External

Military Compensation and Rehabilitation Service

Safety Rehabilitation and Compensation Act 1988

Subject:

Amendment to the Safety, Rehabilitation and Compensation Act 1988

Incapacity payments to employees aged over 65

Background

  1. On 1 October 2001 the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) was amended in several areas, including the provisions relating to compensation for incapacity payable to employees aged over 65.

Previous provisions

  1. Subsection 23(1) of the SRC Act provides that compensation for incapacity is not payable to a person who has reached the age of 65, which was the normal retirement age at the time the act originally came into effect.  Section 30 provided for the redemption of weekly incapacity payments where certain criteria are met.  The section contained a formula for calculating the redemption amount based on weekly incapacity payments ceasing at age 65.

  1. Following abolition of compulsory retirement provisions with the passage of the Public Service Act 1999 (the PS Act), the SRC Act had been amended to provide that subsection 23(1) would not apply to people employed under the PS Act (APS employees).   These employees would have access to a maximum of 104 weeks' incapacity payments.

Reason for amendment

  1. The amendments given royal assent on 1 October 2001 extend to non-APS employees (eg members of the ADF) covered by the SRC Act the additional eligibility made available to APS employees.

New provisions

  1. Subsections 23(1) and 23(1A)  have been amended to read as follows:

Subsection 23(1)

Compensation is not payable under section 19, 20, 21, 21A or 22 to an employee who has reached 65.

Subsection 23(1A)

However, if an employee who has reached 63 suffers an injury (whether before or after the commencement of this subsection):

  1. subsection (1) does not apply; and
  2. compensation is payable under section 19, 20, 21, 21A or 22 in respect of the injury:
  1. to the extent that this Act (other than subsection (1)) allows; and
  2. for a maximum of 104 weeks (whether consecutive or not) during which the employee is incapacitated.

  1. Section 30 (3) has been amended by changing the definition to include the  following:

n means the number worked out using the formula:

Number of days

                                                365

where:

number of days means the number of days in the period beginning

on the day after the day on which the determination is made and

ending:

(a) if the employee is injured before reaching 63 years of age—

on the day immediately before the day on which the

employee reaches 65 years of age; and

(b) if the employee is injured on or after reaching 63 years of

age—on the day immediately before the employee would

cease to be entitled to receive compensation under section 19,

20, 21 or 21A of this Act.

Date of effect

  1. The amendments to sections 23 and 30 apply to employees:
  1. injured after the date of royal assent (ie 1 October 2001) or
  2. who have reached 63 years of age and who are receiving compensation under section 19, 20, 21, 21A or 22 of the SRC Act, or are eligible to apply for such compensation at that date (1 October 2001).

Policy Issues

  1. The following paragraphs elaborate on various issues.

  1. The affect of the reference in s23(1A)(b)(ii), to compensation being payable for a maximum of 104 weeks (whether consecutive or not) during which the employee is incapacitated, means in theory the client can be incapacitated, for a day here and a week there, until the age of 80 and beyond or until such time as the 104 weeks have accumulated. For example a client may discharge in 1980, seek first medical treatment in 1998 (at age 63) claim in 2002 (at age 67) and still be in payment at age 80.  If the employee was injured before the age of 63, incapacity payments continue to be available up to the age of 65.

  1. When assessing whether an entitlement to incapacity exists under the incapacity provisions staff are reminded of the need to ensure that as well as suffering an injury after the age of 63 that results in incapacity, the incapacity must result in a real loss. For example, the employee must be able to demonstrate an actual loss of wages or salary (eg by taking time off or being forced to cease employment). In the absence of an actual loss the client must be able to demonstrate that they were/are an active participant in the workforce but for the incapacity (eg if not employed at the time of the injury or loss the client must demonstrate active steps taken to participate in the paid workforce and that it is the incapacity that results in the loss not the fact the client was otherwise retired etc).

  1. In relation to redemption of compensation for an employee to whom this amendment applies, the number of days for the purposes of paragraph (b) of the definition at 30(3) should be calculated by subtracting the number of days' incapacity since the injury from the total number of days in 104 weeks.

  1. The application provisions (see para 7 above) indicate that this change is retrospective to include any client (other than a defined 'former employee') who is or was injured at any time in the past or future after turning 63 years of age.

  1. The impact of this provision on MCRS claims will almost exclusively involve diseases where the first date of medical treatment is taken to be the date of injury.

  1. Changes to the incapacity calculator (to allow payment beyond age 65 and to track the 104 weeks) and standard letters are being investigated. Timing will depend on the scale of changes required and the number of affected clients. A release is planned for March 2002 although this may be brought forward for this issue.

  1. In the meantime, the attached letter may be used to advise any affected new payees of the implications of the amendment. A report of all those current payees with a Defcare number recorded in PMKEYS indicates there are no current payees aged 63 and over whose date of injury was after the 63 — rd birthday.

  1. Any inquiries concerning the information contained in this MCRI should be directed to Craig Boyd on (08) 9366 8571.

(signed)

Mark Travers

Director, Policy and Procedures

MCRS – National Office, Canberra

25 October 2001

Attachment:

1.Standard letter to client

MILITARY COMPENSATION & REHABILITATION SERVICE