal costs of bringing the action. Those components should therefore be deducted from the total damages awarded prior to calculating how much of that award is recoverable.

8.In this clause:

Damages does not include an amount of damages paid to the Commonwealth under Section 76 of the Veteran's Entitlements Act 1986.

Section 76 allows DVA to institute an action against a person who may have a legal liability to pay damages in respect to an injury suffered by a Veteran (i.e. a person entitled under the Veterans Entitlements Act [VEA]). The damages to be recovered by the VEA delegate are limited to the amount of pension paid to that Veteran up to the date of the award. The decision to institute that action is a decision of the Department, not of the Veteran.

The effect of Subclause (8) is therefore similar to that of Subclause (6)(b), i.e. it acts to prevent persons from being debarred from compensation for death or injury on the basis of actions initiated or taken over by the Commonwealth, (even though the Commonwealth is acting in the client's name.)

Certain Australian State governments have passed laws that provide compensation to the victims of road accidents or for losses due to criminal activity etc. These Acts do not refer to 'workers' per se and are not Workers Compensation Acts (workers compensation acts are dealt with by section 118 - see 9.9. They relate to injuries and loss of ordinary citizens. The provision of compensation under those Acts is as the result of administrative decisions enabled by those Acts and not by a legal 'action' of the dependent through the law courts, i.e. such as would be caught by S48.

However S119 of the SRCA deals with such compensation, i.e. S119(2) provides that:

119(2) Subject to this section, the compensation that is payable under this Act...for the benefit of the dependant in respect of the injury that resulted in the death,...is so much (if any) of the compensation under this Act that, but for this section, would be so payable as exceeds the amount of State compensation recovered...by, or for the benefit of the...dependant,...

This means that the amount of the State compensation entitlement must be deducted from the SRCA compensation entitlement and only the balance paid to the dependant. Naturally, where the State entitlement exceeds the SRCA entitlement nothing is payable under the SRCA.

Furthermore, S119(3) provides for cases where SRCA compensation had already been paid i.e. prior to receipt of money from a State Act:

119(3) Subject to this section, if, before the recovery of State compensation by or for the benefit of the...dependant, compensation under this Act was paid...for the benefit of the dependant in respect of the injury that resulted in the death,...the...dependant is liable to pay the relevant authority:

a)the amount of the compensation paid by it under this Act, or

b)the amount of the State compensation recovered...for the benefit of the dependant,

whichever is less.

Essentially this is the same as for S48, i.e. when the SRCA death benefit has been paid prior to the State death benefit (under the State 'specified law') MCRS must recover either:

• the whole SRCA death benefit where the amount of the State benefit exceeded it,
  
  or, alternatively
• an amount equal to the State benefit, i.e. where the SRCA benefit was the larger.

Note however that S119(5) says:

119(5) A reference in Subsection (3) to compensation under this Act that was paid for the benefit of a dependant does not include a reference to compensation under Subsection 17(5).

This means that, where compensation is to be recovered, amounts paid under S17(5) – i.e. weekly payments in respect of a 'prescribed child' are exempt, and are to be excluded from that recovery. Also S119(5) is framed in such a way that the S17(5) payments may continue while the child continues to be a 'prescribed child' i.e. regardless of payment under the 'specified Act'.

Section 119 refers to 'State compensation' which means compensation payable to the dependant under a 'specified law' of a State or Territory of the Commonwealth of Australia. The laws 'specified' by S119 are those declared in a Ministerial Notice last updated in 1989. This list (List A) applied from 1 December 1988 to 30 June 2007.  A revised list (List B) has applied since 1 July 2007(Note that they are not State Workers Compensation Acts.) Delegates should apply S119 to amounts received by the dependant through the action of the following 'specified Acts'

List A

New South Wales

Compensation to Relatives Act of 1897

Crimes Act 1990

Damage to Aircraft Act 1952

Civil Aviation (Carrier's Liability) Act 1978

Sporting Injuries Insurance Act 1978

Victims Compensation Act 1987

Transport Compensation Act 1987

Victoria

Civil Aviation (Carrier's Liability) Act 1961

Criminal Injuries Compensation Act 1972

Motor Accidents Act 1973

Transport Accident Act 1986

Queensland

The Criminal Code Act 1899

Western Australia

Criminal Code Compilation Act 1913

Fatal Accidents Act 1959

Civil Aviation (Carrier's Liability) Act 1961

Damage by Aircraft Act 1964

Criminal Injuries Compensation Act 1982

South Australia

Civil Aviation (Carrier's Liability) Act 1962

Criminal Injuries Compensation Act 1977–78

Tasmania

Criminal Code Act 1924

Fatal Accidents Act 1934

Civil Aviation (Carrier's Liability) Act 1963

Damage by Aircraft Act 1963

Motor Accidents (Liabilities and Compensation) Act 1973

Criminal Injuries Compensation Act 1976

A.C.T.

Crimes Act 1900 of the State of NSW in its application to the ACT

Criminal Injuries Compensation Ordinance 1983

Northern Territory

Compensation (Fatal Injuries) Act

Motor Accidents (Compensation) Act

Crimes Compensation Act 1982

List B

New South Wales

Compensation to Relatives Act of 1897

Crimes Act 1990

Damage by Aircraft Act 1952

Civil Aviation (Carrier's Liability) Act 1967

Motor Accidents Act 1988

Motor Accidents Compensation Act 1999

Sporting Injuries Insurance Act 1978

Victims Support and Rehabilitation  Act 1996

Victoria

Civil Aviation (Carrier's Liability) Act 1961

Motor Accidents Act 1973

Transport Accident Act 1986

Victims of Crime Assistance Act 1996

Queensland

Criminal Code Act 1899

Criminal Offence Victims Act 1995

Western Australia

Criminal Code Compilation Act 1913

Fatal Accidents Act 1959

Civil Aviation (Carrier's Liability) Act 1961

Damage by Aircraft Act 1964

Criminal Injuries Compensation Act 2003

South Australia

Civil Aviation (Carrier's Liability) Act 1962

Victim of Crimes Act 2001

Tasmania

Criminal Code Act 1924

Fatal Accidents Act 1934

Civil Aviation (Carrier's Liability) Act 1963

Damage by Aircraft Act 1963

Motor Accidents (Liabilities and Compensation) Act 1973

Criminal Injuries Compensation Act 1976

A.C.T.

Crimes Act 1900

Victims of Crime (Financial Assistance) Act 1983

Northern Territory

Compensation (Fatal Injuries) Act

Motor Accidents (Compensation) Act

Victims of Crime Assistance Act

In brief. Where a dependant receives a payment under one of the State 'specified laws' listed at 9.7, clause 10.5.15 of the Defence Determination 2000/1 performs for the ADB, essentially the same function that S119 does for the SRCA.

• The total amount of compensation payable can be expressed as:

(SRCA compo + ADB) LESS (amount awarded by specified State law).

• Where ADB has been paid before the State compensation, the dependant repays:

([SRCA S17 lump sum LESS S17(5) child payments made] + ADB)

OR

(amount awarded under specified State law)

i.e. whichever is less.

• Components of the (amount awarded under the State law) which do not have counterparts in the SRCA or ADB should not be taken into account when calculating entitlements or recoveries.

The SRCA contains separate provisions with respect to the effect of awards from certain State 'specified laws' and awards under State worker's compensation legislation.

• Section 119 of the SRCA (which is discussed at 9.7 above), prevents a dependent of a deceased Commonwealth employee from receiving double benefits via a group of specified State Acts that provides compensation to citizens who suffer death injury or loss from a variety of circumstances. Those specified Acts apply to ordinary Australian citizens, not just government employees. Those specified Acts are not Workers Compensation Acts. Those specified Acts may apply to ADF members who are killed or injured in a manner that brings them under the provisions of that specified Act.
• Each State government provides Workers Compensation legislation which applies to workers within those commercial enterprises operating in that State. These are Acts which are analogous in purpose to the SRCA. Previously, it has been asserted that a Commonwealth employee, (who is, naturally, covered by the SRCA for work-related injury or death) also has coverage under the relevant State Workers Compensation legislation i.e. in the State in which he/she was injured.

Note: This section of the Handbook deals only with the effect of awards from State workers compensation jurisdictions, as identified by S118 of the SRCA. Those Acts 'specified' by S119 therefore play no part in the following discussion:

• Section 118 of the SRCA acts to prevent a Commonwealth employee (or a dependant of a deceased employee) deriving 'double benefits' by accessing both State and Commonwealth Workers Compensation Acts for the same injury, including an injury resulting in death.

• Note that S118 also applies to amounts payable under the Acts of a foreign country, i.e. it would apply in cases where an ADF member was on duty overseas 'on loan' to an allied defence force.

• S118 operates in a similar fashion to S48 and S119, i.e.:

• S118(1) prevents payment of death benefit in respect to an employee where the dependant has already accessed benefits from a State Workers Compensation Act in relation to that death.
• S118(2) provides for recovery of the whole amount of SRCA compensation paid to a person if and when that person subsequently accesses benefits from a State Workers Compensation Act. There is no discretion to recover a lesser amount if the dependant achieves a lesser amount from the State Act than was paid under the SRCA.

SPECIAL NOTE – JUDICIAL DECISION – S118 NUGATORY

The above paragraphs detail the manner in which S118 was intended to operate. The SRCA contemplates the possibility that a dependant may make a claim under both the Commonwealth compensation jurisdiction, and also under a State workers compensation Act. The purpose of the Section is to ensure that a dependant does not achieve double compensation by applying for payment in two separate jurisdictions.

However, the very notion of a 'dual entitlement' under both Commonwealth and State Workers Compensation has now been subjected to legal scrutiny. The previous assumption – i.e. that State Workers Compensation may apply to a Commonwealth worker employed by the Commonwealth in that State – has, since 1999, been significantly weakened, and perhaps completely nullified.

The test case

In Worthing v Telstra Corporation Limited (1997), the NSW Compensation Court held that the SRCA does not provide an exclusive scheme for compensation for Commonwealth employees and that therefore the NSW Compensation Court has jurisdiction to determine claims in circumstances where a Commonwealth employee is injured at work in NSW.

The High Court ruling

However in Telstra Corporation Limited v Worthing (1999), the decision of the Court of Appeal was reversed by a unanimous decision of the High Court which held that the SRCA covers the field and that the NSW Worker's Compensation Act has no applicability to Commonwealth employees.

• Delegates curious as to the High Court's reasoning should refer to the extended commentary at S118 in the 'Annotated SRCA' (Ballard/Sutherland).

The High Court decision is applicable to the SRCA's relationship to State workers' compensation jurisdictions in every State or Territory not just NSW. Taken on its face, this means that no Commonwealth worker – and therefore no ADF member – has access to a State Workers Compensation Act.

In cases w — here clients inquire whether they may have a claim under State workers compensation in lieu of the SRCA, those clients should be referred to the decision in Telstra Corporation Ltd v Worthing. They should also be advised to seek professional legal advice as to the applicability of that case to their own circumstances.

If a delegate becomes aware that a dependent of a deceased ADF employee appears, (contrary to the Worthing decision), to have achieved a State Worker's Compensation payment in respect of that death, that Delegate should:

1.not only invoke S118, but

2.also refer the matter to Policy for consideration.

Section 46 of the SRCA says:

46(1)Where:

a)              compensation is payable under this Act in respect of the death of an employee, and injury to an employee or the loss of, or damage to, property used by an employee

b)              the death, injury, loss or damage occurred in circumstances that appear to create a legal liability in a person (other than the Commonwealth, a Commonwealth authority, a licensed corporation or another employee) to pay damages in respect of the death, injury, loss or damage, and

c)              the employee or a dependant of the deceased employee, as the case may be, makes a claim against the person for the recovery of such damages

the employee or dependant must, as soon as practicable but in any event not later than 7 days after the day on which he or she first became aware of the claim, notify Comcare of the claim.

Penalty: 5 penalty points

(2)Subsection (1) is an offence of strict liability.

In short, this means that a dependant must advise the Department that he/she has initiated a third party action in respect of the death, within 7 days of doing so, and a formal penalty applies for failure to do so.

Furthermore, Subsection 48(2) says that:

48(2)The employee or dependant shall, not later than 28 days after the day on which the damages were recovered, notify Comcare in writing of the recovery of the damages and the amount of the damages.

Penalty: 10 penalty points

48(2A) Subsection (2) is an offence of strict liability.

In short this means that a dependant who has settled or concluded a third party action in respect of the employees death, is obliged to notify the Department of the amount recovered within 28 days of that settlement. A formal penalty applies for failure to do so.

Delegates who become aware that a dependant has failed to meet obligations under S46 or 48(2) must notify the Department in writing or by e-mail, with a summary of the circumstances. DVA will then consult with Defence about the legal steps to be taken, i.e. for a court of relevant jurisdiction to exact the penalty.

Section 50 of the SRCA applies to claims for an employee's death in cases when a third party may have legal liability to pay damages for that death AND

50(1)(c)...a claim against the person for the purpose of recovering such damages has not been made by...the dependant, or , having been made, has not been prosecuted:

The MRCC may make a claim or fresh claim against the person in the name of the employee or dependant for the recovery of damages in respect of the injury, loss, damage or death or may take over the conduct of the existing claim, as the case requires.

In other words, the Commonwealth may either initiate or take over an existing legal action in a dependant's name, and prosecute that action against a third party with the object of recovering damages to offset the compensation payable. Subsection 50(4) provides that the Department may insist that the dependant cooperate in various ways i.e. by requiring that various documents be signed by that dependant etc. Subsection 50(3) requires that if MR — CC does indeed cho — o — se to pursue such an action, it becomes liable for all associated costs and must bring the claim to a conclusion.

Where the MR — CC engages in such litigation, Subsection 50(7) is relevant:

50(7) Any damages obtained as a result of a claim made or taken over by MRCC under this section (including damages payable as a result of the settlement of such a claim) must be paid to MRCC and MRCC must deduct from the amount of those damages:

a)an amount equal to the total of all amounts of compensation paid to the employee or dependant under this Act in respect of the injury, loss, damage or death to which the claim relates, and

b)the amount of any costs incidental to the claim paid by MRCC.

MRCC must pay the balance (if any) to the employee or dependant.

This amounts to the same scheme of limitation of damages which would have applied had the dependant prosecuted the case his/her self, (i.e. in effect the lesser of the damages or the compensation is repayable to the Commonwealth):

• except that the costs of conducting the action are also incorporated in the amount repayable to the Commonwealth.

The conduct of any action under S50 requires MR — CC to engage legal advice and legal expertise to identify prosecute and manage those cases. Delegates dealing with death claims involving a third party in the circumstances of that death, should refer the determined compensation claim for consideration of possible S50 action.

Section 99 of the 1971 Act is the counterpart of Section 48 of the SRCA. That is, it acts to limit the compensation payable in situations where the dependant also recovers damages by means of a common law action against the Commonwealth (or a third party). However the action of S99 of the 1971 Act differs in a number of respects from provisions of the current Act.

In general, the provisions of the 1930 Act in relation to recovery of damages are much simpler than under either the 1971 Act or the SRCA.

In practice Delegates need only concern themselves with the effects and recoveries from past legal actions, as all attempts at a new legal action in respect to 1930 Act deaths would be well out of the time allowed by law, by some decades...with one exception. The group-action brought by the survivors of the 1964 collision between HMAS Melbourne and HMAS Voyager represents a special case. It is not likely to be repeated. If any such cases arise it should be referred to National Office.

Covert optical surveillance is an activity that intrudes into the privacy of individuals in an extreme way. An individual should be placed under covert surveillance only after careful consideration of whether there are sufficient public reasons to justify that course of action. (Source: Privacy Commissioner, February 1992)

Within the Military Rehabilitation and Compensation Commission (MRCC), covert optical surveillance is to be used prudently and only within the parameters outlined below and in accordance with the broad principles of natural justice.

Natural justice means in this context that decisions taken in relation to the use of covert optical surveillance are only taken fairly, in good faith, without bias and having due regard to the views of the individuals observed. Where possible and appropriate in the circumstances, those individuals will be given an opportunity to state their case prior to any decision being taken that could adversely affect them.

Where there is any doubt as to how to apply natural justice in the above situation, local MRCC Managers or staff in the Policy and Procedures Section of MRCC National Office, Canberra should be consulted.

Covert surveillance should only be undertaken by trained investigators/surveillance officers. Instructions to surveillance operatives on services and actions must include the points listed below. Points a) to (d) below are of a general nature, whilst (e) and (f) are case specific. The instructions should cover:

a)avoidance of any actions which may unreasonably impinge on the privacy and rights of other people, e.g. when using photography avoid, where practicable, including other individuals such as relatives and friends, who may be in contact with the surveillance subject during the surveillance period, in the photograph.

b)where practicable, only material relevant to the purpose of conducting the covert surveillance should be collected. There should be a clear separation of facts from opinions and only relevant personal information should be included in records resulting from the surveillance.

c)instructions on the manner of collection of personal information:

• the collection should not involve the commission of a criminal offence or give rise to a civil action, e.g. trespass on land or damage to property or goods.
• the collection should not involve entrapment of the surveillance subject.
• hence, passive observation is permissible, however, any attempts to actively induce the subject into a situation in which that person would not ordinarily and voluntarily enter, thereby creating a false or misleading impression of the person's abilities, is not permitted.

d)instructions by MRCC on the obligations of investigators to safeguard the material collected. The MRCC Office should ensure appropriate provisions, protecting privacy, are included in contracts engaging private contractors.

e)the method by which information is to be collected (e.g. logs with observations recorded, photography or video recordings). This should be appropriate to the purpose of collection in the particular case.

f)the period and scope of the surveillance procedure as specified above.

Material collected by covert surveillance is to be used in accordance with the following conditions:

a)the material is to be used only for the purpose for which the approval is given, or where exceptions under IPP 10 of the Privacy Act apply.

b)each MRCC Office must ensure that information is accurate, up to date and complete prior to the information being used. Material collected by covert surveillance must not be used in isolation but corroborated by other information to ensure accuracy.

Tests for accuracy may include:

a)identity check, i.e. name and address of surveillance subject.

b)checking timing of the surveillance procedure.

c)verifying that material collected is consistent with the nature and details of the claim e.g. musculo-skeletal injuries.

d)checking that there is not another reasonable explanation for the particular information collected such as:

• injured worker able to lift box because he/she was wearing a splint
• box lifted by injured worker was empty
• activity performed by worker did not involve using injured muscles.

Material collected by covert surveillance is not to be disclosed to another person, body or agency, other than in accordance with IPP 11 of the Privacy Act (Reproduced at Attachment A). Any request for release of surveillance material either made under a Section 59 request under the SRC Act 1988 or the Freedom of Information Act, must be reported to the Director of the Policy and Procedures Section at MRCC National Office who will also make decisions regarding disclosure of material in consultation with the local MRCC Manager and our legal advisers.

When material is disclosed there must be a record of:

a)the reason(s) for disclosure

b)the recipient of the information of documents

c)the officer authorising disclosure, and

d)exactly what information or documents were disclosed.

Where material is disclosed to another person, body or agency, safeguards should be in place to ensure that the information is only disclosed by the receiving agency or person in accordance with IPP 11 of the Privacy Act.

The MRCC Office should put in place appropriate measures to protect the material against loss, unauthorised access, use, modification or disclosure by:

a)ensuring the classification is clearly marked on the material

b)restricting access to relevant personnel on a 'need to know' basis

c)marking all envelopes used to transmit this material with 'TO BE OPENED BY ADDRESSEE ONLY'

d)storing the material in an approved security container

e)storing material separately from other files

f)maintaining a log of all personnel accessing, using or removing the material, in order to establish an audit trail.

'Incapacity' for the purposes of the SRCA and former Commonwealth compensation Acts, means incapacity for work.

• It is also common usage that the word 'incapacity' also means 'incapacity payments'. Incapacity payments compensate injured employees for salary or other earned income lost due to the incapacitating effects of injury. The Act provides this compensation as regular payments calculated on a weekly basis but actually paid fortnightly through PMKeyS, the Defence payroll system.
• These payments are not made at a flat rate but are calculated on the basis of formulae contained in the Act, in relation to the client's former income, degree of incapacity, receipt of superannuation and other factors.

The word 'Incapacity' is not specifically defined in the SRCA although S4(9) does establish an extended basis for determining whether a person has an 'incapacity for work':

4(9) A reference in this Act to an incapacity for work is a reference to an incapacity suffered by an employee as a result of an injury, being:

a)an incapacity to engage in any work, or

b)an incapacity to engage in work at the same level at which he or she was engaged by the Commonwealth or a licensed corporation in that work or any other work immediately before the injury happened.

The word 'injury' used in this definition, is itself defined under Section 4. In short, it means only those injuries or diseases having a compensable nexus with employment.

Thus, a period of incapacity for work includes any period when:

• the client is not working ('engage in any work') because of the injury, or
• the client is on an approved rehabilitation program, or
• the client is restricted in work hours, ability to undertake shifts or undertake certain elements of the job ('work at the same level'), or
• the client is away from work attending medical treatment, etc., and
• the client has incurred loss of earnings.

This type of incapacity is for:

• a period when a client is totally unable to work as a result of a compensable condition, or
• a client is seeking medical treatment during work hours for a compensable condition.

During each of these periods, irrespective of the duration, the client is unable to engage in any work.

Note, that the AAT has rejected the argument that this phrase 'incapacity to engage in any work' at S4(9)(a) should be interpreted to mean that there is incapacity if there is any single form of work that the employee is unable to do. However the proper interpretation is that there is incapacity for 'any' work if there is now no form of work that the employee is able to do.

In Re Sullivan and Comcare (1998), the Tribunal said:

67 Mr Johnson also referred to the definition of 'incapacity for work' in S4(9) of the Act. He submitted that 'incapacity for work' does not mean that an employee is incapacitated for all work: merely that the person has some incapacity which restricts the sort of work the person can undertake. The Tribunal notes there are two parts of the definition in S4(9), although in both cases the reference is to an incapacity suffered by the employee as a result of an injury. Paragraph (a) is 'an incapacity to engage in any work'. The alternative paragraph (b) is 'an incapacity to engage in work at the same level' at which the person was employed immediately before the accident happened.

68 In the Tribunal's view, the paragraph (a) reference to an incapacity to engage in any work, is a reference to being unable to undertake any form of work at all. This is the plain English meaning. By contrast, paragraph (b) is linked to the employee's work for the particular employer before the injury. The Tribunal rejected Mr Johnson's submission that paragraph (a) should be read as meaning a person is incapacitated if there is any form of work which they are unable to do.'

This is an important finding in respect to contentions by some clients who, having been medically discharged from the ADF, continue to define themselves narrowly as infantryman, gunner etc. and assert that their incapacity for employment will not end unless re-enlisted at the same occupation. That assertion is not correct. In fact, they cease to be incapacitated when able to engage in suitable employment 'at the same level' i.e. the same rate of pay in any suitable civilian job.

• See 11.1.4 for a discussion of 'work at the same level'.
• Some members are medically discharged due to injuries which prevent only operational deployment or satisfaction of the ADF's rigorous physical fitness standards and they are thus able to work 'at the same level' in suitable civilian employment, i.e. virtually from the date of discharge. Nevertheless, it is DVA policy that such members are deemed to be 'incapacitated for all work' for the first four weeks after the date of medical discharge.

This type of incapacity occurs when a client, because of the accepted condition is:

• on a graduated return to work
• is unable to work pre-injury hours
• unable to undertake specific duties
• unable to work shifts or overtime, or
• redeployed to a lower paying position.

The duration of incapacity will be the full duration of the period and not just the hours the client is absent.

Thus the essential requirements for a person to be a 'former employee' are:

• he/she was receiving weekly payments of compensation immediately before 1 December 1988 (the 'commencing day' of the SRCA), i.e. actually on 30 November 1988, and
• he/she had ceased to be a Commonwealth employee before 1 December 1988.

It is important to note that the person must actually have been receiving weekly compensation, it is not sufficient that they were entitled to compensation at that day. In the case of Comcare v. Neil (1993) the Federal Court decided that the phrase 'was receiving' should be given its natural meaning, i.e. it is not sufficient that a person was simply entitled to receive the 1971 Act's incapacity payments on 30 November 1988. That person must have actually been, as a historical fact, in receipt of payments made in respect of that day, to qualify as a 'former' employee.

Consequently, a retrospective determination – i.e. one made today under the SRCA – that a person was entitled to incapacity payments on the 30 November 1988 does not mean that this person is a 'former'.

The significance of the Section 123 definition is that the current incapacity periods of 'former employees' are to be paid under Sections 131 to 137 of the SRCA. These are different transitional provisions to other old-Act clients and they specify a scheme of payment different to either that of the 1971 Act or of the SRCA.

Note: Given the very narrow defined meaning of 'former employee', delegates should avoid using this term to describe ordinary ADF dischargees.

Note: Use of the calculator when determining the quantum of an entitlement, is a mandatory procedure in all cases.

Failure to run the calculator is a 'critical error' for Quality Assurance purposes.

However remember that you are the Delegate, and it is you, not the computer who will be signing the determination!

The Calculator result is only a guide, (albeit a very powerful and complete guide) and you are not legally obliged to accept the Defcare result. It is possible to reject the Calculator result and determine another if you are not satisfied with the Calculator result. However as the Calculator rule base takes all policy into account, this should be an exceedingly rare event!

If and when you are ever faced with such an occurrence (i.e. Defcare gives a result which appears anomalous and not consistent with your understanding of the case), firstly go back and check your entries! If there continues to be a discrepancy, you should submit a query on the SRCA discussion line, i.e. before committing a determination to check:

a)whether you have made an error of policy, or

b)whether the rule base of the Defcare calculator needs adjustment.

If you still need to proceed with a decision which is at variance with the Calculator summary:

• You must write a detailed justification of your preferred outcome, demonstrating that your actual determination is 1) legal, and 2) more consistent with the evidence and demonstrated circumstances of the case than that of the calculator.
• This justification should be recorded BOTH on Defcare in the Investigation notes part of the calculator and also printed to the document file.

Note: The following guidance relates to S19 as amended from April 2002. Delegates engaged in paying incapacity for a period prior to April 2002 should therefore read the following summary in conjunction with the more detailed discussion at 31.3.

S19(2A) provides that a week during the first 45 weeks of incapacity (i.e. a period '45 times the employee's normal weekly hours') is to be designated a 'maximum rate compensation week'. S19(2) provides that the entitlement in a 'maximum rate compensation week' is ordinarily to be calculated by the formula:

(NWE – AE)

• NWE is calculated in accordance with S8 and is a formal representation of what the client's earnings would have been but for the injury, i.e. based on average earnings during a 'relevant period' (i.e. a period as defined by S9)
  
  (see chapter  31 about NWE, including 31.2.4 re: 'relevant period')
• AE is a representation of the client's post-injury earnings (See chapter 15 and chapter 32)

Note that incapacity payments, being income replacement and not a veteran's pension, is taxable at the appropriate marginal tax rate prior to payment to the client. Instructions as noted on the Tax Declaration form should always be followed.

For reservists the 'reserves earnings' component only of their income is not taxable and is discussed at 31.9 and 38.3.

Note: The following guidance relates to S19 as amended from April 2002. Delegates engaged in paying incapacity for a period prior to that date should therefore read the following summary in conjunction with the discussion at 31.3.

The method of calculating weekly payments under S19(2) – i.e. the formula (NWE-AE) discussed at 30.1.1 above – extends only for the first 45 weeks of incapacity:

• actually expressed by 19(2) as '45 times the employee's normal weekly hours'

Note: The 45 weeks is a cumulative total, and not necessarily one derived from a continuous period of incapacity. It is common for clients with chronic illnesses to suffer incapacity for work in a sporadic fashion, for example with the client off work for only days or a few weeks at a time or perhaps in longer but still discontinuous 'episodes', with this pattern persisting over a long period.

Delegates must diligently monitor the cumulative total period of 19(2) payments to ensure that the transition to S19(3) entitlement is made accurately, i.e. without any overpayment.

Subsection.19(3) provides that after 45 weeks of incapacity the S19(2) compensation entitlement is to be varied downwards to a level between 75% and 100% of that otherwise payable. The actual percentage of the pre-45 week entitlement previously payable, depends upon the hours per week that the client actually worked.

Subsection.19(3) in fact provides the following formula for post-45 week entitlements:

(adjustment percentage x NWE) – AE

where:

Adjustment percentage is a percentage equal to:

a)if the employee is not employed during that week – 75%, or

b)if the employee is employed for 25% or less of his or her normal weekly hours for that week – 80%, or

c)if the employee is employed for more than 25% but not more than 50% of his or her normal weekly hours during that week – 85%, or

d)if the employee is employed for more than 50% but not more than 75% of his or her normal weekly hours during that week – 90%, or

e)if the employee is employed for more than 75% but less than 100% of his or her normal weekly hours during that week – 95%, or

f)if the employee is employed for 100% of his or her normal weekly hours during that week – 100%.

Thus, upon the expiration of 45 weeks of proven incapacity, the entitlement of a person who is not working at all (0% of normal weekly hours) because of the injury, reduces to 75% of that formerly payable under S19(2). However the entitlement of a person who, for example, is able to work 75% of his normal weekly hours will amount to 95% of his S19(2) calculation.

Note that incapacity payments, being income replacement and not a veteran's pension, is taxable at the tax rate indicated on the clients Tax Declaration form prior to payment to the client.

• The tax situation of reservists, for whom the reserves earnings portion only of their NWE is not taxable, is discussed at 31.2.3.

Subsections 19(2B), (2C) and (2D) of the SRCA are merely very detailed provisions relating to compensation in the balance of that week in which the period '45 times the employee's weekly hours' finally terminates, i.e. these subsections deal with the transition between the pre-and post 45-week periods. Nevertheless the practical result differs little or not at all from that which prevailed prior to 1 April 2002 and the complexities of 19(2B)–(2D) are handled by the existing rules in the Defcare Incapacity Calculator.

Delegates requiring more extensive guidance to S19(2B)–(2D) should read 31.1.1 and 31.1.2.

This topic is also discussed at chapter 36.

Subsections 19(6) to (14), provide a financial 'safety net' for clients who are:

• still incapacitated, in the period after the initial 45 weeks of incapacity, and
• are in fact wholly incapacitated (i.e. worked 0 hours in the week), and
• the $ value of 75% of (NWE – AE) + A is less than statutory 'minimum earnings'.

'

Minimum earnings' is a statutory dollar-value defined by S19(8) and is the total of:

• a specified amount per week in respect of the client, plus
• another specified value per week in respect of each 'prescribed person', plus
• yet another specified value per week in respect of each 'prescribed child'.

Current $ values declared for each of these statutory amounts are subject to annual indexation increases. Current and historical rates are tabled at 36.1.3. 'Prescribed person' and 'prescribed child' are defined in detail at 36.2 to 36.6.

Thus, where a totally incapacitated client's '75% of NWE' entitlement falls below the 'minimum earnings' computed in his or her case, that entitlement is adjusted upwards to the amount of minimum earnings which applies (via S19(7) to 19(14)) in his/her case.

Furthermore, in cases where reservists are paid on the basis of 19(6), – either on the basis of their known NWE or as a form of 'interim payment' (see 30.6.1) – there is no distinction between compensation for reserves or civilian income.

• Note that all incapacity payments, including the statutory rates provided by S19(6), represent income replacement and are not made on the same basis as a veteran's pension. They are therefore taxable at the current marginal tax rate prior to payment to the client.

Therefore, this means that where S19(6) payments are made to reservists, the whole amount of that payment is taxable.

See Part 30.6 for a more detailed discussion of this whole topic.

See 36.1.3 for a table of current and past statutory amounts re: 'minimum earnings'.

There is no upper limit to the compensation payable under S19(2) – i.e. within the first 45 weeks of incapacity – other than the full amount of the client's NWE.

However after the first 45 weeks of incapacity Subsection 19(5) provides an upper limit to the amount of compensation payable under Subsection 19(3).

Subsection 19(5) provides that no amount calculated under S19(3) may exceed 150% of the Average Weekly Ordinary Time Earnings of Full-Time Adults (AWOTEFA).

• AWOTEFA is published, from time to time, by the Australian Statistician.
• See chapter 35 for a more detailed discussion of this topic

'Former Employee' is a specific technical term under the SRCA, and means a person who satisfies the criteria at S123.

' Former Employee' does not, therefore, refer to just any ex-member of the ADF.

Compensation entitlements of those 'Former Employees' who are not in receipt of superannuation forms a special case which is discussed at chapter 44.

Sections 8 and 9 of the SRCA provide for the calculation of normal weekly earnings (NWE). Essentially, these provisions are a re-enactment of S25 of the Compensation (Commonwealth Government Employees) Act 1971 (the 1971 Act), and allow for the calculation of a weekly amount that is a fair representation of what a client would have earned but for their compensable injury.

See 14.1 and 14.2 for general discussion of content and operation of S8 and S9.

In short, the Normal Weekly Earnings (NWE) represents a deemed value in respect of the client's pre-injury earnings.

NWE is intended to provide a fair representation of what the client could normally have expected to earn at any particular point in time but for the injury, based on the client's actual earning capacity at the time of injury. It is subsequently adjusted for those general (industrial) wage movements current between injury and time of incapacity.

NWE for reservists includes civilian earnings as well as earnings from the Commonwealth (i.e. full-time civilian + part-time reserves employment).

NWE thus provides a reference point for the calculation of the weekly incapacity compensation entitlement for a client under the SRCA. It is incorporated within all incapacity payment calculations other than for some categories of 'Former Employee' (see chapter 13) and also other than for those periods of incapacity which predate the SRCA.

Subsection 8(1) specifies a formula for calculating NWE which can be paraphrased as:

(average weekly hours worked x average hourly rate) + allowances

Note: This calculation is dealt with in more detail and with more exactness at 31.2.

Furthermore, Subsection 8(2) provides a second formula for additional NWE in respect of those clients 'required to work overtime on a regular basis' i.e.:

(average hours of overtime per week x average hourly overtime rate)

Note: This calculation is dealt with in more detail and with more exactness at 31.1.3

Both of the above calculations are based on averages (of hours, allowances etc.) taken during a 'relevant period'. The term 'relevant period' is defined by Section 9.

This issue is dealt with in more detail at 14.2 and 31.2.4.

Calculations of NWE for reservists are conducted on the same basic principles as above, but differ from those of full-time members in that they are have two components, i.e. part-time reserves earnings plus earnings from civilian work also.

Note that NWE is based upon the client's earnings for the period whilst in Commonwealth employment, not earnings from subsequent employment undertaken after discharge from the ADF.

In practice, most incapacity payments made to full-time ADF members are made after the member has discharged. In all such cases the NWE is based on the higher of either the rank/pay at date of injury or the rank/pay group at discharge, and subsequently adjusted by the Wage Cost Index as per S8(9) (b&c) of the SRCA.

Section 8 does provide for adjustment to the NWE to account for promotions, changes to award payments, allowances etc. following the injury.

Some clients may have multiple periods of ADF employment, including full-time and part-time service. NWE is always based on earnings from the period of employment during which the injury occurred.

Example: an ex-member enlisted in the Army on 6 August 1968 and discharged from full-time service on 8 August 1980, at which time she held the rank of Corporal Pay Group 3.  She subsequently enlisted in the Reserves and continued to serve for 13 years before discharging in 1993, at the rank of Sergeant Pay Group 4. If she was injured during full-time service her NWE is calculated at discharge from full-time service as a Corporal Pay Group 3.  If she was injured during Reserve service then her NWE is based on Reserve plus civilian earnings at the time of her discharge from the Reserves in 1993. See 31.3 below for guidance on post-injury adjustments to NWE.

Merely notional improvements in earning capacity (e.g. likely future promotions or loss of career prospects) are not taken into account.

• However some classes of employee (e.g. recruits and trainees, apprentices and officer cadets) are ordinarily advanced in rank and/or pay-level automatically, i.e. as the training course progresses. Subsection 8(6) requires that NWE encompass this incremental form of advancement.
• This topic is discussed in more detail at 31.3.6 and 31.3.5.

Last amended: 19 June 2014

Notes

NWE is generally b — ased on a 2-week relevant (example) period when the person was continuously employed by the Commonwealth prior to the onset of incapacity.  Delegates have discretion to determine example periods as is considered reasonable.

*  Reserve pay and allowances :

Long-term incapacity where the member is unlikely to return to Reserve service:

current (financial) year of service – (Parades Attended + Parades expected to attend for the year) x the daily rate of Reserve Pay x 6/313. to get a weekly rate of Reserve pay. See Part 31.9.3 of the SRCA Incapacity Handbook.

history of service – (Parades Attended during the previous financial year x the daily rate of Reserve pay x 6/313 to get a weekly rate of Reserve pay. See Part 31.9.4 of the SRCA Incapacity Handbook.

Short-term incapacity used for short-term or intermittent periods of incapacity.  It is the number of parades the member would have attended if not incapacitated x the daily rate of reserve pay.  See Part 31.9.6 of the SRCA Incapacity Handbook

**  Civilian pay and allowance are based on actual civilian earnings prior to the onset of incapacity.  But NWE will default to 7 x the daily rate of reserve pay if reserve + civilian is less than 7 x the daily rate of Reserve pay.

Maximum rate weeks are counted for any periods of incapacity as a serving member.

SRCA INCAPACITY PAYMENTS - QUICK REFERENCE GUIDE.  DISCHARGED MEMBERS

Notes

Under SRCA, NWE is generally calculated as it is for a current serving members.  The amount of NWE is then set at the date of discharge and only indexed in accordance with the WPI.

*   Reserve Pay and allowances for discharged members is generally calculated using the long-term incapacity method described above for current serving members.

Last service is not relevant to calculation of NWE under the SRCA.

Special rules apply to 'former' employees under the SRCA who were in receipt  of incapacity payments on 30 November 1988.  As the term 'former' has legislative meaning given by s123 the term discharged member is used to describe those members not currently serving.  This table does not include calculation of NWE for 'former' members within the meaning of s123.

The nature of 'AE' and its relationship to the amount of compensation payable, is discussed at length at 15.1 and 15.2.

In short, AE refers to the client's post-injury earning capacity and is basic to most calculations of the incapacity benefit. In contrast, NWE represents the pre-injury capacity.

While NWE is relatively static (apart from indexation) the AE varies widely depending upon the client's circumstances, including state of convalescence, progress with a vocational rehabilitation program, etc. In general, it is expected that a member's AE will improve over time with active case management, and with rising AE the formulae for calculating weekly entitlement then limits or ends payment, accordingly.

Delegates in fact will be involved in determining the client's AE at each and every period of incapacity for which the client seeks payment. Mostly, this involves requiring and examining a medical certificate of work-hour capacity and the progress of rehabilitation programs etc in order to determine the type or value of employment to which these hours may be applied.

'AE' is defined in S19(2) as the greater of the following amounts:

a)the amount per week (if any) that the employee is able to earn in suitable employment

b)the amount per week (if any) that the employee earns from any employment (including self-employment) that is undertaken by the employee during that week.

This means that the AE may be either an 'actual' amount that the client is currently earning, or an amount deemed by the delegate in accord with the client's known ability, in cases where the client is either unemployed or underemployed for reasons other than the injury.

The 'AE' amount is used in three incapacity rate calculations in the SRCA:

• calculation of the 'AE' amount in S19(2). This subsection provides that the weekly rate of incapacity compensation during the first 45 weeks after injury ('maximum rate compensation weeks') is the client's NWE less AE
• calculation of the 'AE' amount in S19(3). This subsection provides that the weekly rate of incapacity compensation after the first 45 weeks is at a reduced rate of 75% of NWE. The subsection also provides for an increased rate of payment (combining earnings from employment and compensation) where the client undertakes actual employment during the week, and
• where weekly compensation is paid to former employees under Part X of the SRCA, S132A provides that the amount that the client is able to earn in employment in a week is subtracted from the weekly incapacity compensation otherwise payable.

Section 19(4) of the SRCA sets out matters to which delegates 'shall have regard' when deciding the amount per week that a client is able to earn in suitable employment. These matters are relevant to all three provisions above, and are discussed in relation to Part 32.2 'Ability to Earn in Suitable Employment', below.

Note that amendments to the SRCA which commenced on 1 April 2002 provide that the AE amount includes both earnings from designated 'suitable employment' and any other amount that a client earns from employment (including self-employment) during the week.

Until 1 April 2002, S19(2) provided for the amount of compensation payable in the first 45 weeks of incapacity:

19(2) Subject to this Part, Comcare is liable to pay compensation to the employee in respect of the injury, for each of the first 45 weeks (whether consecutive or otherwise) during which the employee is incapacitated, of an amount calculated under the formula: NWE – AE...

As a result of legislative amendments commencing on 1 April 2002, the amount of compensation payable in the first 45 weeks of incapacity is worked out under Ss19(2)-(2D). The amendments introduced new terminology and additional calculations for a part of a week, however the new provisions had the same general effect as the policy adopted by DVA in relation to former S19(2) and did not require any change in the method which the Defcare Incapacity Calculator uses for calculating the first 45 weeks. The new provisions apply to all determinations made on or after 1 April 2002.

The Military Compensation Act 1994, which commenced on 7 April 1994, provided that clients continue to receive weekly compensation at 100% of normal weekly earnings for the first 45 weeks of incapacity, in respect of payments made under Ss20, 21 and 21A. This beneficial amendment applies only to clients who were discharged on or after 7 April 1994.

If a client was discharged before 7 April 1994, compensation paid under Ss20, 21 and 21A is reduced to 75%* of NWE immediately upon discharge from the ADF.

[* the percentage of NWE may be higher if the client engages in suitable employment.]

Progress toward 45 weeks is monitored through the Defcare Incapacity Calculator and the Period Summary Report. A warning on Defcare issues 4 weeks before the expiry of 45 weeks incapacity at 100% 0f NWE. Action taken to ensure that, where it appears likely the 45 week total will be reached, that:

• The client is advised of the impact of reaching the 45 weeks including the possibility of a reduction in the rate of compensation payable.
• Action is taken by the use of resubmit to ensure that the client's case is recalculated once the 45 weeks total is reached. It is important that this action is taken promptly to reduce the possibility of an overpayment occurring.

Section 19(3) was in the following form until 31 March 2002:

19(3) Subject to this Part, Comcare is liable to pay to the employee, in respect of the injury, for each week during which the employee is incapacitated, other than a week referred to in Subsection (2), compensation:

a)where the employee is not employed during that week – of an amount equal to 75% of his or her normal weekly earnings less the amount (if any) that he or she was able to earn during that week in suitable employment

b)where the employee is employed for 25% or less of his or her normal weekly hours during that week – of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 80% of his or her normal weekly earnings

c)where the employee is employed for more than 25% but not more than 50% of his or her normal weekly hours during that week – of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 85% of his or her normal weekly earnings

d)where the employee is employed for more than 50% but not more than 75% of his or her normal weekly hours during that week – of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 90% of his or her normal weekly earnings

e)where the employee is employed for more than 75% but less than 100% of his or her normal weekly hours during that week – of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 95% of his or her normal weekly earnings, and

f)where the employee is employed for 100% of his or her normal weekly hours during that week – of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 100% of his or her normal weekly earnings.

Section 19(3) was repealed and substituted on 1 April 2002 by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 with the new provision having the same general effect as the previous provision. The new provision applies to all determinations made on or after 1 April 2002.

The amendments introduced an 'adjustment percentage', defined in S19(3), however the overall effect of stepping up the amount of compensation payable according to the number of actual hours worked remained unchanged.

The SRCA provides for a minimum level of compensation (calculated at statutory rates, rather than based on a NWE), in some cases. This provision is governed by S19(6)-(9) which reads as follows:

6.Where an amount of compensation calculated under paragraph (3)(a) is less than the minimum earnings, the amount so calculated shall be increased by an amount equal to the difference between that amount and the minimum earnings.

7.For the purposes of Subsection (6), the minimum earnings of an employee shall be taken to be:

a)$202, or, if Subsection (8) or (9) applies in relation to the employee, the sum of $202 and the amount or amounts required to be added under whichever of those subsections applies, or

b)an amount equal to 90% of the employee's normal weekly earnings

whichever is less.

8. If there are prescribed persons wholly or mainly dependent on the employee, there shall be added to the amount of $202 specified in the paragraph (7)(a) the amount of $50.

9. If there are prescribed children in relation to whom this Act applies (whether born before, on or after the date of the injury) wholly or mainly dependent on the employee, there shall be added to the amount of $202 specified in paragraph (7)(a) the amount of $25 for each of those children, but an amount shall not be so added for a child in relation to any period before the date of the birth of that child.

The actual $ amounts specified in these subsections have been updated regularly since proclamation of the Act and delegates should apply the amounts specified in the table at 36.1.3

This provision means that:

• after the first 45 weeks of incapacity, and
• if the client is not engaged in actual employment during the week,

where compensation calculated under S19(3)(a) is less than 'minimum earnings' i.e. the lesser of:

• a statutory rate set by Ss19(7)(a), (8) and (9), or
• 90% of the employee's normal weekly earnings,

the compensation payable shall be raised to that minimum level.

Note that the 'minimum earnings' floor does not apply where the client is engaged in some actual employment during the week. Where the client is so engaged,

Ss19(3)(b)-(f) provide for a higher rate of compensation based on their relevant 'adjustment percentage'.

Note also that Section 19(7)(a) specifies the 'minimum earnings' amount for a client and Subsections (8) and (9) provide for a higher amount when the employee has 'prescribed persons' or 'prescribed children' (respectively) wholly or mainly dependent on him or her. The identity of prescribed persons, prescribed children and the matter of dependency is discussed in detail at Parts 36.2 to 36.6. These instructions are of some importance when applying the minimum earnings provisions and delegates should read those Parts now.

Historical weekly minimum earnings under Ss19(7)(a), (8) and (9) are set out in the Table below:

For policy and administrative purposes, clients are often described as "current employees" or "non-former employees". These terms have no statutory basis, but they are a convenient way of describing any person covered by the SRC Act who is not a former employee.

A "current employee" may have been injured, and have retired, before 1 December 1988; the critical issue of distinction is whether they were receiving weekly compensation at the commencing day.

This distinction means that it is both possible and correct for two people, who received similar injuries in the same training accident before 1 December 1988 and who retired at about the same time, to have quite different compensation entitlements.

Division 3 of Part X of the SRC Act (ss 131 - 137), which sets out transitional and savings provisions, provides incapacity compensation benefits for former employees which are generally more favourable than the incapacity benefits available to current employees. In particular, former employees continue to receive weekly incapacity compensation after [glossary:Age Pension age:469], a benefit which is not available to current employees because of the age bar in s 23(1) in Part II of the Act.

Note, however, that s 134 reduces the amount of compensation payable to former employees, when the former employee turns [glossary:Age Pension age:469], by 5% for each year since the commencement of the Act. This formula ensures that, after 2008, former employees will not receive compensation once they turn [glossary:Age Pension age:469], and will be in the same position as those who were injured after 1 December 1988. Former employees who turn [glossary:Age Pension age:469] before 2008 will continue to receive the appropriate reduced rate of compensation until their incapacity ceases or until their death.

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 s 134 remains frozen. Neither s 8 (which provides for calculation and indexation of normal weekly earnings) nor s 13 (which provides for calculation and indexation of certain compensation benefits in accordance with the consumer price index) apply to the reduced amount of compensation calculated in accordance with s 134(1).

The vast majority of eligible former employees were identified as such and recorded in December 1988. Occasionally, however, special cases arise and must be considered by delegates.

Former employees who cease to receive incapacity payments and later re-establish entitlement

If a former employee ceased receiving incapacity payments (eg. because of improvement in their condition) and subsequently re-establishes an entitlement to compensation, whether for the original injury or a fresh injury, they must continue to be treated as a former employee. The rule is: "once a former, always a former".

Benefits were suspended or wrongly cancelled as at 1 December 1988

If weekly compensation was suspended or cancelled as at 30 November 1988, and it was later reinstated (in respect of that day) by the Administrative Appeals Tribunal, or on a reconsideration, the client is to be treated as "receiving compensation" for the purposes of the definition of former employee.

Compensation entitlements affected by damages

Under s 99 of the 1971 Act, weekly compensation for incapacity was not payable to an employee who recovered lump sum damages until the amount of compensation foregone equalled the amount of damages received. Where the lump sum was large, this suspension of compensation payments could extend for 10 - 20 years.

In these cases, when compensation once again becomes payable, the client may be entitled to be treated as a former employee.

The client should be treated as a former employee if investigation clearly shows that:

• they retired from Commonwealth employment before 1 December 1988; and
• their entitlement to payment of weekly compensation was suspended under s 99 of the 1971 Act, before 1 December 1988, because of the recovery of damages.

Note: This does NOT include situations where compensation was redeemed in a lump sum.

Before compensation is paid, evidence must be obtained which demonstrates that the compensation which would have been paid during the intervening period equals or exceeds the common law award. The following points should be noted:

• contemporaneous medical evidence must support the proposition that the client was incapacitated and identify the period or periods of incapacity;
• medical expenses should be supported by receipts or accounts;
• rates of compensation should be calculated at the applicable rate under the legislation applying at the time for each period of proven incapacity;
• periods of incapacity before 1/12/1988 should be calculated under the 1971 Act (usually ss 45 or 46). Under the 1971 Act, generally the first 26 weeks of incapacity were paid at 100% of NWE and thereafter statutory rates applied;

References

• DCA 66 : "Former employee"
• Comcare v Neil (1993) 41 FCR 517 : Definition of former employee; "was receiving weekly payments" of compensation
• Re Delaney and Comcare [2002] AATA 110 (21 February 2002) : "was receiving weekly payments" of compensation
• Reserve Bank & Comcare and Wheeler (1990) 12 AAR 160 : Compensation wrongly cancelled

This criterion makes it necessary to have regard to the client's background. For example, if a RAAF General Hand was injured to the extent that their employment prospects were limited to sedentary clerical work, such work would be inappropriate if the client were illiterate. Similarly, employment as a cleaner may not be considered suitable employment for a RAAF pilot or a skilled Officer Engineer.

This criterion is generally guided by a formal rehabilitation assessment provided under S36 of the SRCA. The RAAF General Hand discussed in (i) above could be provided with literacy and office skills training as part of a rehabilitation program, and therefore become suitable for clerical work.

If it is unreasonable for the client to move, the employment would not be suitable employment within the meaning of the SRCA. Factors affecting the reasonableness of a requirement to move could include:

• continuity of school attendance for the client's children
• existing or potential employment of the client's spouse
• availability of family support
• long-standing social networks
• continuing contact with children after marital separation
• availability of appropriate and affordable housing
• access to medical services.

Where a client moves to an area of low employment (without a reasonable explanation such as family support or medical need), it may be appropriate to consider suitable employment in either the new location or the previous location.

This is discussed further at Part 20.18.

This criterion is broadly stated and properly encompasses a wide variety of special circumstances in the client's case. The criterion certainly includes the client's medical restrictions, whether or not they arise out of the client's compensable condition. For example a client may not be considered suitable for work as a barperson if they suffer from asthma and would be required to work in smoke filled rooms, even though the asthma condition is not itself compensable.

This criterion does not specifically provide for consideration of the state of the labour market in making 'suitable employment' decisions. However, when considering a client's capacity for employment, it is appropriate to consider the effect of the client's injury on their ability to secure work on the open labour market.

If a former employee ceased receiving incapacity payments (e.g. because of improvement in their condition) and subsequently re-establishes an entitlement to compensation, whether for the original injury or a fresh injury, they must continue to be treated as a former employee. The rule is:

'Once a former, always a former'

If weekly compensation was suspended or cancelled as at 30 November 1988, and it was later reinstated (in respect of that day) by the Administrative Appeals Tribunal, or on a reconsideration, the client is to be treated as 'receiving compensation' for the purposes of the definition of former employee.

Under S99 of the 1971 Act, weekly compensation for incapacity was not payable to an employee who recovered lump sum damages (i.e. from a civil action) until the amount of compensation foregone equalled the amount of damages received. Where the lump sum was large, this suspension of compensation payments could extend for 10 – 20 years.

In these cases, when compensation once again becomes payable, the client may be entitled to be treated as a former employee.

The client should be treated as a former employee if investigation clearly shows that:

• they retired from Commonwealth employment before 1 December 1988, and
• their entitlement to payment of weekly compensation was suspended under S99 of the 1971 Act, before 1 December 1988, because of the recovery of damages.

Note: This does NOT include situations where compensation was redeemed by payment of a lump sum.

Before compensation is paid, evidence must be obtained which demonstrates that the compensation which would have been paid during the intervening period equals or exceeds the common law award. The following points should be noted:

• contemporaneous medical evidence must support the proposition that the client was incapacitated and identify the period or periods of incapacity
• medical expenses should be supported by receipts or accounts
• rates of compensation should be calculated at the applicable rate under the legislation applying at the time for each period of proven incapacity
• periods of incapacity before 1/12/1988 should be calculated under the 1971 Act (usually Ss45 or 46). Under the 1971 Act, generally the first 26 weeks of incapacity were paid at 100% of NWE and thereafter statutory rates applied.

Subsection 8(1) of the SRCA says:

8(1) For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in Subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula:

(NH x RP) + A

where:

NHis the average number of hours worked in each week by the employee in his or her employment during the relevant period.

RPis the employee's average hourly ordinary rate of pay during that period.

Ais the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect to that employment.

This means that the NWE is normally to be set by the above-specified method of averaging income over a 'relevant period', to which are added the average amount of allowances also paid over that same 'relevant period'.

• For discussion of 'relevant period' see 14.2 and 31.2.4.
• For discussion of (NH x RP) – i.e. salary or earnings:

• In relation to members/ex members of full-time ADF see 31.2.5 and 31.2.6.
• In relation to members/ex members of the Reserve see 31.2.7 – 31.2.9.
• In relation to cadets, see 31.2.10.

• For a discussion of 'A' – i.e. allowances – see 31.11.

S8(2) also makes provision for inclusion of earnings from overtime into NWE, thus:

8(2) Where an employee is required to work overtime on a regular basis, the normal weekly earnings of the employee before an injury shall be the amount calculated in accordance with Subsection (1) plus an additional amount calculated in relation to the relevant period under the formula:

NH x OR

where:

NHis the average number of hours of overtime worked in each week by the employee in his or her employment during the relevant period, and

ORis the employee's average hourly overtime rate of pay during that period.

This provision has no application to full-time (permanent force) ADF members who, although they may work long or irregular hours, do not work formal 'overtime' within the meaning of any industrial award, i.e. they do not earn extra pay for extra hours.

However S8(2) may have application to the civilian employment of some Reserves members.

• See 31.9 and 31.10 below for calculation of reservists NWE.
• See also 14.2 and 31.2.4 for discussion of the term 'relevant period' used in 8(2).

'Required to work overtime on a regular basis'

It is clear from S8(2) that compensation is not automatically payable in respect to any occurrence of overtime in a 'relevant period'.

• The delegate must be satisfied that the client was required to work that overtime.
• The requirement to work overtime must have been part of a requirement to do so on a regular basis.

In the case of Re Zarb and Comcare (1997) the AAT:

'...formed the view that the word 'required' should be given its ordinary everyday meaning in the context in which it appears. In the Tribunal's opinion, the ordinary everyday meaning of 'required' is the imposition, by the employer in an authoritative fashion, of an obligation upon the employee to work overtime on a regular basis.'

Furthermore:

'The Tribunal is of the view that 'regular' means a uniform or symmetrical pattern over time which can be described as usual or customary. To establish whether the overtime of an employee occurs on a 'regular' basis, one would look to the overtime worked during the relevant period to determine whether the pattern is 'uniform or symmetrical'.

This means that clients who work overtime only occasionally or sporadically or seasonally or in response to crises etc. in the workplace should not have that overtime included in his/her NWE. Given that a 'relevant period' as defined by S9 means a period of only two weeks, delegates should expect that 'regular' means at least weekly, and of ongoing occurrence.

NWE forms the basis for setting rates of compensation under the SRCA. It represents a deemed value in respect of the client's pre-injury earnings. This applies equally to part-time and full-time employees.

Reservists are part-time employees of the Commonwealth

Except rare occasions when called up for Full-Time Service (e.g. a deployment overseas), Reservists are part-time employees of the Commonwealth.

• During call–up and full-time service their conditions of service and compensation entitlements become those of members of the permanent force, i.e. for that period only.
• Note full-time service does not include participation in periodic multi-day courses and annual two-week training camps incidental to part-time service.

NWE of part-time employees = part-time earnings PLUS full-time (i.e. non-C'wth)

In respect to part-time service, Subsection 8(3) says:

8(3) Where an employee was, at the time of the injury, employed by the Commonwealth or a licensed corporation in part-time employment, any earnings for the employee from any other employment shall, for the purposes of this section, be treated as earnings of the employee from his or her employment with the Commonwealth or the licensed corporation.

Subsection 8(3) recognises that a person incapacitated for work by an injury in part-time employment is thereby incapacitated for all other (concurrent) employment also. The intent of Ss8(3) is therefore that the weekly compensation must encompass all earnings lost due to the injury.

Military/civilian earnings to be separately investigated.

This means that in addition to the payments for reserves attendance, a reservist's civilian earnings (i.e. earnings other than from the Commonwealth) must also be taken into account, i.e. a reservist's NWE is composite and consists of both:

• military salary and allowances from Reserve employment, and
• salary and allowances from civilian employment.

Determining Reservists' NWE therefore requires two separate investigations from a delegate.

• 31.9 deals specifically with Reservists' military salary and allowances.
• 31.10 deals only with Reservists' civilian salary and allowances.

Calculation

S8(1) requires that NWE for any employee be calculated as (NH x RP) + A where

NH = average weekly hours, RP = average pay rate and A = average allowances paid for the period. (see 31.2.1)

This means for reservists, where the earnings are split between two sources with differing rates, conditions and allowances, that the composite NWE be calculated as:

[military (NH x RP) + A] + [civilian (NH x RP) + A]

or, more succinctly:

[(average reserves earnings & allowances) + (average civilian earnings & allowances)]

• The average reserves and civilian earnings/allowances are derived from applying the relevant strategy in 31.9 and 31.10, respectively.
• 31.11 gives guidance as to which allowances may be included.

Where the client is required to work regular overtime in his/her civilian employment, the resultant aggregate NWE can be expressed as:

[(average reserves earning/allowances) + (average civilian earning/allowances + average overtime)]

Re: Tax status of Reserves earnings

Reserves payments (earnings) are tax-free. All other earnings, i.e. earnings from civilian employment, are subject to tax. However there is only one NWE. Both civilian and reserves earnings combined, form a single amount, only part of which is taxable. The Defcare Incapacity Calculator identifies what portion of any compensation paid is taxable and non-taxable.

That obviously adds some complication with respect to the actual calculation of the amount payable.

The calculation of Normal Weekly Earnings (NWE) is dependent upon the concept of a 'relevant period'. This 'relevant period' is significant because it is the period of employment from which the client's pre-injury earnings are to be sampled and 'averaged' into an NWE.

'Relevant period' is a phrase defined by Subsection 4(1) to be 'the period calculated under Section 9'. Section 9 then says:

9(1) For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference in Section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation.

This means that for ordinary purposes,

'relevant period' is the two-week period of employment preceding injury

Special circumstances (1) – S9 adjustments to 'relevant period'.

Subsections 9(2), (3) and (4) provide for a number of circumstances where the 2-week period referred to in 9(1) may not provide a fair representation of the client's NWE. These circumstances will be of only infrequent occurrence, and may therefore be summarised briefly as follows:

• 9(2) provides that where the industrial agreement, award, law etc. governing the client's pay rates actually changed that rate during this same period, only the final (i.e. resulting) pay rate should be taken into account.
• 9(3) operates where a pay rate variation occurs at or very near the end of the 'relevant period' and as a result, the operation of 9(2) reduces the NWE to an impractical or unrepresentative amount. In those cases, the delegate shall instead deem the pay variation to have applied from the beginning of the period and calculate the NWE on that basis.
• 9(4) provides that, if for any reason a client was not paid for an interval during the 2 week 'relevant period', that interval without income should be disregarded (i.e. disregarded when calculating average income for NWE purposes).

Special circumstances (2) – S8 adjustments to 'relevant period'.

Subsection 8(4) says:

8(4) Where, because of the shortness of the relevant period, it is impractical to calculate the normal weekly earnings of an employee before an injury under Subsections (1) or (2), the normal weekly earnings of the employee before the date of injury shall be taken to be the normal weekly earnings before that date of another employee performing comparable work, being normal weekly earnings from employment by the Commonwealth or a licensed corporation and calculated under Subsection (1) or (2), as the case requires.

This means that where a 'relevant period' is of insufficient duration to produce a meaningful NWE in a particular case, a delegate may establish NWE by reference to the employer's generic pay scales, i.e. the normal weekly earnings of other employees 'performing comparable work'.

• This method should of course also take account of the average level of allowance paid to similarly employed persons of that classification/rank.
• Note that the strategies specified by Ss9(2), (3) and (4) relate only to changes to pay rates or from gaps in payment during that period. Subsection 8(4) on the other hand operates where the deficiency is due to the period's 'shortness'.

Furthermore, Subsection 8(5) says

8(5) Where because of the shortness of the relevant period, the normal weekly earnings as calculated in relation to the relevant period under Subsection (1) or (2) would not fairly represent the weekly rate at which the employee was being paid in respect of his or her employment before the injury, the normal weekly earnings before the date of the injury shall be calculated in relation to such other period as Comcare considers reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate at which the employee was being so paid.

This subsection might be applied for example, in a case where a reservist had only irregular or fluctuating casual civilian employment from casual employment, of which the ordinary Ss8(1) period (i.e. the 2 weeks before injury) was not typical or not a fair representation. For instance, it may have been that the client was (uncharacteristically) unemployed during that fortnight, or alternatively was unusually busy, i.e. while generally unemployed was as an exception engaged in seasonal work (e.g. fruit picking) during that period. Where an injured employee is a shift worker the relevant period could be extended to cover the full range of shift rotations. This obviously gives a more accurate of an employees NWE over an appropriate period.

Note that S8(5) allows the delegate to calculate the NWE in accordance with whatever period is considered 'reasonable'. This provides delegates with a wide discretion. Obviously no specific guidance can cover all eventualities which may lead to one period rather than another being considered 'reasonable'. However delegates are reminded that the purpose of the NWE is establish a value of the client's pre-injury earnings, so that compensation can be paid for the degree to which this earning power has been lost. The discretion under S8(5) should be used to produce a just and moderate result.

1.NWE is (military salary for rank/pay-level) + (allowances rec'd), all at injury.

2.Using DocTracker, request information on the client's rank/pay group and nature/amount of any allowances payable (see 31.8) via the DVA Single Access Mechanism (SAM).

3.This request should confirm the duration of any disability allowances i.e. 'but for' the injury:

–note this does not apply to skill and qualification allowances.

4.Adjust NWE at point in time where the disability allowance would have ceased:

–i.e. when it would have ceased anyway, had the injury not happened.

5.Adjust NWE by applying new Military pay rates directly to current rank/pay group.

6.NWE is updated to the new rank/pay group with clients post injury promotions:

–but of course AE then rises also and will equal or exceed the lost pay levels.

1.NWE is [(military salary for rank/pay-level) + allowances] at discharge.

2.Using Doctracker, request confirmation of the client's salary and allowances at discharge (see 31.8).

3.Where the discharge is a medical discharge, use DocTracker to request confirmation of the date when any disability allowance cut short by the discharge, would have ceased anyway. (Note allowances for skills/qualifications are not affected i.e. have no end-date).

4.Calculate the NWE from the formula above, including any increases in the Military rates of pay/allowances on the date that they occurred, up to the date of discharge.

5.Reduce the NWE by the amount of any disability allowance included, from that point in time where the disability allowance would have ceased anyway (i.e. the date the allowance would have ceased even if the injury had not happened).

6.Adjust NWE by applying all of the Military pay/allowance scales which would have applied to the client, from the date of discharge to the last one prior to

1 October 2001.

7.Adjust NWE of ex-recruits, ex-officer cadets, ex-apprentices etc. in accordance with the incremental progression from the trainee classification to the lowest post-trainee classification (i.e. Pte Pay level 3 in the case of Army recruits or other service equivalents). Each increment should be implemented at the time it would have otherwise have come into effect 'but for' the injury.

8.Then, adjust NWE for Award and National Wage indexation increases after 1 October 2001 by annual application of the Wage Cost Index % for that year

(see 31.3.1 and 31.3.2).

1.NWE is:

(average reserves earnings & allowances) + (average civilian earnings & allowances)

at injury

• see 31.9.2 to 31.9.4 for guidance re: averaging reserves income.
• see all of 31.10 re: averaging civilian income.
• Where using the method discussed at 31.10.2 for averaging civilian earnings (i.e. 'Option A'), delegates should obtain civilian pay slips or other documentary evidence to confirm the client's earnings or have reference to published civilian pay scales, whichever is appropriate.

2.If the client was also required to work regular overtime in civilian employment at the time of the injury the NWE then becomes:

(average reserves earning & allowance) + (average civilian earning & allowance + average overtime)

• See 31.2.2 re: required to work regular overtime.

3.Alternatively, where the client had no civilian income (or only a small part-time civilian income) the NWE is (7 x Reserves daily rate for rank/pay level) at injury.

• See 31.9.1 for more guidance on this method.

4.Adjust both the civilian and military components of the NWE according to the latest pay, allowance and overtime rates applicable to the client's a) military and b) civilian classification

• i.e. as each pay/allowance increase becomes available to an uninjured person, it is applied directly to the injured client's NWE.

1.NWE is :

(average reserves earnings & allowances) + (average civilian earnings & allowances)

at date of discharge

• see 31.9.2 to 31.9.4 for guidance re: averaging reserves income
• read all of 31.10 re: averaging civilian income
• where using the averaging method in 31.10.2 for averaging civilian earnings (i.e. 'Option A'), delegates should obtain civilian pay slips or other documentary evidence to confirm the client's earnings or have reference to published civilian pay scales whichever is appropriate.

2.If the client was also required to work regular overtime, the NWE is:

(average reserves earning & allowance) + (average civilian earning & allowance + average overtime)

at discharge

3.Alternatively, where the client had no civilian income (or only a small part-time income), NWE = (7 x Reserves daily rate for rank/pay level) i.e. rate at discharge.

• See 31.9.1 for more guidance on this method.

4.Adjust the NWE annually, after discharge, in line with the Wage Cost Index.

• Actual amendments to former pay rates are no longer relevant.

The NWE of a Reservist injured whilst engaged in a period of full-time service – i.e. either call-up under the Defence Act or a contract of temporary full-time service – is determined in exactly the same way as for a permanent member of the full-time ADF.

Note, therefore, that the client's status was as a full-time employee of the ADF at the time of the injury and civilian earnings are not taken into account, i.e.:

• neither while the period of full-time service runs its course
• nor after return to part-time reserves status
• nor after discharge from the Reserve.

Refer to 31.2.5 and 31.2.6 above for calculation of NWE for a full-time member.

Delegates should read 31.6. However, by way of summary:

Members of the Cadet are not paid but cadets with part-time incomes may have a NWE computed on the basis of that proven income.

Cadets with long term injuries which prevent entry into the work-force, should have their NWE deemed as a recruit in the single Service with which they were a cadet, and have that salary increased incrementally up to the Private, Pay level 3 or equivalent.

See 31.3.6 for advancement of NWE.