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8.11.1 Totally incapacitated for work


The 1971 Act drew a distinction between 'total incapacity for work', which was compensated under S45 of that Act, and 'partial incapacity for work', which was compensated under S46. In addition, S26 operated to deem a partially incapacitated employee to be totally incapacitated in certain circumstances where the employee was unable to obtain suitable employment.

This distinction between total incapacity and partial incapacity was not carried forward into the 1988 Act which instead, in a sense, 'codifies' the rate of payment of compensation for incapacity in S19 (and Ss20, 21 and 21A where there is a superannuation entitlement) and in Division 3 in Part X for former employees. Under the SRCA, an employee's loss of earning capacity (i.e. incapacity) is measured by taking their normal weekly earnings (NWE) and subtracting from NWE what he or she is able to earn in suitable employment.

In deciding whether a member is, or is likely to become, 'totally incapacitated for work' for the purposes of the application of S39(14), it is suggested that, essentially, the question should be treated as one of fact, rather than deciding the issue in terms of Ss26, 45 and 46 of the repealed 1971 Act. The essential test is whether or not the client has any current capacity for work.

Note that a client could not be said to be 'totally incapacitated for work' if an 'AE' amount is being applied under Ss19, 20, 21 or 21A or if a former employee is being paid under S132A in Part X rather than S131 or S132.

'likely to become' totally incapacitated – S39(14)

The 1971 Act did not define what is meant by the words 'likely to become totally incapacitated for work', however the context and the significant effect of the subsection suggest that there must be a high likelihood of total incapacity for a significant period of time.

As a matter of policy, the likely period of total incapacity for work at some time in the future must be for a continuous period of at least three months, or for broken periods constituting not less than one quarter of the total time that the client would have enjoyed in employment throughout his or her lifetime.