Policy

The client's compensation entitlement immediately before 1/12/1988 is relevant to calculation of the amount of weekly incapacity compensation paid to former employees under the transitional provisions in Division 3, Part X of the SRC Act. Specifically, this amount is the "1971 amount" as defined in s 123 of the Act:

"1971 amount", in relation to a former employee, means the amount of compensation that was, immediately before the commencing day, payable per week to the former employee under the 1971 Act.

Content contained within Chapter 37 (37.1 to 37.12) has been removed as information has been replaced by content in Chapter 6.6 of the MRCA Policy Manual - Effect

Provision of 'interim' payments at statutory rates nevertheless carries with it, some risk: i.e. that the eventual Commonwealth Superannuation Corporation decision will grant a relatively large pension (i.e. an A or B class superannuation pension back-paid to the date of discharge). A relatively large pension may (through the action of S20, 21 etc.) reduce the SRCA compensation entitlement to a level below the rate of interim payments. The client will in fact have received an overpayment, which must be recovered.

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.

There are two Incapacity Assessment Checklists. The checklists can be used to guide incapacity delegates on matters to be considered as part of the reviews.  The appropriate checklist must be completed:

• prior to commencing a new starter;
• at the 1 — st General Review;
• at the Ongoing General Review.

Weekly incapacity benefits which are paid for loss of Reserve income are not considered to be taxable income because they are considered to retain the original nature of the salary payment. In other words, Reserve earnings are not taxable so compensation for loss of ability to earn in the Reserve is also considered not to be taxable.

Non-taxable lump sum redemptions must not be made through DEFCARE/DOLARS but should be processed through PMKeyS using Earnings Codes M61 for Section 30 and M70 for Section 137 redemptions.

Nevertheless, and regardless of the format in which the request is made, the delegate must also be provided with a medical certificate of incapacity for that request to be processed (see 20.5 and 20.6 for more detail on this requirement). Delegates should generally require the original certificate, not a copy. However a fax or other electronic image may be accepted as an advance copy for the purposes of initiating an investigation of entitlement, i.e.

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.

In this respect, Section 19(4)(b) 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).........

b) where, after becoming incapacitated for work, the employee received an offer of suitable employment and failed to accept that offer – the amount per week that the employee would be earning in that employment if he or she were engaged in that employment.