Pre-Schlenert assessments may require a correction for NEL entitlement

Pre-Schlenert assessments may require a correction for NEL entitlement

In Schlenert v Australian and Overseas Telecommunications Corporation (1994), the Full Federal Court held that an impairment which became permanent under the 1971 Act or the 1930 Act must be compensated both under s 24 for the physical effect of the impairment (with the quantum calculated under the previous Acts) and under s 27 for non-economic loss (NEL).

Where an assessment of entitlement to compensation for a pre-1/12/88 permanent impairment was carried out before the Schlenert decision was implemented by MCRS (between 1 December 1988 and 30 September 1995), it is likely that compensation for NEL was not paid even though it was subsequently established by the Federal Court that an entitlement existed.  In most cases, the assessment will predate the introduction of Defcare and the Permanent Impairment Calculator.

If such a case is discovered in an investigation or a reassessment, the original assessment should be reinvestigated using the Permanent Impairment Calculator (using the date of the prior determination as the Date of Assessment).  The Calculator will calculate the total entitlement amount including NEL.  The compensation previously paid under s 24 should be entered as a Correction on the Deductions and Clearances Screen.  The resulting s 27 entitlement should then be paid to the client.

A second assessment should then be conducted for the later claim (for the subsequent deterioration).  Care should be taken to enter only the s 24 payment in the Previous 1971 Compensation Paid box.  That amount will be deducted from the total current assessment amount.  As from 1 October 2001, NEL amounts will be excluded from 1971 Act impairments where the application is made on or after 7 December 2000.

Effect of new s 27(3) on pre-Schlenert cases

The Schlenert entitlement to NEL for clients with a pre-1/12/88 injury was contrary to the original intention of the 1988 Act and has been expressly excluded by the insertion of new s 27(3) by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 which commenced on 1 October 2001.  This exclusion of NEL payments for pre-88 impairments applies only where the application for permanent impairment compensation is made on or after 7 December 2000.  Where the application for permanent impairment compensation was made before 7 December 2000 (including cases where a previous interim or final assessment did not include a s 27 payment), compensation for NEL should be calculated using the Permanent Impairment Calculator and paid to the client as described above.