External

Amendment to the Safety, Rehabilitation and Compensation Act 1988

Normal Weekly Earnings for Former Employees

Background

  1. On 1 October 2001 the Safety, Rehabilitation and Compensation Act 1988 (the act) was amended in several areas, including the provisions relating to maintaining payments for former employees at a minimum level of 70% of normal weekly earnings (NWE).

Previous provisions

  1. The transitional provisions of the act apply in part to people who were receiving incapacity payments at commencement of the act on 1 December 1988 and who had ceased to be employed before that day (“former employees”).  Section 131 allows for the weekly compensation of a former employee under age 65 to be reduced in line with increases in their superannuation payments (to provide a combined total of 70% of NWE).  This is normally adjusted annually.

Reason for amendment

  1. The transitional provisions intended that former employees under age 65 would continue to receive weekly compensation based on 70% of their NWE.

  1. However, section 131 did not provide for weekly compensation to be adjusted in line with increases in a former employee's NWE .  The weekly compensation rate could have fallen below 70% until it was adjusted at the time of the annual superannuation increase.

  1. It was therefore necessary to amend section 131 to ensure that the weekly compensation rate was adjusted by reference to NWE whenever increases in the NWE occurred.


New provisions

  1. Section 131 has been amended by inserting new sub-sections as follows:

After subsection 131(2)

Insert:

(2A) If, as a result of an increase in the amount of a former employee's

normal weekly earnings, the amount of combined benefit payable

to the former employee under subsection (2) is less than 70% of

those increased normal weekly earnings, the amount of

compensation must be increased or further increased (as the case

may be) until it is equal to 70% of those increased normal weekly

earnings.

After subsection 131(3)

Insert:

(3A) If, as a result of an increase in the amount of a former employee's

normal weekly earnings, the amount of compensation payable to

the former employee under subsection (3) is less than 70% of those

increased normal weekly earnings, the amount of compensation

must be increased or further increased (as the case may be) until it

is equal to 70% of those increased normal weekly earnings.

  1. Amendments have also been made to sub-section 8(9) to enable the NWE of former employees to be updated by a prescribed index.  It is intended that the index be prescribed early in 2002 for application from 1 July 2002.  A JPA will be issued to advise determining authorities of details when the rate of adjustment for 2002 has been calculated.

  1. In addition, to correct a technical error in sub-sections 131(5) and (6) and 132(5) the following amendment has been made to each of the sub-sections:

Omit “or (3)”, substitute “, (3) or (4)”.

Date of effect

  1. This amendment has effect from the date of Royal Assent.

  1. Any issues relevant to this policy advice may be discussed with the Policy & Co-ordination Group on 1300 366 979.

Regulatory Services Division

Comcare

    October 2001

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