Policy

However, DRCA cases can seldom be accepted on the strength of an RMA SOP alone.  To accept liability for a particular medical condition requires more than confirmation that the disease may be caused by the factors cited in the relevant SOP.  A medical examination and opinion confirming or discounting employment factors as 'probably' causing the particular condition will generally be required.  All of the available evidence must be considered.  RMA SOPs can be an effective tool for quickly eliminating fanciful contentions or for elucidating other likely causes

The following sections of the Safety Rehabilitation and Compensation Act 1988 are relevant to compensation for 'incapacity':

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:

Lump sum redemptions made in accordance with sections 30 or 137 of the SRCA are taxable.  However that component of a lump sum redemption to a former employee under section 137 that is made in substitution of incapacity payments beyond [glossary::469] is exempt from income tax.  See 20.28.3 of this manual for further information.

Sections 30 of the SRCA and 49 of the 1971 Act both provide that, when an entitlement to weekly compensation falls below a certain amount and this appears likely to continue indefinitely, the weekly entitlement should be 'redeemed' by payment of a lump sum. Where these qualifying conditions are met, redemption is voluntary under the 1971 Act but mandatory under the SRCA. The amount of the lump sum is determined by formulae that take into account the clients age, expectation of life and previous entitlement. Payment of that lump sum is in lieu of further weekly payments.

Payment of a lump sum redemption is in effect the 'bringing forward' of the payment of weekly compensation as income replacement. The advice from the Australian Taxation Office (ATO) regarding Sections 30 and 137 (please see the exceptions 21 below) is that, 'a capital sum received in substitution of weekly payments does not alter the character of the compensation for 'income replacement' and that such payments are subject to taxation in accordance with Subsection 25(1) of the Income Tax Assessment Act 1936.

Furthermore, Section 19(4)(e) says:

19(4) In determining, for the purposes of Subsections (2) and (3), the amount per week that an employee is able to earn in suitable employment, Comcare shall have regard to:

a)to d)..........

e)where, after becoming incapacitated for work, the employee has failed to seek suitable employment – the amount per week that, having regard to the state of the labour market at the relevant time, the employee could reasonably be expected to earn in such employment if he or she were engaged in that employment;

Before approving an interim payment under S19, a Delegate must write to the client in the following terms:

• advising the client that the rate of his or her weekly compensation entitlement is subject to the amount of any superannuation pension or superannuation lump-sum benefit received by the client, however details of any such superannuation entitlements are not yet known, and
• advising the client that he/she has two options:

1.deferral of determination and payment of weekly compensation until the superannuation information is known, or

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.