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Ch 8 Permanent Impairment under the 1971 Act
In this chapter
The 1971 Act is the Compensation (Commonwealth Government Employees) Act 1971, which commenced on 1 September 1971 and provided workers' compensation coverage to Defence Force personnel until 30 November 1988. For discussion of the 1971 Act, see Chapter G 64.1 in the General Handbook.
A claimant may be entitled to lump-sum compensation under the 1971 Act if the claimed impairment is of a kind specified in Ss39–42 of that Act:
- S39(2) – loss of sight of one or both eyes
- S39(4) – specified losses set out in a Table of Losses (often also referred to as a 'Table of Maims'), including losses of hearing, speech, arms, legs, fingers, toes, etc.
- S40 – loss of genitals, breasts or the capacity to engage in sexual intercourse
- S41 – facial disfigurement
- S42 – total and permanent loss of the sense of taste or of smell.
If the impairment is one of the losses set out in Ss39–42 of the 1971 Act, compensation is payable at a rate calculated in accordance with the specified percentage of the maximum statutory rate.
The statutory rates for lump-sum compensation under the 1971 Act were increased on a regular basis to protect the value of the compensation from the effects of inflation.
If the impairment suffered by the client is not one of the losses set out in Ss39–42 of the 1971 Act, lump-sum compensation will not be payable to the claimant.
Note that many disabling impairments were not compensated by a lump- sum under the 1971 Act, including back injuries and mental disorders.
The maximum statutory amount for calculating compensation for permanent impairment under s39(3) of the 1971 Act for the purpose of assessing LOEU claims that are governed by s124(4)(c) of the SRCA is the maximum amount specified under the Compensation (Commonwealth Government Employees) Regulations 1971 (1971 Regulations) at the time the impairment became permanent.
Section 124 of the SRCA allows for injuries that occurred before the commencement of the SRCA to be compensated under the SRCA where they would have been compensable under the Act that was in force at the time of the injury, including under the immediate predecessor to the SRCA, the 1971 Act.
By the operation of s124(4) of the SRCA, the amount of compensation a person is entitled to receive under ss24 or 25 of the SRCA in respect of permanent impairment is deemed to be the amount of compensation that would have been payable under the 1971 Act.
A claimant may be entitled to lump-sum compensation under the 1971 Act if the claimed impairment is of a kind specified in the ss39-42 of the 1971 Act. The statutory rates for lump sum compensation under the 1971 Act were increased on a regular basis to protect the value of the compensation from the effects of inflation.
What is the applicable maximum amount for the purposes of s39(1)of the 1971 Act?
The first principle of statutory interpretation is that statutory words should be given their ordinary meaning and grammatical construction unless this would contradict the apparent purpose of the enactment or provision.
Section 124(1A) was inserted into the SRCA as an amendment under the Industrial Relations Legislation Amendment Act 1991. It reads:
“(1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the 1912 Act, the 1930 Act or the 1971 Act.”
Section 124(4) of the SRCA sets out how the amount of compensation a person would be entitled to under the 1971 Act is determined, which is:
“the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under …. The 1971 Act as in force when the impairment …. Occurred.”
The words of ss124(1A) and (4) are not ambiguous – their ordinary meaning clearly indicates that the relevant ‘amount of compensation’ is the amount that would have been payable under the 1971 Act as in force ‘when the impairment occurred” as if the SRCA had not been enacted. The maximum statutory amounts for the purpose of s39 and a number of other provisions of the 1971 Act are set out in schedule 4 of the repealed 1971 Regulations.
The rates under schedule 4 of the 1971 Regulations were amended from time to time. For example, on 12 June 1988, schedule 4 was amended to increase the maximum amount for s39(1) to the current figure of $59,980. This increase followed a number of earlier amendments e.g. an amendment on 12 June 1987 increased the maximum amount from $54,620 (which had applied from 12 December 1986) to $56,700.
The maximum amount for s39(1) is set by the 1971 Regulations which are regulations made, and therefore laws, under the 1971 Act. Section 124(4) of the SRCA requires compensation to be determined under the 1971 Act “as in force when the impairment … occurred”
Therefore, the statutory amount for calculating compensation for permanent impairment will be the maximum amount specified under the 1971 Regulations when the impairment occurred.
When does impairment occur for the purposes of s124(4)(c) of the SRCA?
This question was examined by Gummow J of the Full Court of the Federal Court in Brennan v Comcare:
47. No direct legislative guidance is given, in relation to the concept of “permanent impairment”, as to the effect of the expression sub-s124(3), “occurred before the commencing date.” However, the legislative framework indicates that there are as least three steps involved. The first is that there must have been an injury to Mr Brennan, Obviously this must have occurred before the commencement date. It was not, as I understand it, disputed that Mr Brennan satisfied this criterion.
48. Next, the injury must have resulted in an impairment, meaning the loss, or the loss of the use, or the damage or malfunction of any part of the body, or of any bodily system or function or part thereof. Further, that impairment must have been permanent, that is to say likely to continue indefinitely. That state of affairs must have been reached before the commencement date [of the SRCA Act]”
In Comcare v Levett (1995) 60 FCR 14, the Full Federal Court held that suffering an impairment before the relevant provisions of the SRCA came into force on 1 December 1988 is not sufficient to trigger the application of s124(3) exclusion. The impairment must be permanent, in which case s124(4) would come into operation.
The Brennan and Levett decisions confirm that the requirement under s123(4)(c) of the SRCA for compensation for permanent impairment to be determined “when the impairment … occurred” means when the impairment became permanent. The question of when a particular impairment has become permanent is largely a matter for medical evidence. This is consistent with Comcare’s policy on this subject.
This position is also consistent with the general principle that is discernible in s124 of the SRCA that:
“an employee should not be worse off as a result of the enactment of the [SRCA] and the repeal of the [1971 Act] but, generally, should be no better off.”
In summary, the statutory amount for calculating compensation for permanent impairment under s39(3) of the 1971 Act for the purpose of s124(4)(c) of the SRCA will be the maximum amount specified under the 1971 Regulations at the time the impairment became permanent.
In this regard, the steps to be considered in deciding a 1971 Act permanent impairment claim under s39 would need to be:
- Be satisfied that the relevant injury occurred during the operation of the 1971 Act;
- Be satisfied that the injury resulted in an impairment prior to the commencement date of the SRCA;
- Be satisfied that the impairment became permanent prior to the commencement date of the SRCA;
- Be satisfied as to the date on which the impairment became permanent;
- Be satisfied that the permanent impairment is of a type that is compensable under s39 of the 1971 Act; and
- Determine, the same manner as the Commissioner would have done under the 1971 Act, the compensation due to the claimant by reference to the percentage permanent impairment and the maximum compensation applying on the date on which the impairment became permanent (both of these factors would normally be decided on medical evidence).
Please be aware that the DEFCARE commentary cannot be changed, therefore where the calculator says ‘stable’ this should read ‘permanent’.