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11.3 Ceasing payments when a person is imprisoned after conviction of an offence

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Last amended 
30 April 2021

Section 23(2) of the DRCA and Section 122 of the MRCA states the Commonwealth is not liable to pay compensation for a week to a person who is incapacitated for work if the person is imprisoned for the week in connection with his or her conviction of an offence.

MRCA only - Section 208 of the MRCA also states that the Commonwealth is not liable to pay Special Rate Disability Pension (SRDP) for any period during which the person is imprisoned in connection with an offence.

Section 23(2) of the DRCA, Section 122 or section 208 of the MRCA are triggered only if the person is:

  • convicted,

  • imprisoned in connection with that conviction.

It should be noted that only weekly incapacity payments (or SRDP payments under the MRCA) are affected. The person continues to be entitled to claim other compensation benefits that may be appropriate.

Compensation under section 31 of the DRCA or section 139 of the MRCA (incapacity payments after a redemption/conversion of weekly amounts to a lump sum) is also affected as the rate payable under that section is derived from the amount of incapacity payment.

DRCA only - the exclusion applies only to 'current' employees. Payments to former employees under Ss131 – 136 in Part X are unaffected by imprisonment.

11.3.1 Meaning of ‘imprisoned’

Situations where a person is imprisoned include:

  • in custody in a correctional centre (adult prison) of any grading, including a prison farm;

  • detention in a juvenile detention centre;

  • admission to a prison hospital; or

  • admission to a public hospital after transfer from prison under guard because of a medical emergency.

The following situations do not constitute imprisonment for the purposes of section 23(2), section 122 or section 208:

  • community service orders;

  • detention in a remand centre or police cells;

  • home detention (e.g. under the Home Detention Act 1996 (NSW)); or

  • Court-ordered residence in an alcohol and drug rehabilitation centre.

11.3.2 Status of periodic detention as ‘imprisonment’

Periodic detention programs may involve incarceration of the offender for only part of the week, usually Friday evening to Sunday evening. At other times the offender lives at home and attends work, without supervision but possibly with some Court-imposed conditions.

As a matter of policy, periodic detention will not be regarded as ‘imprisonment’ for the purposes of section 122 or section 208. Although the section could be seen as authorising a partial reduction in compensation each week (equating to the ‘period’ of imprisonment), this is not desirable as the person continues to face almost the full financial costs of living (e.g. rent, support of dependants, bills, loan repayments, etc.).

11.3.3 Status of work release programs as ‘imprisonment’

Work release programs are operated by most State Corrective Services Departments. They usually involve release of a prisoner during the day to undertake employment or training activities. In some cases, the prisoner may live, with some supervision, in a half-way house run by the Department or a non-Government agency.

Cases involving work release programs must be decided on their particular facts, including consideration of

  • the nature of the accommodation;

  • the level of supervision;

  • the degree of self-responsibility accorded the person; and

  • financial responsibilities of the person for their board and lodging.

11.3.4 Imprisonment to be in connection with conviction of an offence

While an offender may be ‘imprisoned’, this imprisonment is not always ‘in connection with conviction of an offence’. Where there is no conviction of an offence, compensation entitlements are unaffected.  

Examples where compensation is NOT affected include:

  • on remand awaiting trial;

  • detention in police custody after arrest;

  • detention in police custody for the person’s own protection (drunkenness, psychiatric disorder); or

  • detention in an Immigration Detention Centre.

‘In connection with’, although clearly not requiring a causal relationship, does require some real relevance of the conviction to the detention, there must be more than just a temporal coincidence.

11.3.5 Evidence of conviction is required

Documentary evidence should be obtained from the relevant authorities to confirm:

  • the fact of conviction;

  • the date of conviction;

  • the sentence, and

  • the earliest date of parole.

11.3.6 Date of effect

The date of effect of any cessation of benefits is the date of imprisonment as imposed by the Court. Payments are only ceased from this date which, if retrospective, will give rise to an overpayment.

11.3.7 Status of imprisonment on remand

If a person is in prison on remand while awaiting trial, subsection 23(2) of the DRCA or section 122 (or section 208) of the MRCA should not be applied because the imprisonment at that stage is not ‘in connection with his or her conviction of an offence’.

The period of imprisonment that is 'in connection with his or her conviction of an offence' begins on the date that the court orders the sentence commences.

The conviction must be in respect of the same offence for which the person was held on remand. While it is not necessary for convictions to be recorded in respect of all charges, at least one charge must result in a conviction.

11.3.7.1 Applying DRCA S23(2) and MRCA S122 or 208 

Scenario

A person has been imprisoned on remand for the period 1 January 2005 to 1 January 2010, pending trial, and was convicted of the offence on 2 January 2010.

Example 1 Backdating a sentence 

The court imposed a sentence of 25 years, commencing on 1 January 2005 (i.e. a backdated sentence). DRCA S23(2), MRCA S122 or S208 is applied retrospectively from the date the sentence commenced and results in overpayment of incapacity payments from 1 January 2005.

Example 2 Sentence for time already served

The court ordered that the sentence was to be for 5 years from date of imprisonment on remand (1 January 2005), and that the person was to be released immediately (having served the sentence). DRCA S23(2), MRCA S122 or S208 is applied retrospectively and results in overpayment of incapacity payments for the period 1 January 2005 to 1 January 2010.

Example 3 Sentence commenced from the date of conviction

The court ordered the sentence was 5 years commencing on 2 January 2010. The period on remand (from 1 January 2005) is not an imprisonment in connection with the person's conviction. DRCA S23(2), MRCA S122 or S208 is applied from the date the court ordered the sentence ocmmenced (2 January 2010) and should not be applied retrospectively for the period of remand (1 January 2005 to 1 January 2010).

Example 4 No sentence imposed

The court did not impose any term of imprisonment as part of the person's sentence. The period of time the person was held on remand is not an imprisonment in connection with his conviction, and DRCA S23(2), MRCA S122 or S208 should not be applied restrospectively.

11.3.8 Status of detention in a psychiatric institution

Where a person is detained in a closed psychiatric institution, careful investigation of the situation is required. In most cases, it is likely that subsection 23(2) of the SRCA and section 122 or 208 of MRCA will not apply for one of several reasons:

  • the person is not ‘imprisoned’, as the institution is a hospital not a correctional centre;

  • the person was not convicted of an offence because he or she was found to be unfit to plead to the offence; or

  • the person’s detention in the psychiatric institution is a result of a medical condition and has no ‘connection’ with offences for which they had previously been convicted and imprisoned.

11.3.9 Contact with the person

Where a person is imprisoned on remand and this fact is known, the person should be advised that subsection 23(2) of the SRCA or section 122 or 208 of the MRCA (as the case may be) may apply if they are convicted of an offence. Such notification may assist a person to rearrange his/her financial affairs and thus limit the impact of any possible overpayment of compensation arising from a subsequent conviction.

When compensation is cancelled because of the operation of section 23(2) of the SRCA or section 122 or 208 of the MRCA, it is important to write to the person attaching a copy of the relevant determination and advising them that:

  • entitlement to compensation benefits may be restored upon release from imprisonment if liability to pay compensation for incapacity for work still exists; and

  • other compensation entitlements (e.g. permanent impairment etc.) continue during the period of imprisonment.