DCI 40 - RETRAINING AS A MEANS OF SECURING SUITABLE EMPLOYMENT -

DEFENCE COMPENSATION INSTRUCTION – NO 40

Military Compensation Scheme - Safety Rehabilitation and Compensation Act 1988

Subject

RETRAINING AS A MEANS OF SECURING SUITABLE EMPLOYMENT

1.This instruction provides guidance for military Rehabilitation Co-ordinators to determine, in accordance with Subsection 37(3) of the Safety Rehabilitation and Compensation Act 1988 (SRCA), when retraining, and in particular tertiary training, may be funded as a means of securing suitable employment.

Scope

2.This instruction applies to military and ex-military employees who meet both of the following criteria:

Criterion 1 - Incapacity or Impairment

The employee must have suffered an injury or illness which has resulted in an incapacity for work or impairment (as defined in Section 4 of the SRCA).  The incapacitated/impaired employee must subsequently either have an accepted claim for compensation under the SRC Act or be eligible for non-compensation rehabilitation assistance (this is available only to current serving ADF members).

AND

Criterion 2 - Rehabilitation Assessment or Program

The employee must have either:

1. been assessed (in line with Section 36 of the SRCA) as capable of undertaking a rehabilitation program, or

1. already commenced a rehabilitation program

3.Whilst funding for retraining is technically available to serving members who qualify for non-compensation rehabilitation assistance, this would be extremely rare in practice.  Rather, serving members should be directed to seek assistance under the Services Vocational and Educational Training Scheme (SVETS) and/or the Defence Force Assisted Study Scheme (DFASS).

4.The only situation where non-compensation retraining assistance would be approved is where military discharge is imminent and where the proposed training is able to be completed prior to discharge.

Background - Legislation

5.Rehabilitation programs are provided under Section 37(1) of the SRCA for employees who have suffered an injury or illness resulting in incapacity or impairment.  Such rehabilitation programs may include course-based training, including tertiary training.

6.Decisions regarding provision of rehabilitation programs are made according to the considerations contained in Section 37(3).

7.MCRS Rehabilitation Co-ordinators have a delegated authority to approve the costs of rehabilitation programs provided under Section 37(4).

8.The purpose of providing funding under Section 37 for retraining as part of a rehabilitation program, is to enable the employee to enter “suitable employment”.

9.“Suitable employment” is defined in Section 4 of the SRCA.

10.Pages 35 - 38 of the Annotated Safety Rehabilitation and Compensation Act 1988, 3 — rd Edition (Ballard et.al.) include a detailed discussion of the legislative issues surrounding the definition of suitable employment.

Background - Relevant Legal Decisions

11.The 1995 Federal Court decision in Hardin v. Comcare, dealt with two separate issues, both were related to course-based retraining in rehabilitation:

1. payment of Higher Education Contribution Scheme (HECS) under Section 37; and

1. the requirement for a rehabilitation provider approved under Section 34 to be involved in the provision of retraining under Section 37.

12.In the first Hardin decision, HECS was found to be not payable under Section 37. In the second Hardin decision, Comcare was found to be not empowered to pay rehabilitation program costs directly to a retraining facility without the involvement of a rehabilitation provider approved by Comcare under Section 34.

13.The 1997 Federal Court decision involving Department of Defence & Fox, established that “suitable employment” must be at a level commensurate with the Commonwealth employment at the time of injury.  This was further clarified to include employment for which a person was undergoing training at the time of their injury.  Ms Fox was an Officer Cadet at Royal Military College Duntroon (RMC) at the time of her medical discharge and this training was considered to be commensurate with a Bachelor's degree.

14.The 1997 Administrative Appeals Tribunal decision in Hardin v. Comcare (AAT No. 11727/97) provides a useful discussion of “suitable employment”.  The actual finding in the case was that financial losses incurred in “suitable employment” are not used in the calculation of incapacity payments under Section 19(2).

Definitions

On the job training

Informal acquisition of work skills, usually through a Work Trial or Work Incentive program.

Vocational skills training

Formal training and certification for a specific job requirement.  Examples include: fork lift licence, workplace-based training course, warehouse training, retail sales course, first aid and security officer training.

Course-based, short-term training

Formal training up to 3 months duration which involves full-time or part-time attendance at an educational facility.

Course-based, long-term training

Formal training of more than 3 months duration which involves full-time or part-time attendance at an educational facility.

Tertiary study

TAFE, College of Advanced Education, University or private courses, greater than 3 months duration, that are recognised within the Australian Qualifications Framework.  Tertiary study is a formally recognised version of course-based, long-term training.

Principles for Decision Making

15.The primary goal of MCRS vocational rehabilitation is to assist employees to obtain suitable employment.  Course-based retraining is one of a range of possible options for achieving the goal of suitable employment.

16.Course-based training is usually considerably more expensive than other avenues for securing suitable employment.  The main factor contributing to the higher costs is the increased duration of the rehabilitation program required to achieve the outcome of suitable employment.  Course fees and other rehabilitation expenses tend to be insignificant when compared to the cost of incapacity payments made during extended study programs.

17.Similarly, a long term course of study is also not necessarily in the employee's interests because their placement in suitable employment is delayed.

18.As established in the Fox decision, “suitable employment” is required to be at a level commensurate with employment (or training for employment) at the time of injury.  However, regardless of an employee's potential, there is no requirement for MCRS to substantially improve their position and status in subsequent civilian employment.

19.In line with the Comcare “Return to Work Handbook for Case Managers”, provision of course-based, long-term training and tertiary study should only be considered after all other return to work options have been exhausted.  The hierarchy for consideration of training options is in the following order:

Training Hierarchy

1. on the job training  - (first option)

1. combination of on the job training and vocational skills training
2. course-based, short-term training
3. course-based, long-term training

1. tertiary study  - (last option)

20.Any reasonable opportunity for on the job or work based training, particularly industry based or accredited training, should be actively pursued and readily supported.

21.Course-based, short-term training should also be relatively readily approved if there is a reasonable likelihood that the training will lead directly to suitable employment.

22.If the training hierarchy (at para 19. above) has been systematically considered and it is concluded that course-based, long-term training or tertiary study is likely to be the only realistic means of obtaining suitable employment, then a decision is made according to Subsection 37(3) of the SRCA.  Careful and balanced consideration of each point in Subsection 37(3) is required.

23.Subsection 37(3) of the SRCA provides that:

“In making a determination under Subsection (1), a rehabilitation authority shall have regard to:

(a)any written assessment given under Subsection 36(8);

(b)any reduction in the future liability to pay compensation if the program is undertaken;

(c)the cost of the program;

(d)any improvement in the employee's opportunity to be employed after completing the program;

(e)the likely psychological effect on the employee of not providing the program;

(f)the employee's attitude to the program;

(g)the relative merits of any alternative and appropriate rehabilitation program; and

(h)any other relevant matter.”

24.In order to reach a decision under Subsection 37(3), the delegate will consider whether:

1.     it is the shortest duration program which is both reasonable and viable;

1.     it is the highest return to work option in the training hierarchy (refer para 19.) which is both reasonable and viable (note: also consider “reasonable” in terms of the Fox decision - commensurate employment or training);

1.     there is a favourable cost versus benefit (especially considering the cost of incapacity payments during the course of study);

1.     the employee has the intellectual and physical capacity to manage the course (including the likelihood of recurrence of injury and the presence of any psychological factors);

1.     there is a high likelihood that the employee will complete the proposed program;

1.     the proposed study is likely to lead to sustainable work in an occupation suitable for the employee (ie. clear medical guidelines plus competent vocational assessment and counselling);
2.     there are good future employment prospects for graduates from the proposed course (this evidence must include a well researched labour market analysis);

1.     the proposed course is accessible (ie. are there significant travel, relocation or disabled access expenses involved?);
2.     expensive aids and appliances are required for the employee to manage the course of study; and

1.     expensive additional equipment is required to complete the course.

25. The employee's ability to satisfactorily complete a course of tertiary study is a particularly important consideration and should be supported by a psychological assessment which may include formal vocational assessment or other psychometric testing.  There should be clear evidence in the report to demonstrate the employee's aptitude and interest in the proposed course of study.

26.In certain circumstances, it may be possible to obtain the approved rehabilitation provider's report regarding retraining issues, in conjunction with a Section 36 assessment of rehabilitation capability.  Otherwise a separate report should be requested from the provider.  Sample letters for this purpose are included as attachments A and B to this Instruction.  To ensure that the provider's report is directed to the issue of suitable employment, a guide to suitable employment (attachment C) should be included with the request to the provider.

27.Decisions regarding provision of funding for retraining are made according to the principles outlined at paragraph 24 (above).  The following examples demonstrate the application of the principles.  It should be noted that cases may be less than clear-cut in practice.  Therefore, the actual decision is made by carefully weighing up the totality of evidence in a case, which may have a combination of strong and weak points, when considered against the principles.

28.In general, options which are lower down the Training Hierarchy (eg. long-term, course-based training and tertiary study) should be scrutinised more thoroughly and require a more convincing argument against the principles.

Example 1a:

A request for funding to support a university Bachelor's Degree in Civil Engineering is approved when a report from the approved rehabilitation provider confirms that:

a)the employee was being trained to become an ADF Officer and was part way through a similar course at ADFA at the time of discharge (entitlement to a commensurate level of employment - per the Fox decision);

b)the employee is committed to pursuing employment in civil engineering (employee's attitude);

c)aptitude tests confirm the employee's ability to succeed in study at tertiary level (employee's likelihood of successful completion); and

d)labour market information shows a strong demand for qualified civil engineers (future employment prospects and likely reduction/cessation of compensation payments).

Example 1b:

A request for funding to support a university Bachelor's Degree in Civil Engineering is not approved when a report from the approved rehabilitation provider confirms that:

a)The employee was a Corporal at the time of discharge (career choice is a substantial improvement in status and position compared to the military employment);

b)the employee was undergoing training to join the Special Air Services as an airborne infantryman at the time of injury (training at the time of injury was not commensurate with the proposed study);

c)vocational assessments confirm that the employee has well above average intelligence and the study is well within their capability (this is favourable but over-shadowed by other considerations);

d)the employee is so motivated to study civil engineering that they have already enrolled and commenced his first year studies (favourable but over-shadowed by other factors); and

f)the employee is physically and mentally capable of entering less highly qualified employment through a Work Trial (able to obtain suitable employment through an alternative method higher in the training hierarchy).

Example 2a:

A request for funding to support a six month computer technician course at a private business college is approved when a report from the approved rehabilitation provider confirms that:

a)the employee was a Corporal involved in maintenance of communications equipment at the time of discharge (career choice is comparable in status to the military employment);

b)the employee is capable of sedentary work but has relatively poor clerical skills (training hierarchy - not easily able to obtain employment without formal training);

c)The six month course includes a job placement component at the end, with an excellent record of successful placements (future employment prospects and likely reduction/cessation of compensation payments within a reasonable period of time);

d)vocational assessments confirm that the study is well within the employee's capability (employee's likelihood of successful completion); and

e)the course fees are $8,000 (cost is high but balanced by expected savings in incapacity payments).

Example 2b:

A request for funding to support a six month computer technician course at a private business college is not approved when a report from the approved rehabilitation provider confirms that:

a)the employee was a Corporal working as an Army driver at the time of discharge.  He is physically capable of obtaining suitable employment as a driver but wants a better job (ie he is able to earn as a driver and a rehabilitation plan is not required);

b)the employee would prefer computer technician work but has no prior experience with computers (attitude/motivation and ability to complete the training is questionable);

c)vocational assessment indicates above average intelligence but a rather limited study history (ability to complete the training is questionable); and

Confirmation of the Decision

29.Approval for retraining funding is provided via the delegate's signature on a rehabilitation plan.  The rehabilitation goal on any such rehabilitation plan involving retraining should be stated as: “to obtain suitable employment as a (insert occupation)”.  As an option, the Rehabilitation Co-ordinator may also send a covering letter to the employee which specifies the extent of funding approval, expectations for continuing funding and other conditions which apply.  A sample letter for this purpose is included at attachment D.

30.Funding for long-term and tertiary training should always be subject to satisfactory progress and completion of the course requirements.  Therefore, approval of funding on the rehabilitation plan(s) should only be provided for one semester at a time.

31.It is important to ensure, at the commencement of retraining, that the employee understands the aim of the retraining is to cease or reduce their incapacity payments when they become able to earn in suitable employment.

32.Similarly, it is also important to ensure that at the commencement of retraining the employee understands only one tertiary course will be supported.

33.If an undergraduate qualification is supported, then any subsequent training (eg. post graduate study) will be the responsibility of the employee.  Vocation-specific post graduate study may be considered when the employee is already eligible for entry to such a course.

Entitlements During Training

34.As a guiding principle, once a decision has been made to support an employee in a course of study, all reasonable efforts should be made to assist them to be successful in their study program.

35.After the initial phase of careful scrutiny of the appropriateness of retraining (where the emphasis is to identify quicker and less costly alternatives to retraining) and approval, the attitude and focus of the Rehabilitation Co-ordinator should be to assist and enable the client to complete the program (within the confines of the SRCA and Defence Compensation Instructions).

36.The following expenses are payable under Section 37:

• Course fees (including union fees, administration fees and examination fees);

• A $250 per semester “incidentals allowance” to cover the cost of essential books, equipment, excursions and consumables - paid at the beginning of each semester.

37.Some courses of study require the purchase of additional equipment which cannot be reasonably accommodated under the $250 per semester “incidentals allowance”.

38.Where it is verified that such additional equipment is a truly essential course requirement (ie. not just desirable) then the item(s) may be provided under Section 37.

39.Consideration should be given to hiring such equipment if that is an available and cost-effective option.

40.Aids and appliances may be provided under Section 39 where these items are reasonably required (as a result of impairment) to assist an employee to undertake a course of study.

41.Instructions on the provision of aids and appliances under Section 39 are contained in Defence Compensation Instruction No. 19 dated 31 January 1997.

42.HECS fees are not payable under Section 37.

43.Child care and travel costs are not normally payable as these are costs the employee would have to bear if they were attending a workplace.

44.If significant additional travel costs are involved as a direct result of the employee's disabilities, reimbursement may be authorised under Section 37 (as outlined in Section 10 of Comcare's Return To Work Handbook for Case Managers).

Regular Reviews of Ongoing Entitlement

45.A formal review of ongoing funding should be scheduled to co-incide with the release of examination results (or other formal assessment) at the end of each semester.  If progress is satisfactory, a rehabilitation plan for a further semester of study should be developed and approved.

46.The1995 Federal Court decision in Hardin v. Comcare creates a requirement for a Comcare approved rehabilitation provider to be involved in the provision of a retraining program.

47.Following the initial investigations of suitability for retraining an approved rehabilitation provider will often not be required for the full duration of an extended study program.

48.If the approved rehabilitation provider's report and examination (or other assessment) results indicate that the employee's progress in the study program is unsatisfactory the delegate may decide to cease funding.  Any such decision is an exercise of a delegation under Section 37 and must be accompanied by a letter outlining the reasons for the decision.

49.If a study program is to be ceased the Rehabilitation Co-ordinator will either formulate new rehabilitation goals or close the rehabilitation case.

Incapacity Benefits

50.Guidance on incapacity benefit entitlements during a rehabilitation program is contained in Defence Compensation Advice No 80, dated 5 December 1994.

51.If liability for the compensable condition is ceased prior to completion of the course of study incapacity and rehabilitation payments should continue until the end of the relevant semester.  It is then matter for the employee to choose to continue the course of study at their own expense and in their own time (ie without compensation support).  Liaison is required between the Claims Manager and Rehabilitation Co-ordinator in these circumstances.

52. Where a rehabilitation program involves course-based, long term retraining (ie. greater than 3 months duration) the employee should be made aware that they will be deemed able to earn in suitable employment at the conclusion of their rehabilitation program with a resultant impact on incapacity payments.  This must be documented in the original rehabilitation plan and requires clear return to work medical guidelines prior to commencement of the program.  The rehabilitation plan should provide for a month of assisted job search at the conclusion of the training.

53.Enquiries regarding this instruction should be directed to ADCR  on
(02) 6266 8639.

D. CLARKE

DGPSIM

    May 1999

Attachment A — Training Assessment (Only) – Provider (SL18a).

Attachment B — Training Assessment (Current Plan) – Provider (SL18b).

Attachment C — Suitable Employment Guidelines.

Attachment D — Retraining Plan Approval – Client (SL9c)