6.4.1 Maximum Rate Weeks (45 weeks)

External

Section 129 of the MRCA defines a maximum rate week as one during which:

a person's incapacity prevents the person from working either his or her normal weekly hours, or working at the level he or she worked before the incapacity; and
the total number of hours in that week and all previous maximum rate weeks during which the person's incapacity has prevented him or her from so working does not exceed 45 times the person's normal weekly hours.

Normal Weekly Hours (NWH) are defined in subsection 132(2) and discussed further in 6.8. For part-time Reservists NWH are defined in section 158.

Maximum rate weeks do not commence until after the discharge. This guarantees a discharged member at least 45 weeks of maximum payments.

While under SRCA a person may have an entitlement to 45 maximum rate weeks for each injury, under MRCA a person only ever gets a total of 45 maximum rate weeks, irrespective of which injury causes their incapacity for work.

In the case of part-time Reservists and Cadets, section 10 provides for Defence to specify a date from which a person is taken to have ceased to be a member for the purposes of MRCA, even though they may not have been formally discharged.

The amount of compensation that the Commonwealth is liable to pay for a maximum rate week is:

NE-AE

6.4.1.1 Is the person continuously incapacitated?

The incapacity calculator asks the delegate whether the person is continuously incapacitated for the period of the incapacity entered in the calculator. Where a person is only incapacitated for a day (or part of a week but less than a whole week) then the delegate will enter the whole week as a period in the calculator, to get the correct amount of compensation payable. However the delegate must select 'not continuously incapacitated' thereby allowing them to enter the exact days/hours that should be counted towards the maximum rate weeks. In the scenario above only .02 of a week will count towards the maximum rate week calculation.

The following scenarios illustrate examples of continuously and not-continuously incapacitated:

Example	Work circumstance during assessment period	Continuously incapacitated?
1	Not working.	Yes
2	Working – but unable to work at pre-injury level. (ability to earn is less than normal earnings.	Yes
3	Working at a level equal to or greater than pre-injury level BUT only for part of a normal weekly hours.	No
4	Only able to work part of normal weekly hours and at a level less than pre-injury level.	Yes

Examples

1. During a period of incapacity where the person is not working and incapacity is being paid, we count the entire period in the calculation of maximum rate compensation weeks.

Where:

Normal Weekly Hours (NWH) are 37.5;

Maximum rate compensation weeks = 37.5 x 45 = 1687.5 hours;

Person has been discharged;

The person is incapacitated for the period 9/7/2007 to 31/7/2007 and returns to their pre-incapacity work on 1/8/2007;

That person was incapacitated for 17 days;They have used 17 x 7.5 = 127.5 hours from their 1687.5 hours (maximum rate compensation weeks);

Their remaining maximum rate compensation weeks are equal to 1687.5 - 127.5 = 1560 hours.

2. If a person is working full time but at a lesser level and therefore entitled to top up incapacity payments, we also count the entire period in the calculation of maximum rate compensation weeks.

Normal Weekly Hours (NWH) are 37.5;

Maximum rate compensation weeks = 37.5 x 45 = 1687.5 hours;

A former Sergeant with Normal Earnings (NE), (including remuneration allowance) of $1000 per week was medically discharged on 31 December 2006;

The former Sergeant commences working (38 hours per week) as a Car Park Attendant on 1 January 2007 earning $573 per week;

He receives incapacity payments at the rate of $427 per week;

His maximum rate compensation weeks will run out on 11/11/2007, 45 weeks after his incapacity payments commenced;

and From 12 November 2007 his incapacity payments will be calculated as per the formula in section 131 as discussed below.

3. If a person is able to work 20 hours in a week, at their pre-incapacity level and incapacity paid for the remaining period of a week up to their normal weekly hours (17.5 hours if NWH are 37.5) then only the remaining hours are included in the calculation of maximum rate compensation weeks.

NWH are 37.5 hours per week;

Maximum rate compensation weeks = 37.5 x 45 = 1687.5 hours;

A former Sergeant with an NE (including remuneration allowance) of $1000 per week is medically discharged on 31/12/2006;

The former Sergeant commences part time work (20 hours per week) on 1/1/2007 as a Consultant earning $600 per week;

On a pro-rata basis the former Sergeant has a higher rate of pay ($30 ph compared to $26.67 ph) as a Consultant. So it can be said that she is working at a higher level than she was prior to discharge and becoming incapacitated;

Therefore only 17.5 hours per week counts towards the maximum rate compensation weeks;

If the former Sergeant’s circumstances remain unchanged she will have 96.43 maximum rate compensation weeks, as only 17.5 hours per week are being counted towards her maximum rate compensation weeks.

4. If a person is able to work 20 hours per week and that 20 hours is at a lesser level than their pre-injury or pre-incapacity earnings, we count the entire period (37.5 hours if that is NWH) in the calculation of maximum rate compensation weeks.

Normal Weekly Hours (NWH) are 37.5;

Maximum rate compensation weeks = 37.5 x 45 = 1687.5 hours;

A Sergeant has an NE (including remuneration allowance) of $1000 per week and is medically discharged on 31 December 2006;

The former Sergeant commences part time work (20 hours per week) as a Car Park Attendant on 1 January 2007 earning $400 per week;

The person received incapacity payments at the rate of $600 per week;

The person's maximum rate compensation weeks run out on 11/11/2007;

This is the same date as in example 1 above, as he is working at lesser level than his pre-incapacity level;

37.5 hours per week are counted towards the calculation of his maximum rate compensation weeks; From 12 November 2007 the person’s incapacity payments are calculated as per the formula in section 131 as discussed below.

The underlying principle is that each hour for which compensation is payable either in full or by way of top-up counts towards the calculation of maximum rate compensation weeks.

6.4.1.2 Compensation during a week when the maximum rate week period ceases

Once the maximum rate week period ceases the person is paid a reduced compensation amount (see following section). If the maximum rate week period ceases during a week, then compensation is paid in the following fashion:

· for the maximum rate period:

· for the reduced rate period:

where total compensation = maximum rate amount + reduced rate amount

In practice incapacity delegates enter the period up to the expiration of the maximum rate weeks in the calculator and then commence a new period for post maximum rate weeks. The calculator will do the actual calculation.

6.4.1.3 Compensation during a week after the maximum rate week period ceases

After the maximum rate week period ceases the person’s normal earnings are multiplied by an adjustment percentage and the compensation paid is the difference between this adjusted amount and his or her actual earnings.

The following table gives the adjustment percentage:

Percentage of normal weekly hours (NWH) being worked:	Adjustment percentage:
Nil	75%
25% or less	80%
More than 25 % but not more than 50%	85%
More then 50% but not more than 75%	90%
More then 75% but not more than 100%	95%
100% or more	100%

The formula for calculating the amount of compensation after 45 weeks is:

(adjustment percentage x NE) - AE

Note:

When a member is injured as a permanent forces member and transfers to the Reserves, periods of incapacity do not count towards the maximum rate weeks calculation until the member discharges from the Reserves. That is, a member is considered a serving member after they discharge from the Permanent Forces if they transfer to the Reserves.

6.4.1.4 Maximum Rate (45) Weeks scenarios and dual eligibility cases

The scenarios described in the following table are intended to guide delegates in dual eligibility cases, to determine against which claim and which Act incapacity payments should be made. It also provides guidance in determining liability to make incapacity payments and compensation offsetting.

Injury A is an accepted knee injury under the SRCA and VEA

Injury B is an accepted back injury under the SRCA.

Injury C is a non-compensable shoulder injury.

Injury D is accepted depressive illness under the VEA and an aggravation under the MRCA.

Injury E is accepted PTSD under the VEA only.

Injury F is an accepted ankle injury under the MRCA only.

VEA Clearances

When requesting a VEA clearance delegates should include all the SRCA and MRCA conditions contributing to the incapacity and not just the condition that the incapacity has been paid against.

	Scenarios (combinations of injuries A-F)	Pay incapacity and count 45 Weeks against	Report costs against	Compensation Offsetting (staff in DP payment section will make final decision after receiving request for clearance)	3^rd Party Recoveries	Comments
1.	The knee injury results in full incapacity i.e. the person is not able to work at all. Surgery is required for the back and a medical certificate indicates the back as the cause of incapacity. The status of the knee has not changed.	Knee alone	Knee alone	Request clearance for all conditions contributing to incapacity – knee and back. DP for knee (but not depression) offset by entire incapacity.	Knee and Back	Knee results in full incapacity and liability is not impacted by the back
2.	The knee injury results in full incapacity ie the person is not able to work at all. The person requires surgery for the shoulder and medical certificate indicates the shoulder as the cause of incapacity. The status of the knee has not changed.	Knee alone	Knee alone	Request clearance for all conditions contributing to incapacity – Knee. As above.	Knee Alone	Knee results in full incapacity and liability is not impacted by the non-compensable shoulder surgery as long as the knee continues to cause full incapacity.
3.	The knee injury results in partial incapacity ie the person is working 10 hours per week. The person requires surgery for the back and the person is fully incapacitated due to the back and medical certificate indicates the back as the cause of incapacity. The status of the knee has not changed. After 1 month the person returned to pre surgery status	Knee, then Back and revert to knee. If 45 weeks used for knee then may have fresh 45 weeks and paid at 100% NWE. Then payments revert to Knee and relevant % of NWE · SRCA only – refer 6.4.1	Knee, then Back and revert to knee.	Request clearance for all conditions contributing to incapacity – knee and back. Offset DP (up to notional limits) by all the incapacity if the incapacity is paid in respect of at least one VEA AD	Knee, then Knee and Back and revert to knee.	Back is a compensable new event in its own right fully incapacitating, and overtakes the knee injury temporarily.
4.	The knee injury results in partial incapacity i.e. the person is working 10 hours per week. The person requires surgery for the shoulder and is fully incapacitated due to the shoulder and medical certificate indicates the shoulder as the cause of incapacity. The status of the knee has not changed. After 1 month the person returns to pre surgery status	Knee alone but at the pre-existing rate of incapacity payments. The amount of compensation payable is only impacted by any change in the hours actually worked and the % of NWE paid (if post 45 weeks). If the person is on sick leave (paid or unpaid) from their usual employer then we continue to use the hours the person is normally employed otherwise the hours used are actual hours worked. We deem AE as if to ignore the effects of the shoulder	Knee alone	Request clearance for all conditions contributing to incapacity – knee. DP for knee (but not depression) offset by entire incapacity.	Knee alone	Shoulder, being non compensable is not compensated. Knee effects continue and would have in any event so pre-existing compensation continues.
5.	The knee injury initially incapacitates the person. The incapacity from the knee injury has resolved and now the back injury incapacitates the person.	Back alone and new 45 weeks	Back alone	Request clearance for all conditions contributing to incapacity – back. DP is for knee and depression, therefore no offsetting.	Back alone	Compensation is paid only for the back
6.	The person is totally incapacitated due to their knee injury. Later the back also is added to medical certificates as a cause of incapacity for work.	Knee alone	Knee alone	Request clearance for all conditions contributing to incapacity – knee and back. DP for knee (but not depression) is offset by entire incapacity.	Knee and Back	Knee results in full incapacity and liability is not impacted by the back so long as the knee effects remain
7.	The person is medically discharged with the knee and the back injuries jointly contributing to the person’s incapacity.	Knee or Back, whichever is deemed as the principle cause of the incapacity	Knee or Back, whichever it deemed as the principle cause of the incapacity	Request clearance for all conditions contributing to incapacity – knee and back. Offset DP (up to notional limits) by all the incapacity if the incapacity is paid in respect of at least one VEA AD	Recover all the incapacity if the 3^rd party action is in respect of at least one of the contributing conditions.	Delegate must investigate and determine which condition is the principle cause of the incapacity.
8.	The person is medically discharged with the knee and depressive illness jointly contributing to the person’s incapacity.	Depression under MRCA because of s15 of the MRC(CTP)Act 2004.	Depression	Request clearance for all conditions contributing to incapacity – knee and depressive illness. Offset DP (up to notional limits) by all the incapacity if the incapacity is paid in respect of at least one VEA AD	Recover all the incapacity if the 3^rd party action is in respect of at least one of the contributing conditions.	Both give rise to incapacity but can only pay under one Act.
9.	The person is partially incapacitated due to the knee. A sequela hip condition increases level of incapacity.	Knee as it gives rise to the full incapacity.	Knee alone	Request clearance for all conditions contributing to incapacity – knee and hip. DP for knee and not depression offset by entire incapacity payment.	Recover all the incapacity if the 3^rd party action is in respect of at least one of the contributing conditions.	The knee is the principle cause of the incapacity as it gives rise to liability for the hip condition.
10.	The shoulder results in full incapacity i.e. the person is not able to work at all. The person requires surgery for the knee and medical certificate indicates the knee as the cause of incapacity. The status of the shoulder has not changed.	No compensation	No compensation	No compensation	No compensation	Non compensable shoulder causes the incapacity and remains.
11.	The person is paid incapacity payments under MRCA for the aggravations of Major Depressive Disorder.	Incapacity payments under MRCA for Depression.	Depressive Disorder	Request clearance for all conditions contributing to incapacity – depressive illness. Is offset against VEA DP for depression.	Depressive Disorder
12.	The person presents well after If the person is on sick leave (paid or unpaid) from their usual employer then we continue to use the hours the person is normally employed, otherwise the hours used are actual hours worked.discharge with a mix of compensable and non compensable injuries listed as the cause of incapacity.	Investigate chronology and cause of incapacity. See comments.		Request clearance for all conditions contributing to incapacity. DP for knee and depression would be offset by entire incapacity.	Recover all the incapacity if the 3^rd party action is in respect of at least one of the contributing conditions.	Outcome will depend on whether the person is totally or partially incapacitated. In either case investigate chronology of incapacity and: If compensable factors first resulted in total incapacity then pay against the principle cause. If non compensable factors first resulted in total incapacity then not compensable (refer 10 above). If compensable factors first resulted in a partial incapacity then pay against condition causing initial incapacity. If non compensable factors increase the level of pre existing compensable incapacity pay against existing cause of incapacity. If compensable factors increase the level of pre existing non compensable incapacity then pay against condition that increases level of incapacity.
13.	The person is partially incapacitated due to their MRCA ankle injury and is able to work 3 days per week. Subsequently the person's PTSD cause a total incapacity.	Top-up incapacity payments under MRCA for the ankle while working then full rate of incapacity (with hours adjusted when totally incapacitated).	Ankle (unless Special Rate is awarded for PTSD).	Request clearance for all conditions contributing to incapacity. Incapacity payments are precluded if the person becomes eligible for Special Rate under the VEA.	Recover all the incapacity if the 3^rd party action is in respect of the ankle condition.	If the ankle injury continues to cause an incapacity, incapacity payments are still payable under the MRCA.

Note: Where a condition cease to be a cause of incapacity, a new VEA clearance should be requested.