External

Safety Rehabilitation and Compensation Act 1988 (SRC Act)

Subject:

REVERSAL OF LIABILITY DECISIONS

OVERPAYMENTS OF COMPENSATION BENEFITS

Purpose

  1. The purpose of this MCRI is to advise staff of the action which must be taken before reversing a previous finding of liability to pay compensation.

Background

  1. From time to time, Delegates may consider it necessary to revoke an earlier determination which found that there was liability to pay compensation and to determine instead that there should not have been liability to pay compensation in the first instance. Such a situation may arise where, for example, a previous finding of liability:
  •     was based on information provided by the claimant which subsequently proved to be incomplete or untrue, or
  •     was clearly made in error given the medical and other evidence available to the Delegate.

  1. There have recently been a number of instances where cases involving reversal of an earlier finding of liability (with the resultant creation of an overpayment of compensation benefits) have been reported in the media. While such cases are most often reported inaccurately or incompletely, the effect has nonetheless been adverse publicity for the Government as well as a good deal of work in preparing Ministerial briefings and replies to a number of Ministerial representations and Ombudsman enquiries.
  2. It is not intended to imply that it is not appropriate in some circumstances to reverse an earlier finding of liability. However, Delegates must be aware of the implications of such decisions.

Considerations

  1. It is important that Delegates appreciate that decisions which have the effect of disentitling a claimant to compensation benefits which may have been paid previously can have quite devastating financial and emotional effects on the claimants who are affected by such decisions (and their dependants) even though the decision might be fully justifiable. For that reason, it is obvious that such decisions should never be taken lightly.
  2. As indicated, it is also important that Delegates note that there is considerable potential for media interest in cases in which injured employees can be presented as having been poorly dealt with by a Government agency such as the MCRS.

Policy

  1. In all future cases in which it is proposed to revoke a previous finding of liability and thus create an overpayment of compensation benefits previously paid, it will be essential for the Delegate who is handling the case (and who proposes to revoke the earlier determination) to discuss it with the Manager of the relevant MCRS office or with staff in the Policy and Procedures Section of the MCRS's National Office in Canberra if the local Manager is unavailable. If the Manager (or, where necessary, MCRS National office staff) agrees with the action the Delegate proposes to take, the Director, Policy and Procedures Section of the MCRS's National Office in Canberra must be provided with details of the case as well as the action which is proposed and the reasons why that action is considered appropriate before the determination revoking the earlier finding of liability is issued. The purpose of this action is to ensure that National Office staff are forewarned of the action which is proposed and if necessary forewarn the Minister's office of the possible difficulties arising from the decision if it is to be made.
  2. If it is considered appropriate to revoke the earlier finding of liability, a letter must also be sent to the claimant detailing the action which is proposed, the reasons why it is considered necessary to take that action and offering the claimant the opportunity to provide further reasons, arguments and medical or other evidence to show why the previous finding of liability should not be revoked. This is in line with the MCRS Client Charter which provides for a "No Surprises" decision making process.
  3. The period allowed in which a claimant will have an opportunity to provide argument or evidence to support his/her claim will necessarily vary depending on the circumstances of the individual case. For example, it may be considered appropriate to allow a shorter period (say 14 days) if weekly payments of compensation are being paid to the claimant than if no payments are actually being awarded under the SRC Act. Where no payments are being made, the claimant should, as a general rule, be allowed a period of 28 days to provide further argument or evidence to support his/her claim.
  4. The situation described in the above example should not be confused with the situation where it is considered necessary to determine that the Department of Defence's liability to pay a particular claimant compensation under the SRC Act has ceased. In such a situation, it will often be on the basis of new medical opinion that such a decision is made. Delegates should note that in such cases it should generally be determined that there is no liability to pay compensation only from the date of the determination which ceases liability. However, there may be circumstances in which it could reasonably be considered appropriate to "cease effects" retrospectively. For example, if an employee's treating specialist indicates that the effects of any ADF related injury ceased some time previously, it may be appropriate to determine that the Department of Defence's liability to pay compensation ceased at some time prior to the date of the determination. Once again, such decisions should be discussed by the determining Delegate with the local MCRS Manager or with staff in the Policy and Procedures Section of the MCRS's National Office in Canberra if the local Manager is unavailable.
  5. While it is not possible to be prescriptive about the circumstances in which a decision to revoke an earlier finding of liability might be justifiable, there are circumstances where it is not appropriate to revoke such a decision (with the possibility of creating a potentially large overpayment of compensation). Such decisions should not be made simply on the basis that one Delegate takes a different view of the evidence available in a given case. Different interpretations of the same evidence would not generally warrant revoking an earlier finding of liability UNLESS the original decision was so patently incorrect as to leave the second Delegate with no alternative to revoking the earlier decision.
  6. All such cases must be discussed with the local MCRS Manager or with staff in the Policy and Procedures section of the MCRS's National Office before any action is taken to revoke a finding of liability.
  7. Finally, if a decision is made after following the above procedures, and if as a result of that decision an overpayment of compensation is created, any request by the claimant for a "write off" or for a "waiver" of the overpayment must be fully investigated. DCI 38 is relevant to that issue and it should be noted that decisions regarding "write off" and "waiver" of overpayments must be referred to the Director, Policy and Procedures Section of the MCRS's National Office in Canberra for consideration.
  8. Any enquiries concerning the information contained in this MCRI should be directed to John Vidler on (02) 6289 4851.

Mark Travers

Director, Policy and Procedures

MCRS – National Office, Canberra

June 2001