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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SAFETY, REHABILITATION AND COMPENSATION AMENDMENT (IMPROVING
THE COMCARE SCHEME) BILL 2015
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Employment, Senator the Honourable Eric Abetz)
Outline
SAFETY, REHABILITATION AND COMPENSATION AMENDMENT
(IMPROVING THE COMCARE SCHEME) BILL 2015
OUTLINE
The Safety, Rehabilitation and Compensation Act 1988 (the Act) establishes a scheme (the
Comcare scheme) to provide compensation and rehabilitation support to injured Australian
Government and Australian Capital Territory Government employees. The Act also applies to
deemed employees and certain members of the Australian Defence Force in relation to defence
service rendered prior to 1 July 2004, as well as employees of private corporations who hold a
licence under the Act (licensees).
It is important that the rules governing workers` compensation meet the needs of employees,
employers and workplaces. Since the Act was designed in 1988 there have been important
changes in workplaces and working conditions, health care and rehabilitation, technology,
individual and social behaviour, and community expectations.
As a result, the Comcare scheme has come under significant pressure. Return to work rates have
fallen from a high of 89% in 2008-9 to around 80% in recent years. This is despite the
emergence of a growing body of evidence that work is good for health and well-being. The
scheme creates barriers and disincentives for injured employees to recover at work, for example,
by emphasising the medical rather than vocational nature of rehabilitation services. This is out of
step with prevailing community expectations that those who can work (even if part-time) should
do so to their capacity. The scheme`s ratio of assets to liabilities has fallen below 70%, and the
incidence of costly psychological claims has been growing. Originally designed as a public
sector workers` compensation scheme, the Comcare scheme is no longer limited to the
Australian Public Service. Employees covered by the scheme have a broader and more diverse
range of pay and work benefits that make it increasingly difficult to calculate the correct amount
of compensation to be paid. The distinction between work and non-work related conditions has
been blurred and unreasonable constraints have been placed on how employers manage the
workplace, resulting in increased premiums and pressures on scheme sustainability.
The proposed changes will mean that employees will be better off in terms of access to early
rehabilitation and access to provisional medical expense payments, getting back to work and
quality medical treatment and attendant care. Claims and disputes will be processed more
quickly and some claimants will receive higher payments than they currently receive.
The Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme)
Bill 2015 (the Bill) is an important step towards modernising a scheme that has not been
comprehensively reformed since it was established in 1988. The Bill:
implements, in part, recommendations of the Safety, Rehabilitation and Compensation
Act Review (the Review) by Mr Peter Hanks QC and Dr Allan Hawke AC
commissioned by the former Government in 2012; and
makes other changes to the Act which will improve the efficiency, cost effectiveness
and viability of the Comcare scheme, and align parts of the scheme with State
schemes.
i
Outline
The Bill aims to make the Comcare scheme sustainable over time. Broadly, the Bill:
emphasises the vocational (rather than medical) nature of rehabilitation services and
contains measures designed to improve return to work outcomes under the scheme;
promotes fairness and equity in outcomes of injured employees by targeting support
for those who need it most; and
strengthens the integrity and viability of the scheme by clearly distinguishing between
work and non-work related injuries, improving the quality of compensable medical
treatment and support services, and limiting legal and medical costs under the scheme.
The amendments contained in the Bill are organised into 17 Schedules.
Schedule 1 amends the Act to alter eligibility requirements for compensation to align with
similar requirements under some state and territory workers` compensation schemes. The
amendments:
distinguish more clearly between work and non-work related injuries by requiring
certain matters be taken into account in determining whether an ailment or
aggravation was contributed to, to a significant degree, by an employee`s
employment;
introduce new eligibility criteria for compensation for designated injuries (such as
heart attacks, strokes and spinal disc ruptures) and aggravations of designated injuries
(based on recommendation 5.3 of the Review);
increase the threshold for perception-based disease claims (based on recommendation
5.2 of the Review); and
widen the scope of the reasonable administrative action` exclusion to encompass
injuries suffered as a result of reasonable management action generally (including
organisational or corporate restructures and operational directions) as well as the
employee`s anticipation or expectation of such action being taken (based on
recommendation 5.5 of the Review; aligns the Act with reasonable management
action` in the bullying provisions in the Fair Work Act 2009).
Schedule 2 amends the rehabilitation and return to work requirements in the Act to emphasise
the vocational (rather than medical) nature of rehabilitation services to align with similar
requirements under some state and territory workers` compensation schemes and to improve
return to work outcomes under the Comcare scheme. The amendments:
clarify the rehabilitation responsibilities and duties of liable employers` to ensure the
rehabilitation of an injured employee and to provide, or assist the employee to find,
suitable employment` and maintain the employee in suitable employment (based on
recommendation 6.1, 6.5, 6.7 and 6.8 of the Review);
combine the 2-step process for the development of rehabilitation programs into a
single process to ensure that workplace rehabilitation is delivered on a service
continuum of assessment of need, planning, active implementation, review and
evaluation (based on recommendation 6.13 of the review);
ii
Outline
expand the existing definition of suitable employment` to include any employment
with any employer, including self-employment (based on recommendation 6.16 of the
Review); and
provide relevant authorities with the discretion to perform work readiness
assessments.
Schedule 3 makes a number of amendments to the Act to improve the integrity and financial
viability of the Comcare scheme. These amendments align with similar requirements under some
state and territory workers` compensation schemes. In particular, the amendments:
require third parties to indemnify compensation payers under the Act in circumstances
that give rise to both an obligation to pay compensation under the Act and a liability
on the part of the third party to pay damages (based on recommendation 10.1 of the
Review) or State compensation;
provide more timely and responsive services and support for injured employees by
requiring employers to forward claims to Comcare within 3 days of receipt and
specifying time limits in relation to the determination and reconsideration of
compensation claims (based on recommendation 9.2 of the Review);
improve a relevant authority`s information gathering powers in relation to both
compensation claims and the administration of liabilities (based on
recommendation 9.17 of the Review);
require licensees (and a relevant authority for a group employer licence) to notify
Comcare of any proceedings they commence under the Act and empower Comcare to
request documents relevant to any proceedings brought against, or instituted by, a
licensee (or a relevant authority for a group employer licence);
require licensees (and corporations covered by a group employer licence) to comply
with applicable Commonwealth, State and Territory laws with respect to the safety,
health and rehabilitation of workers;
enable Comcare to recover overpayments of compensation that have been made to an
employer by Comcare; and
enable Comcare to pay compensation for detriment caused by defective administration
(based on recommendation 9.20 of the Review).
Schedule 4 amends the Act to enable a relevant authority to make provisional medical expense
payments (capped at $5000) in respect of an alleged injury before a claim is determined (based
on recommendation 6.2 of the Review). These amendments are broadly based on similar
provisions in the NSW workers` compensation scheme.
Schedule 5 amends the Act to impose more rigorous requirements in relation to determining the
amount of compensation payable under section 16 of the Act in respect of medical expenses
incurred by an injured employee (based on recommendations 7.1, 7.24 to 7.27 and 7.28 of the
Review). These amendments are broadly based on similar requirements under the Victorian
workers` compensation scheme.
iii
Outline
Schedule 6 amends Division 5 of Part II of the Act (and related provisions) which deal with the
payment of compensation for household services and attendant care services. Amendments
regarding household services and attendant care services for employees with catastrophic injury
will comply with minimum benchmarks set for workers` compensation schemes to align with the
National Injury Insurance scheme. These amendments also align with similar requirements under
some state and territory workers` compensation schemes. In particular, these amendments:
establish a tiered approach to the payment of compensation for household services and
attendant care services, depending on whether the employee`s injury was catastrophic,
and limit the period for which compensation is payable to employees with a non-
catastrophic injury (based on recommendation 7.33 of the Review);
require an independent assessment of an injured employee`s need for household
services, attendant care services or both (based on recommendation 7.35 and 7.36 of
the Review); and
require attendant care services to be provided by accredited, registered or approved
providers (based on recommendation 7.37 of the Review).
Schedule 7 amends the Act to suspend compensation payments when an injured employee is
absent from Australia for non-work related purposes for a period of more than 6 weeks and
enhances the notification requirements for recipients of compensation proposing to leave
Australia (based on recommendation 7.17 of the Review). These amendments align with certain
provisions of the Social Security Act 1991 and some state and territory workers` compensation
schemes.
Schedule 8 amends section 116 of the Act to provide that an employee is not entitled to take or
accrue any leave or absence provided by the National Employment Standards while on
compensation leave consistent with proposed amendments to section 130 of the Fair Work Act
2009.
Schedule 9 contains amendments that align with some state and territory workers` compensation
schemes. These amendments:
alter the method of calculating an employee`s weekly incapacity payments to better
reflect the employee`s earnings before their injury and clarify the operation of the cap
on average weekly earnings (based on recommendation 7.1 and 7.2 of the Review);
introduce new step down` provisions to taper the amount of weekly compensation
payments an injured employee is entitled to (based on recommendation 7.13 of the
Review);
link the payment of incapacity payments to the pension age, rather than cutting off
those payments at a set age (based on recommendation 7.16(a) of the Review); and
remove the 5% deduction on compensation payments to employees who are accessing
superannuation benefits. (based on recommendation of 7.6 of the Review).
Schedule 10 amends the Act to increase the compulsory redemption threshold (based on
recommendation 7.19 of the Review). These amendments align the Act with the Military
Rehabilitation and Compensation Act 2004.
iv
Outline
Schedule 11 contains a range of amendments designed to control, and thereby reduce, costs
under the Comcare scheme associated with proceedings brought before the Administrative
Appeals Tribunal (AAT), noting that Comcare scheme disputes take longer to resolve than
disputes in other Australian workers` compensation schemes (based on recommendation 9.12 of
the Review). These amendments align with some state and territory workers` compensation
schemes.
Schedule 12 contains amendments that align with some state and territory workers`
compensation schemes. These amendments:
combine the compensation payable for permanent impairment under section 24 of the
Act and compensation payable for non-economic loss under section 27 of the Act into
a single permanent impairment payment under section 24, and increase the maximum
benefit payable under section 24 to $350,000 (based on recommendation 8.4 of the
Review);
provide a new method for calculating permanent impairment compensation that more
equitably distributes compensation based on the level of permanent impairment (based
on recommendation 8.5 of the Review);
treat multiple injuries arising out of the same incident or state of affairs as a single
injury so that the impairment resulting from that deemed single injury can be
combined to achieve a whole person impairment value (based on recommendation 8.2
of the Review);
require relevant authorities to discount pre-existing conditions (both compensable and
non-compensable) when assessing the level of permanent impairment resulting from
an injury; and
exclude access to permanent impairment compensation for secondary psychological or
psychiatric ailments and injuries.
Schedule 13 amends the Act (as it will be amended by the Safety, Rehabilitation and
Compensation Amendment Bill 2014) to clarify that a single employer licence for an eligible
corporation or group employer licence must authorise acceptance of liability and management of
claims, and that a single employer licence for a Commonwealth authority must authorise
acceptance of liability or management of claims, or both.
Schedule 14 amends the Act to clarify compensation responsibilities for gradual onset injuries
(including for incapacity, impairment or death resulting from gradual onset injuries) where
employment by 2 or more employers covered by the Act has contributed, to a significant degree,
to the injury, and provide for apportionment of liability between employers covered by the Act.
These amendments align with some state and territory workers` compensation schemes.
Schedule 15 amends the Act to streamline and enhance the existing regime of sanctions. These
amendments align with some state and territory workers` compensation schemes. In particular,
these amendments:
identify key requirements of the Act that an injured employee must comply with as
obligations of mutuality`; and
v
Outline
where obligations of mutuality have been breached, provide for the application of
sanctions in stages, culminating in a cancellation of compensation, rehabilitation and
review rights.
Schedule 16 amends the Act to ensure that the amendments made by Schedules 1-15 to the Bill,
with minor exceptions, do not apply to defence-related claims.
Schedule 17 amends the Act to define a number of terms that are used in the amendments
contained in the various schedules to the Bill.
vi
Financial Impact Statement
FINANCIAL IMPACT STATEMENT
NIL
vii
Regulation Impact Statement
AUSTRALIAN GOVERNMENT
Safety, Rehabilitation and Compensation
Amendments (Improving the Comcare Scheme)
Bill 2015
Regulation Impact Statement
Department of Employment
March 2015
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
RIS 8
Regulation Impact Statement
Table of Contents
1. Background.......................................................................................................................................... 12
2. Description and scope of the problem........................................................................................ 14
3. Objectives ............................................................................................................................................. 15
4. Overview of this Regulation Impact Statement ....................................................................... 15
4.1. Other Matters ..................................................................................................................16
5. Income Replacement ........................................................................................................................ 16
5.1. The Problem.....................................................................................................................16
5.2. Options.............................................................................................................................19
5.2.1. Option One -- Maintain the status quo .................................................................................19
5.2.2. Option Two -- The Hanks Review Recommendations - Three-level system for
stepping down income replacement benefits......................................................................19
5.2.3. Option Three -- Four-level system for stepping down income replacement
benefits .................................................................................................................................................19
5.2.4. Option Four - ACT system - Two level system for stepping down income
replacement benefits......................................................................................................................20
5.3. Impact Analysis ................................................................................................................20
5.3.1. Option Two -- The Hanks Review Recommendations - Three-level system for
stepping down income replacement benefits......................................................................20
5.3.2. Option Three -- Four-level system for stepping down income replacement
benefits .................................................................................................................................................21
5.3.3. Option Four - ACT system - Two level system for stepping down income
replacement benefits......................................................................................................................23
5.4. Consultation.....................................................................................................................23
5.5. Conclusion........................................................................................................................24
6. Evidence based medical treatment.............................................................................................. 25
6.1. The Problem.....................................................................................................................25
6.2. Options.............................................................................................................................28
6.2.1. Option One -- Maintain the status quo .................................................................................28
6.2.2. Option Two -- Restrictions on compensation for prescription medicines;
medical treatment must meet objective standards to be compensable, be
provided by a legally qualified health practitioner or overseas equivalent or
recognised and accredited by Comcare.................................................................................28
6.2.3. Option Three - Cap on the lifetime costs of a claim, adoption of the National
Clinical Framework, medical treatment to be provided by an Allied Health
Provider or Comcare approved medical providers (based on WA model).............29
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
6.3. Impact Analysis ................................................................................................................29
6.3.1. Option Two -- Restrictions on compensation for prescription medicines;
medical treatment must meet objective standards to be compensable, be
provided by a legally qualified health practitioner or overseas equivalent or
recognised and accredited by Comcare.................................................................................29
6.3.2. Option Three - Cap on the lifetime costs of a claim, adoption of the National
Clinical Framework, medical treatment to be provided by an Allied Health
Provider or Comcare approved medical providers (based on WA model).............32
6.4. Consultation.....................................................................................................................33
6.5. Conclusion........................................................................................................................34
7. Household and attendant care services -- tiered system of services and support..... 34
7.1. The Problem.....................................................................................................................34
7.2. Options.............................................................................................................................36
7.2.1. Option One -- Maintain the status quo .................................................................................36
7.2.2. Option Two -- Tiered system for support services provided in the home, formal
framework for in-home services assessment, accreditation system for attendant
care services.......................................................................................................................................36
7.2.3. Option Three - Household and attendant care services provided at the request of
a medical practitioner and with the support of an occupational therapist, for a
maximum of 6 hours per week and for not longer than three months. Attendant
care services must be provided by a person or organisation approved by
Comcare and an `attendant care program' must be developed..................................36
7.3. Impact Analysis ................................................................................................................37
7.3.1. Option Two -- Tiered system for support services provided in the home, formal
framework for in-home services assessment, accreditation system for attendant
care services.......................................................................................................................................37
7.3.1. Option Three - Household and attendant care services provided at the request of
a medical practitioner and with the support of an occupational therapist, for a
maximum of 6 hours per week and for not longer than three months. Attendant
care services must be provided by a person or organisation approved by
Comcare and an `attendant care program' must be developed..................................38
7.4. Consultation.....................................................................................................................38
7.5. Conclusion........................................................................................................................40
8. Medical treatment and legal costs................................................................................................ 40
8.1. The Problem.....................................................................................................................40
8.2. Options.............................................................................................................................43
8.2.1. Option One -- Maintain the status quo .................................................................................43
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
8.2.2. Option Two -- Develop a schedule of costs for medical services, medical reports
and legal services.............................................................................................................................44
8.2.3. Option Three -- Utilise state medical services and medical report schedules
where they exist and refer appeals to mediation and advocacy services...............45
8.3. Impact Analysis ................................................................................................................45
8.3.1. Option Two -- Develop a schedule of costs for medical services, medical reports
and legal services.............................................................................................................................45
8.3.2. Option Three -- Utilise state medical services and medical report schedules
where they exist and refer appeals to mediation and advocacy services...............47
8.4. Consultation.....................................................................................................................48
8.5. Conclusion........................................................................................................................48
9. Costing ................................................................................................................................................... 49
9.1. Regulatory Burden and Cost Offset Estimate Table.........................................................50
10. Stakeholder Consultation................................................................................................................ 51
10.1. Engagement Methods......................................................................................................51
10.2. Consultation Process........................................................................................................51
10.2.1. Consultation Stage 1.................................................................................................................51
10.2.2. Consultation Stage 2.................................................................................................................52
10.2.3. Consultation Stage 3.................................................................................................................52
10.2.4. Other Consultation - Cross Agency Working Groups.................................................52
10.2.5. Committee on Industrial Legislation.................................................................................53
10.3. Consultation Feedback.....................................................................................................53
10.3.1. Licensees and Premium Payers............................................................................................53
10.3.2. Industry Groups ..........................................................................................................................53
10.4. Ongoing consultations .....................................................................................................54
11. Implementation and Evaluation ................................................................................................... 54
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Regulation Impact Statement
Background
The Safety, Rehabilitation and Compensation Act 1988 (SRC Act) provides rehabilitation and workers'
compensation arrangements for Commonwealth and Australian Capital Territory (ACT) Government
employees as well as employees of 33 licensed corporations comprising current and former
Commonwealth authorities and approved private corporations. The SRC Act also applies to
members of the Australian Defence Force (ADF) who were injured before 1 July 2004 during
non-operational service1.
Australian Government agencies and statutory authorities (excluding members of the ADF) and
ACT Government agencies and authorities pay premiums to Comcare under the SRC Act (premium
payers). The SRC Act also enables current and former Commonwealth authorities, and private
corporations who can demonstrate that they are in competition with a current or former
Commonwealth authority, to seek a licence to self-insure for workers' compensation purposes under
the SRC Act (self-insurers or licensees). Comcare determines and manages claims lodged by the
employees of premium payers. Licensees determine and manage claims lodged by their own
employees. Claims for ADF members under the SRC Act are managed by the
Department of Veterans' Affairs.
Comcare operates on a cost-recovery basis for premium payers and licensees and does not receive
Budget funding for these services. Comcare receives, via the Department of Employment, annual
and special appropriations for pre-1989 workers' compensation claims. All expenses associated with
post-1989 Comcare-managed workers' compensation claims are fully cost recovered through
premiums paid by Commonwealth and ACT Government agencies.
A licence provides eligible corporations the authority to manage and bear the costs and risks of
workers' compensation claims submitted by their own employees. The arrangement for private
sector corporations to have coverage for workers' compensation under the SRC Act was introduced
to provide competitive neutrality for those corporations competing in the market with government
business enterprises - such as Optus competing in telecommunications business with Telstra and
TNT Australia competing in the freight business with Australia Post.
For the purposes of the SRC Act, determinations, decisions or requirements under specific sections
of the Act are made by Comcare, licensees and the Department of Veterans' Affairs and they are
collectively referred to as determining authorities.
As at the end of the 2012-13 financial year, about 57 per cent of all employees covered under the
SRC Act were employed by premium payers, and the remaining 43 per cent by licensees.2 The
proportion of employees employed by self-insurers is significantly higher under the SRC Act than in
any other jurisdiction. The percentage of employees covered by self-insurers in New South Wales is
24 per cent; in Victoria 6.1 per cent; in Queensland 9 per cent; in Western Australia 9.3 per cent; in
Tasmania 4.7 per cent; in the Northern Territory 3.7 per cent; and in the Australian Capital Territory
less than 1 per cent.3
1 ADF members injured on or after 1 July 2004 are covered by the Military Rehabilitation and Compensation Act 2004
2 Comcare Annual Report 2012-2013, p. 65
3 Comparison of Workers` Compensation Arrangements in Australia and New Zealand, July 2013, p. 156
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
There have been numerous ad-hoc changes since the SRC Act was enacted in 1988. However, it is
the department's view that it no longer reflects current best practice or community expectations. In
2012-13, reviews of the SRC Act were undertaken by Mr Peter Hanks QC and Dr Allan Hawke AC.
Mr Hanks reviewed the SRC Act's workers' compensation benefit structures, rehabilitation and
return-to-work provisions. Dr Hawke reviewed the performance of workers' compensation under
the SRC Act, in particular the governance and financial frameworks. The terms of reference did not
enable consideration of any reduction in existing benefits afforded to workers covered under the
SRC Act.
Mr Hanks and Dr Hawke consulted extensively and engaged with participants in the workers'
compensation process under the SRC Act to assist in the development of the recommendations. The
participants consulted included employer associations and employers, employee organisations,
medical practitioners, rehabilitation professionals, lawyers and other professionals, government
agencies, licensees and workers' compensation administrators. Stakeholders were extensively
involved in the identification of issues, through to the development of recommendations and
consulted again post-publication of the recommendations. The Report on the Review of the SRC Act
was released in March 2013; however, no further action was taken under the previous Government.
The Government has developed a two stage process to reform the SRC Act, which includes
recommendations made by Mr Hanks and Dr Hawke. The department has also consulted widely to
develop the package of reforms and reviewed state and territory workers' compensation schemes in
detail, including recent changes in New South Wales and Queensland. The first stage of reform
focussed on expanding eligibility for companies to self-insure under the SRC Act and reducing red
tape as part of the application process. This culminated in the Safety, Rehabilitation and
Compensation Legislation Amendment Bill 2014 (the Bill) which was introduced into Parliament on
19 March 2014 and passed the House of Representative on 26 November 2014 and is currently
before the Senate. If passed, the amendments in the Bill will open up workers' compensation under
the SRC Act to national employers by removing the competition test and enabling corporations
operating and employing in two or more states and territories to self-insure under the SRC Act and
have coverage under the Commonwealth's work health and safety regime. The amendments will
also enable group licences to be issued to an eligible group of corporations. The amendments will
exclude compensation for injuries occurring during recess breaks away from work and injuries
resulting from serious and wilful misconduct.
This Regulation Impact Statement (RIS) examines the second stage of the Government's reforms to
the SRC Act. The amendments will improve the operation of workers' compensation under the SRC
Act by improving return-to-work outcomes for injured workers; improving the focus on early
intervention and health outcomes of injured workers; and improving administration of the scheme.
They will also reduce red tape and compliance costs.
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
Description and scope of the problem
The SRC Act was designed with one employer in mind, the Australian Public Service, and it was
introduced at a time when employment conditions (including the administrative arrangements
around employment, superannuation conditions and other entitlements) were relatively consistent
across a workforce that was engaged in generally similar types of work.4
This environment has changed significantly over the past 26 years. As at 1 July 2014, there were
212 Australian and ACT Government premium payers and 30 licensed corporations covered by the
SRC Act. Of all fulltime equivalent employees covered under the SRC Act, 216 082 were employed
by premium payers and 161 153 were employed by licensees.5
It is estimated that approximately 80 large employing businesses (with operations in five states or
territories) will seek coverage under the SRC Act following the removal of the competition test. It is
further assumed that, on a yearly basis, an average 12 businesses of the 80 would seek a licence
under the SRC Act.
The shift in the employment profile has already resulted in the SRC Act becoming out of step with
current working conditions and best practice in rehabilitation and health issues. Consequently, the
incentives, or disincentives, currently provided to employees and employers to facilitate an early
return-to-work are not always suitable for today's workforce.
The current legislative framework for medical treatment does not align with recent changes to the
regulation of health practitioners in Australia and limits Comcare's ability to have appropriate
oversight and control over the treatment it is funding. Additionally, no formal training is required for
the provision of in-home care which does not provide the injured worker the best possible chance of
recovery and care is not linked to the level of impairment which can result in less injured employees
being provided services that are not commensurate with the level of injury. Furthermore the
legislation does not benefit from contemporary evidence on the benefits of work.
Disputes under the Comcare scheme generally take more time to resolve than disputes in other
jurisdictions. In the Comcare scheme only 13.7 per cent of disputes are resolved within three
months; this compares to 85.1 per cent in Queensland, 81.9 per cent in Western Australia and
70.1 per cent in Tasmania6. This is despite Comcare spending on average the same amount of its
total expenditure on dispute resolution (1.2 per cent) as other jurisdictions7.
Compared to licensees under the SRC Act, premium paying employers are less successful with
achieving early and sustained return-to-work for their employees. Over a nine year period, return-
to-work rates have fallen from the mid to high eighties (reaching 89 per cent in 2005-06) to plateau
at 80-81 per cent in the last four years. While Comcare's 2012-13 return-to-work rate of 80 per cent
is higher than or equal to other jurisdictions (New South Wales' is 80 per cent, Tasmania's is 79 per
cent, Victoria's is 77 per cent, Queensland and Western Australia's is 75 per cent and South
4 Safety, Rehabilitation and Compensation Act Review Report--February 2013, Peter Hanks QC, p. 23. Available at:
http://docs.employment.gov.au/node/31849
5 Comcare Annual Report 2012-2013 p. 65
6 Safe Work Australia`s Comparative Performance Monitoring Report, 16th Edition, p.34
7 Safe Work Australia`s Comparative Performance Monitoring Report, 16th Edition, p. 29
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
Australia's is 70 per cent8) it has been on a downward trajectory with no indications of
improvement.
The cost of all claims under the SRC Act during 2012-13 was $540 million, which is an increase of
11 per cent from 2011-129. The types of claims lodged under the SRC Act have also changed over
time, with a significant increase in time off work for mental stress claims. This has contributed to
claim costs increasing by 37 per cent in the five years to 2012-1310.
Premiums charged to Commonwealth agencies have increased by more than 50 per cent over the
past four years. Comcare's asset to liability ratio, that is, the adequacy of the scheme to meet future
claim payments, was quite low at 66 per cent in 2012-13. This compares unfavourably with
Queensland at 156 per cent, Victoria at 125 per cent and New South Wales at 118 per cent11.
Objectives
The objective of this package of reforms is to modernise the SRC Act to emphasise the vocational
(rather than medical) nature of rehabilitation services and improve return-to-work outcomes under
the scheme; to promote fairness and equity in outcomes of injured employees by targeting support
to those who need it most; and to strengthen the integrity and viability of the scheme.
Overview of this Regulation Impact Statement
This RIS deals with the overall regulatory impact of the Government's second stage of reforms.
These will modernise the SRC Act to reflect the current working environment and remuneration
arrangements, promote expectations of evidence-based medical care and encourage early
rehabilitation and return-to-work of injured employees.
Given the complex linkages and interdependencies of the reform package, the regulatory impact of
each amendment cannot be assessed individually but is considered as a whole. To allow for
meaningful assessment, the reforms have been categorised in a manner that is consistent with the
implementation of the reform package. The categorisation of these measures follows four themes:
income replacement; evidence based medical treatment; household and attendant care; and
medical and legal costs.
Many of the amendments relate to government processes and will not have any regulatory impact
on businesses or the not-for profit sector. Other changes are likely to have only a minor impact on
businesses. Consistent with the Australian Government Guide to Regulation, this RIS examines those
amendments that are likely to have an impact on businesses, but not those that are minor or
machinery in nature or do not substantially alter existing arrangements.
8 Safe Work Australia`s Comparative Performance Monitoring Report, 16th Edition, p. 31
9 Comcare Annual Report 2012-2013 p. 65
10 Compendium of WHS and Workers` Compensation Statistics, December 2013, p. 52
11 Safe Work Australia`s Comparative Performance Monitoring Report, 16th Edition, p. 26
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
Other Matters
There are a range of other matters not specifically examined in this RIS which are contained in the
second stage of the government's reforms to the SRC Act. Most are matters with no regulatory
impact and those matters that have a regulatory impact are minor or machinery in nature and
therefore do not substantially alter existing regulatory arrangements.
These amendments align eligibility criteria for both physical and mental injuries with state and
territory schemes and community standards; ensure a stronger focus on rehabilitation and
return-to-work; provide early access to rehabilitation and medical treatment; reform the process of
assessment and compensation of permanent impairment; and improve the administrative efficiency
of workers' compensation under the SRC Act.
Income Replacement
The Problem
All Australian workers' compensation schemes reduce the proportion of income replacement over
time; this is called a `step-down'. The step-down provides an incentive for employees to
return-to-work as quickly as possible as well as recognising the need to manage compensation costs.
Under the SRC Act, income replacement benefits are paid at 100 per cent of pre-injury normal
weekly earnings (NWE) for the first 45 weeks, after which they reduce to 75 per cent of pre-injury
NWE for as long as income replacement is payable. This provides the unintended incentive for
injured employees to stay at home. The evidence is clear that the longer employees are away from
work, the less likely it is they will return-to-work12. This is undesirable and unintended.
In most state and territory workers' compensation schemes, there is more than one step-down for
incapacity payments, with the first occurring relatively early in the life of a claim. In Victoria,
South Australia and Western Australia, the first step-down occurs after 13 weeks. All other states
and territories initiate the first step-down after 26 weeks. By contrast, the only step-down in the
SRC Act occurs much later, at 45 weeks.
12 Johnson, D., Fry T. Factors Affecting Return to Work after Injury: A study for the Victorian WorkCover
Authority. Melbourne: Melbourne Institute of Applied Economic and Social Research; 2002. Referenced by the
Australasian Faculty of Occupational & Environmental Medicine Realising the Health Benefits of Work: A
Position Statement. 2011: Royal Australian College of Physicians. Page 12.
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Regulation Impact Statement
Percentage of pre-injury earnings 100% Comparison of step-down in incapacity entitlements - total incapacity NSW
95% VIC
90% 13 26 39 52 65 78 91 104 Qld
85% Weeks WA
80% SA
75% Tas
70% NT
65% ACT
60% Comcare (current)
0 Comcare (proposed)
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Many states providing entitlements after the first step-down do so subject to limitations on the sum
of entitlement and require a stipulated degree of impairment or a cap on the total of entitlements
payable. Such restrictions do not apply under Comcare's long-tail scheme which provides incapacity
payments until age 65 and compensation for medical treatment and rehabilitation for life.
The existing late step-down in the Comcare scheme may create a disincentive for early
return-to-work by injured employees and increases costs. This is consistent with the international
evidence, for example, Meyer, Viscusi and Durbin found that return-to-work rates decreased when
Michigan and Kentucky increased the amount they paid higher income injured workers. The rate
was steady for other workers (whose payments did not change). The authors found '...substantial
labour-supply effects of workers' compensation benefits13.'
A sizeable body of empirical work has accumulated over the past 40 years (particularly over the last
decade) in which epidemiologists and multi-disciplinary researchers have investigated the possible
link between the recovery and health outcomes of an injured person based on whether or not they
are potentially eligible to pursue compensation. The majority of studies and, indeed, systematic
reviews of such studies, find a link between various measures of an injured person's compensation
status and worse health outcomes.14
A 2002 actuarial study found that if an injured employee is off work for 20 days, their chance of ever
getting back to work is 70 per cent, after 45 days this falls to 50 per cent and after 70 days the
chance of ever returning to work is only 35 per cent15.
Apart from step-downs, there is a further reduction in income replacement when an employee
accesses their superannuation before age 65. At this point, the SRC Act offsets the compensation
payable to an employee who has retired early and received a superannuation pension and/or a lump
sum benefit in two ways:
reducing the amount of compensation payable to the employee by deducting the amount of
superannuation that is derived from the employer's contribution (to prevent double-dipping of
benefits and ensuring that these employees do not receive a higher take-home pay than they
had before their injuries); and
reducing the amount of compensation payable to the employee by a further 5 per cent of the
employee's pre-injury earnings, being representative of the amount the employee would have
contributed to superannuation.
The 5 per cent reduction has attracted considerable criticism over a number of years on the grounds
that it discriminates against the most severely injured and vulnerable employees. At the same time,
it has been ineffective as an incentive in returning people to the workforce.
Under current provisions, where an employer is undergoing a partial return-to-work, the period of
the step-down varies according to the number of hours worked. This operates to extend the
13 Meyer, B.D., Viscusi, W.K., & Durbin, D.L. Workers' Compensation and Injury Duration: Evidence from a
Natural Experiment from Vol. 85, No. 3 of the American Economic Review, June 1995, page. 322.
14 Appendix J, Productivity Commission Inquiry Report: Disability Care and Support, July 2011 Volume 1, p. J. 1
15 Johnson, D., Fry T. Factors Affecting Return to Work after Injury: A study for the Victorian WorkCover
Authority. Melbourne: Melbourne Institute of Applied Economic and Social Research; 2002. Referenced by the
Australasian Faculty of Occupational & Environmental Medicine Realising the Health Benefits of Work: A
Position Statement. 2011: Royal Australian College of Physicians. Page 12.
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Regulation Impact Statement
45 week period before the step-down is applied. For example, if an injured employee is at work for
50 per cent of their pre-injury hours (rather than completely off work) then, currently, the step-
down period runs for double the time it does for those employees who are completely off work
(90 weeks instead of 45 weeks).
This approach is inconsistent with that taken in the states and territories, which count any incapacity
in a week as a whole week of incapacity. Under the states' arrangements, an employee who was
incapacitated for one day in, say, each of ten weeks, would have those ten days counted as ten
weeks towards the next step-down. In contrast, the SRC Act step-down arrangement would have
only offset ten days against the 45 weeks and would then allow access to a further 43 weeks of
incapacity entitlements at 100 per cent of NWE. This further reduces the effectiveness of the step-
down arrangements and acts as a disincentive for early return-to-work.
Options
Option One -- Maintain the status quo
Under this option, incapacity payments will continue to be provided at 100 per cent of NWE for a
period of 45 weeks, after which they will step down to 75 per cent for as long as income
replacement is payable. The amount of incapacity benefits paid to employees who have retired and
receive a superannuation pension and/or a lump sum will continue to be reduced by a further 5 per
cent of the employee's pre-injury earnings. The current provisions also add a layer of complexity
when introducing variations to the step-down arrangements for injured employees who have made
a partial return-to-work. This is because after the step-down to 75 per cent of NWE, if an injured
employee returns to work on a part-time basis their incapacity payments will be topped up by an
amount commensurate with their part-time hours.
Option Two -- The Hanks Review Recommendations - Three-level system for stepping
down income replacement benefits
The Hanks Review preferred recommendation proposes three step-downs:
100 per cent of NWE for the first 13 weeks of incapacity for work;
90 per cent of NWE during weeks 14-26 of incapacity for work; and
80 percent of NWE thereafter.
Any week when the employee is participating in a return-to-work program, or absent from work for
any reason other than undergoing medical treatment of the compensable condition, will be counted
for the purposes of the step-down provisions. The 5 per cent reduction in incapacity benefits to
injured employees who have retired and received their superannuation before age 65 will be
removed.
Option Three -- Four-level system for stepping down income replacement benefits
This was one of the models considered in the Hanks Review. It proposes four step-downs:
100 per cent of NWE during the first 13 weeks of incapacity for work;
90 per cent of NWE during weeks 14-26 of incapacity for work;
80 per cent of NWE during weeks 27-52 of incapacity for work; and
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Regulation Impact Statement
70 per cent of NWE thereafter.
If the employee returns to work after 26 weeks, even on a part-time basis, their income will be
topped up to 90 per cent of NWE as an incentive to return-to-work.
Any week when the employee is participating in a return-to-work program, or absent from work for
any reason other than undergoing medical treatment of the compensable condition, will be counted
for the purposes of the step-down provisions. The 5 per cent reduction in incapacity benefits to
injured employees who have retired and received their superannuation before age 65 will be
removed.
Option Four - ACT system - Two level system for stepping down income replacement
benefits
This option is based on the model used in the ACT. It proposes two step-downs:
100 per cent of NWE for the first 26 weeks of incapacity for work; and
65 percent of NWE thereafter.
Any week when the employee is participating in a return-to-work program or absent from work for
any reason other than undergoing medical treatment of the compensable condition, will be counted
for the purposes of the step-down provisions. The 5 per cent reduction in incapacity benefits to
injured employees who have retired and received their superannuation before age 65 will be
removed.
Impact Analysis
This impact analysis considers the impact of the changes beyond the status quo.
Option Two -- The Hanks Review Recommendations - Three-level system for stepping
down income replacement benefits
This option was recommended by Hanks because it shifts the balance of expenditure on
compensation from short-term to long-term incapacitated employees and better recognises the
needs of that second group. It also provides significant incentives for employees to pursue
rehabilitation and return-to-work at an early stage when rehabilitation has the best prospects of
success. Under this option, injured employees with long term incapacity will receive a higher level of
income replacement than is currently the case.
This option was based on the terms of reference for that Review that stipulated there be no
reduction in incapacity benefits. Consequently, this option will increase the current cost of
incapacity entitlements for long-term injured employees and is opposed by employers.
Impacts on Employers
Step-down provisions will generate increased productive capacity for employers by encouraging
injured employees back to work sooner, even if on a part-time basis. Employers will also be required
to increase their focus on providing suitable employment for employees able to return-to-work
early.
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Regulation Impact Statement
This option will lead to a small amount of downward pressure on premiums for premium payers (a
saving of $6.2 million across the Commonwealth and ACT Government per year), a nominal decrease
in claims costs for licensees (a saving of $2.7 million across all licensees per year16).
Impacts on Employees
There is compelling evidence that, for most individuals, working improves general health and
wellbeing and reduces psychological distress. This is better for the employee, their family, the
workplace and the community17.
Step-down provisions are an effective incentive to encourage injured employees to return-to-work.
Increasing the number of step-downs and bringing these forward will result in a greater motivation
to return-to-work earlier for many injured employees.
Although 85 per cent of employees receiving income replacement have returned to work after
13 weeks of incapacity18, those remaining will receive less income replacement (90 per cent, then
80 per cent after 26 weeks, rather than the current 100 per cent) as a result of this amendment.
However, injured employees who receive income replacement for longer than 45 weeks will not be
worse off under this option as, after 26 weeks, they will receive 80 per cent of their income for the
duration of their incapacity, compared to 75 per cent of their income which is currently paid. This is
in line with the terms of reference of the Hanks Review which stipulated that there be no reduction
in benefits for injured employees.
Option Three -- Four-level system for stepping down income replacement benefits
This model applies similar principles to Option Two in that it encourages injured employees with a
shorter recovery time to return-to-work while still recognising the financial needs of the long-term
incapacitated by providing a generous level of income replacement (70 per cent) until the employee
is able to return-to-work or reaches retirement age.
As with Option Two, the 5 per cent reduction in incapacity benefits to injured employees who have
retired and received their superannuation before age 65 will be removed. As a consequence, the
final step-down to 70 per cent provides the employee with the same level of income replacement as
currently applies for this cohort of injured employees (i.e. 75 per cent less 5 per cent = 70 per cent).
Injured employees who return-to-work after 26 weeks, even on a part-time basis, will have their
income topped up to 90 per cent of NWE as an added incentive to return-to-work.
In the Comcare scheme, evidence shows that injured workers who are off work for between 13 to 45
weeks are less likely to return-to-work and stay in work than other injured workers.19
Together, the four-level system of step-downs and counting any week when the employee is absent
from work as a week of compensation will provide a significantly stronger incentive than current
arrangements for employees to return-to-work as quickly as possible.
16 Taylor Fry Actuarial Costings requested for Review of the Safety, Rehabilitation and Compensation Act 1988
Summary Report, 8 February 2013, Appendix C of the Safety, Rehabilitation and Compensation Act Review
Report - February 2013, pp. 219-230.
17 Australian and New Zealand Consensus Statement on the Health Benefits of Work, p. 7
18 Data provided by Comcare on return to work performance for 2012-13
19 Comcare, SRCC and Comcare Annual Reports 2013-14. Canberra. Page 75.
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Regulation Impact Statement
Data provided by Comcare on its return-to-work performance for the financial year 2012-13 is as
follows:
Period of Less than 1 week 12 weeks 45 weeks 52 weeks
Absence 1 week or more or more or more or more
Percentage of 58% 42% 15% 4% 3%
employees
receiving
compensation
Impacts on Employer
Step-down provisions will generate increased productivity for employers by encouraging injured
employees back to work sooner, even if on a part-time basis. Employers will also be required to
increase their focus on providing suitable employment for employees able to return-to-work early.
This option will lead to downward pressure on premiums for premium payers (a saving for the
Commonwealth and ACT Government of approximately $45 million per year), a reduction in claim
costs for licensees (a saving of $14 million across licensees per year20), and will reduce the overall
cost of workers' compensation for all employers under the SRC Act.
Impacts on Employees
There is compelling evidence that, for most individuals, working improves general health and
wellbeing and reduces psychological distress. This is better for the employee, their family, the
workplace and the community21.
Step-down provisions are an effective incentive to encourage injured employees to return-to-work.
Increasing the number of step-downs and bringing these forward will result in a greater incentive to
return-to-work earlier for many injured employees. This incentive to return-to-work will be
enhanced after 26 weeks when injured employees will have their incapacity payments topped up to
90 per cent of NWE if they return-to-work, even if on a part-time basis.
Although 85 per cent of employees receiving income replacement have returned to work after
13 weeks of incapacity, the remaining 15 per cent will receive less income replacement22 (90 per
cent, then 80 per cent after 26 weeks, rather than the current 100 per cent) as a result of this
amendment. Injured employees who are receiving income replacement for more than 52 weeks will
be better off from weeks 45 to 52 as they will receive 80 per cent of the pre injury income rather
than 75 per cent, as is currently the case. However the four per cent of injured employees who
receive income replacement for 52 weeks or more will receive five per cent less under this option
than is currently the case. Under current arrangements, if an injured employee accesses their
superannuation before age 65, their income replacement is reduced by five per cent, resulting in
income replacement equal to 75 per cent. Therefore, these employees would receive the same
amount of income replacement after 52 weeks under this option as they currently do.
20 Taylor Fry Actuarial costing of the impact of proposed changes to the Safety, Rehabilitation and
Compensation Act 1988, 8 July 2014, p. 10.
21 Australian and New Zealand Consensus Statement on the Health Benefits of Work, p. 7
22 Data provided by Comcare on return to work performance for 2012-13
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Regulation Impact Statement
Option Four - ACT system - Two level system for stepping down income replacement
benefits
This model has a greater focus on compensation for short-term incapacitated employees who make
up the vast majority of workers' compensation claims. However, long-term incapacitated employees
will receive less under this option than is currently the case. As these employees are generally the
most severely injured, this scenario is less than ideal.
As with Options Two and Three, the five per cent reduction in incapacity benefits to injured
employees who have retired and received their superannuation before age 65 will be removed.
The two-level system of step-downs, with a significant drop in income replacement after 26 weeks,
will provide a stronger incentive for employees to return-to-work as quickly as possible.
Impacts on Employer
Step-down provisions will generate increased productive capacity for employers by encouraging
injured employees back to work sooner. Employers will also be required to increase their focus on
providing suitable employment for employees able to return-to-work early.
This option will lead to downward pressure on premiums for premium payers, a reduction in
licencing costs for licensees and will reduce the overall cost of workers' compensation for all
employers under the SRC Act.
Impacts on Employees
There is compelling evidence that, for most individuals, working improves general health and
wellbeing and reduces psychological distress. This is better for the employee, their family, the
workplace and the community23.
Step-down provisions are an effective incentive to encourage injured employees to return-to-work.
However, as evidence suggests that the majority of injured employees have returned to work after
26 weeks, this option does not provide an incentive for these employees.
Approximately four to fifteen per cent of employees are receiving income replacement after
26 weeks24. These employees will face a significant drop in their income replacement from 100 per
cent to 65 per cent of their pre-injury earnings. This is compared to the 100 per cent of pre-injury
earnings they would receive after 26 weeks of incapacity under current arrangements. Injured
employees with a long term incapacity for work will also receive less for the duration of their
incapacity; 65 per cent instead of 75 per cent, as is currently the case.
Consultation
In response to the recommendations put forward by Mr Hanks in his review of the SRC Act,
stakeholders provided the following comments:
Telstra indicated its support generally but believed the final step-down should remain at 75 per cent
rather than the 80 per cent proposed by Mr Hanks. *Note: The Review's Terms of Reference
stipulated that there be no reduction in existing benefits.]
23 Australian and New Zealand Consensus Statement on the Health Benefits of Work, p. 7
24 Data provided by Comcare on return to work performance for 2012-13
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Regulation Impact Statement
The Australian Chamber of Commerce and Industry supported the introduction of four levels of step-
downs but suggested the incentive to return-to-work should commence from date of injury; that is,
compensation start at 90 per cent of NWE rather than 100 per cent.
Some licensees believed that the proposed system of step-downs would not offer enough
motivation for injured employees to return-to-work and believed a statutory rate should be imposed
after one year of income replacement. Other licensees believed the proposed changes (Option 3)
were a significant improvement on current arrangements and would be an effective tool to
encourage injured employees back to work. Some licensees also believed that counting any period
of incapacity as a week of incapacity for the purpose of step-downs could be too harsh.
Premium payers were also very supportive of the proposed changes, indicating that the new
step-downs would provide a stronger incentive for injured employees to return-to-work while
containing escalating claim costs.
The Australian Council of Trade Unions opposed step-down provisions generally and submitted that
injured employees should be compensated with a 100 per cent replacement of lost income
indefinitely. They believed the proposal was punishing people for being injured and forcing them
back to work by shifting costs from the employer to the employee.
The Australian Manufacturing Workers' Union also opposed changes to step-down provisions,
indicating they should remain at their current timing and levels.
Conclusion
The department recommends Option Three as it provides a stronger incentive for injured employees
to return-to-work earlier by reducing income replacement payments sooner and more frequently
than is currently the case. This package of amendments also includes the added incentive after 26
weeks of `topping up' income replacement to 90 per cent if the employee returns to work, even if on
a part-time basis. It also rectifies anomalies and outdated provisions in the SRC Act such as counting
each day of absence individually so that the current 45 week step-down can be dragged out for
years.
There is compelling evidence that, for most individuals, working improves general health and
wellbeing and reduces psychological distress. This is better for the employee, their family, the
workplace and the community25.
This option will better align income replacement provisions under the SRC Act with state and
territory schemes by introducing multiple step downs at an earlier stage in the claim. As these
schemes represent the vast majority of employees, better alignment with these schemes should
accord with community standards and expectations. This option will also generate increased
productivity for businesses and reduced administration for determining authorities. It will lead to
downward pressure on premiums for premium payers and will reduce the overall cost of workers'
compensation for all employers under the SRC Act.
25 Australian and New Zealand Consensus Statement on the Health Benefits of Work, p. 7
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Regulation Impact Statement
Evidence based medical treatment
The Problem
The framework in the SRC Act for the provision and monitoring of medical treatment is not clearly
defined or in alignment with current best practice across state and territory workers' compensation
schemes. The lack of a modern framework for regulating the provision of these services under the
SRC Act is producing barriers to timely and effective recovery and return-to-work, in addition to
imposing increased costs.
Standard of medical treatment
Under the SRC Act, a determining authority26 has no involvement in, or control over, an injured
employee's choice of medical or therapeutic practitioner or treatment. Requirements need to be
put in place to ensure that funds are used appropriately for the provision of medical treatment and
the services provided are in line with accepted best practice.
Under the SRC Act, a determining authority is liable to pay compensation in respect of medical
treatment that is `reasonable' for an injured employee to obtain. There have been many legal cases
over the years that have considered `reasonable' medical treatment, as this is not defined under the
SRC Act. In each case, what is `reasonable' has been determined by reference to the employee's
individual circumstances and perspective.
This has resulted in case law that works against the original intent of the SRC Act such as:
The Administrative Appeals Tribunal (AAT) approving the continuation of massage therapy
payments as part of a broader treatment plan, despite no evidence of any curative effect
associated with the massage therapy in this case. This cost $29,000 over an eight-year
period.
The AAT finding it was reasonable for an injured employee living in Alice Springs (who had
`generalised anxiety disorder and adjustment reaction with brief depressive reaction') to
attend a Buddhist meditation retreat in Queensland, at taxpayer expense, because he
identified as a Buddhist.
The AAT finding it was reasonable for an employee to be flown from Canberra to Townsville
to receive psychoneuroimmunology treatment after the clinical nurse psychotherapist
providing the treatment relocated. This relatively new and unique form of treatment was
not offered by anyone else in Canberra.
In June 2012, Comcare, along with all state and territory workers' compensation schemes, endorsed
the National Clinical Framework, which is based on a document published in 2005 by WorkSafe
Victoria and the Victorian Transport Accident Commission. The National Clinical Framework is an
evidence-based policy framework that outlines a set of five guiding principles for the delivery of
allied health services to injured employees. The guiding principles of the Clinical Framework require:
measurement and demonstration of the effectiveness of treatment;
26 A Determining Authority, whether Comcare, a Commonwealth authority, a licensed authority or a licensed
corporation, is able to make determinations, decisions or requirements under specific sections of the SRC Act.
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Regulation Impact Statement
adoption of a bio-psycho-social approach - this approach explains how, in general, work is
good for health and wellbeing. `Bio' describes the impairment, body structure and function
elements; `psycho' describes the activity, support and relationship elements; and `social'
describes the participation elements;
empowering the injured person to manage their own injury;
implementing goals focused on optimising function, participation and return-to-work; and
basing treatment on best available research evidence.
A full adoption of the National Clinical Framework and the resulting benefits of timely and effective
return-to-work are being undermined by the current provisions in the SRC Act. The SRC Act does not
define standards of medical treatment, whether provided in Australia or overseas, nor does it
require that health providers' qualifications be accredited by the appropriate professional body or
by Comcare.
Medical treatment provided by `legally qualified health practitioners'
According to the Australian and New Zealand Consensus Statement on the Health Benefits of Work,
employees attempting to return-to-work after a period of injury face a complex situation with many
variables. Good outcomes are more likely when employees understand the health benefits of work
and are empowered to take responsibility for their own recovery. Health practitioners exert a
significant influence on work absence and in promoting the health benefits of work27.
Other state and territory workers' compensation schemes maintain a level of oversight and control
over the medical treatment they are funding in different ways:
In Victoria, service providers such as chiropractors, dentists, psychologists and
physiotherapists, must be registered with WorkSafe Victoria to provide services to injured
employees. Providers must complete a `WorkSafe Application for Registration to Provide
Services to Workers' form and must satisfy the relevant provider eligibility requirements.
Medical practitioners registered under Medicare are not required to register separately with
WorkSafe.
In New South Wales, allied health providers must be approved as WorkCover providers and
follow administrative procedures developed by WorkCover in conjunction with the relevant
professional association.
Registration standards, such as those in Victoria and New South Wales, provide an extra layer of risk
control that is currently lacking under the SRC Act.
Although the definition of `medical treatment' under the SRC Act refers to eight types of treatment,
it does not prescribe a level of national accreditation required for these practitioners in line with
current protocols under the National Accreditation and Registration Scheme for health providers.
In its current form, the SRC Act's definition of medical treatment does not enable Comcare to
maintain a level of oversight and control over the medical treatment it is funding thereby exposing
27 Australian and New Zealand Consensus Statement on the Health Benefits of Work, p. 7
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Regulation Impact Statement
injured employees to treatment, both within Australia and overseas, that is not evidence based or
provided by trained health professionals.
The SRC Act is also out of step with current regulatory practice in the states and territories as it does
not recognise the `National Registration and Accreditation Scheme' and its registration and
regulation requirements.
The `National Registration and Accreditation Scheme' for registered health practitioners was
established by the Council of Australian Governments in 2008. Under the `National Registration and
Accreditation Scheme', 14 health professions are regulated by National Boards and must meet set
standards in order to be registered to practise in Australia. The 14 National Boards are supported by
the Australian Practitioner Regulation Agency.
For those injured employees who are required to seek medical treatment whilst overseas, there is
no provision in the SRC Act for relevant determining authorities to review the qualifications of
overseas health care providers or the standard of treatment provided. Compensation for these
costs must be paid if the need for the treatment is considered reasonable, no matter the standard of
treatment provided or the qualifications of those providing it.
The SRC Act also has no provisions to enable determining authorities to refer health practitioners to
the appropriate professional regulatory body where treatment is provided outside the Clinical
Framework, or where there are concerns about the adequacy, appropriateness or frequency of
treatment.
Provision of medicines
The definition of `medical treatment' under section 4(1) of the SRC Act allows for the provision of
`medicines ... whether in a hospital or otherwise'. The definition of what constitutes `medicine'
under the SRC Act has been compromised beyond the common understanding of that term by court
decisions between 1996 and 2006, where `medicine' has been deemed to include packaged dietary
foods, vitamin and mineral supplements and non-prescription medicines such as analgesics.
Compensation for the cost of `medicines' under state and territory schemes is restricted to
medicines recommended or prescribed by a medical practitioner or dentist.
Some prescription medicines, such as drugs that are addictive (schedule 8 opioids and schedule 4
sedatives), are subject to misuse and abuse that may result in death or serious damage to health. In
addition, there is a risk that some injured employees may visit multiple general practitioners in order
to obtain more prescription medicines than is clinically necessary or safe for the treatment of their
condition (doctor shopping). Unregulated payment of compensation for these treatments and
prescriptions finances these behaviours.
Comcare's Clinical Panel pharmacist reviews all pharmacy billed items (invoices). Pharmacy or
supermarket receipts (injured employee reimbursement) are not currently reviewed. The
pharmacist pays particular attention to drugs of concern, including that they have one prescriber
and one dispenser.
The pharmacist estimates the following:
Schedule 8 (opioids) comprise about 25-30 per cent of the invoices reviewed.
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Regulation Impact Statement
Including schedule 4 sedatives (benzos), the estimate is increased to around 40 per cent of
invoices that contain both opioids and/or sedatives.
Since the establishment of Comcare's Pharmacy Policy on 1 February 2012, Comcare has identified
87 claims of concern and written to the treating doctors of those injured employees.
Other workers' compensation schemes in Australia, such as Victoria, require prescription medicines
to be dispensed by a registered pharmacist on the request of a legally qualified medical practitioner
or legally qualified dentist.
Options
Option One -- Maintain the status quo
As demonstrated, retaining the status quo will continue to pose additional costs as a result of
non-evidence based treatments that are provided by untrained health practitioners, or by health
practitioners who are not meeting accepted standards in their treatments, with little recourse for
restricting compensation for that treatment. The current approach does not focus on
return-to-work and its benefits for injured employees.
Currently, under the SRC Act, there is no recourse to refer health practitioners to their professional
regulatory bodies if a practitioner is found not to be adhering to standards set by the Clinical
Framework in the provision of treatment. Additionally, for those injured employees who are
overseas, treatment providers and the provision of treatment will continue to be compensated no
matter the standard of treatment provided or the qualifications of those providing it.
Determining authorities are also currently required to individually assess each claim to determine
whether medical treatment provided is reasonable. As each determination is influenced by the
employee's individual circumstances, this process is administratively inefficient and poses additional
costs.
Retaining the status quo will therefore inhibit access to effective evidence based medical treatment.
Option Two -- Restrictions on compensation for prescription medicines; medical
treatment must meet objective standards to be compensable, be provided by a
legally qualified health practitioner or overseas equivalent or recognised and
accredited by Comcare
Under this option, the definition of `medical treatment' in the SRC Act will be amended so that, in
order to be compensable, medical treatment must meet objective standards, such as those in the
Clinical Framework, and must be provided by health practitioners who are accredited and registered
under the `National Registration and Accreditation Scheme'. This option will also enable Comcare to
consider and accredit those not registered under the Accreditation Scheme for eligibility to provide
medical treatment under the SRC Act. This will ensure that medical treatment obtained is
measurable and outcome focussed.
In addition, the SRC Act will be amended to include treatment provided outside Australia only where
the determining authority is satisfied that the quality and cost of that treatment is comparable with
treatment available in Australia provided by a health practitioner registered under the National
Registration and Accreditation Scheme or recognised and accredited by Comcare.
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Regulation Impact Statement
Amendments to the SRC Act will provide for the referral of practitioners to the appropriate
professional regulatory bodies where treatment falls outside the principles of the Clinical
Framework, or where there are concerns about the adequacy, appropriateness or frequency of
treatment.
This option will also amend the definition of `medical treatment' in the SRC Act to restrict
compensation for `medicines' to medicines recommended or prescribed by legally qualified medical
practitioners or dentists (or under some circumstances a legally qualified optometrist or nurse) and
provided by a legally qualified pharmacist. In addition, compensation for drugs of addiction will be
restricted to those prescribed by the employee's nominated `legally qualified medical practitioner'.
The employee will nominate a specific legally qualified medical practitioner at the outset of their
claim and will be able to change the nomination throughout the life of the claim. An employee will
only be able to have one nominated legally qualified medical practitioner at any one time.
This option is consistent with the recommendations put forward by Mr Hanks in his review of the
SRC Act in 2012.
Option Three - Cap on the lifetime costs of a claim, adoption of the National Clinical
Framework, medical treatment to be provided by an Allied Health Provider or
Comcare approved medical providers (based on WA model)
This option is based on current practice in Western Australia and has several similarities to Option
Two presented above. Like Option Two, this option will require medical treatment to be provided by
health practitioners who are accredited and registered under the `National Registration and
Accreditation Scheme' in order to be compensable. Comcare will also have the ability to consider
and accredit those not registered under the Accreditation Scheme for eligibility to provide medical
treatment under the SRC Act.
The National Clinical Framework will also be adopted to provide an evidence-based policy
framework for the delivery of health services to injured employees and compensation for
`medicines' will be restricted to prescription medicines only.
A cap on the lifetime costs of a claim will also be implemented which will help to reduce and/or
stabilise rising costs.
Impact Analysis
This impact analysis considers the impact of the changes beyond the status quo.
Option Two -- Restrictions on compensation for prescription medicines; medical
treatment must meet objective standards to be compensable, be provided by a
legally qualified health practitioner or overseas equivalent or recognised and
accredited by Comcare.
Impacts on Employers
Determining authorities, including licensees, will notice a minor reduction in regulatory burden as
they will no longer be required to interpret whether medical treatment is reasonable in every
situation. Instead, they will be required to ensure that medical treatment is provided by legally
qualified health practitioners and in accordance with objective standards such as those in the Clinical
Framework. Each determining authority will be able to determine how they assess whether medical
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Regulation Impact Statement
treatment meets objective standards; for example, by requiring the provision of a treatment plan.
Where treatment is provided outside the principles of the Clinical Framework, or where there are
concerns about the adequacy, appropriateness or frequency of treatment, determining authorities
will be able to refer practitioners to the appropriate professional regulatory body.
Health providers which are not registered under the `National Registration and Accreditation
Scheme' will be assessed and accredited by Comcare on a national basis rather than as individuals.
This will impose no additional regulatory burden on premium payers or licensees.
As the party responsible for reimbursing the cost of medications, determining authorities are
exposed to risks, such as injured employees doctor shopping, illegally selling or overusing
medications, exacerbated injuries or even potential fatalities of employees. Legislating the
conditions relating to the SRC Act's reimbursement of medications will reduce risk to both injured
employees and determining authorities.
Under this option, an employee will be required to nominate a legally qualified medical practitioner
for the purpose of prescribing medications classified as drugs of addiction. Determining authorities
will need to ensure that compensation is only paid for drugs of addiction prescribed by the
employee's nominated legally qualified medical practitioner.
Impacts on health providers
Health providers registered under the National Registration and Accreditation Scheme are regulated
by 14 National Boards that set the standards that practitioners must meet and manage complaints
about the health, conduct or performance of practitioners. Each National Board has also set a code
of conduct and ethics that seek to assist and support practitioners to deliver appropriate, effective
services within an ethical framework. Practitioners have a professional responsibility to be familiar
with their relevant code and to apply the guidance it contains.
The ability of determining authorities to improve accountability in regards to treatment outcomes,
for example, by requiring the development of a treatment plan, will place an additional reporting
burden on health professionals. The referral of those professionals not meeting appropriate
standards to the relevant National Board or professional regulatory body will also place an additional
reporting burden on health professionals. However, any additional reporting burden should be
minimal for providers registered under the National Registration and Accreditation Scheme due to
existing responsibilities under their relevant code of conduct.
Health providers who are not registered under the `National Registration and Accreditation Scheme'
will need to apply to Comcare to be assessed and accredited on a national basis rather than as
individuals. For example, the national body of masseurs (not subject to the National Registration
and Accreditation Scheme) will need to seek accreditation from Comcare rather than individual
massage therapy providers.
Medical treatment costs totalling $37 million were incurred by injured employees of premium
payers during 2012-13. Legally qualified medical practitioners provided 54 per cent of this
treatment, 29 per cent was provided by allied health professionals and 17 per cent by other service
providers such as masseurs etc. It is estimated that the practitioners providing 90 per cent of
acupuncture, health and fitness and massage services, as well as 50 per cent of practitioners
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Regulation Impact Statement
providing diet/nutrition, hypnotherapy and pain management services, may need to seek
accreditation.
As a minimum, this would mean that practitioners who were paid 13 per cent of treatment costs
($4.8 million) during 2012/2013 will need to seek accreditation from Comcare.
Those health providers, for whom Comcare is required to independently assess the nature and
standard of their qualifications and the treatments they provide, will experience an additional
administrative burden during the accreditation process. However, this is a once-off activity and any
burden will not be significant. This will be more than offset by reduced claim costs as injured
employees benefit from evidence based treatment and therefore a more timely return-to-work.
Legally qualified medical practitioners nominated for the purpose of prescribing medications
classified as drugs of addiction should not experience additional work as they are already required to
monitor any prescription of drugs of addiction medications.
Any additional regulatory burden for health providers is justified in that it is part of ensuring best
practice in treatment standards. Costs will be reduced over time as higher standards are met and
injured employees return-to-work more quickly.
Impacts on Injured Employees
Amending the definition of `medical treatment' will ensure that injured employees will receive
evidence based, effective treatment which meets the standards established by the Clinical
Framework by legally qualified health practitioners. This will result in an improvement in the health
and return-to-work outcomes of injured employees, ensure that treatment standards are met and
provide value for taxpayer money.
Employees will be required to ensure that medical treatment is obtained from legally qualified
health practitioners or by health providers recognised and accredited by Comcare if the treatment is
to be compensable.
In addition, employees will be required to nominate a legally qualified medical practitioner for the
purpose of prescribing medications classified as drugs of addiction, if required.
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Regulation Impact Statement
1.1.1. Option Three - Cap on the lifetime costs of a claim, adoption of the National
Clinical Framework, medical treatment to be provided by an Allied Health
Provider or Comcare approved medical providers (based on WA model)
Impacts on Employer
Determining authorities, including licensees, will be required to ensure that medical treatment is
provided by health practitioners who are accredited and registered under the `National Registration
and Accreditation Scheme' and in accordance with objective standards such as those in the Clinical
Framework. Where treatment is provided outside the principles of the Clinical Framework, or where
there are concerns about the adequacy, appropriateness or frequency of treatment, determining
authorities will be able to refer practitioners to the appropriate professional regulatory bodies.
Determining authorities will only be liable to compensate injured employees for prescription
medicines; however, they will continue to be exposed to risks of unlegislated boundaries around the
funding of prescription medications. This may include injured employees doctor shopping, illegally
selling or overusing medications, exacerbated injuries or even potential fatalities of employees.
Determining authorities will benefit from decreased medical costs through the use of a cap on
lifetime medical costs. This figure will be indexed for inflation and can be reconsidered in cases
where the whole person permanent impairment ratio is greater than 15 per cent, or if the worker's
social or financial circumstances justify it, or both. This will reduce employer costs and give
employers security regarding their workers' compensation liabilities.
Impacts on Health Providers
Health providers will be subject to the same impacts under both Options Two and Three: those who
are registered under the National Registration and Accreditation Scheme will be able to continue to
provide services to injured employees with a workers' compensation claim. Health providers who
are not registered under the Scheme will need to apply to Comcare to be assessed and accredited
(as a profession rather than as individuals).
Health providers seeking accreditation will experience an additional administrative burden during
the accreditation process. However, this is a once-off activity and any burden will not be significant.
Health providers that do not meet the criteria of evidence based medical treatment due to the
nature and standard of their qualifications will likely face a reduction in their income.
In addition, the lifetime cap on claim costs will likely result in injured employees forgoing
non-essential treatment which will have flow on effect to some health providers.
Impacts on Injured Employees
Limiting compensation to the services of medical providers registered under the National
Registration and Accreditation Scheme, or accredited by Comcare, will ensure that injured
employees receive evidence based, effective treatment which meets the standards established by
the Clinical Framework. This will result in an improvement in the health and return-to-work
outcomes of injured employees, ensure that community standards are met and provide value for
taxpayer money.
Employees will no longer have access to unlimited compensable medical treatment over the life of
their claim and consequently may need to rationalise non-essential treatment.
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Consultation
In response to the recommendations put forward by Mr Hanks in his review of the SRC Act,
stakeholders provided the following comments.
The Australian Psychological Society commented:28
`The definition of therapeutic treatment (s 4) should be updated to ensure it is producing an
outcome for employees. This will require a new clinical framework to be implemented
addressing the issue of long term "maintenance" treatment within the scheme and also
provide a nexus with "mental injury" (s 5A). The new framework will require an active
partnership between the scheme, its providers and employers. The scheme should have
access to a panel of expert clinicians reflective of its new bio-psycho-social focus, backed up
with new guidelines on evidence-based clinical assessment and interventions. These expert
clinicians have the responsibility to educate providers and employers on the new treatment
framework and powers to direct providers to resubmit their treatment plans that do not
comply. Employers on the other hand will be supported by expert clinicians who can assist
them with early identification and intervention of claims (as well as prevention programs).
Providers will be accessed in an appropriate and timely manner based on their training and
qualifications and willingness to provide goal-oriented and evidence-based interventions.'
Comcare's submission to the Review noted that revising the definition of `medical treatment' so that
the effectiveness of the treatment could be measured:29
`... would allow injured employees, their medical providers and determining authorities to
assess whether the treatment is improving, worsening or not changing the effects of the
compensable injury. This informs and justifies medical treatment decisions and prevents the
development of dependence on ineffective treatment which may worsen the health
outcomes of injured employees. Measurement of outcomes to determine clinical
effectiveness is considered best practice. Measures should be related to the functional goals
of treatment and relevant to the *injured employee's+ injury.'
One of the medical experts consulted by the Review (who asked for anonymity) submitted30:
`Evidence indicates that compensation patients have a worse clinical outcome when
matched for injury. Although not fully understood why, research indicates that a closer
monitoring approach of treatment delivery by providers is required to drive best treatment
outcomes in the compensation population.
One factor that is understood in the compensation patient cohort is the unique three way
value transaction. The compensation client receives treatment and services, but makes no
financial outlay and has reduced outcome leverage in the service provision. This results in a
low financial risk for the patient and potentially reduces the tension over the cost benefit or
cost effectiveness of treatment. The consequence is reduced accountability in the client -
provider relationship for measurable health improvement and outcomes....'
28 Australian Psychological Society, Submission to the Review, pp. 3-4.
29 Comcare, Submission to the Review, p. 33
30 Safety, Rehabilitation and Compensation Act Review Report--February 2013, Peter Hanks QC, p. 128.
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Regulation Impact Statement
Conclusion
The department recommends implementing Option Two on the basis that it introduces an evidence
based, higher quality integrated framework for the provision and monitoring of medical treatment
by appropriately qualified health practitioners, both in Australia and overseas. Option Two is
anticipated to produce a significant improvement in treatment outcomes and reduce the cost of
medical treatment under the SRC Act. Key benefits of Option Two are as follows:
Ensuring all medical treatment is provided by legally qualified health practitioners or by
health practitioners whose qualifications and experience have been accredited by Comcare.
Ensuring that treatment provided adheres to the Clinical Framework and where is does not,
enabling determining authorities to refer to the appropriate professional regulatory body to
query the standard of the provided treatment.
Providing that all medications compensated for under the SRC Act are recommended or
prescribed medications only - and where they are classified as drugs of addiction in
particular - they are prescribed only by a `nominated legally qualified medical practitioner' to
ensure their use is monitored.
This package of reforms was recommended by Mr Hanks in his 2012 review of the SRC Act.
The majority of those who responded to the Review agreed that if these recommendations were
implemented there would be significant improvements in treatment outcomes.
The regulatory cost impact of these amendments is minimal for licensees and health providers.
However, the improvement in treatment outcomes should produce savings in claims costs for
licensees. The overall budgetary impact for the Government is nil.
Household and attendant care services -- tiered system of
services and support
The Problem
There is no clear framework in the SRC Act for the provision and monitoring of support services
provided in the home (household and attendant care services), nor any means to ensure that those
providing these services are appropriately qualified; in particular, attendant care service providers.
Under the SRC Act, household services are defined to mean services of a domestic nature (including
cooking, house cleaning, laundry and gardening services) that are required for the proper running
and maintenance of the injured employee's household. Attendant care services are services that are
required for the essential and regular personal care of an injured employee (other than household
services, medical or surgical services or nursing care) and may include assistance with mobility,
personal hygiene (bathing and toileting), grooming, dressing and feeding.
At present, the SRC Act provides insufficient mechanisms for the assessment and equitable provision
of household and attendant care needs to injured employees.
In 2012-13, determining authorities paid $4.9 million for 1300 accepted claims for household and
attendant care services. This is an increase of 34 per cent from 2008-09, when $3.2 million was paid
by determining authorities for 900 accepted claims.
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Regulation Impact Statement
Compensation for support services provided in the home
Compensation for support services provided in the home is currently available to all injured
employees, regardless of the nature or extent of the impairment sustained. There is also no limit on
the period and total cost for which compensation for household and attendant care services is
payable. This is imposing increased costs on employers and is not producing optimal outcomes for
those most in need.
Attendant care services
In 2012-13, determining authorities paid $720,000 for attendant care services. This is an increase of
35 per cent from 2008-09.
Comcare data indicates that since 1989, of the 751 accepted claims for attendant care services,
70 per cent of claims were made within three years of the injured employees' date of injury;
25 per cent were made five or more years after the injured employees' date of injury; 13 per cent
were made ten or more years after the injured employees' date of injury; and five per cent had been
compensated for attendant care services twenty or more years after the injured employees' date of
injury.
In addition, 23 per cent of injured employees did not make their first claim for attendant care
services until after three years from the date of their injury.
Household services
There have been sustained increases in household services over the last five years. In 2012-13,
determining authorities paid $4.2 million for household support services, compared to $2.7 million
in 2008-09.
Comcare data indicates that since 1989, of the 5807 accepted claims for household services,
60 per cent of claims were made within three years of the injured employees' date of injury;
33 per cent were made five or more years after the injured employees' date of injury; 17 per cent
were made ten or more years after the injured employees' date of injury; and four per cent had
been compensated for household services twenty or more years after the injured employees' date
of injury.
In addition, 19 per cent of injured employees did not make their first claim for household services
until after three years from the date of their injury.
Providers of support services provided in the home
Currently the engagement of household or attendant care services is the prerogative of the injured
employee. This limits any control on costs, the quality of the care and the development of formal
care plans. There is no requirement for attendant carers to have any level of training to ensure the
injured employee is receiving appropriate care. These issues can mean that an injured employee
may not be correctly assisted to recover from their injuries or learn the coping strategies that they
need to manage any residual impairment.
Determining authorities have a responsibility to protect the health and wellbeing of injured
employees receiving compensation and to ensure appropriate usage of employer funds. However,
the mechanisms provided by the SRC Act are insufficient to allow for the effective management and
regulation of attendant care services funded under the SRC Act.
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Regulation Impact Statement
Options
Option One -- Maintain the status quo
Maintaining the status quo will result in injured employees receiving compensation for unlimited
support services provided in the home regardless of the nature or extent of the injuries sustained.
Injured employees will continue to be responsible for the engagement (though costs are borne by
determining authorities) of household or attendant care service providers. Combined, this cost
determining authorities $4.9 million in 2012-13.
Option Two -- Tiered system for support services provided in the home, formal
framework for in-home services assessment, accreditation system for attendant
care services
This option proposes a tiered system for the provision of support services provided in the home, as
well as restricting long-term access to these services. Under this option, household services will be
provided for three years from the date of injury. Attendant care services will be provided for three
years from the date of injury and for an additional six months after specific events, such as the
employee is admitted into hospital. An exception will be made in circumstances where an employee
has sustained a severe (catastrophic) injury. Household and attendant care services will be provided
on an ongoing basis for the severely injured with no cap on costs. A new definition of `catastrophic
injury' will be introduced into the SRC Act to accommodate this provision.
Under this option, Comcare will establish a formal framework for the assessment of need for
support services provided in the home. Any need for these services will be assessed by an
independent party such as a registered occupational therapist.
Comcare will also be empowered to prepare and issue a list of approved attendant care providers
recognised under the SRC Act. Other entities such as the Department of Veterans' Affairs have
already established lists for ex-service men and women that could be used as the basis for the
Comcare list.
There are situations in which it may be appropriate for a family member to provide attendant care
services. In these situations, the family member should be registered with an attendant care
provider and required to meet all qualifying requirements.
This issue was considered by Mr Hanks in his 2012 review of the SRC Act and this option is consistent
with recommendations from that review.
Option Three - Household and attendant care services provided at the request of a
medical practitioner and with the support of an occupational therapist, for a
maximum of 6 hours per week and for not longer than three months. Attendant
care services must be provided by a person or organisation approved by
Comcare and an `attendant care program' must be developed.
This option is a hybrid of the household and attendant care services provided in New South Wales
and Victoria. In order to be compensable, household and attendant care services must be requested
by a medical practitioner and supported by an occupational therapist after completing an in-home
assessment of the injured worker.
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Regulation Impact Statement
Attendant care must be provided by a person or organisation certified by Comcare as an approved
attendant care provider. Paid attendant care services cannot be provided by friends or family
members unless under exceptional circumstances.
An attendant care program must be developed for each injured employee specifying the goals of the
program; description of the care and services to be provided; specific duties of the attendant carer;
other support services to be involved; hours recommended; regular review intervals; and program
duration.
Household and attendant care services will be provided on a temporary basis for not more than 6
hours per week and for a period that is not longer than, or during periods that together are not
longer than 3 months.
Impact Analysis
The impact analysis considers the impact of the changes beyond the status quo.
Option Two -- Tiered system for support services provided in the home, formal
framework for in-home services assessment, accreditation system for attendant
care services
By introducing a tiered model for the provision of support services provided in the home and a
formal framework to assess the need for services, the integrity of the SRC Act is improved and
funding is utilised where it is most needed. Payments to the less injured are carefully controlled,
while payments to the severely injured may be increased to provide better support.
Impacts on Attendant Care Providers
This option should not place a regulatory burden on attendant care providers as Comcare could use
an already established list of approved attendant care providers. If an established list is not utilised,
attendant care providers will be required to produce documents and show evidence of experience in
order to provide services under the SRC Act. This would result in a medium regulatory burden.
Impacts on Employers
This option will impose an additional compliance burden on determining authorities, which will be
more than offset by the resulting fall in claim costs.
Impacts on injured employees
Comcare data indicates that 19 per cent of injured employees did not make their first claim for
household services until after three years from the date of their injury; and 23 per cent of injured
employees did not make their first claim for attendant care services until after three years from the
date of their injury. Under this option, injured employees who do not have a severe injury will not
be able to claim household services or attendant care services after three years from the date of
their injury, unless they claim attendant care services as a result of a specific event.
Limiting compensation for household and attendant care services to a maximum period of three
years (and attendant care to a maximum of six months following a specific event) should provide
sufficient time for employees to recover from most injuries, be rehabilitated for return to the
workforce and learn any coping strategies that they need to manage any residual impairment.
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Regulation Impact Statement
Payments for attendant care services for employees with catastrophic injuries will be uncapped
under this option, from a maximum weekly rate of $442.40 (as at 1 July 2014), thus providing better
support where required.
Injured employees will not be able to continue to receive compensation for attendant care services
if those services are provided by family members not recognised by Comcare as approved providers.
This may limit injured employees choice in regards to selecting providers of those services.
Option Three - Household and attendant care services provided at the request of a
medical practitioner and with the support of an occupational therapist, for a
maximum of 6 hours per week and for not longer than three months. Attendant
care services must be provided by a person or organisation approved by
Comcare and an `attendant care program' must be developed.
Impacts on Attendant Care Providers
As with Option two, this option should not place a regulatory burden on attendant care providers as
Comcare could use an already established list of approved attendant care providers. If an
established list is not utilised, attendant care providers will be required to produce documents and
show evidence of experience specified by Comcare in order to provide services under the SRC Act.
This would result in a medium regulatory burden.
Impacts on Employers
This option will impose a sightly additional compliance burden on determining authorities to
monitor the use of household and attendant care services. However, this will be more than offset by
the resulting fall in claim costs.
Impacts on injured employees
This option may be administratively burdensome to employees, as they will be required to prove
that they are entitled to household and attendant care services.
Limiting compensation for household and attendant care services to a maximum period of three
months may significantly reduce the time available for injured employees to recover from their
injuries.
Injured employees will receive better targeted and effective services as a result of the `attendant
care program'. They will also benefit from programs delivered by qualified professionals who are
trained to teach them long-term coping mechanisms.
Injured employees will not continue to receive compensation for ongoing attendant care services if
those services are provided by family members not recognised by Comcare as approved providers.
This may limit injured employees choice in regards to selecting providers of those services.
Consultation
In response to the recommendations put forward by Mr Hanks in his 2012 review of the SRC Act,
stakeholders provided the following comments:
The previous Department of Finance and Deregulation supported all recommendations for
household and attendant care services. However, it believed that an independent medical
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Regulation Impact Statement
(panel) assessment should be conducted where the severe injury falls into the category of
`other injury' and includes a secondary psychological condition31.
Telstra supported the implementation of a tiered system of household and attendant care
services and support. However, it advised that compensation for household and attendant
care services for the severely injured should be subject to ongoing reviews, particularly for
the severely injured. Telstra supported the establishment of a formal framework for the
assessment of need for household and attendant care services but believed that
physiotherapists should only be required to complete this assessment in limited
circumstances32.
Assessments Australia strongly agreed with the Review recommendations in relation to a
framework for assessment of need for services provided in the home and that any need is
assessed by an independent third party33.
Australia Post agreed with the recommendations with a clarification that household services
are payable for `up to' three years. This would avoid an expectation that household services
would be paid beyond when they are required34.
The Australian Council of Trade Unions did not support the introduction of the new term
`severe injury' as it believed `injury' is currently sufficiently defined35.
The Australian Manufacturing Workers' Union supported a three-tiered approach for home
services. However, it did not believe this should be time-limited. It opposes the proposed
definition of `severe injury `as too narrow and opposes capping of household care and
attendant services at 40 hours per week at a cost of $170036.
The Australian Lawyers Alliance believed some discretion should be allowed, in appropriate
cases, to exceed the maximum 40 hours per week for attendant care services37.
The Law Council of Australia agreed that it is reasonable for household services and
attendant care to be reviewed periodically and more critical scrutiny placed on its provision,
but did not support the recommendations. Specifically, it believed that the definition
proposed for `severe injury' is too restrictive and does not, for example, include
psychological injuries. The test to determine the severity of the injury does not take into
account the injury circumstances of the employee; the amount of non-paid, family
assistance that may be available to them; and the cut- off point of three years for household
and post-acute service seems arbitrary and without merit. The Law Council of Australia
believed the problem has been the lack of regular review of these services rather than the
model of delivery itself38.
31 The Department of Finance and Deregulation, Submission to the Review, pp. 7-8.
32 Telstra, Submission to the Review, pp. 14-15.
33 Assessments Australia, Submission to the Review, pp. 2.
34 Australia Post, Submission to the Review, pp. 4.
35 Australian Council of Trade Unions, Submission to the Review, pp. 11.
36 Australian Manufacturing Workers` Union, Submission to the Review, pp. 9 and 12.
37 Australian Lawyers Alliance, Submission to the Review, pp. 7.
38 Law Council of Australia, Submission to the Review, pp. 9.
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Regulation Impact Statement
Conclusion
Option Two is the recommended option for the provision of support services under the SRC Act.
This option will ensure that services are targeted at those injured employees most in need and
provided at the time the services are most needed. This option also ensures that support services
are provided by appropriately qualified persons. For those who suffer a temporary impairment,
services are provided only as needed, while those with more severe injuries and impairments are
able to access increased and ongoing support.
The increased regulatory impact on attendant care providers and determining authorities is
outweighed by more equitable, effective, transparent, evidence-based and targeted provision of
services and the savings in claims costs.
Option Two will ensure more cost effective provision of support services and ensure improved care
and service standards.
Medical treatment and legal costs
The Problem
The department, in reviewing the costs and operation of the SRC Act, has identified the potential for
better operational efficiency and consistency in the areas of medical service fees, medical report
costs and legal costs arising from disputation.
Comcare has a responsibility to ensure that health and legal practitioners are held accountable for
their conduct and do not take advantage of the SRC Act, or injured employees, by over-charging,
over-servicing or providing services that do not meet basic professional standards. Comcare's
current inability to exert any form of regulatory oversight over the cost of medical and legal services
affects the financial integrity of the SRC Act's workers' compensation scheme. Additionally the party
that receives the services does not bear the cost which creates the potential for over-servicing (a
`principle-agent problem').
Workers' compensation schemes in other jurisdictions control medical and legal costs. The lack of
regulation of medical and legal costs under the SRC Act makes it vulnerable to providers willing to
take advantage of the fact that they will be reimbursed for whatever services and fees they see fit to
impose.
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Regulation Impact Statement
Breakdown of claim expenditure 2012-13
under the Comcare scheme*
Legal, Paid to claimant
Administrative 49%
and Regulatory
Costs
28%
Medical and
rehabilitation
Costs
23%
39
Breakdown of claim expenditure
from 2008-09 to 2012-13 under the Comcare scheme*
200
$ Million 150 Medical and
rehabilitation
100
Legal, administrative
50 and regulatory costs
0 40
2008-09 2009-10 2010-11 2011-12 2012-13
*This refers to costs of both premium payers and licensees.
Medical Treatment Costs
Medical and rehabilitation costs currently represent 23.4 per cent of the total costs of claims
liabilities under the SRC Act. This figure has been increasing at a consistent rate over the past three
years. The SRC Act currently allows for compensation of medical treatment costs `of such amount as
Comcare determines is appropriate for that medical treatment'. In practice, Comcare has limited
ability to determine the `reasonableness' or the `appropriateness' of the treatment. Comcare is not
permitted, under the SRC Act, to have any involvement in, or control over, an injured employee's
choice of medical or therapeutic practitioner or treatment. Medical costs are approved on a case-
by-case basis, with appeals to the Administrative Appeals Tribunal (AAT) further varying the amounts
paid. In some cases, this creates inequitable outcomes.
39 Data provided by Comcare on claim expenditure for 2012-13
40 Data provided by Comcare on claim expenditure from 2008-09 to 2012-13
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Regulation Impact Statement
Medical Report Costs
One of the most immediate and pertinent increases in medical costs relate to the provision of
medical reports by legally qualified medical practitioners. A workers' compensation medical report
will generally relate to events or injuries that occur in relation to causation, capacity for work, or
treatment or assessment of permanent impairment. These reports provide detailed information
about an injured employee's condition and are not only used to determine liability, but may also be
requested to assist decision-making at any stage of the claims process where existing information is
inadequate.
In 2012-13, medical reports cost $6.8 million; an increase of 22.1 per cent since 2008-09. In
addition, the cost of medical reports not resulting from section 57 medical examinations41 was $3.7
million; an increase of 43.2 per cent since 2008-09. The issue, in this instance, is not that medical
reports are considered surplus, but that the cost of medical reports does not accurately reflect the
required reporting complexity. A standard report will involve assessment of a single event or injury,
or a simple permanent impairment assessment. A complex report requires more complex methods
of permanent impairment assessment, including assessment of multiple injuries. In instances where
the report is being prepared a by an independent medical professional, the need to examine the
employee and consider documentation from other sources will contribute to the cost.
Currently, there is nothing to prevent a practitioner producing an overly complex report where a
standard report is required, or a standard report where a more complex report is needed. The
determining authority is then obliged to pay for either sub-standard or over-priced reports,
depending on the complexity of the injury.
Legal Costs
Following an initial determination of a claim, either party to the claim may apply for an internal
`reconsideration' by the determining authority. Up to this point, legal representation is not
envisaged and therefore not payable by the determining authority. If either party disagrees with the
reconsideration, they can have the matter reviewed externally by the AAT. Matters may then be
progressed to the Federal Court of Australia or the Federal Magistrates Court on questions of law
only.
Determining authorities are liable for their own legal costs in all matters brought before a court or
tribunal; in addition, if the matter is found in favour of the employee, the determining authority is
also liable for the employee's legal costs.
In the last year alone, legal, administrative and regulatory costs paid under the SRC Act have
increased by 11 per cent. Legal costs are directly correlated to dispute resolution timeframes and
disputes under the SRC Act have, at 44.8 per cent, the lowest resolution rate - for disputes resolved
within nine months - of all Australian workers' compensation schemes. The more protracted a
matter in the AAT, the greater the legal costs. By comparison, New South Wales resolves 97.3 per
cent of disputes within nine months. In the last financial year, reconsiderations under the SRC Act
have increased five per cent, with a four per cent decline in the number of matters proceeding to
the AAT. The corresponding and disproportionate 11 per cent increase in scheme legal costs
41 Under section 57 of the SRC Act, a determining authority is able to require an injured employee to undergo an
examination by a legally qualified medical practitioner nominated by the determining authority.
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
underscores the fact that the current protracted dispute resolution timeframes under the SRC Act
are highly undesirable.
There is limited provision under the SRC Act by which to curtail payment of excessive legal costs
arising from disputation of claim decisions. Once a case has proceeded to the AAT, the Tribunal
cannot order an employee to pay the respondent's costs; that is, the costs incurred by Comcare,
licensees or DVA. In practice, and in the current legal climate of `no win no pay', there is little to
discourage the employee progressing a claim to the AAT when they are not required to meet the
respondent's costs. This is not the case for the respondent who is required to meet the employee's
costs, no matter how trivial the issue or how unnecessarily protracted the proceedings.
Taxation of legal costs is the only strategy currently available under the SRC Act to recover legal
costs. Taxation of legal costs refers to the process by which a court may fix the amount of costs it
orders one party to pay to the other. Alternatively, a taxing officer may assess the amount of costs
by reference to the relevant scale of costs. Taxation is generally designed to regulate the level of
legal costs and shield participants from excessive charging. However, parties are generally reluctant
to proceed to taxation as it incurs a cost in itself and is typically seen only as a tool for managing
costs in extreme circumstances.
In limited circumstances, determining authorities can also employ Calderbank offers. A Calderbank
offer refers to the process by which an employee refuses a pre-trial offer, proceeds to trial and then
receives a trial offer that is not more favourable than the terms of the original offer. In this case, the
determining authority can then apply to the AAT to exercise its discretion not to award all or parts of
the costs to the injured employee. However, because the AAT cannot order an employee to pay a
respondent's costs, Calderbank offers have only a limited impact on workers' compensation cases,
particularly as relevant authorities must still pay their own costs, regardless of whether or not the
matter may have settled pre-trial.
Options
Option One -- Maintain the status quo
Medical service fees and medical report costs
Retaining the status quo will result in the continuation of existing problems identified by Mr Hanks
and annual Comcare financial reports. These include rising medical compensation costs, provision of
inconsistent medical treatment for injured employees and financial unsustainability of workers'
compensation under the SRC Act in the long-term. Determining authorities will continue to lack any
enforceable instrument that will permit effective regulation of medical compensation costs and
services. As such, they will continue to be liable for medical treatment costs that result from
treatment prescribed without regard to consistency, suitability and the financial sustainability of a
workers' compensation body. Given that medical compensation costs under the SRC Act have
increased considerably over the last three years, there is little doubt that retention of the status quo
will see similar, if not greater, increases in medical compensation costs and related problems in the
coming years.
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Regulation Impact Statement
Legal Costs
Under this option, determining authorities will continue to pay inflated legal costs without the
means to moderate them or to discourage protracted disputation.
Option Two -- Develop a schedule of costs for medical services, medical reports and
legal services
Medical service fees and medical report costs
Under this option, the SRC Act will be amended to allow Comcare to develop a Schedule of Medical
Service Fees. This list of regulated fees will be used to pay medical practitioners and suppliers for
medical and rehabilitation services under the SRC Act. These fees will be set by Comcare, in
consultation with relevant professional associations, and will have legislative authority as the rates
at which determining authorities are liable to pay compensation for medical treatment under the
SRC Act. This amendment was recommended by Mr Hanks.
Pricing levels for medical reports will also be set by Comcare and will have legislative authority as the
rates at which determining authorities are liable to pay for medical reports under the SRC Act.
Legal costs
Under this option, the SRC Act will be amended to enable the development and enforcement of a
Schedule of Legal Costs, similar to those that apply in the states and territories. This will be a list of
legal services that are compensated on the basis of time (Western Australia) or cost (New South
Wales), or a combination of both. The schedule will provide guidance for determining authorities,
injured employees, employers and legal representatives as to what constitutes reasonable amounts
of time and/or expenditure on prescribed workers' compensation issues. The schedule of legal costs
will have legislative authority as the rates at which determining authorities are liable to pay for legal
costs under the SRC Act.
LEGAL COST SCHEDULE EXAMPLES - NSW & WA
Costs model - example NSW Amounts Payable Hours model - example WA Maximum
Allowable
Lump sum compensation Obtaining instructions from client
and attempts to resolve the Hours
Item claim or dispute resolved Claimant $2475 -$3275 dispute by negotiation prior to 4
before application accepted Insurer $1575 involvement in a proceeding +7
Where the dispute is resolved at
by Registrar or after an arbitration +7
hearing, including all necessary
Other compensation dispute preparation and
documentation in the approved
resolved - after initial form in accordance with
the Arbitration Rules.
teleconference and up Add for each additional hearing
day.
to and including Claimant $4250 - $5645
Item conciliation conference Insurer $3665 - $4860
including
consequential
settlement attendances
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Regulation Impact Statement
Option Three -- Utilise state medical services and medical report schedules where they
exist and refer appeals to mediation and advocacy services
Medical service fees and medical report costs
Comcare will use the relevant state or territory medical fee and medical report schedules, where
they exist, to reimburse medical expenses in the state or territory in which they were incurred. New
South Wales, Victoria, Queensland, Western Australia and South Australia currently have fees
schedules which could be utilised. These could also be applied to the remaining jurisdictions
(Tasmania, Northern Territory and the Australian Capital Territory) based on a combination of
proximity and similar economies. For example, Western Australia's cost schedules could be applied
to the Northern Territory as they both have similar cost pressures of remoteness; and South
Australia's cost schedules could be applied to Tasmania and the ACT as they have similar cost
pressures of a relatively small economy.
Legal Costs
Comcare will establish an alternative dispute resolution service, in the form of mediation or an
advocacy service, that could be accessed following a reconsideration and as an alternative to legal
proceedings through the AAT. If mediation or advocacy was unsuccessful, the claim would proceed
to the AAT on appeal.
Impact Analysis
This impact analysis considers the impact of the changes beyond the status quo.
Option Two -- Develop a schedule of costs for medical services, medical reports and
legal services
Medical Service Fees and Medical Report Costs
The implementation of a structured pricing approach to the provision of medical compensation
services under the SRC Act will ensure accountability for tax payer and employer costs and be an
important legislative recognition of Comcare's right to more effectively manage medical costs and
pursue more sustainable financial outcomes. The regulation of medical report costs will ensure
medical reports more accurately reflect the complexity of an employee's injury.
This option is consistent with the approach in state and territory workers' compensation jurisdictions
and creates certainty for both providers and employees as to what medical compensation amounts
will be paid under the SRC Act.
Impacts on Employers
Under this option, there will be a decrease in the time and compensation costs associated with
disputation of medical compensation payments and unnecessary or excessive medical reporting.
This option will also provide a disincentive to over-charging and over-servicing of injured employees.
There will be associated establishment and enforcement costs for Comcare to prepare and issue a
table of medical service rates. This amendment may also result in minor changes to the regulatory
burden for determining authorities, as they will need to crosscheck payments against the medical
service rates. However, as this option will be implemented in tandem with schedules of medical
service fees and legal costs, it will avoid duplication of consultation, implementation and
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Regulation Impact Statement
administrative costs. It will also result in improved administrative processes through consistent
reporting and defined standards.
Impacts on Injured Employees
Injured employees will retain the right to a treating practitioner of their choice. However, where
treatment costs are in excess of the prescribed schedule, these costs will no longer be borne by the
determining authority. In practice, employees may be less likely to retain treating practitioners
whose costs are above the pricing schedule in order to minimise their own out of pocket expenses.
Firmer guidelines for medical reports will allow for a standard of consistency and accuracy that will
enable more effective investment in an injured employee's treatment, recovery and rehabilitation.
This amendment, implemented in isolation, may be seen by employees as a reduction in benefits
under the scheme. However, the package of proposed reforms will improve the delivery of medical
services and outcomes under the SRC Act. The adoption of clinical justification principles (in the
Clinical Framework) will ensure that treatment is reasonable, transparent and cost effective, and
highlights the need for the provider to deliver value (or a functional outcome) to the injured worker.
In addition, research also indicates that when treatment is provided by experts in compensation care
and in an environment of high accountability, health outcomes for compensation patients are vastly
improved42.
Impact on Health Providers
Practitioners have the legal right to charge in excess of schedule rates, regardless of whether the
rates are prescribed by workers' compensation bodies or the Australian Medical Association (AMA).
This reflects general medical practice and is not limited to patients presenting with work-related
conditions.
The department has consulted with health practitioners in regard to scheduling medical treatment
costs. While there is general support for costs schedules, this support is predicated on the
assumption that costs schedules reflect market pricing.
Legal Costs
Several state and territory jurisdictions have legislated legal costs, fixing maximum costs or number
of hours, for legal services provided in connection with workers' compensation matters. The main
objective of having a schedule of legal costs is to ensure that legal costs are proportionate to the
importance and complexity of the subject matter in dispute.
Impacts on Employers
There will be cost implications for the development of a legal costs schedule. However, legal costs
schedules have precedent in other Australian workers' compensation schemes and it is expected
these schedules will be referenced in order to mitigate initial implementation costs.
Additional administrative and resource costs are likely for a transitional period as determining
authorities and the AAT adopt and adapt their systems to legislative change.
42 Safety, Rehabilitation and Compensation Act Review Report 2013, Peter Hanks QC, p 141
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Regulation Impact Statement
Medium-term post-implementation costs would include regular review of the fees prescribed in the
schedule by Comcare to ensure currency. These would be borne by premium payers and licensees
through regulatory costs paid to Comcare.
Impacts on Injured Employees
In workers' compensation matters, the personal nature of the subject matter can sometimes lead to
excessive time and money being spent on relatively unimportant or simple legal issues. A formalised
schedule of legal costs will limit the potential for over-charging and over-servicing and may reduce
the incentive for individuals and their lawyers to litigate weak and unlikely claims.
Introducing a schedule of fees would not limit an employee's right to pursue legal action but it
would limit determining authorities' financial liability for such actions.
A schedule of fees would set parameters as to compensable costs for all parties to a dispute,
providing certainty about what would and would not be paid. In turn, placing limits on legal costs
would provide further incentive to resolve disputes in a timely manner.
Option Three -- Utilise state medical services and medical report schedules where they
exist and refer appeals to mediation and advocacy services
Medical service fees and medical report costs
The main benefit of using state service fee schedules is that Comcare would avoid the costs
associated with establishing its own schedule. State schedules would also be more closely aligned to
the living costs and standards of each state and avoid the standardisation of medical costs that must
arise from a national fee schedule.
Impacts on Employers
The use of established fee schedules could possibly minimise implementation costs. However, this
option does not offer national consistency and multiple fee schedules would be administratively
inefficient, with claims staff required to reference and check payments against multiple state
schedules and payment systems.
Impacts on Injured Employees
Injured employees will retain the right to a treating practitioner of their choice. However, where
treatment costs are in excess of the prescribed schedule, these costs will no longer be borne by the
determining authority. In practice, employees may be less likely to retain treating practitioners
whose costs are above the pricing schedule in order to minimise their own out of pocket expenses.
This amendment, implemented in isolation, may be seen by employees as a reduction in benefits
under the scheme. In addition, varying levels of reimbursement between jurisdictions for employees
employed by the same organisation may be perceived as unfair.
Impact on Health Providers
Practitioners have the legal right to charge in excess of schedule rates, regardless of whether the
rates are prescribed by workers' compensation bodies or the AMA. This reflects general medical
practice and is not limited to patients presenting with work-related conditions.
Health practitioners would also be familiar with compensation amounts and would require little
adjustment to pricing under the SRC Act.
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Regulation Impact Statement
Legal Costs
Impacts on Employers
An effective alternative dispute resolution service could positively influence disputation rates and
lower associated legal costs. The provision of a less adversarial approach to dispute resolution could
be sufficient to avoid progression of many disputes to the AAT and avoid the resulting legal costs.
There would be establishment and ongoing resourcing and maintenance costs for a mediation
service. If the service is offered as a free service to disputing parties, it would require access to
funding - either from government appropriations or from premiums and regulatory contributions -
which may prove prohibitive for a comparatively small workers' compensation scheme.
Impacts on injured employees
An unsuccessful mediation would add another layer to the dispute resolution process, impose
additional costs and increase the time taken to resolve disputes.
Consultation
In response to the recommendations put forward by Mr Hanks in his 2012 review of the SRC Act,
stakeholders were generally supportive of setting medical service rates.
Capping medical report or legal report costs was not considered by Mr Hanks in his review of the
SRC Act. However, the Safety, Rehabilitation and Compensation Licensees Association (SRCLA) first
raised the issue of medical report costs noting that there is strong support amongst self-insurers and
premium payers for this amendment.
During the most recent consultation process, health practitioners noted that AMA's list of fees could
be used to guide the Comcare's fee schedule. However, the list should not be published on
Comcare's website as this would reduce AMA's commercial interests. It was also noted that `you get
what you pay for'; for example, there are currently only two neurosurgeons in South Australia who
accept the rate paid by WorkCover. There was also concern as to how the rates would reflect
qualifications; for example, in New South Wales, payment rates are linked to course completion
rather than the level of qualification of the health professional.
Licensees strongly supported the introduction of a fee schedule for medical costs, particularly
medical report costs. However, it was suggested that the legal fee schedule should not apply to
licensees.
Legal practitioners indicated they were not prepared to reduce their fees, which they said would
result in injured employees paying the gap, forgoing the service or `bottom feeders' entering the
market.
Recent departmental consultations with the Australian Public Service Commission, the Department
of Veterans' Affairs and Comcare indicate there is support for this amendment.
Conclusion
In compensation matters, the insurer, as the third party payer, takes on a greater accountability for
outcomes by the provider as it manages the financial transaction. Contemporary compensation
legislation needs to take into account the financial risks of treatments and the subsequent impact on
scheme viability.
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Regulation Impact Statement
The use of fee schedules to regulate workers' compensation medical treatment costs is current
practice for some state and territory jurisdictions. In addition, the AMA also prescribes suggested
rates for health practitioners.
The department recommends Option Two, the introduction of Schedules of Costs for medical service
fees, medical report costs and legal costs developed by Comcare. The regulation of medical and
legal costs would give Comcare the authority to implement measures necessary to ensure the long-
term financial sustainability of workers' compensation under the SRC Act, reduce overall disputation
rates and improve certainty, for all parties, as to the SRC Act's compensatory limits. A national
legislated Schedule of Costs under the SRC Act would reduce the regulatory burden for employers
and prevent perceived inequity between jurisdictions.
Costing
The Office of Best Practice Regulation requires the calculation of costs associated with the regulatory
burden of each option to be tabled in a Regulation Impact Statement (RIS). However, the regulatory
costs of all options provided in this RIS relate mostly to updating IT systems and training staff on new
methodology. As these costs relate to the fact there is a change rather than the quantum of the
change, the regulatory burden is the same across all options.
Most claim management functions are completed with the use of specialised software and any
significant changes to claims management processes, such as those that are analysed in this RIS, will
require a re-design of system software. There are five IT companies - SBC, Figtree, SAP Cnet, Marsh
CS Stars and SAI Global/Cintellate - who provide IT systems to all licensees. Therefore, the cost of
updating IT systems will be limited to these companies only.
Claims management staff will also require training on new systems. There are currently
17 organisations that perform claims management services for the 33 licensees. This is because:
o two insurance companies share eight licensees' contracts for claims management and
training for those companies will apply to all their licensees in their contract (i.e. the training
will not be for each licensee but for each insurance company's claims managers).
o four corporate groups provide claims management for 11 licensees (five with
Commonwealth Bank, two with National Bank, three with John Holland and one with
Gallagher Bassett) and would only require one set of training per corporate group.
o the remaining 11 licensees do their own claims management in-house.
IT and training costs have been applied to current licensees only as costs for new licensees entering
the scheme after the introduction of these amendments are considered to be establishment costs.
Where regulatory costs go beyond updating IT systems and training staff on new methodology - for
example, accreditation costs for attendant care providers and health practitioners not registered
under the `National Registration and Accreditation Scheme' - they are a feature of both options
and, therefore, they do not change regulatory costs between options. Accreditation costs for
attendant care providers include undertaking a course with a tertiary institution, while health
practitioners' costs are associated with the time it takes to complete application requirements.
Taylor Fry Actuaries conducted costings on the proposed package of changes in July 2014. As a
result of the improved return-to-work outcomes as well as changes to the benefit structure, the
Government's package of changes will save both premium payers and licensees between 12 per cent
Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015
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Regulation Impact Statement
and 21 per cent annually. This equates to between $62 million and $105 million for premium payers
and between $19 million and $32 million for licensees.
Regulatory Burden and Cost Offset Estimate Table
Average Annual Regulatory Costs (from Business as usual)
Change in costs Business Community Individuals Total change
($million) Organisations in cost
Income replacement $0.037 $0.037
Evidence based $0.024 $0.024
medical treatment
Household and $0.027 $0.027
attendant care
services
Accreditation of $0.010 $0.010
attendant care
providers
Medical treatment $0.014 $0.014
and legal costs
Other changes in - $0.256 - $0.256
submission
Total by Sector - $0.154 $0.010 - $0.144
Are all new costs offset?
yes, costs are offset no, costs are not offset deregulatory, no offsets required
Total (Change in costs - Cost offset) ($million) -$0.144
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Regulation Impact Statement
Stakeholder Consultation
The department considers that the issues raised in this RIS have been discussed, reviewed and
consulted on extensively over the last two years.
An early assessment RIS was initially prepared and submitted to Cabinet for its consideration of the
proposed policy. It was not considered necessary to publish a RIS for consultation due to the
detailed and lengthy consultation that occurred from 2012 to 2015. The RIS was finalised and
published upon the introduction of the Safety, Rehabilitation and Compensation Amendments
(Improving the Comcare Scheme) Bill 2015.
Engagement Methods
The department has engaged in extensive and ongoing consultation with participants in the Scheme
to:
inform the content of the SRC Act Review and its recommendations;
gauge stakeholder responses to the SRC Act Review recommendations; and
inform the second stage of the proposed reforms to the SRC Act.
Engagement methods included:
targeted consultation groups
meetings
public submissions tenders
workshops
cross agency working groups
Consultation Process
The Department of Employment conducted the following stakeholder consultation sessions between
July 2012 and June 2014.
Consultation Stage 1
The review of the SRC Act in 2012-13 was a broad review that looked at a range of legislative and
operational areas, including scheme governance, performance and access to self-insurance.
Consultation was conducted in three stages by Mr Peter Hanks QC and Dr Allan Hawke AC and
consisted of:
1. initial meetings with targeted participants to develop a preliminary list of issues and possible
recommendations;
2. publication of an issues paper to stimulate and encourage public submissions to the review;
3. focus workshops with select participants and participant groups to explore particular issues
and matters arising in the submissions; and
4. acceptance of written submissions.
Approximately 44 workshops, meetings and other consultations were held between July and
November 2012. Written submissions for the Issues Paper closed on 25 October 2012 and 45
submissions were received.
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Regulation Impact Statement
Consultation Stage 2
On publication of the SRC Act Review report in March 2013, a series of consultations were
conducted in April 2013 with key stakeholder groups in Canberra, Sydney and Melbourne. The
purpose of the consultations was to gauge stakeholder response to the SRC Act Review and to
inform future implementation of the recommendations.
The consultations included feedback sessions held by the department and written submissions
regarding the recommendations in the final report. Forty written submissions were received by the
department during April and May 2013. Stakeholders who made submissions and participated in
workshops and consultations included workers, employer organisations, unions, insurers, Comcare,
Commonwealth government agencies, current licensees, premium payers under the scheme, health
practitioner bodies and legal practitioners.
Consultation Stage 3
The purpose of the consultations was to inform the second stage of proposed reforms to the SRC Act
and advise stakeholder groups of the proposed content of the SRC Act reform package.
A series of confidential consultations were conducted with key stakeholder groups in Canberra,
Sydney and Melbourne during May to June 2014.
Details regarding the stakeholders involved in the consultations are detailed in the table below.
Key Stakeholder Group Number of consultation Number of
sessions Stakeholders
Unions 2 10
18
Licensees 3 11
5
Legal Practitioners 2 9
14
Rehabilitation Providers 1
1
Health Service Providers 1 68
Commonwealth Agencies 6
Including Comcare, Military and Rehabilitation
Compensation Commission, Department of
Veteran Affairs
ACT Government 1
Total 16
Confidential consultations were conducted to assist in the development of the Government's
response to the Review's recommendations and the proposed reforms not addressed by the Review.
Participants were also invited to submit written responses to the recommendations.
Other Consultation - Cross Agency Working Groups
The purpose of the consultations was to inform the second stage of proposed reforms to the SRC Act
and stimulate policy discussion.
During December 2013 to May 2014, representatives from Australian Government Agencies,
Comcare and the Department of Veteran's Affairs were invited to attend a series of workshops
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Regulation Impact Statement
conducted in Canberra. Meetings were held on a fortnightly basis to present research on issues
pertinent to the recommendations. Participants were encouraged to provide comment or written
feedback, including presentation of their own research.
The following Australian Government Agencies were represented at the working group meetings:
Department of the Prime Minister and Cabinet
Australian Public Service Commission
Department of Finance
Treasury
Committee on Industrial Legislation
The purpose of this consultation was to identify any unintended consequences in the Safety,
Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015.
The Committee on Industrial Legislation (CoIL) is a subcommittee of the National Workplace
Relations Consultative Council and meets when required to provide technical input on draft
workplace relations legislation. It is common practice to convene the CoIL to consider workplace
relations and work health and safety legislation.
A CoIL like process was held in Canberra on 19 February 2015 where representatives from employer
and employee peak bodies were provided with a draft of the Bill in confidence to review and provide
feedback.
Consultation Feedback
Stakeholder groups, despite varying motivations, have generally been supportive of many of the
proposed amendments, recognising the need to modernise a piece of legislation that has remained
largely unchanged since its introduction in 1988.
A summary of the feedback received from various stakeholder groups is outlined below.
Licensees and Premium Payers
Both groups are supportive of amendments that streamline operational procedures and reduce
upward pressure on premiums and claims costs, in particular proposed step-down arrangements
which will provide organisations with a tool to better manage claims.
Industry Groups
Legal Practitioners:
Legal Practitioners have mixed opinions of the recommendations, but are generally supportive of
amendments that seek to clarify difficult or controversial case law. They are concerned about
recommendations that they perceive as tightening eligibility requirements, particularly for mental
stress claims, as well as the potential reduction in benefits for injured employees.
Health Practitioners:
Health practitioners are generally supportive of amendments that improve the health and
return-to-work outcomes of injured workers. They require that any intended medical costs
schedules accurately reflect market costs.
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Regulation Impact Statement
Rehabilitation Providers:
Rehabilitation Providers have been supportive of the rehabilitation amendments and the reform
package's emphasis on improving return-to-work outcomes, including compliance measures.
Trade Unions and Employees:
Trade unions recognise the benefits of improving return-to-work arrangements for injured
employees. However they are not supportive of any amendments that they perceive as reducing
monetary compensation or access to the broadest range of rehabilitation support services.
Ongoing consultations
Ongoing consultation with Comcare, the Department of Veteran Affairs, Australian Public Service
departments, licensees and other determining authorities will continue during implementation of
the operational requirements of the proposed reforms.
Implementation and Evaluation
The Government will introduce a Bill to legislate the amendments in early 2015. The department
will monitor the impact of these legislative changes on employers and employees to ensure they
meet their intended objectives. A key aspect of this monitoring will be whether the amendments
reduce claim costs for employers and increase return-to-work rates for injured employees and
whether the predicted savings in compliance costs to businesses have been realised.
Work is also being undertaken by some public service departments to better manage work health
and safety, early intervention and return-to-work outcomes through trialling a range of `best
practice' initiatives. These efforts will be monitored and learnings applied to the public service more
broadly.
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Notes on Clauses
NOTES ON CLAUSES
In these notes on clauses, the following abbreviations are used:
AAT Administrative Appeals Tribunal
the Act Safety, Rehabilitation and Compensation Act 1988
the Bill Safety, Rehabilitation and Compensation Amendment
(Improving the Comcare Scheme) Bill 2015
the Commission Safety, Rehabilitation and Compensation Commission
the Exit Safety, Rehabilitation and Compensation Legislation
Arrangements Amendment (Exit Arrangements) Bill 2015
Bill
the Fair Work Act Fair Work Act 2009
the Review Safety, Rehabilitation and Compensation Act Review by
Mr Peter Hanks QC and Dr Alan Hawke AC (Report - February
2013)
Clause 1 - Short title
1. This is a formal provision specifying the short title.
Clause 2 - Commencement
2. The table in this clause sets out when the provisions of the Bill commence.
Clause 3 - Schedule(s)
3. Clause 3 of the Bill provides that an Act that is specified in a Schedule is amended as set
out in that Schedule, and any other item in a Schedule operates according to its terms.
4. The Bill comprises 17 schedules which principally amend the Safety, Rehabilitation and
Compensation Act 1988 with consequential amendments to the Military Rehabilitation and
Compensation Act 2004, the Seafarers Rehabilitation and Compensation Act 1992 and the
Administrative Decisions (Judicial Review) Act 1977.
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SCHEDULE 1 - ELIGIBILITY FOR COMPENSATION AND REHABILITATION
Overview
5. Schedule 1 to the Bill amends the Act to make a number of changes to eligibility
requirements for compensation which, in part, give effect to recommendations made by the
Review. The amendments:
provide an expanded list of matters that may be taken into account in determining
whether an ailment or aggravation was contributed to, to a significant degree, by an
employee`s employment;
enable Comcare to determine a Compensation Standard in relation to a specified
ailment that sets out the factors that must, as a minimum, exist before it can be said that
an employee is suffering from the specified ailment - those factors must then be taken
into account in determining whether the specified ailment or an aggravation of the
specified ailment was contributed to, to a significant degree, by the employee`s
employment;
introduce new eligibility criteria for designated injuries` (defined to include heart
attacks, strokes and spinal disc ruptures) and aggravations of designated injuries`, and
require the degree of contribution from employment or a pre-existing compensable
disease to be significant before compensation is payable (recommendation 5.3 of the
Review);
increase the threshold for perception-based disease claims (that is, claims for a
psychological or psychiatric ailment or aggravation) by requiring an employee to have
reasonable grounds for the belief or interpretation of the incident or state of affairs
(recommendation 5.2 of the Review); and
widen the scope of the reasonable administrative action` exclusion to encompass
injuries suffered as a result of reasonable management action generally (including
organisational or corporate restructures and operational directions) as well as the
employee`s anticipation or expectation of such action being taken.
Commencement
6. The amendments in Schedule 1 to the Bill commence on the day after Royal Assent.
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
7. This item inserts a number of new definitions into subsection 4(1) of the Act.
The terms designated injury` and relevant pre-existing ailment` are further defined in
new section 5C (see item 15 below). These provisions, together with amendments to the
definition of injury` in section 5A of the Act (see items 5-7 below), give effect to
recommendation 5.3 of the Review.
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Item 2 - Subsection 4(1) (definition of significant degree)
8. This item substitutes a definition of significant degree`. This is a technical amendment
which relocates the current definition contained in subsection 5B(3) of the Act.
Item 3 - Subsection 4(10)
Item 4 - Subsection 4(10A)
9. These items make technical amendments to subsections 4(10) and (10A) of the Act as a
consequence of the enactment of new section 7A (see item 16 below). The amendments
ensure that only Comcare can determine a Compensation Standard under new section 7A.
Item 5 - Subsection 5A(1) (paragraphs (b) and (c) of the definition of injury)
Item 6 - Subsection 5A(1) (at the end of paragraph (c) of the definition of injury)
Item 7 - Subsection 5A(1) (after paragraph (c) of the definition of injury)
10. These items amend the definition of injury` in subsection 5A(1) of the Act to include
four new categories of injury based on the concept of a designated injury`. The term
designated injury` is defined in new subsection 5C(1) to include specified heart, brain and
spinal injuries consisting of, caused by, resulting from, or associated with a pre-existing
ailment. The effect of these amendments is to ensure that incidents that are a manifestation of
an underlying disease (such as heart attacks, strokes and spinal disc ruptures caused by
degenerative diseases and lifestyle factors) will be covered in the same manner as diseases` -
that is, they will only be compensable if contributed to, to a significant degree, by:
the employee`s employment; or
a pre-existing ailment where that ailment is a disease`, that is, the ailment was
contributed to, to a significant degree, by the employee`s employment.
11. Courts have treated such conditions under the current provisions of the Act as injuries`
rather than diseases`, with the effect that they are compensable if they occur at work,
regardless of whether employment contributed to the condition - see, for example, Australian
Postal Corporation v Burch [1998] FCA 944.
12. These amendments, together with the related amendments in items 1 and 15 below,
give effect to recommendation 5.3 of the Review.
13. There is little justification for employers having to insure against the costs of heart
attacks, strokes and similar incidents that occur at the workplace, where those conditions are
manifestations of underlying genetic, lifestyle-based or age-related disease processes without
any significant contribution from employment. Workers` compensation should only be
available for such conditions if they are contributed to, to a significant degree, by a pre-
existing compensable disease or by the employee`s employment.
14. Victoria, New South Wales, Queensland, Tasmania and the Australian Capital Territory
have all excluded incidents such as heart attacks and strokes from workers` compensation
coverage where there is no significant employment contribution.
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Item 8 - Subsection 5A(1) (definition of injury)
Item 9 - Subsection 5A(2)
15. These items expand the scope of the reasonable administrative action` exclusion
currently in section 5A of the Act in 2 ways:
firstly, the exclusion will apply to reasonable management action` more generally; and
secondly, the exclusion will extend to an employee`s anticipation or expectation of such
action being taken.
16. The Act currently aims to prevent compensation claims from being used to obstruct
legitimate and reasonable management action by excluding from the definition of injury` any
condition (usually a psychological or psychiatric injury or disease) that has arisen as a result
of such action. To this end, subsection 5A(1) of the Act currently provides that the definition
of injury` does not include a disease, injury or aggravation suffered as a result of reasonable
administrative action taken in a reasonable manner in respect of the employee`s employment.
Subsection 5A(2) of the Act provides a non-exhaustive list of matters that are administrative
action`.
17. This exclusion has been the subject of a considerable volume of litigation, for the most
part in the AAT but also in the Federal Court. In Commonwealth Bank of Australia v Reeve
[2012] FCAFC 21; (2012) 199 FCR 463 the Full Court drew a distinction between
administrative` and operational` actions of an employer. The effect of this decision is that,
in some cases, operational decisions of employers, such as corporate restructures or
instructions to employees to perform work at a particular location, or to perform particular
duties, are not administrative action and do not trigger the exclusionary provision, so that any
injury to an employee resulting from such actions is compensable.
18. Item 8 amends subsection 5A(1) of the Act to widen the scope of the exclusion to
encompass injuries resulting from reasonable management action taken in a reasonable
manner as well as the employee`s anticipation or expectation of such action being taken. This
amendment is consistent with a similar exclusion from the bullying provisions of the Fair
Work Act - in particular, subsection 789FD(2) of that Act. Both section 789FD of the Fair
Work Act and new paragraph 5A(1)(h) of the Act recognise that employers have rights and
obligations to take appropriate management action and make appropriate management
decisions.
19. Item 9 substitutes a new subsection 5A(2) to provide a non-exhaustive list of matters
that are management action`. The effect of this amendment is to expand the scope of the
exclusion to include organisational or corporate restructures and operational directions as
well as anything done in connection with these actions. These actions are in addition to the
administrative actions previously encompassed within the exclusion.
20. Item 9 also inserts a new subsection 5A(3) which provides a test for determining when
a designated injury` (or aggravation thereof) will be compensable. For such injuries to be
compensable, the employee`s employment must have contributed to the injury to a significant
degree. New subsection 5A(3) also contains a list of factors that may be taken into account in
determining whether a designated injury` (or aggravation thereof) was contributed to, to a
significant degree, by an employee`s employment. The list is consistent with the factors set
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out in subsection 5B(2) of the Act (as amended by Schedule 1 to the Bill (see items 10 to 13
below) that must be taken into account in determining whether an ailment or aggravation was
contributed to, to a significant degree, by an employee`s employment. This amendment gives
effect to recommendation 5.3 of the Review.
Item 10 - After paragraph 5B(2)(b)
Item 11 - After paragraph 5B(2)(c)
Item 12 - After paragraph 5B(2)(d)
Item 13 - Paragraph 5B(2)(e)
21. These items amend subsection 5B(2) of the Act to enable certain matters be taken into
account in determining whether an ailment or aggravation was contributed to, to a significant
degree, by an employee`s employment.
22. Under the Act, an ailment falls within the definition of disease` in subsection 5B(1) of
the Act - and is therefore compensable - only if it was contributed to, to a significant degree,
by the employee`s employment. It was the original intention of the Act that an employee`s
eligibility for compensation payments for a disease should require a close causal connection
between the employee`s work and the contraction or aggravation of the disease. Subsection
5B(2) of the Act currently provides a non-exhaustive list of matters that may be taken into
account in determining whether an ailment or aggravation was contributed to, to a significant
degree, by an employee`s employment. The amendments provide an expanded list of matters
that may be taken into account in making this determination. The effect of these amendments
is to strengthen the causal connection between the employee`s employment and the ailment
or aggravation required before compensation is payable in respect of a disease.
23. Item 10 inserts a new paragraph 5B(2)(ba) requiring that the state of the employee`s
physical and psychological health before the ailment or aggravation is to be taken into
account. A similar requirement exists under State and Territory workers` compensation
legislation - for example, paragraph 9A(2)(e) of the Workers Compensation Act 1987
(NSW).
24. Item 11 inserts a new paragraph 5B(2)(ca) requiring consideration of the probability
that, if the employee had not been employed in the employment, the ailment or aggravation
(or a similar ailment or similar aggravation) would have been suffered by the employee at or
about the same time in the employee`s life (or at the same stage of the employee`s life). In
assessing the contribution of the employment, this would require consideration of issues such
as genetic predisposition, prior traumatic events, and personal and social factors which
influence how a person perceives or experiences events to which they are exposed, whether
that be in their employment or everyday life. Similar considerations exist under State and
Territory workers` compensation legislation - for example, paragraph 9A(2)(d) of the
Workers Compensation Act 1987 (NSW).
25. Item 12 inserts a new paragraph 5B(2)(da) that applies to an ailment or aggravation that
is, to a significant degree, attributable to the employee`s belief about or interpretation of an
incident or state of affairs. In determining whether the employee`s employment contributed to
the ailment or aggravation to a significant degree, new paragraph 5B(2)(da) requires
consideration of whether the employee had reasonable grounds for the belief or
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interpretation. The expression reasonable grounds` has been the subject of a considerable
body of case law. In McKenna v Secretary, Department of Treasury [2006] HCA 45; (2006)
228 CLR 423, the High Court accepted that reasonable grounds` means grounds based on
reason, as distinct from something irrational, absurd or ridiculous.
26. This amendment negates the effect of the Federal Court`s decision in Wiegand v
Comcare [2002] FCA 1464; (2002) 72 ALD 795 where the Federal Court held that an
employee`s perception about something related to his or her employment would be a
sufficient basis to connect the employee`s psychological reaction to his or her employment,
provided that the perception was a perception about an incident or state of affairs that actually
happened and regardless of whether the perception was reasonable or itself reflected reality.
It is an unfair burden on employers to make them liable to pay compensation for a
psychological or psychiatric ailment that is caused by an employee`s unreasonable perception
rather than by an aspect of employment. This amendment gives effect to recommendation 5.2
of the Review.
27. Item 13 substitutes a new paragraph 5B(2)(e) requiring consideration of any other
matters affecting the employee`s physical or psychological health. The amendment makes
clear that health includes both physical and psychological health. Item 13 also inserts a new
paragraph 5B(2)(f) requiring consideration of any other relevant matters in assessing the
contribution of employment to an ailment or aggravation.
Item 14 - Subsection 5B(3)
28. This item repeals subsection 5B(3) which defined significant degree`. That definition
has been relocated into section 4 of the Act (see item 2 above).
29. This item also inserts new subsections 5B(3), (4) and (5) which require that any matters
included in a Compensation Standard in force under new section 7A (see item 16 below) also
be taken into account in determining whether a specified ailment (or the aggravation of a
specified ailment) was contributed to, to a significant degree, by the employee`s employment.
Item 15 - After section 5B
New section 5C - Definition of designated injury
30. This item inserts a new section 5C which contains new definitions of designated
injury` and relevant pre-existing ailment`. This amendment, together with amendments to
the definition of injury` in section 5A of the Act (see items 5 to 7 above), gives effect to
recommendation 5.3 of the Review.
31. In order for an injury (in its ordinary sense) to be a designated injury`, it must be one
that consists of, is caused by, results from, or is associated with, a pre-existing ailment`. The
term ailment` is defined in subsection 4(1) of the Act as any physical or mental ailment,
disorder, defect or morbid condition (whether of sudden onset or gradual development)`. This
means that not all injuries to the heart, brain or spine will be designated injuries`. For
example, a traumatic brain injury sustained as a result of a falling object in the workplace will
be a compensable injury` (as defined in section 5A of the Act) if the injury arose out of, or in
the course of, the employee`s employment.
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Item 16 - After section 7
New section 7A - Compensation Standards relating to ailments
32. This item inserts a new section 7A which empowers Comcare to determine a
Compensation Standard that relates to a specified ailment and sets out the factors that must,
as a minimum, exist before it can be said that an employee is suffering from the ailment. A
Compensation Standard can also set out matters that must be taken into account in
determining whether an aggravation of the ailment was contributed to, to a significant degree,
by the employee`s employment.
33. If a Compensation Standard is in force and an employee is taken not to have suffered,
or be suffering, from a specified ailment as a consequence of new subsection 7A(2), or if the
specified ailment or aggravation of that ailment is taken not to have been contributed to, to a
significant degree, by the employee`s employment as a consequence of new subsections
5B(3) or (4), then the employee`s claimed condition is not an injury` in respect of which
compensation is payable under the Act.
34. A Compensation Standard will be a legislative instrument for the purposes of the
Legislative Instruments Act 2003.
Part 2 - Application provisions
Item 17 - Application of amendments
35. This item provides that the amendments made by Schedule 1 to the Bill only apply to
injuries sustained by an employee after commencement of this item, being the day after the
Royal Assent.
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SCHEDULE 2 - REHABILITATION
Overview
36. Schedule 2 to the Bill amends the rehabilitation and return to work requirements in the
Act to emphasise the vocational (rather than medical) nature of rehabilitation services and
improve return to work outcomes under the scheme. The amendments:
combine the current 2-step process for the development of rehabilitation programs into
a single process to ensure that workplace rehabilitation is delivered on a service
continuum of assessment of need, planning, active implementation, review and
evaluation (recommendation 6.13 of the Review);
clarify rehabilitation responsibilities by combining the roles of rehabilitation authority`
and employer` into one concept, the liable employer` - a liable employer will have a
duty to ensure the rehabilitation of an injured employee and to provide the employee
(or assist the employee to find) suitable employment and maintain the employee in
suitable employment;
expand the existing definition of suitable employment` to include any employment
with any employer, including self-employment (recommendation 6.16 of the Review);
and
provide relevant authorities with the discretion to perform work readiness assessments.
Commencement
37. The amendments in Parts 1 and 4 of Schedule 2 to the Bill commence on a day to be
fixed by Proclamation, but no later than 12 months after Royal Assent. The extended period
for Proclamation is necessary to enable Comcare and licensees to establish systems and
processes to give effect to the new rehabilitation requirements.
38. The amendments in Part 2 of Schedule 2 to the Bill commence immediately after the
commencement of Parts 1 and 4 or immediately after the commencement of Schedule 2 to the
Safety, Rehabilitation and Compensation Legislation Amendment Act 2015, whichever is the
later.
39. The amendments in Part 3 of Schedule 2 to the Bill commence immediately after the
commencement of Parts 1 and 4 or immediately after the commencement of Part 1 of
Schedule 1 to the Exit Arrangements Bill, whichever is the later.
Part 1 - General Amendments
Military Rehabilitation and Compensation Act 2004
Item 1 - Subsection 41(1) (paragraph (a) of the definition of approved program provider)
40. This item makes a consequential amendment to the Military Rehabilitation and
Compensation Act 2004 as a result of amendments made to the Act by Schedule 2 to the Bill,
in particular, the change of name from approved program provider` to approved workplace
rehabilitation provider`.
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Safety, Rehabilitation and Compensation Act 1988
Item 2 - Subsection 4(1) (definition of approved program provider)
Item 3 - Subsection 4(1)
Item 4 - Subsection 4(1)
Item 5 - Subsection 4(1) (definition of exempt authority)
Item 6 - Subsection 4(1)
Item 7 - Subsection 4(1) (definition of rehabilitation authority)
Item 8 - Subsection 4(1) (definition of rehabilitation program)
Item 9 - Subsection 4(1) (definition of suitable employment)
Item 10 - Subsection 4(1)
41. These items amend section 4 of the Act to provide definitions for new terms, repeal
obsolete terms and make consequential amendments to defined terms. The new terms will be
explained in the context of the provisions within which they appear.
Item 11 - Subparagraph 6(1)(f)(iii)
Item 12 - Subparagraph 6(1)(f)(v)
Item 13 - Subparagraph 6(1)(f)
Item 14 - Subparagraph 6(1)(g)(iii)
Item 15 - Subparagraph 6(1)(g)(iv)
Item 16 - At the end of paragraph 6(1)(g)
42. These items make a number of minor consequential amendments to section 6 of the Act
to reflect the new terms workplace rehabilitation plan` (defined in new section 36 - see item
52 below) and work readiness assessment` (defined in new section 38B - see item 64
below).
Item 17 - Paragraph 19(4)(d)
Item 18 - Paragraph 19(4)(f)
43. These items make minor consequential amendments to section 19 of the Act to reflect
the new term workplace rehabilitation plan` (defined in new section 36 - see item 52 below).
Item 19 - Section 34 (definition of principal)
Item 20 - Division 2 of Part III (heading)
Item 21 - Subsection 34A(1)
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Item 22 - Paragraph 34A(2)(b)
Item 23 - Subsections 34A(3) to (6)
Item 24 - Paragraph 34A(7)(a)
Item 25 - Paragraph 34A(7)(b)
Item 26 - Section 34B (heading)
Item 27 - Section 34B
Item 28 - Subsection 34C(1)
Item 29 - Section 34D (heading)
Item 30 - Paragraph 34D(1)(a)
Item 31 - Paragraph 34E (heading)
Item 32 - Subsection 34E(1)
Item 33 - Paragraphs 34E(2)(a) and (b)
Item 34 - Subsection 34F(1)
Item 35 - Paragraph 34F(2)(a)
Item 36 - Section 34G
Item 37 - Section 34H (heading)
Item 38 - Subsection 34H(1)
Item 39 - Paragraphs 34H(2)(a) and (b)
Item 40 - Subsection 34H(5)
Item 41 - Section 34J (heading)
Item 42 - Subsection 34J(1)
Item 43 - Subsection 34K(1)
Item 44 - Subsection 34L(1)(d)
Item 45 - Subsection 34M
Item 46 - Section 34P
Item 47 - Subparagraph 34P(b)(ii)
Item 48 - Section 34Q
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Item 49 - Subsection 34R(1)
44. These items make consequential amendments to sections 34 to 34R of the Act
substituting references to rehabilitation program provider` with workplace rehabilitation
provider`.
Item 50 - After Division 2 of Part III
45. This item inserts new Divisions 2A and 2B after Division 2 of Part III of the Act. New
Division 2A introduces the concept of a liable employer` to replace the concept of
rehabilitation authority`. New Division 2B sets out the duties of liable employers.
New Division 2A - Liable employers
New section 35 - Liable employer - basic rule
46. New section 35 sets out the rules for determining who is the liable employer` in
relation to an injured employee in the case of:
an injury (other than a disease, a designated injury or an aggravation of a designated
injury) (new subsection 35(1));
an injury that is a disease (new subsection 35(2));
an injury that is a designated injury where the designated injury was contributed to, to a
significant degree, by the employee`s employment (new subsection 35(3));
an injury that is a designated injury arising from or associated with a pre-existing
ailment that was contributed to, to a significant degree, by the employee`s employment
(new subsection 35(4));
an injury that is an aggravation of a designated injury where the aggravation was
contributed to, to a significant degree, by the employee`s employment (new subsection
35(5)); and
an injury that is an aggravation of a designated injury arising from or associated with a
pre-existing ailment that was contributed to, to a significant degree, by the employee`s
employment by the Commonwealth or a licensee (new subsection 35(6)).
47. Generally, the liable employer` is the employer at the time the injury occurred. Where
the injury is a disease, designated injury, aggravation of a designated injury or relevant pre-
existing ailment, the liable employer` is the employer at the time the employment
contributed to the disease, designated injury, aggravation of a designated injury or the
relevant pre-existing ailment to a significant degree. This will be the case regardless of where
or by whom the employee may later be employed. The liable employer` may, but need not
be, the employee`s current employer. Where the employee was employed by an exempt
authority, Comcare will be the liable employer`. The word liable` is only used in the context
of rehabilitation, and is not meant to imply that the liable employer` has liability in any other
context.
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48. New subsections 35(7) and (8) deal with the situation where 2 or more employments
contributed (to a significant degree) to the disease, designated injury, aggravation of the
designated injury or the relevant pre-existing disease. In this situation, the most recent
contributory employment will determine who is to be the liable employer`.
49. These amendments address uncertainty, confusion and duplication of responsibilities
under the current scheme, in particular for Commonwealth employees. The identity of the
rehabilitation authority can be difficult to establish for employees who have changed
employers, been affected by machinery of government changes or where the liable
employer` no longer exists. This can result in difficulty for employees in accessing
rehabilitation benefits or workplace programs. The amendments clarify that the liable
employer` will always be responsible for providing suitable employment and rehabilitation to
injured employees. This gives effect to recommendation 6.5 of the Review.
New section 35A - Liable employer ceases to exist
50. New section 35A deals with the situation where a liable employer` ceases to exist, for
example where an Entity or Commonwealth authority (as those terms are defined in the Act)
is abolished. In this situation, new section 35A provides that Comcare will be the liable
employer of the employee in relation to the injury unless another Entity or Commonwealth
authority is ascertained to be the liable employer` in accordance with the regulations.
New section 35B - Liable employer ceases to perform a function
51. New section 35B deals with the situation where a person was injured while employed
for the purposes of performing a particular function and the liable employer` subsequently
ceases to perform that function, for example following a machinery of government change. In
this situation, new section 35B provides that Comcare will be the liable employer of the
employee in relation to the injury unless another Entity or Commonwealth authority (as those
terms are defined in the Act) is ascertained to be the liable employer` in accordance with the
regulations.
New section 35C - Deemed liable employer
52. New section 35C enables Comcare to make a written determination specifying the
principal officer of a specified Entity or Commonwealth authority (as those terms are defined
in the Act) to be the liable employer. Comcare may also revoke a determination. Neither the
written determination nor the revocation is a legislative instrument. For the avoidance of
doubt, new subsection 35C(3) clarifies that a determination under new subsection 35C(1) is
not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act
2003. This provision is declaratory of the law and does not amount to an exemption from the
Legislative Instruments Act 2003.
New section 35D - Transitional - change of liable employer
53. New section 35D provides that the regulations may provide for transitional matters
arising out of a change from a former liable employer to a new liable employer as a result of
the operation of new sections 35A, 35B or 35C.
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New section 35E - Delegation by liable employer
54. New section 35E enables the delegation of liable employer powers (including powers
under a workplace rehabilitation plan), subject to directions to the delegate.
New section 35F - Deemed delegation by liable employer
55. New section 35F enables Comcare to intervene in the rehabilitation of an injured
employee if satisfied that a liable employer has either failed to fulfil or has contravened the
liable employer`s obligations in relation to the employee. In this situation, Comcare can
determine that the liable employer is taken to have delegated all or specified liable employer
powers relating to workplace rehabilitation plans to Comcare staff.
New section 35G - Arrangements for the provision of rehabilitation services
56. New section 35G enables a liable employer to enter into an arrangement with an
approved workplace rehabilitation provider for the provision of rehabilitation services.
New section 35H - Compensation for acquisition of property
57. New section 35H makes clear that if the operation of new Division 2A or regulations
made for the purposes of Division 2A results in an acquisition of property from a person
otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of
compensation to that person. The person may institute proceedings against the
Commonwealth if the person and the Commonwealth do not agree on the amount of
compensation.
58. New Division 2B sets out the duties of liable employers.
Division 2B - Duties of liable employers
New section 35J - Liable employer`s duty to take all reasonably practicable steps to ensure
rehabilitation of employee
59. New section 35J requires a liable employer who has been formally notified of an injury
to take all reasonably practicable steps to ensure the rehabilitation of the injured employee.
Any reasonable costs incurred by a liable employer may be reimbursed by the relevant
authority.
New section 35K - Liable employer`s duty to provide suitable employment etc.
60. New section 35K requires a liable employer who has been formally notified of an
injury to take all reasonably practicable steps to provide the employee with suitable
employment or assist the employee to find such employment. Where an injured employee is
in suitable employment the liable employer is required to take all reasonably practicable steps
to maintain the employee in suitable employment. In performing these duties the liable
employer is required to consult the employee concerned and any medical practitioner who is
providing medical treatment for the injury. A medical practitioner who is consulted by a
liable employer may be paid in relation to the consultation.
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61. The Review observed that ensuring accessibility of suitable employment to injured
employees is a cornerstone requirement for any framework to ensure employees are engaged
to their full capacity, and to achieve an equitable and cost-effective compensation system.
62. Currently, under section 40 of the Act the relevant employer has a duty to take all
reasonable steps to provide suitable employment to employees who are eligible for
compensation and who are undertaking, or have completed, a rehabilitation program, or to
assist the employee to find such employment. The term suitable employment` is defined in
subsection 4(1) of the Act: for employees who were permanent employees and remain so,
suitable employment is employment by that same employer; for all other employees,
suitable employment may be any employment (including self-employment). In both
situations, suitable employment is employment to which the particular employee is suited,
having regard to a number of factors, including the personal circumstances of the employee,
the employee`s suitability for rehabilitation or vocational retraining, whether it is reasonable
to require the employee to change his or her place of residence, and any other relevant matter.
63. The Act currently provides no sanction or consequence for an employer who fails to
provide suitable employment. As a result, employees with a capacity to work remain on
incapacity benefits for longer than necessary.
64. Schedule 2 to the Bill makes a number of amendments to the suitable employment`
provisions currently in the Act.
65. Firstly, item 9 expands the existing definition of suitable employment` in subsection
4(1) of the Act so that any employment (including self-employment) to which the employee
is suited, can be considered as suitable. This gives effect to recommendation 6.16 of the
Review.
66. Secondly, new section 35K requires the liable employer to take all reasonably
practicable steps to provide an injured employee with suitable employment or assist the
employee to find such employment and maintain the employee in suitable employment. This
replaces and expands on the obligation currently provided in section 40 of the Act. The
obligation now applies to the liable employer` rather than the relevant employer`. In the
case of Commonwealth employees, this means that duty falls on the actual employer of the
employee at the time of the injury (rather than the Commonwealth at large). This amendment
addresses an identified barrier to an effective return to work under the current Act. The
obligation to provide suitable employment` will apply when the employer is formally
notified of the injury rather than when an employee is undertaking, or has completed, a
rehabilitation program as is currently the case. A failure by a liable employer to fulfil these
obligations may result in a deemed delegation of liable employer functions and powers to
Comcare under new section 35F.
67. Finally, amendments made in Schedule 15 to the Bill introduce an obligation of
mutuality in relation to suitable employment. Breaches of obligations of mutuality may be
subject to a sanctions regime and result in the cancellation of compensation rights (see item
14 of Schedule 15 to the Bill below).
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Amendments ~ Schedule 2
Item 51 - Division 3 of Part III (heading)
68. This item renames Division 3 of Part III of the Act as Workplace rehabilitation plans`
to place more emphasis on the vocational - rather than medical - nature of rehabilitation
services.
Item 52 - Sections 35, 36 and 37
69. This item repeals existing sections 35, 36 and 37 and substitutes those sections with
new provisions, relating to workplace rehabilitation plans.
70. Currently there is a 2-stage process for the development of rehabilitation programs:
first, an assessment of whether an injured employee is capable of undertaking a
rehabilitation program (section 36 of the Act); and
second, a determination made about whether the employee should undertake a
rehabilitation program (section 37 of the Act).
71. The amendments combine these processes into a single process and ensure that
workplace rehabilitation is delivered on a service continuum of assessment of need, planning,
active implementation, review and evaluation. This gives effect to recommendation 6.13 of
the Review.
New section 36 - Workplace rehabilitation plan
72. New section 36 defines workplace rehabilitation plan` which replaces the current
rehabilitation program` (repealed by item 8). The new term emphasises the vocational nature
of the services, and removes references to other treatment forms. This gives effect to
recommendation 6.3 of the Review.
73. For the avoidance of doubt, new subsection 36(5) clarifies that a workplace
rehabilitation plan` is not a legislative instrument within the meaning of section 5 of the
Legislative Instruments Act 2003. This provision is declaratory of the law and does not
amount to an exemption from the Legislative Instruments Act 2003.
New section 36A - Employee`s responsibilities under a workplace rehabilitation plan
74. New section 36A provides that a workplace rehabilitation plan` may require an
employee to carry out specified activities, and that the obligation to do so becomes part of the
employee`s responsibilities under the plan.
75. New section 29R (see item 14 of Schedule 15 to the Bill below) provides that an
employee`s refusal or failure to fulfil his or her responsibilities under a workplace
rehabilitation plan is a breach of an obligation of mutuality. Breaches of obligations of
mutuality are subject to the sanctions regime in new Subdivision B of Division 5A of Part II
of the Act and may result in the cancellation of compensation rights (see item 14 of Schedule
15 to the Bill below).
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New section 36B - Obligations of liable employer under a workplace rehabilitation plan
76. New section 36B provides that a workplace rehabilitation plan may require a liable
employer to carry out specified activities, and that the employer is required to comply with
the plan.
New section 36C - When liable employer is formally notified of an injury etc.
77. New section 36C provides for the manner in which a liable employer is formally
notified of an injury or an alleged injury. Formal notification of an injury or an alleged injury
will result in the liable employer assuming responsibility under amended Part III of the Act
for the rehabilitation of the employee.
New section 36D - Liable employer must consider the need for a workplace rehabilitation
plan
78. New section 36D requires a liable employer who has been formally notified of an
injury to consider whether there should be a workplace rehabilitation plan for the employee in
relation to the injury and, if so, the content of the plan.
New section 36E - Employee may request workplace rehabilitation plan
79. New section 36E empowers an employee who has sustained a workplace injury to
request that the liable employer formulate a workplace rehabilitation plan in relation to the
injury. The liable employer is obliged to consider the request.
New section 36F - Formulation of workplace rehabilitation plan
80. New section 36F empowers (but does not require) a liable employer to formulate a
workplace rehabilitation plan for an injured employee either in response to an employee
request or on the employer`s own initiative.
New section 36G - Variation or revocation of workplace rehabilitation plan
81. New section 36G provides for the variation or revocation of a workplace rehabilitation
plan by a liable employer.
New section 36H - Consultation about workplace rehabilitation plan
82. New section 36H imposes consultation obligations on a liable employer when
formulating a workplace rehabilitation plan. The liable employer is obliged to consult with
the employee, any treating medical practitioner and the current employer (if the employee is
not employed by the liable employer). New subsection 36H(2) requires the employee to
participate in consultations with the liable employer; however, a failure to do so does not
affect the validity of the plan. New subsection 36H(4) entitles a treating medical practitioner
to be paid in respect of any consultation. New subsections 36H(5) and (6) clarify that a
medical practitioner and current employer may give employee information to the liable
employer without breaching the Privacy Act 1988.
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Amendments ~ Schedule 2
New section 36J - Notification of workplace rehabilitation plan etc.
83. New section 36J requires a liable employer to notify an employee of any workplace
rehabilitation plan formulated for the employee as well as any variation to or revocation of
the plan. If the employee is not employed by the liable employer, the liable employer is
required to provide a copy of the plan (including any variation or revocation of the plan) to
the current employer. If the liable employer is not the relevant authority, the liable employer
is required to provide a copy of the plan (including any variation or revocation of the plan) to
the relevant authority.
New section 36K - Costs associated with workplace rehabilitation plan
84. New section 36K provides that any costs associated with carrying out a workplace
rehabilitation plan and any costs incurred by the liable employer in relation to a plan are to be
paid by the relevant authority.
New section 36L - Current employer must facilitate workplace rehabilitation plan
85. New section 36L deals with the case where the liable employer is not the current
employer of the employee. New section 36L requires the current employer, as far as
reasonably practicable, to cooperate with the liable employer in relation to a workplace
rehabilitation plan and allow the employee to fulfil the employee`s responsibilities under the
plan.
New section 36M - Notification of circumstances that affect employee`s ability to carry out a
job-seeking activity under a workplace rehabilitation plan
86. New section 36M deals with the case where a workplace rehabilitation plan requires an
employee to carry out one or more job-seeking activities. New section 36M specifies time
limits within which an employee is required to notify the liable employer of any change to the
employee`s circumstances that affects the employee`s ability to carry out those activities.
Item 53 - Section 38 (heading)
Item 54 - Before subsection 38(1)
Item 55 - Subsection 38(1)
Item 56 - Subsection 38(1)
Item 57 - Subsection 38(1)
Item 58 - Subsection 38(1)
Item 59 - Subsection 38(2)
Item 60 - Subsection 38(2)
Item 61 - subsection 38(2)
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Amendments ~ Schedule 2
87. These items make consequential amendments to section 38 of the Act by substituting
liable employer` for rehabilitation authority` and removing references to sections 36 and 37,
which have been repealed and replaced with new provisions.
Item 62 - At the end of section 38
88. This item inserts new subsections 38(5) to (9) which enable the relevant authority to
review workplace rehabilitation plan determinations made under section 36F by a liable
employer who is the principal officer of a licensed corporation.
Item 63 - After section 38
89. This item re-enacts repealed section 35 (exempt authorities) as new section 38A.
90. For the avoidance of doubt, new subsection 38A(2) clarifies that a written declaration
under subsection 38A(1) is not a legislative instrument within the meaning of section 5 of the
Legislative Instruments Act 2003. This provision is declaratory of the law and does not
amount to an exemption from the Legislative Instruments Act 2003.
Item 64 - Before section 39
91. This item inserts a new Division 4, dealing with work readiness assessments, and a new
heading Division 5 - Miscellaneous` before section 39 of the Act.
Division 4 - Work readiness assessment
New section 38B - Assessment of capacity to undertake suitable employment
92. New section 38B empowers the relevant authority to require an injured employee to
undergo a work readiness assessment or examination by a nominated medical practitioner or
other suitably qualified person or by a panel comprising both. Subsection 33(1) of the Acts
Interpretation Act 1901 enables this power to be exercised from time to time as occasion
requires.
New section 38C - Report of work readiness assessment
93. New section 38C requires a report of the work readiness assessment to be given to the
relevant authority. Comcare can make rules in relation to the form and content of work
readiness assessment reports. The rules will be a legislative instrument for the purposes of the
Legislative Instruments Act 2003.
New section 38D - Cost of carrying out work readiness assessment
94. New section 38D provides that certain costs in relation to a work readiness assessment
are to be met by the relevant authority.
New section 38E - Relevant authority to comply with rules
95. New section 38E empowers Comcare to make rules for the purposes of new Division 4
of Part III of the Act. The rules will be a legislative instrument for the purposes of the
Legislative Instruments Act 2003. Relevant authorities are required to comply with the rules.
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Amendments ~ Schedule 2
Item 65 - Paragraph 39(1)(b)
Item 66 - Subsection 39(1)
Item 67 - Sections 40, 41 and 41A
96. These items amend subsection 39(1) and repeal sections 40, 41 and 41A as a
consequence of the workplace rehabilitation plan and liable employer amendments.
Item 68 - At the end of Division 3 of Part III
New section 41E - Liable employers to comply with rules
97. This item inserts new section 41E that empowers Comcare to make rules for the
purposes of Part III of the Act with which liable employers must comply. The rules are to be
legislative instruments for the purposes of the Legislative Instruments Act 2003.
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Amendments ~ Schedule 2
Item 69 - Part V (heading)
98. This item amends the title of Part V of the Act as a consequence of amendments made
to Part V by Schedule 2 to the Bill.
Item 70 - Subsection 53(1)
Item 71 - After subsection 53(2)
Item 72 - At the end of paragraph 53(3)(a)
Item 73 - At the end of section 53
99. These items amend section 53 of the Act to enable notification of a workplace injury be
given to either the relevant authority or the liable employer.
100. New subsection 53(2A) deals with the situation where notice is given to a relevant
authority that is not the liable employer. The relevant authority is required to inform the liable
employer of the contents of the notice within 3 working days, and may give the liable
employer information about the employee that is relevant to the injury.
101. New subsection 53(2B) deals with the situation where notice is given to the liable
employer that is not the relevant authority. The liable employer is required to inform the
relevant authority of the contents of the notice within 3 working days, and may give the
relevant authority information about the employee that is relevant to the injury.
102. New subsection 53(2C) deems a provisional medical expense payment request to a
relevant authority - see amendments made in Schedule 4 to the Bill - to be a notice of the
injury provided to the relevant authority under subsection 53(1) of the Act.
103. New subsection 53(4) deems written notice to have been given to a liable employer
under subsection 53(1) in certain situations, including where a notice fails to comply with the
requirements of section 53 because of a mistake, ignorance or any reasonable cause.
Item 74 - Subsection 54(4)
104. This item inserts a new subsection 54(4A) that deals with the situation where a claim
for compensation is given to a relevant authority that is not the liable employer. In this case,
the relevant authority must give a copy of the claim to the liable employer together with any
information about the employee that is relevant to the claim.
Item 75 - Subsection 57(1)
Item 76 - At the end of section 57
105. These items amend section 57 of the Act which empowers a relevant authority to
require a claimant to undergo a medical examination.
106. Item 75 substitutes new subsection 57(1) to enable the relevant authority to require an
injured employee to undergo an examination by a nominated medical practitioner or other
suitably qualified person, or a nominated panel. Subsection 57(1) currently empowers the
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Amendments ~ Schedule 2
relevant authority to require an injured employee to undergo an examination by a nominated
medical practitioner only.
107. Item 76 inserts new subsections 57(7) and 57(8). New subsection 57(7) empowers the
relevant authority to require an employee to undergo an examination in order to assist the
liable employer to make a decision about a workplace rehabilitation plan for the employee.
New subsection 57(8) makes it clear that this does not limit the circumstances in which the
relevant authority may require an examination.
Item 77 - After section 57
New section 57A - Report of medical examination etc.
108. This item inserts a new section 57A requiring the person or persons who conducted an
examination under section 57 of the Act to provide a report of the examination to the relevant
authority. The relevant authority may provide a copy of the report to the liable employer who
may then use the report for the purposes of performing the liable employer functions under
Part III of the Act.
Item 78 - Subsection 60(1) (definition of determination)
Item 79 - Subsection 60(1) (definition of determination)
Item 80 - Subsection 60(1) (definition of reviewable decision)
Item 81 - At the end of section 60
109. These items amend section 60 of the Act to provide that the employee`s responsibilities
and the obligations of a liable employer under a workplace rehabilitation plan are not
reviewable under the Act. The formulation (and any variation of) a workplace rehabilitation
plan will be reviewable. In practice this means that the objectives of a workplace
rehabilitation plan will be reviewable. However, review of the content of a rehabilitation plan
is considered inappropriate for the following reasons:
the content of rehabilitation plans are developed in consultation with the employee and
their medical professionals; and
review would frustrate the purpose of these provisions which is to promote compliance
with rehabilitation plans rather than arguments regarding particular employee
responsibilities and obligations of a liable employer.
Item 82 - Paragraph 69(b)
Item 83 - Paragraph 69(f)
110. These items amend Comcare`s functions in section 69 of the Act to reflect the
amendments made by Schedule 2 to the Bill.
111. Item 82 repeals paragraph 69(b), as these functions are now conferred on Comcare
under new Division 2A and 2B of Part III of the Act (see item 50 above).
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Amendments ~ Schedule 2
112. Item 83 substitutes new paragraph 69(f) to empower Comcare to take steps directed
towards ensuring that each liable employer is complying with the liable employer`s
obligations under Part III.
Item 84 - Before section 71
New section 70D - Comcare Incentive Scheme for Employers
113. This item inserts a new section 70D to empower Comcare to formulate the Comcare
Incentive Scheme for Employers to provide financial incentives to employers to provide
suitable employment for employees who have suffered an injury, are unemployed and
seeking paid work. This allows Comcare to provide financial incentives authorised by
subsection 51(xxiiiA) of the Constitution. The Scheme will be a legislative instrument for the
purposes of the Legislative Instruments Act 2003.
Item 85 - Before section 122
New section 121C - Variation or revocation of instruments
114. This item inserts a new section 121C dealing with the variation or revocation of
instruments. This is a technical amendment that ensures that subsection 33(3) of the Acts
Interpretation Act 1901 - which provides that a power to make an instrument includes a
power to vary or revoke that instrument - continues to operate despite the inclusion of
express provisions dealing with the variation or revocation of instruments.
Seafarers Rehabilitation and Compensation Act 1992
Item 86 - Section 48 (definition of approved program provider)
115. This item substitutes a new definition of approved program provider` into the
Seafarers Rehabilitation and Compensation Act 1992. The effect of this amendment is to
align terminology used in both Acts.
Part 2 - Amendments contingent on the commencement of Schedule 2 to the Safety,
Rehabilitation and Compensation Legislation Amendment Act 2015
Safety, Rehabilitation and Compensation Act 1988
Item 87 - After subsection 35E(1)
116. This item amends new section 35E (see item 50) by inserting new subsection 35E(1A)
to enable the delegation of liable employer powers (including powers under a workplace
rehabilitation plan) by corporations covered by a group employer licence.
Part 3 - Amendments contingent on the commencement of Part 1 of Schedule 1 to the
Safety, Rehabilitation and Compensation Legislation Amendment (Exit Arrangements) Act
2015
117. Part 3 of Schedule 2 to the Bill makes consequential amendments to provisions to be
inserted by the Exit Arrangements Bill currently before Parliament.
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Amendments ~ Schedule 2
118. The Exit Arrangements Bill will amend the Act to provide for financial and other
arrangements for a Commonwealth authority to exit the Comcare scheme. The framework
will:
enable Comcare to determine and collect exit contributions` from former
Commonwealth authorities and successors of former Commonwealth authorities to
ensure that an exited employer does not leave the Comcare scheme without
contributing an appropriate amount to cover any current or prospective liabilities that
are not funded by premiums the employer has paid before exit; and
ensure that employees injured before the employer`s exit continue to be supported by
an appropriate rehabilitation authority.
119. The consequential amendments in Schedule 2 to the Bill retain the approach in the Exit
Arrangements Bill as far as possible but make appropriate amendments. For example the
concept of rehabilitation authority in relevant sections is replaced with concept of liable
employer.
Safety, Rehabilitation and Compensation Act 1988
Item 88 - Subsection 4(1) (at the end of the definition of liable employer)
120. This item amends the definition of liable employer` inserted by item 6 (see above) as a
consequence of the amendments made by items 92, 93, and 94 (see below).
Item 89 - At the end of paragraph 35A(d)
Item 90 - At the end of paragraph 35A(d)
121. These items amend new section 35A (inserted by item 50 above) by including a
reference to new section 41C.
Item 91 - After paragraph 35H(1)(a)
122. This item amends new section 35H (inserted by item 50 above) by including references
to new sections 41B, 41C and 41D. The effect of this amendment is that the safeguards in
new section 35H against a possible acquisition of property will also apply to the operation of
those sections.
Item 92 - Section 41B
Item 93 - Section 41B
Item 94 - Paragraphs 41B(d) and (e)
Item 95 - At the end of section 41B
123. These items amend new section 41B which will be inserted by the Exit Arrangements
Bill and apply when a Commonwealth authority ceases to be covered by the Comcare scheme
but continues in existence.
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Amendments ~ Schedule 2
124. Items 92, 93 and 94 amend new section 41B to provide that the principal officer of the
former Commonwealth authority is deemed to be the liable employer of an employee who
was injured before the employer exited the Comcare scheme.
125. Item 95 inserts a new subsection 41B(2) to provide that, for the purposes of this section,
the principal officer of a body corporate is the principal executive officer of the body
corporate.
Item 96 - Subsection 41C(1)
Item 97 - Paragraphs 41C(1)(e) and (f)
Item 98 - Subsection 41C(2)
Item 99 - Paragraphs 41C(2)(f) and (g)
Item 100 - At the end of section 41C
126. These items amend new section 41C which will be inserted by the Exit Arrangements
Bill and apply when a Commonwealth authority ceases to exist.
127. Items 96, 97, 98 and 99 amend new section 41C to identify the principal officer of a
successor, or another appropriate body, as the liable employer for an employee of the former
Commonwealth authority who was injured before the Commonwealth authority ceased to
exist.
128. Item 100 inserts a new subsection 41C(3) to provide that, for the purposes of this
section, the principal officer of a body corporate who is not a Commonwealth authority or a
licensed corporation is the principal executive officer of the body corporate.
Item 101 - Section 41D
Item 102 - Paragraphs 41D(c) and (d)
129. These items amend new section 41D which will be inserted by the Exit Arrangements
Bill and apply if the Australian Capital Territory ceases to be a Commonwealth authority.
These items amend section 41D to identify the principal officer of the Australian Capital
Territory as the liable employer for employees who were injured before the Australian
Capital Territory exited the Comcare scheme.
Part 4 - Application and transitional provisions
Item 103 - Application of amendments
130. This item provides that the amendments made by Schedule 2 to the Bill apply to an
employee who sustained an injury before, at or after commencement of this item. This will
enable a liable employer to formulate a workplace rehabilitation plan in respect of a current
recipient of compensation. It will also enable a relevant authority to require a current
recipient of compensation to undergo a work readiness assessment or a medical examination.
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Amendments ~ Schedule 2
Item 104 - Transitional - formal notification of an injury
131. This item deems the notification of an injury under section 53 of the Act prior to
commencement of this item to comply with the formal notification requirements of new
section 36C of the Act (see item 52. This will enable a liable employer to assume
responsibility under amended Part III of the Act for the rehabilitation of employees injured
prior to commencement of this item and to consider the need for a workplace rehabilitation
plan in respect of those employees.
Item 105 - Transitional - rehabilitation programs
132. This item provides that, despite the repeal of section 37 of the Act, a rehabilitation
program determined prior to commencement of this item continues in force as if it were a
workplace rehabilitation plan formulated under new section 36F (see item 52).
Item 106 - Transitional - approval of person or body as a workplace rehabilitation
provider
Item 107 - Transitional - renewal of approval of a person or body as a workplace
rehabilitation provider
133. These items provide that persons or bodies approved as rehabilitation program
providers prior to the commencement of this item are taken to be approved workplace
rehabilitation providers after commencement of this item.
Item 108 - Transitional - exempt authority
134. This item provides that exempt authorities declared under section 35 of the Act prior to
the commencement of this item are taken to be exempt authorities declared under section 38A
of the Act after commencement of this item.
Item 109 - Transitional - medical examination
135. This item provides that a requirement to undergo a medical examination under
subsection 57(1) of the Act given before commencement of this item continues to apply
notwithstanding the repeal of that section.
Item 110 - Transitional rules
136. This item empowers the Minister to make rules in relation to transitional matters arising
out of the amendments and repeals made by Part 1 of Schedule 2 to the Bill. The rules will be
a legislative instrument for the purposes of the Legislative Instruments Act 2003.
137. Subitem 110(2) limits the matters that may be dealt with in the transitional rules.
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Amendments ~ Schedule 3
SCHEDULE 3 - SCHEME INTEGRITY
Overview
138. Schedule 3 to the Bill amends the Act to improve the integrity of the Comcare scheme,
as recommended by the Review. In particular, the amendments:
require third parties to indemnify compensation payers under the Act in circumstances
that give rise to both an obligation to pay compensation under the Act and a liability on
the part of the third party to pay damages (recommendation 10.1 of the Review) or
State compensation;
provide more timely and responsive services and support for injured employees by
requiring employers to forward claims to Comcare within 3 days of receipt
(recommendation 9.2 of the Review) and specifying time limits in relation to the
determination of compensation claims (recommendation 9.3 of the Review) and the
reconsideration of claims (recommendation 9.6 of the Review);
improve a relevant authority`s information gathering powers in relation to both a claim
for compensation and the ongoing management of that claim (recommendation 9.17 of
the Review) and impose a general obligation on claimants to notify their relevant
authority of any change to the employee`s circumstances (recommendation 9.18 of the
Review);
require licensees (and a relevant authority for a group employer licence) to notify
Comcare of any proceedings they commence under the Act and empower Comcare to
request documents relevant to any proceedings brought against, or instituted by, a
licensee (or a relevant authority for a group employer licence);
require licensees (and corporations covered by a group employer licence) to comply
with applicable Commonwealth, State and Territory laws with respect to the safety,
health and rehabilitation of workers;
enable Comcare to pay compensation for detriment caused by defective administration
(recommendation 9.20 of the Review); and
enable Comcare to recover overpayments of compensation that have been made to an
employer by Comcare (recommendation 9.19 of the Review).
Commencement
139. The amendments in Part 1 of Schedule 3 to the Bill commence on the day after Royal
Assent.
140. The amendments in Part 2 of Schedule 3 to the Bill commence immediately after the
day after Royal Assent or immediately after the commencement of Schedule 2 to the Safety,
Rehabilitation and Compensation Legislation Amendment Act 2015, whichever is the later.
Part 3 of Schedule 3 to the Bill commences on the day of after Royal Assent.
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Amendments ~ Schedule 3
Part 1 - General Amendments
Administrative Decisions (Judicial Review) Act 1977
Item 1 - After paragraph (hf) of Schedule 1
141. This item amends Schedule 1 to the Administrative Decisions (Judicial Review) Act
1977 to provide that decisions under new section 70C of the Act are not subject to review
under that Act.
142. New section 70C of the Act provides that Comcare can pay compensation for detriment
caused by defective administration. This provision replicates, in statutory form, the Scheme
for Compensation for Detriment caused by Defective Administration (the CDDA scheme)
which is generally available to non-corporate Commonwealth entities under the Public
Governance, Performance and Accountability Act 2013. The CDDA scheme is an
administrative scheme that provides Commonwealth authorities with discretionary authority
to compensate individuals or bodies that have suffered loss or damage as a result of defective
administration and who cannot be compensated through other avenues, such as the settlement
of a legal claim. Decisions to compensate under the CDDA scheme are approved on the basis
that there is a moral as distinct from a legal obligation to pay compensation to a claimant. The
CDDA scheme is discretionary and permissive, and does not oblige the decision-maker to
approve a payment in any particular case.
143. The amendment places Comcare in the same position as other non-corporate
Commonwealth entities. As decisions under the CDDA scheme are not subject to review
under the Administrative Decisions (Judicial Review) Act 1977, it would be anomalous to
provide for judicial review of Comcare`s decisions under a CDDA-like scheme.
144. In its report Putting Things Right: Compensating for Defective Administration`
(August 2009) the Commonwealth Ombudsman set out the following reasons why review of
decisions under the CDDA scheme (and, by necessary implication, a CDDA-like scheme
such as that established by new section 70C) by a tribunal or court may not be appropriate:
a court or tribunal might interpret the CDDA criteria more expansively and be more
generous in awarding compensation, resulting in unpredictable and inflationary costs to
government;
the spirit of legalism and legal doctrine in a court or tribunal would blur the current
distinction between moral` and legal` obligation that is central to the CDDA scheme;
and
the CDDA scheme could become mired in adversarial disputes and legal principles,
which are fundamentally inconsistent with the purpose of the scheme as an avenue of
last resort.
145. As is the case with decisions under the CDDA scheme, Comcare`s decisions under the
proposed amendments will be reviewable by the Commonwealth Ombudsman and may be
subject to judicial review under section 75 of the Constitution or section 39B(1) of the
Judiciary Act 1903, noting the limitations of judicial review of decisions made under a
scheme that does not impose legal duties on decision-makers.
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Amendments ~ Schedule 3
Safety, Rehabilitation and Compensation Act 1988
Item 2 - Subsections 4(10) and (10A)
146. This item makes technical amendments to subsections 4(10) and 4(10A) as a
consequence of the amendments to section 114 (see item 24 below). The amendments ensure
that only Comcare can recover overpayments of compensation that have been made to an
employer by Comcare.
Item 3 - After section 50
New section 50A - Indemnification by third parties
147. This item inserts a new section 50A, which replaces current section 51 of the Act with a
broader statutory indemnification provision by requiring third parties to indemnify
compensation payers under the Act in circumstances that give rise to both an obligation to
pay compensation under the Act and an undischarged liability on the part of the third party
(or parties) to pay damages (recommendation 10.1 of the Review) or State compensation.
148. Under current section 50 of the Act, a compensation payer can only recover damages
from a liable third party where the injured employee (or a dependant) can recover damages.
In other words, it is the employee`s (or dependant`s) right to recover which defines the right
of recovery of Comcare and licensees.
149. New subsection 50A(2) requires a liable third party (or parties) to indemnify the
compensation payer under the Act, thereby enabling the compensation payer to recover some
or all of the compensation paid in respect of the injury, loss or damage directly from the
liable third party (or parties) rather than by subrogation of an employee`s (or dependant`s)
right to recovery. The entitlement to be indemnified may arise on more than one occasion, for
example, where a compensation payer makes further compensation payments under the Act
for incapacity or permanent impairment or the employee dies and compensation is paid to the
employee`s dependants.
150. New subsection 50A(3) provides that where a payment is made under the indemnity
before the employee has obtained a judgment or an award, the payment is, to the extent of the
amount of the payment, a discharge of the liability of the third party (or parties) to pay
damages or State compensation, as the case may be, to the employee (or the dependant), in
respect of the injury, loss or damage.
151. New subsection 50A(4) provides that where a payment is made under the indemnity
after the employee has obtained a judgment or an award, the payment, to the extent of the
amount of the payment, satisfies the judgment or award.
152. New subsections 50A(5) and (6) provide that if a payment is made under the indemnity
and, at the time of the payment, the employee (or the dependant) is liable to pay an amount to
Comcare due to the operation of section 48, 49 or 119 of the Act in respect of the injury, loss
or damage, the payment under the indemnity, to the extent of the amount of the payment,
satisfies that liability of the employee (or the dependant).
153. New subsections 50A(7) and (8) confirm that new section 50A only has effect to the
extent to which it is authorised by a constitutional head of power.
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154. New subsection 50A(9) inserts a new definition, for the purpose of section 50A, for
award` and provides that the term State compensation` has the same meaning as in
section 119 of the Act. The term damages` is also used in new section 50A. It is defined in
subsection 4(1) of the Act to include any amount paid under a compromise or settlement of a
claim for damages, whether or not legal proceedings have been instituted, but does not
include an amount paid in respect of costs incurred in connection with legal proceedings`.
Illustrative example
Alex works for a licensed corporation. Alex is directed to meet with a client for the purposes
of his employment and to travel to the meeting in a company vehicle. Whilst stationary at
traffic lights, another vehicle collides with the rear of the company vehicle causing Alex to
suffer a serious neck injury. The accident is reported to police and Alex is treated in hospital
for several days.
Alex submits a claim for workers` compensation and a claim for compensation with the other
driver`s compulsory third party insurer. Both the relevant authority and the other driver`s
insurer accept liability for Alex`s injury. Alex decides to pursue his claim under the Act and
the relevant authority pays compensation to Alex for incapacity, permanent impairment and
medical treatment expenses, totalling $30,000.
Since compensation is payable under the Act in respect of Alex`s injury, and the injury
occurred in circumstances that create an undischarged legal liability in a third party, the
relevant authority is entitled to be indemnified by the third party and/or the third party`s
insurer. Under the relevant State compensation scheme, Alex is entitled to no-fault
compensation of up to $5000, after which a claim for damages must be pursued for further
amounts to be paid. Accordingly, the third party insurer is liable to pay $5000 to the relevant
authority.
The relevant authority writes to Alex to enquire whether he intends to pursue a claim for
damages against the other driver. The relevant authority also advises Alex that it will make a
claim for damages against the other driver under section 50 of the Act if Alex decides not to
pursue such a claim.
Alex subsequently decides to pursue a claim for damages against the other driver and notifies
the relevant authority of the claim in accordance with the obligation in section 46 of the Act.
The relevant authority writes to the other driver`s insurer to confirm that it will be entitled to
further indemnification of up to $25,000 (the balance of the compensation it has paid to Alex
under the Act) if liability to pay damages is accepted or judgment for damages is obtained
against the other driver. The other driver`s insurer subsequently agrees to settle the claim for
damages and pay an amount of $100,000 plus costs, less the amount of $5,000 already paid in
respect of the indemnity. At the time of the settlement:
the other party`s insurer is liable to pay the relevant authority $25,000 in accordance
with new section 50A of the Act;
the other party`s insurer is liable to pay $70,000 plus costs to Alex in accordance with
the settlement agreement; and
Alex`s liability to pay $30,000 to the relevant authority under section 48 of the Act is
discharged by the payments made by the other driver`s insurer in accordance with new
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section 50A.
Compensation ceases to be payable under the Act in respect of the injury after the amount of
$70,000 is paid to Alex in accordance with sections 10 and 48 of the Act.
Item 4 - Section 51
155. This item repeals section 51 of the Act as a consequence of the enactment of new
section 50A (see item 3 above).
Item 5 - At the end of section 54
156. This item adds new subsection 54(6) which provides that when an employee gives a
claim for compensation to his or her employer on the understanding that the employer will
forward that claim to Comcare, the employer must ensure the claim is given to Comcare
within 3 working days after the day on which the claim was received.
157. Section 54 of the Act provides compensation is not payable to a person under the Act
unless a claim for compensation is made, and that the claim must be given to the relevant
authority. In the case of Commonwealth employees, the relevant authority is Comcare. The
claim form contains sections that must be completed by both the injured employee and the
employer. In practice, injured employees typically give their claim to their employer who
then completes the employer information section before forwarding the claim to Comcare.
The amendment imposes a timeframe on employers to forward claims to Comcare to avoid
unnecessary delays in the determination of claims.
158. This item does not have any effect on employees of licensees.
159. This amendment gives effect to recommendation 9.2 of the Review.
Item 6 - Section 58
160. This item substitutes a new section 58 and inserts new section 58A which enhance a
relevant authority`s information gathering powers.
161. Currently, relevant authorities can request information from claimants under section 58
of the Act and from employers under section 71 of the Act. Different time frames apply to
these requests: section 58 of the Act requires a claimant to provide information within 28
days while section 71 of the Act requires employers to provide information within a specified
period. Relevant authorities cannot request information or documents that are relevant to a
claim from third parties.
New section 58 - Relevant authority may obtain information or documents from claimant
162. New section 58 enables a relevant authority to request a claimant to provide
information or documents relevant to the claim within a specified period not less than 14
days. This aligns the time frames with those in section 71 of the Act.
163. New section 29T (see item 14 of Schedule 15 to the Bill) provides that an employee`s
refusal or failure, without reasonable excuse, to comply with a notice under new subsection
58(1) is a breach of an obligation of mutuality. Breaches of obligations of mutuality are
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subject to the sanctions regime in new Subdivision B of Division 5A of Part II of the Act and
may result in the cancellation of compensation rights (see item 14 of Schedule 15 to the Bill).
New section 58A - Relevant authority may obtain information or documents from third party
164. New section 58A enables a relevant authority to request a third party to provide
information or documents relevant to a claim within a specified period not less than 14 days.
A third party may, but is not required to, comply with the request and may be paid for
compliance.
165. These provisions only apply to compensation claims prior to their determination. New
sections 120A and 120B (see item 26 below) contain similar provisions in relation to the
administration of liabilities under the Act, that is, after a compensation claim has been
determined and liability accepted.
166. These amendments give effect to recommendation 9.17 of the Review.
Item 7 - Subsection 60(1) (at the end of the definition of reviewable decision)
167. This item inserts a note which draws the reader`s attention to new subsection 64(2) -
see item 11 - which allows the parties to a review to agree to related matters being co-joined
in AAT proceedings.
Item 8 - Subsection 61(1A)
168. This item repeals subsection 61(1A) and inserts new subsections 61(1A) to (1D) which
specify time limits in relation to the determination of liability under section 14 of the Act in
respect of claims for compensation.
169. Currently, subsection 61(1A) of the Act allows time limits for the determination of
liability under section 14 to be set by regulation; however, to date no regulation has been
made. New subsections 61(1A) to (1D) specify the following statutory time limits:
liability for any injury that is not a disease or a designated injury, or an aggravation of a
designated injury, must be determined within 30 days; and
liability for any injury that is a disease or designated injury, or an aggravation of a
designated injury, must be determined within 70 days.
170. Any claim for compensation in respect of which liability is not determined within these
time limits is taken to have been rejected at the end of the specified time limit. The benefit of
a deemed rejection is that it provides certainty and then immediate access to the next
decision-making layer, that is, reconsideration.
171. These amendments give effect to recommendation 9.3 of the Review.
Item 9 - Subsection 61(2)
172. The effect of this amendment to subsection 61(2) of the Act is to provide that a
determining authority is not required to make a written determination in relation to the full
amount of the payment of medical costs under subsection 16(1) of the Act.
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Item 10 - Subsection 62(6)
173. This item repeals subsection 62(6) of the Act and inserts new subsections 62(6) and
62(6A) which specify time limits in relation to the reconsideration of compensation claims.
174. Currently, subsection 62(6) of the Act allows time limits for the reconsideration of
claims to be set by regulation; however, to date no regulation has been made. New
subsections 62(6) and 62(6A) specify that a reconsideration must be made within 60 days.
175. A reconsideration that is not made within this time limit is taken to have affirmed the
original determination at the end of the specified time limit. The benefit of a deemed rejection
is that it provides certainty and then immediate access to the next decision-making layer, that
is, review by the AAT.
176. These amendments give effect to recommendation 9.6 of the Review.
Item 11 - After subsection 64(1)
177. This item inserts new subsection 64(2) which provides that where an application has
been made to the AAT for review of a reviewable decision (the first application), the parties
to the review may agree, in writing, that a specified determination should be treated as a
reviewable decision if the determination and reviewable decision relate to the same
employee, and directly or indirectly relate to either the same issue or the same incident or
state of affairs. An application to the AAT for review of the deemed reviewable decision (the
second application) is taken to have been made on the day on which the applicant lodged the
agreement with the AAT. The AAT may then deal with the first and second applications
together.
Item 12 - After section 70B
New section 70C - Compensation for detriment caused by defective administration
178. This item inserts new section 70C that provides that Comcare can make, but is not
required to make, payments for detriment caused by defective administration in connection
with the payment of compensation under its claims management functions or powers. In
making payments under this section Comcare must comply with principles determined by the
Minister. The Ministerial principles will be a legislative instrument for the purposes of the
Legislative Instruments Act 2003. Comcare will be required to include particulars of each
payment made under this section in its annual report.
179. This provision, and the Ministerial principles, replicate, in statutory form, the Scheme
for Compensation for Detriment caused by Defective Administration (the CDDA scheme)
which is generally available to non-corporate Commonwealth entities under the Public
Governance, Performance and Accountability Act 2013. The CDDA scheme is an
administrative scheme established under the executive power of the Commonwealth.
However, it does not currently apply to Comcare because the Act provides a comprehensive
regime in relation to the payment of compensation. As a result, Comcare currently has no
means of lawfully making discretionary payments to people who have suffered detriment due
to defective administration on Comcare`s part. The amendment places Comcare in the same
position as other non-corporate Commonwealth entities.
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180. This amendment gives effect to recommendation 9.20 of the Review.
Item 13 - Section 71 (heading)
Item 14 - Subsection 71(1)
181. These items make technical amendments which clarify that Comcare may obtain
information from licensed corporations as well as Entities and Commonwealth authorities.
This corrects an error in the current provision.
Item 15 - Section 99
182. This item inserts a new definition of worker` into section 99 of the Act. That term will
have the same meaning as in the Work Health and Safety Act 2011.
Item 16 - Paragraph 104(2)(d)
Item 17 - Paragraph 104(2A)(a)
Item 18 - Paragraph 104(2A)(a)
Item 19 - At the end of section 104
183. These items amend section 104 of the Act which deals with decisions by the
Commission to grant self-insurance licences to Commonwealth authorities and eligible
corporations. The amendments replace references to occupational health and safety` with
work health and safety` and references to employees` with workers`. These amendments
align terminology in the Act with the Work Health and Safety Act 2011.
Item 20 - After subsection 108C(8)
Item 21 - Subsection 108C(9)
Item 22 - At the end of section 108C
184. These items amend section 108C of the Act to require licensees to notify Comcare of
any proceedings they commence under the Act.
185. Section 108C of the Act currently requires licensees to inform Comcare when legal
proceedings are brought against them and entitles Comcare to be joined as a party to these
proceedings. Comcare uses these provisions, together with licence conditions, to ensure that
proceedings involving licensees do not establish precedents which undermine the integrity of
the Comcare scheme as a whole.
186. However, there is currently no obligation on licensees to inform Comcare of when they
bring proceedings themselves. As such, Comcare may not be informed of these proceedings
and may not be able to intervene. New subsection 108C(8A) requires licensees to notify
Comcare of any proceedings they commence and entitles Comcare to be joined as a party to
those proceedings.
187. New subsection 108C(11) empowers Comcare to request documents relevant to any
proceedings brought against, or instituted by, a licensee.
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Item 23 - paragraph 108D(1)(e)
188. This item amends paragraph 108D(1)(e) to require a licensee to comply with applicable
Commonwealth, State and Territory laws with respect to the safety, health and rehabilitation
of workers.
Item 24 - At the end of section 114
189. This item adds new subsections 114(3) and (4) which enable Comcare to recover
overpayments of compensation that have been made to an employer by Comcare.
190. Section 114 of the Act provides Comcare with powers to recover amounts of
compensation from a person who has received compensation:
that has been paid because of a false or misleading statement or representation or a
failure or omission to comply with a provision of the Act; or
that should not have been paid.
191. Sections 23A, 112A and 112B of the Act facilitate payments by Comcare to employers
for the benefit of an injured employee. These provisions were introduced in 2005 by the
Financial Framework Legislation Amendment Act (No. 2) 2005 to provide legislative
authorisation for the existing administrative practice of employers paying compensation on
behalf of Comcare.
192. While the 2005 amendments facilitated payments by Comcare to employers for the
benefit of an injured employee, no provision was made for amounts to be returned to
Comcare where a payment (or part payment) is made in error. In practice, this is an issue for
departments and agencies subject to the Public Governance, Performance and Accountability
Act 2013 because there is no apparent legislative authority to return amounts that have been
overpaid.
193. New subsection 114(3) requires an employer who receives an overpayment from
Comcare pursuant to sections 23A, 112A or 112B of the Act to repay the amount to Comcare.
194. New subsection 114(4) provides that where an employer has paid a corresponding
equal amount to an employee, the employee must repay that amount to the employer.
195. This amendment gives effect to recommendation 9.19 of the Review.
Item 25 - After section 119
New section 119A - Notification of change of circumstances
196. This item inserts a new section 119A that imposes a general obligation on claimants to
notify their relevant authority of any change to the employee`s circumstances.
197. The Act creates limited obligations on claimants to provide information to their
relevant authority:
sections 46 and 47 of the Act require employees and dependants to notify Comcare of
any common law claims;
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section 48 of the Act requires employees and dependants to notify Comcare of any
damages recovered; and
section 120 of the Act requires certain employees to notify their relevant authority if
they leave Australia.
198. Each of these requirements is supported by an offence of strict liability.
199. In addition to these sections, section 58 of the Act requires claimants to comply with a
request for information.
200. Where a legal duty exists to provide information, an omission to provide that
information which results in the overpayment of compensation will constitute an offence
against the Criminal Code. However, there is no general obligation under the Act for
claimants to notify their relevant authority of changes in circumstances which alter the
claimant`s entitlement to compensation, in particular, where the claimant`s employment
status changes. Consequently, it is difficult to identify criminal conduct which could form the
basis of a charge under the Criminal Code where an individual has dishonestly withheld
information that affected their eligibility for compensation: see Commonwealth Director of
Public Prosecutions v Poniatowska [2011] HCA 43; (2011) 244 CLR 408.
201. New section 119A imposes such an obligation.
202. This amendment gives effect to recommendation 9.18 of the Review.
Item 26 - Before section 121A
203. This item inserts new sections 120A and 120B which enhance a relevant authority`s
information gathering powers. These provisions complement new sections 58 and 58A (see
item 6 above) by enabling a relevant authority to obtain information or documents from an
employee or a third party in relation to the administration of liabilities under the Act, that is,
after a compensation claim has been determined and liability accepted.
New section 120A - Relevant authority may obtain information or documents from employee
204. New section 120A enables a relevant authority to request a claimant to provide
information or documents relevant to the payment of compensation within a specified period
not less than 14 days.
205. New section 29T (see item 14 of Schedule 15 to the Bill) provides that an employee`s
refusal or failure, without reasonable excuse, to comply with a notice under new subsection
120A(1) is a breach of an obligation of mutuality. Breaches of obligations of mutuality are
subject to the sanctions regime in new Subdivision B of Division 5A of Part II of the Act and
may result in the cancellation of compensation rights (see item 14 of Schedule 15 to the Bill).
206. New section 120B enables a relevant authority to request a third party to provide
information or documents relevant to the payment of compensation within a specified period
not less than 14 days. A third party may, but is not required to, comply with the request and
may be paid for compliance.
207. These amendments give effect to recommendation 9.17 of the Review with some
modifications.
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Part 2 - Amendments contingent on the commencement of Schedule 2 to the Safety,
Rehabilitation and Compensation Legislation Amendment Act 2015
Safety, Rehabilitation and Compensation Act 1988
Item 27 Paragraph 107D(4)(e)
Item 28 - Paragraph 107D(4)(e)
Item 29 - Subsection 107D(7)
Item 30 - Subsection 107D(7)
Item 31 - At the end of section 107D
208. These items amend section 107D of the Act. Section 107D - which will be inserted into
the Act by the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2015
currently before Parliament - deals with decisions by the Commission to grant group
employer licences. The amendments replace references to occupational health and safety`
with work health and safety` and references to employees` with workers`.
Item 32 - Paragraph 108C(8A)(a)
Item 33 - Paragraphs 108C(8A)(b), (c) and (d)
Item 34 - Subparagraphs 108C(11)(a)(i) and (ii)
Item 35 - Paragraphs 108C(11)(b) and (c)
Item 36 - Subsection 108C(11)
209. These items amend section 108C of the Act to replace references to licensee` with
references to the licence holder of a single employer licence`. These amendments are
consequential on amendments that will be made by the Safety, Rehabilitation and
Compensation Legislation Amendment Bill 2014 currently before the Parliament.
Item 37 - After subsection 108CB(4)
Item 38 - Subsection 108CB(5)
Item 39 - At the end of section 108CB
210. These items amend section 108CB of the Act to require a relevant authority for a group
employer licence to notify Comcare of any proceedings the relevant authority may commence
under the Act.
211. Section 108CB - which will be inserted into the Act by the Safety, Rehabilitation and
Compensation Legislation Amendment Bill 2015 currently before Parliament - deals with the
management of claims by a relevant authority for a group employer licence. As currently
drafted, section 108CB of the Act requires a relevant authority to inform Comcare when legal
proceedings are brought against them and entitles Comcare to be joined as a party to these
proceedings. It is intended that Comcare use these provisions, together with group licence
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conditions, to ensure that proceedings involving group licensees do not establish precedents
which undermine the integrity of the Comcare scheme as a whole.
212. However, there is currently no obligation on group licensees to inform Comcare of
when they bring proceedings themselves. As such, Comcare may not be informed of these
proceedings and may not be able to intervene. New subsection 108CB(4A) requires licensees
to notify Comcare of any proceedings they commence and entitles Comcare to be joined as a
party to those proceedings.
213. New subsection 108CB(7) empowers Comcare to request documents relevant to any
proceedings brought against, or instituted by, a group licensee.
Item 40 - Paragraph 108DA(2)(e)
214. This item amends paragraph 108DA(2)(e) of the Act - which will be inserted into the
Act by the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2015
currently before Parliament - to require each corporation covered by a group employer
licence to comply with applicable Commonwealth, State and Territory laws with respect to
the safety, health and rehabilitation of workers.
Item 41 - Transitional - licences
215. This item:
provides that the amendments made by this Part apply to licensing decisions under
section 107D of the Act;
provides for the continuity of licence conditions notwithstanding amendments to
paragraph 108DA(2)(e) of the Act made by item 40 above; and
empowers the Commission to vary a licence condition in order to comply with the
amendments.
Part 3 - General application and transitional provisions
Item 42 - Application of amendments
216. This item provides for the application of the amendments made in Part 1 of Schedule 3
to the Bill. In general, the amendments will apply to events occurring after commencement.
Item 43 - Transitional - damages
217. This item provides that, despite the repeal of section 51 of the Act (see item 4 above), a
notice given under that provision before commencement continues to apply.
Item 44 - Transitional - provision of information
218. This item provides that, despite the repeal of section 58 of the Act (see item 6 above),
an information request made under that provision before commencement continues to apply.
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Item 45 - Transitional - licence condition
219. This item provides for the continuity of licence conditions notwithstanding
amendments to paragraph 108D(1)(e) of the Act made by item 23 above.
220. This item also empowers the Commission to vary a licence condition in order to
comply with the amendments.
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SCHEDULE 4 - PROVISIONAL MEDICAL EXPENSE PAYMENTS
Overview
221. Schedule 4 to the Bill amends the Act to enable a relevant authority to make provisional
medical expense payments (capped at $5000 and indexed annually) in respect of an alleged
injury before a claim for compensation is determined. This will allow injured employees to
obtain medical treatment in the critical early stages of an injury.
222. This amendment gives partial effect to recommendation 6.2 of the Review.
Commencement
223. The amendments in Schedule 4 to the Bill commence on a day to be fixed by
Proclamation, but no later than 12 months after Royal Assent. The extended period for
Proclamation is necessary to enable Comcare and licensees to establish systems and
processes to enable them to make provisional medical expense payments.
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
224. This item inserts a number of definitions of terms used in new Part IVA (see item 2
below).
Item 2 - Subsections 4(10) and (10A)
225. These items make technical amendments to subsections 4(10) and (10A) as a
consequence of new Part IVA (see item 4 below). The amendments ensure that only Comcare
can approve forms requesting provisional medical expense payments.
Item 3 - Subsection 13(1) (definition of relevant amount)
226. This item amends the definition of relevant amount` in subsection 13(1) of the Act as a
consequence of amendments made by Schedule 3 to the Bill. The amendment ensures that the
$5000 cap on provisional medical expense payments is indexed annually.
Item 4 - Before Part V
227. This item inserts new Part IVA which will provide for provisional medical expense
payments in respect of an alleged injury to allow injured employees to access up to $5000 in
medical costs before his or her claim for compensation is determined by the relevant
authority. This amendment gives partial effect to recommendation 6.2 of the Review which
recommended provisional medical expense payments of up to $3000.
New Part IVA - Provisional medical expense payments
New section 52B - Simplified outline of this Part
228. New section 52B contains a simplified outline of Part IVA.
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New section 52C - Provisional medical expense payment request
229. New section 52C enables an employee (or a person acting on behalf of the employee) to
request a provisional medical expense payment in respect of costs incurred by the employee
in the medical treatment of an alleged injury. The request is to be given to the relevant
authority. If the request is given to an employer (other than a licensee or a corporation
covered by a group licence) on the understanding that the employer will give the request to
the relevant authority, the employer must do so within 2 working days.
230. Only one request under new section 52C need be made in respect of an injury; the
employee may then request payment for one or more items of medical treatment from the
relevant authority, and the employee will be deemed to have made those requests under new
section 52C.
New section 52D - Provisional medical expense payment
231. New section 52D provides that where a request is made within 40 working days after
the alleged injury was sustained the relevant authority is liable to pay medical expenses in
accordance with section 16 of the Act (as if the alleged injury was an injury) up to a
maximum of $5000 (indexed annually under section 13 of the Act). This cap applies to
medical treatment obtained for the injury and any associated injuries.
232. A relevant authority will not be liable to make a payment if:
the relevant authority refuses to do so within 7 working days after the request is made
on any of the reasonable grounds specified in new subsection 52D(7) - the reasonable
grounds exception; or
the claim is determined within 7 working days after the request is made.
233. If the relevant authority refuses to make a payment under the reasonable grounds
exception, the relevant authority must inform the employee in writing. New subsection
52D(8) specifies the requirements of the notice.
New section 52E - Notice of provisional medical expense payment
234. New section 52E provides that the relevant authority must notify the employee in
writing that a provisional medical expense is payable. The notice must also set out the effect
of new section 52F (that payment will be counted towards any compensation that later
becomes payable under section 16 of the Act after a claim is made and accepted), new section
52H (that the payment is not acceptance of a claim) and section 54 of the Act as amended (if
the person wishes to make a claim, that must be done under section 54).
New section 52F - Provisional medical expense payment discharges liability to pay
compensation
235. New section 52F provides that if a provisional medical expense payment is made, and
compensation subsequently becomes payable in respect of those costs, the payment is taken
to have discharged so much of the relevant authority`s liability to pay the total amount of the
compensation and the payment is not recoverable from the employee.
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New section 52G - Cost of medical treatment
236. New section 52G applies subsections 16(2) and (3) of the Act, and new subsections
16(3A), (3B) and (3C), to a provisional medical expense payment. That is, provisional
medical expense payments are subject to the same criteria as compensation for medical
treatment under subsection 16(1) of the Act.
New section 52H - Making a provisional medical expense payment does not constitute an
acceptance of a claim
237. New section 52H provides that the making of a provisional medical expense payment
does not constitute acceptance of a claim.
New section 52J - Certain documents to be supplied on request
238. New section 52J requires a relevant authority, when requested to do so, to provide
documents relating to provisional medical expense payment requests to:
the employee;
the Commonwealth or a Commonwealth authority; or
a licensed corporation.
New section 52K - Provisional medical expense payment to be treated as compensation for
certain purposes
239. New section 52K provides that a provisional medical expense payment is taken to be
compensation for specified purposes, that is, the provisions dealing with:
compensation not payable where damages recovered (section 48 of the Act);
common law claims against third parties (section 50 of the Act);
third party indemnities (new section 50A);
the use of Comcare-retained funds (section 90C of the Act); and
compensation payable under a State workers` compensation scheme (sections 118 and
119 of the Act).
Item 5 - Subsection 97A(2) (at the end of the definition of bonus amount)
Item 6 - Subsection 97A(2) (at the end of the definition of penalty amount)
Item 7 - Subsection 97A(3) (at the end of the definition of estimated liability component)
Item 8 - subsection 97A(3) (at the end of the definition of estimated management
component)
240. These items amend subsections 97A(2) and (3) of the Act so that Comcare must have
regard to the number of provisional medical expense payment requests made by employees of
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an employer and the amount of provisional medical expense payments paid to such
employees in determining the amount of the premium payable by that employer.
Item 9 - At the end of paragraph 114A(1)(a)
Item 10 - After paragraph 114(1)(a)
241. These items amend subsection 114(1) of the Act so that provisional medical expense
payments paid as a result of a false or misleading statement are recoverable by the relevant
authority from the person in a court of competent jurisdiction as a debt due to the relevant
authority.
Part 2 - Application and transitional provisions
Item 11 - Application of amendments
242. This item provides a provisional medical expense payment is available for injuries
sustained after the commencement of this item.
Item 12 - Transitional - indexation
243. This item ensures that indexation of the $5000 cap on a provisional medical expense
payment does not commence until at least 6 months after commencement.
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SCHEDULE 5 - MEDICAL EXPENSES
Overview
244. Schedule 5 to the Bill amends the Act to impose more rigorous requirements in relation
to determining the amount of compensation payable under section 16 of the Act in respect of
medical expenses incurred by an injured employee. In particular, the amendments:
require that medical treatment be carried out by, or under the supervision of, a
registered or accredited health practitioner and impose requirements in relation to
which medical practitioners can prescribe schedule 8 medicines (recommendations
7.21, 7.24-7.27 of the Review);
specify the matters that a relevant authority must have regard to in determining whether
medical treatment was reasonably obtained (recommendation 7.28 of the Review);
limit the amount of compensation payable by a relevant authority in respect of medical
treatment and medical examinations to the amounts specified in the medical services
table and the medical examination rates determination, respectively;
empower Comcare, by legislative instrument, to identify accredited healthcare
practitioners for the purposes of the Act;
enable Comcare to disclose information relating to medical treatment obtained in
relation to an injury suffered by an employee to a professional disciplinary authority;
and
enable legislative rules to empower Comcare to approve specified types of medical
treatment obtained by an employee outside Australia.
Commencement
245. The amendments in Part 1 and Division 2 of Part 2 of Schedule 5 to the Bill commence
on a day to be fixed by Proclamation, but no later than 12 months after Royal Assent. The
extended period for Proclamation is necessary to enable Comcare to make the Clinical
Framework Principles under new section 16A and the medical services table under new
section 16B.
246. The amendments in Division 1 of Part 2 of Schedule 5 to the Bill commence on the day
after Royal Assent. This will enable an injured employee to designate a medical practitioner
or a medical clinic under new section 54A (see item 9 below).
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
Item 2 - Subsection 4(1) (paragraph (b) of the definition of medical treatment)
Item 3 - Subsection 4(1) (paragraph (d) of the definition of medical treatment)
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Item 4 - Subsection 4(1) (paragraph (h) of the definition of medical treatment)
Item 5 - Subsection 4(1)
247. These items amend the definition of medical treatment` in subsection 4(1) of the Act
and insert a number of new definitions.
248. The amendments made by item 3 ensure that therapeutic treatment` will only be
compensable if it is provided by a registered health practitioner` - defined as a practitioner
registered (other than as a student) under a Health Practitioner Regulation National Law in
one of the listed professions or occupations - or under the supervision of an accredited
health practitioner` as defined in new section 71B. These changes are based on
recommendation 7.21 of the Review.
249. The amendments made by item 4 expand on the requirements currently contained in
paragraph (h) of the definition of medical treatment` in subsection 4(1) of the Act:
new paragraph (h), in conjunction with the new definitions of nursing care` and
registered nurse` give effect to recommendation 7.27 of the Review;
new paragraph (ha) includes treatment and maintenance as a resident in a nursing
home` - this gives effect to recommendation 7.24 of the Review;
new subsections (hb) to (hc) impose additional requirements in relation to the
compensability of prescription medicines, schedule 8 medicines` and medicines which
are a registered good` under the Therapeutic Goods Act 1989 - this gives effect to
recommendations 7.25 and 7.26 of the Review.
Item 6 - Subsections 4(10) and (10A)
250. This item makes technical amendments to subsections 4(10) and (10A) of the Act as a
consequence of new sections 16A and 16B (see item 8 below). The amendments ensure that
only Comcare can formulate Clinical Framework Principles and prescribe a medical services
table.
Item 7 - After subsection 16(3)
251. This item amends section 16 by inserting new subsections 16(3A), (3B) and (3C).
252. New subsection 16(3A) specifies that Comcare must have regard to the Clinical
Framework Principles (made by Comcare under new section 16A - see item 8 below) and
such other matters as Comcare considers relevant, in determining whether it was reasonable
for an employee to obtain medical treatment. Similar requirements are contained in
subsection 223(2) of the Workplace Injury and Compensation Act 2013 (Vic).
253. This amendment - together with new section 16A (see item 8 below) - gives effect to
recommendation 7.28 of the Review.
254. New subsection 16(3B) specifies the matters that Comcare must have regard to in
determining the amount of compensation appropriate to the medical treatment in the
circumstances.
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255. New subsection 16(3C) limits the amount of compensation payable by Comcare in
respect of medical treatment to the amounts specified in the medical services table prescribed
under new section 16B (see item 8 below).
Item 8 - At the end of Division 1 of Part II
256. This item adds new sections 16A and 16B.
New section 16A - Clinical Framework Principles
257. New section 16A empowers Comcare to determine Clinical Framework Principles that
are to be taken into account under new subsection 16(3A) (see item 7 above) in determining
whether medical treatment was reasonably obtained. The Clinical Framework Principles will
be a legislative instrument for the purposes of the Legislative Instruments Act 2003.
258. The Clinical Framework Principles will be based on principles issued in 2005 by
Worksafe Victoria and the Victorian Transport Accident Commission.
New section 16B - Medical services table
259. New section 16B empowers Comcare to prescribe a medical services table that sets out
items of medical treatment and specifies the amount of compensation payable by Comcare in
respect of each item. The table can also include interpretation rules. The medical services
table will be a legislative instrument for the purposes of the Legislative Instruments Act 2003.
260. This amendment gives effect to recommendation 7.30 of the Review.
Item 9 - After section 54
New section 54A - Designated medical practitioner
261. This item inserts new section 54A which enables compensation claims to designate a
medical practitioner and medical clinic who can prescribe a schedule 8 medicine to an injured
employee. Schedule 8 medicines prescribed other than by a designated medical practitioner
or a medical practitioner who practices in a designated medical clinic are not compensable
under section 16 of the Act.
262. New subsections 54A(3) and (4) enable designations to be revoked and new
designations to be made.
Item 10 - Before subsection 57(6)
263. This item inserts a new subsection 57(5A) that limits compensation payable in respect
of a medical examination required under section 57 of the Act to the amount specified in the
medical examination rates determination made under new subsection 57B.
Item 11 - Before section 58
New section 57B - Medical Examination Rates Determination
264. This item inserts new section 57B which empowers Comcare to make a Medical
Examination Rates Determination that sets out the amount of compensation payable by
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Comcare in respect of specified medical examinations. The determination will be a legislative
instrument for the purposes of the Legislative Instruments Act 2003.
Item 12 - Subsection 60(1) (definition of determination)
265. This item amends the definition of determination` in subsection 60(1) to enable
decisions made by a relevant authority under new section 115B (see item 14 below) about
treatment outside Australia to be reviewable under Part VI of the Act.
266. Subsection 60(1) will also be amended by Schedule 6 to the Bill with effect from the
day after Royal Assent. The amendment made by this item amends subsection 60(1) as
amended by Schedule 6 to the Bill.
Item 13 - After section 71
267. This item inserts new sections 71A and 71B into the Act.
New section 71A - Disclosure of information to disciplinary bodies
268. New section 71A enables Comcare to disclose information relating to medical
treatment obtained in relation to an injury suffered by an employee to a professional
disciplinary authority specified in new subsection 71A(6). Subsection 71A(3) enables
Comcare to impose conditions to be complied with in relation to information disclosed.
Conditions can relate to individual disclosures or a class of disclosures. Any condition
imposed in respect of a class of disclosures will be a legislative instrument for the purposes of
the Legislative Instruments Act 2003.
269. For the avoidance of doubt, new subsection 71A(4) clarifies that a written declaration
under subsection 71A(3) that imposes conditions relating to one particular disclosure
identified in the instrument is not a legislative instrument within the meaning of section 5 of
the Legislative Instruments Act 2003. This provision is declaratory of the law and does not
amount to an exemption from the Legislative Instruments Act 2003.
270. This amendment gives effect to recommendation 7.29 of the Review.
New section 71B - Accredited healthcare practitioners
271. New section 71B empowers Comcare, by legislative instrument, to identify accredited
healthcare practitioners by reference to a specified class of persons. Accredited healthcare
practitioners may provide (or supervise the provision of) therapeutic treatment - see
amendments to medical treatment` in item 3 above.
Item 14 - Before section 116
272. This item inserts new sections 115A and 115B into the Act.
New section 115A - Relevant authority may request medical report
273. New section 115A enables a relevant authority to request a written medical report from
a provider of medical treatment to an injured employee. The relevant authority is required to
pay the cost of the medical report as specified in a Medical Treatment Reports Determination
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made by Comcare. The Medical Treatment Reports Determination is a legislative instrument
for the purposes of the Legislative Instruments Act 2003.
New section 115B - Approval of treatment obtained outside Australia
274. New section 115B enables a relevant authority to approve specified types of medical
treatment obtained by an employee outside Australia.
Part 2 - Application and transitional provisions
Division 1 - Transitional provisions commencing on the day after Royal Assent
Item 15 - Pre-commencement designations
275. This item provides that an employee can designate a medical practitioner or a medical
clinic, or vary a designation previously given before the commencement of those provisions,
and that the designation will take effect from commencement. This is to ensure a smooth
transition for both claimants and relevant authorities.
Division 2 - Application provisions commencing on Proclamation
Item 16 - Application of amendments
276. This item provides that the amendments made by items 1 to 9 apply in relation to
medical treatment obtained after the commencement of Schedule 5 to the Bill.
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SCHEDULE 6 - HOUSEHOLD SERVICES AND ATTENDANT CARE SERVICES
Overview
277. Schedule 6 to the Bill amends Division 5 of Part II of the Act (and related provisions)
which deal with the payment of compensation for household and attendant care services.
278. Compensation is payable for household services and attendant care services under
section 29 of the Act. These terms are defined in subsection 4(1) of the Act:
household services` are services of a domestic nature (including cooking, house
cleaning, laundry and gardening services) that are required for the proper running and
maintenance of the employee`s household; and
attendant care services` are services that are required for the essential and regular
personal care of the employee (other than household services, medical or surgical
services or nursing care - for example, attendant care services could include help with
bathing and dressing.
279. Although there are different considerations for determining whether compensation is
payable for either household services or attendant care services, the amount of compensation
payable for both is the same. The Review identified a number of shortcomings in the current
provisions, namely:
there is no management or regulation of the provision of those services;
there is no distinction between services required by employees with injuries with
varying degrees of severity; and
there is no limit on the duration for which compensation for household or attendant care
services is payable as long as the services continue to be reasonably required` during
the life of the claim.
280. The amendments in Schedule 6 to the Bill address these shortcomings and give partial
effect to recommendations contained in the Review. The amendments:
establish a tiered approach to the payment of compensation for household services and
attendant care services, depending on whether the employee`s injury was catastrophic`,
and limit the period for which compensation for attendant care services and household
care services is payable to employees with a non-catastrophic injury (recommendation
7.33 of the Review);
allow for a relevant authority to require an independent assessment of an injured
employee`s need for household services, attendant care services or both
(recommendations 7.35 and 7.36 of the Review); and
require attendant care services to be provided by accredited, registered or approved
providers, and provide for the accreditation, registration and approval of providers of
attendant care services (recommendation 7.37 of the Review).
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Commencement
281. The amendments in Part 1 of Schedule 6 to the Bill commence on the day after Royal
Assent. This will allow for the accreditation, registration and approval of providers of
attendant care services before the commencement of the substantive amendments in Part 2 of
Schedule 6 to the Bill.
282. The amendments in Part 2 of Schedule 6 to the Bill commence on a day to be fixed by
Proclamation, but no later than 12 months after Royal Assent. The extended period for
Proclamation is necessary to enable Comcare and licensees to establish systems and
processes to give effect to the new requirements.
Part 1 - Amendments commencing on the day after Royal Assent
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
283. This item inserts a number of new defined terms into subsection 4(1) of the Act relating
to the accreditation, registration and approval of providers of attendant care services.
Item 2 - Subsections 4(10) and (10A)
284. These items make technical amendments to subsections 4(10) and (10A) of the Act as a
consequence of new section 29D (see item 3 below). The amendments ensure that only
Comcare can accredit providers of attendant care services.
Item 3 - At the end of Division 5 of Part II
285. This item amends Division 5 of Part II of the Act by adding new sections 29D, 29E and
29F. These amendments give effect to recommendation 7.37 of the Review.
New section 29D - Accredited providers of attendant care services
286. New section 29D enables regulations to be made about the accreditation of persons
(including bodies corporate) as providers of attendant care services.
New section 29E - Registered providers of attendant care services
287. New section 29E enables regulations to be made about the registration of individuals as
registered providers of attendant care services.
New section 29F - Approved attendant care service providers
288. New section 29F enables regulations to be made about the approval of persons
(including bodies corporate) as attendant care service providers.
Item 4 - Subsection 60(1) (at the end of the definition of determination)
289. This item amends the definition of determination` in subsection 60(1) of the Act to
enable decisions made under regulations made under new sections 29D, 29E and 29F about
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the accreditation, registration and approval of attendant care services providers to be
reviewable under Part VI of the Act.
Part 2 - Amendments commencing on Proclamation
Division 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 5 - Subsection 4(1)
290. This item inserts a number of new defined terms into subsection 4(1) of the Act.
291. The term catastrophic injury`, which will govern the amount and duration of
compensation payable for household services and attendant care, will be defined by the
regulations. It is intended to base the definition on that in the National Injury Insurance
Scheme.
Item 6 - Subsection 29 (heading)
Item 7 - Subsection 29(1)
Item 8 - Subsection 29(1)
Item 9 - Subsections 29(1) and (2)
Item 10 - After paragraph 29(2)(a)
Item 11 - Subsection 29(3)
Item 12 - Subsection 29(4)
Item 13 - After paragraph 29(4)(e)
Item 14 - Subsection 29(5)
Item 15 - Subsections 29(6) and (7)
292. These items amend section 29 of the Act to provide for the payment of compensation
for household services and attendant care services obtained as a result of a non-catastrophic
injury. New section 29A (see item 16 below) provides for the payment of compensation for
household services and attendant care services obtained as a result of a catastrophic injury.
293. Items 6, 7 and 8 contain technical amendments that clarify that section 29 of the Act
applies to compensation for household services and attendant care services obtained as a
result of a non-catastrophic injury. These amendments are consequential on the bifurcation of
compensation payable for household services and attendant care services between
catastrophic and non-catastrophic injuries.
294. Item 10 inserts new paragraph 29(2)(aa) requiring the relevant authority to have regard
to any assessment under new section 29B relating to the employee`s need for household
services in determining the household services that are reasonably required.
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295. Item 11 substitutes new subsections 29(3) and (3A) of the Act requiring attendant care
services to be provided by an accredited, registered or approved provider in order to be
compensable. If satisfied that there are special circumstances, the relevant authority can
authorise an individual to provide attendant care services. Special circumstances could
include the remoteness of the employee`s place of residence, or a reasonable requirement of
the employee for the attendant care provider to have particular skills, such as ability in a
particular language, etc.
296. Item 13 inserts new paragraph 29(4)(ea) requiring the relevant authority to have regard
to any assessment under new section 29B relating to the employee`s need for attendant care
services in determining the attendant care services that are reasonably required.
297. Item 14 substitutes new subsections 29(5) and (5A) of the Act which limit the relevant
authority`s liability to pay compensation for household services and attendant care services
obtained as a result of a non-catastrophic injury for 3 years from the date of injury or, if the
injury was sustained before commencement, for 3 years from the date of commencement.
Notwithstanding the 3-year limit, if the injured employee is hospitalised as a consequence of
the non-catastrophic injury, the relevant authority will be liable to pay compensation for
attendant care services and household services for 6 months after discharge.
298. If an injured employee is hospitalised during the last 6 months of the 3-year limit, the 6-
month timeframe will be instead of, rather than additional to, the rest of the 3-year limit. For
example, if an employee is hospitalised and then discharged 2 years and 9 months after the
date of injury, the employee would have access to household services and attendant care
services for a continual period of 3 years and 3 months.
299. Items 9, 12 and 15 are consequential amendments.
Item 16 - After section 29
300. This item inserts new sections 29A, 29B and 29C.
New section 29A - Compensation for household services and attendant care services
obtained as a result of a catastrophic injury
301. New section 29A provides for the payment of weekly compensation for household
services and attendant care services obtained as a result of a catastrophic injury. The criteria
are the same as those under section 29 of the Act except that the amount of compensation
payable is such amount as the relevant authority considers reasonable in the circumstances.
There is also no limit for how long household services and attendant care services will remain
compensable.
New section 29B - Assessment of need for household services and attendant care services
302. New section 29B provides that the relevant authority may require an injured employee
to undergo an assessment of the employee`s need for either household services, attendant care
services or both. The assessment must be conducted by a registered occupational therapist or
a registered physiotherapist nominated by the relevant authority. The terms registered
occupational therapist` and registered physiotherapist` are defined in subsection 4(1) of the
Act (see item 5 above). The relevant authority is liable to pay the costs (including reasonable
travel costs) associated with an assessment.
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303. New section 29Q (see item 14 of Schedule 15 to the Bill) provides that an employee`s
refusal or failure to undergo an assessment, or obstruction of an assessment, is a breach of an
obligation of mutuality. Breaches of obligations of mutuality are subject to the sanctions
regime in new Subdivision B of Division 5A of Part II of the Act and may result in the
cancellation of compensation rights (see item 14 of Schedule 15 to the Bill).
New section 29C - Reimbursement of costs incurred in relation to accompanying an
employee
304. New section 29C provides for the reimbursement by Comcare of certain costs incurred
by an individual attendant care provider who accompanies an employee to undertake an
activity outside the employee`s place of residence.
Item 17 - Subsection 60(1) (definition of determination)
305. This item amends the definition of determination` in subsection 60(1) of the Act to
enable decisions made under new section 29A about the compensation payable for
household services and attendant care services obtained as a result of a catastrophic injury to
be reviewable under Part VI of the Act.
Division 2 - Application and transitional provisions
Item 18 - Application of amendments
306. This item provides that the amendments to section 29 of the Act (compensation for
household services and attendant care services obtained as a result of a non-catastrophic
injury) and new section 29A (compensation for household services and attendant care
services obtained as a result of a catastrophic injury) apply in relation to compensation in
respect of a week beginning after commencement.
Item 19 - Transitional - indexation
307. This item ensures that indexation of the weekly compensation payments for household
services and attendant care services obtained as a result of a non-catastrophic injury specified
in new subsection 29(3) does not commence until after commencement.
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SCHEDULE 7 - ABSENCES FROM AUSTRALIA
Overview
308. Schedule 7 to the Bill amends the Act to:
suspend compensation payments when an injured employee is absent from Australia for
private purposes (that is, not for work purposes) for a period of more than 6 weeks; and
enhance the notification requirements in section 120 of the Act.
309. At present, there is no limitation on payment of compensation to a person outside
Australia. A person who is receiving compensation payments for incapacity is required under
section 120 of the Act to inform the relevant authority of any overseas travel; however, the
person remains eligible to receive compensation while outside Australia, regardless of the
length of absence. Extended absences from Australia by an injured employee may negatively
impact on the employee`s access to medical treatment and rehabilitation programs which
would assist them in their return to work.
There are strong arguments in favour of restricting payment of compensation while an
employee is outside Australia. In particular:
the prospect of effective assessment of an employee`s continuing incapacity for work,
of the amount that the employee is able to earn in suitable employment and of the
efficacy of medical treatment is very much diminished if the employee is outside
Australia; and
there are significant barriers to an employer arranging an effective rehabilitation
program while the employee is outside Australia.
310. The amendments in Schedule 7 to the Bill suspend compensation payments when an
injured employee is absent from Australia for private purposes for a period of more than 6
weeks. This amendment is based on recommendation 7.17 of the Review, with the
modification that compensation will not be paid after 6 weeks of absence from Australia. The
Review recommended that compensation cease after 60 days. However, the 6-week period is
in line with the capped portability period under the Social Security Act 1991.
Commencement
311. The amendments in Schedule 7 to the Bill commence immediately after Part 1 of
Schedule 15 to the Bill which commences on the day after Royal Assent.
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - At the end of Division 5A of Part II
312. This item inserts new section 29K dealing with extended absences from Australia.
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New section 29K - Extended absences from Australia
313. New subsection 29K(1) provides for the suspension of an employee`s compensation
rights if the employee is absent from Australia for private purposes` (that is, not for work
purposes`) for a period of more than 6 weeks. These terms are defined in new subsections
29K(7) and (8). The suspension will take effect at the end of the 6-week period and will cease
either when the employee returns to Australia or the absence for private purposes becomes an
absence for work purposes.
314. New subsections 29K(2) to (6) contain provisions that deal with the following
situations:
where an employee returns to Australia for a period of less than 6 weeks but whose
subsequent departure was for work purposes;
where an employee is initially absent from Australia for work purposes and,
subsequently the absence becomes an absence for private purposes; and
where an employee was absent from Australia at commencement time.
315. New subsections 29K(9) and (10) enable the relevant authority to extend the period of
absence in limited situations. The situations in which an absence may be extended are
modelled on section 1218C of the Social Security Act 1991.
316. New subsections 29K(13) to (15) provide that any compensation payments made
following a suspension under this section are conditional on the employee remaining in
Australia for a 6-week period. These are anti-avoidance provisions.
317. New subsection 29K(16) enables a relevant authority to exempt an employee from this
section where there are special circumstances.
Illustrative example 1
Tom leaves Australia for 8 weeks to visit Venezuela for private purposes. Before he leaves,
he notifies his relevant authority of his departure date (1 January) and his intended date of
return (25 February of that year). His compensation rights are suspended after 6 weeks
(12 February). When he returns to Australia on 25 February, his compensation rights and
payments recommence. Because he returned to Australia on his notified intended date of
return, Tom does not need to notify his relevant authority of his return.
Illustrative example 2
Howard leaves Australia to visit Bali for 6 weeks. His compensation rights remain during that
time. On the last day of Howard`s 6-week trip, he flies back to Perth, Australia, for one week.
His compensation rights and payments recommence from Howard`s date of return to
Australia. After Howard has been in Perth for one week, he leaves again for Bali for another
5 weeks. Because the period of Howard`s return to Australia was less than 6 weeks, he is
deemed not to have returned to Australia. The one week of compensation paid to Howard is
recoverable from him, as it was conditional upon his return being for longer than 6 weeks.
Compensation is also not payable for the subsequent 5 weeks that Howard is away in Bali, as
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he will be deemed to have been absent for a total of 12 weeks.
Item 2 - Subsection 60(1) (definition of determination)
318. This item amends the definition of determination` in subsection 60(1) of the Act to
enable decisions made under new section 29K about the suspension of compensation rights to
be reviewable under Part VI of the Act.
Item 3 - Subsection 120 (heading)
Item 4 - Subsection 120(1)
Item 5 - At the end of subsection 120(2)
Item 6 - At the end of subsection 120(3)
Item 7 - Subsections 120(4) and (5)
319. These items amend section 120 of the Act to enhance the existing notice requirements
that apply to a compensation recipient who proposes to leave Australia.
320. Section 120 of the Act currently requires a person who has been receiving incapacity
payments under section 19 of the Act for more than 3 months to notify the relevant authority
if he or she has left Australia or proposes to do so. The amendments to section 120 of the Act
will:
extend the notification requirements to persons in receipt of any compensation
payments made under sections 19 to 22 and 31 of the Act, regardless of how long they
have been made;
require the person to notify the relevant authority of any proposed return to Australia;
require the person to notify the relevant authority of changes to information previously
given under a notice under section 120 of the Act; and
provide that any breach of the notification requirements is an offence of strict liability
with a penalty of 10 penalty units. However, the offences do not apply if the person has
a reasonable excuse.
Part 2 - Application and transitional provisions
Item 8 - Application of amendments
321. This item provides that the amended notification requirements in section 120 of the Act
apply in relation to a person who leaves Australia after commencement.
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Item 9 - Transitional - notification of absence from Australia
322. This item contains transitional provisions that require an injured employee who is
absent from Australia at the time of commencement to notify the relevant authority of their
absence. Failure to do so, without reasonable excuse, is an offence of strict liability.
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SCHEDULE 8 - ACCRUAL OF LEAVE WHILE RECEIVING COMPENSATION
Overview
323. Schedule 8 to the Bill amends section 116 of the Act to provide that an employee is not
entitled to take or accrue any leave or absence as provided for by the National Employment
Standards while on compensation leave. This amendment is consistent with proposed
amendments to section 130 of the Fair Work Act.
Commencement
324. The amendments in Schedule 8 to the Bill commence on the day after Royal Assent or
the commencement of item 5 of Schedule 1 to the Fair Work Amendment Act 2015,
whichever is the later.
Safety, Rehabilitation and Compensation Act 1988
Item 1 - After subsection 116(1)
325. This item inserts new subsection 116(1A) which provides that subsection 116(1) of the
Act has no effect to the extent to which it is inconsistent with section 130 of the Fair Work
Act. This amendment is consequential on an amendment to section 130 of the Fair Work Act
that will be made the day after the Fair Work Amendment Bill 2014 (currently before
Parliament) receives Royal Assent.
326. Currently, subsection 130(1) of the Fair Work Act provides that an employee is not
entitled to take or accrue any leave or absence as provided for by the National Employment
Standards while the employee is absent from work for an injury or illness for which the
employee is receiving statutory workers` compensation payments. Subsection 130(2) of the
Fair Work Act provides an exception where a workers` compensation law permits the taking
or accrual of leave. The Fair Work Amendment Bill 2014 currently before Parliament will
repeal subsection 130(2) of the Fair Work Act, with the effect that a workers` compensation
law will no longer be able to allow for the taking or accrual of leave as provided for by the
National Employment Standards while an employee is on compensation leave.
327. Section 116 of the Act allows, in spite of the provisions of any other Act, for the
following leave entitlements during an employee`s absence on compensation leave:
paid maternity leave;
the accrual of long service leave entitlements; and
the accrual of sick leave and recreation leave entitlements.
328. When enacted, the amendments to section 130 of the Fair Work Act would result in an
inconsistency with section 116 of the Act. The amendment to section 116 aligns the Act with
the proposed amendment to section 130 of the Fair Work Act.
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SCHEDULE 9 - CALCULATION OF COMPENSATION
Overview
329. Schedule 9 to the Bill amends the Act to:
ensure that the method of calculating an employee`s weekly incapacity payments is fair
and reflects the employee`s earnings before their injury by:
o changing the concept of normal weekly earnings` in section 8 of the Act to
average weekly remuneration` to better reflect an employee`s income;
o providing flexibility in determining the relevant period` to fairly represent an
employee`s pre-injury remuneration; and
o clarifying the operation of the cap on average weekly earnings in subsection 8(10)
of the Act (recommendations 7.10 and 7.11 of the Review);
introduce new step down` provisions to taper the amount of weekly incapacity
payments to which an injured employee is entitled (recommendation 7.13 of the
Review);
link the payment of incapacity payments to the pension age, rather than cutting off
those payments at a set age (recommendation 7.16(a) of the Review); and
remove the 5% deduction on weekly incapacity payments to employees who are
accessing superannuation benefits.
Commencement
330. The amendments in Schedule 9 to the Bill commence on a day to be fixed by
Proclamation, but no later than 12 months after Royal Assent. The extended period for
Proclamation is necessary to enable Comcare and licensees to establish systems and
processes to give effect to the new requirements.
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
Item 2 - Subsection 4(1) (definition of employee)
Item 3 - Subsection 4(1)
Item 4 - Subsection 4(1) (definition of normal weekly earnings)
Item 5 - Subsection 4(1) (definition of normal weekly hours)
Item 6 - Subsection 4(1)
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331. These items repeal and insert a number of new defined terms into subsection 4(1) of the
Act as a consequence of the amendments made by Schedule 9 to the Bill, in particular:
amendments to section 8 of the Act which replace the concept of normal weekly
earnings` with average weekly remuneration`;
the definition of total remuneration` in new section 8A; and
amendments to section 23 of the Act which align the age cut-off provisions for the
payment of compensation with the qualifying age for the age pension as set out in the
Social Security Act 1991.
Item 7 - Section 8 (heading)
Item 8 - subsections 8(1), (2) and (3)
Item 9 - Subsection 8(4)
Item 10 - Subsection 8(4)
Item 11 - Subsection 8(4)
Item 12 - Subsection 8(4)
Item 13 - Subsection 8(5)
Item 14 - Before subsection 8(6)
Item 15 - Subsections 8(6) and (7)
Item 16 - Paragraph 8(8)(a)
Item 17 - Paragraph 8(8)(b)
Item 18 - subsection 8(8)
Item 19 - subsection 8(8)
Item 20 - Subsections 8(9), (9B) and (9E)
Item 21 - Paragraphs 8(9E)(a) and (b)
Item 22 - Subsection 8(9F)
Item 23 - Subsection 8(9F)
332. These items amend section 8 of the Act to change the concept of normal weekly
earnings` - which is used to calculate an employee`s weekly incapacity payments - to
average weekly remuneration` to better reflect an employee`s pre-injury income.
333. Currently, an injured employee who is incapacitated for work as a result of an injury
receives weekly incapacity payments for a specified period based on the employee`s normal
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weekly earnings` (section 19 of the Act). Normal weekly earnings` are calculated using the
formulae in subsections 8(1) and (2) of the Act:
subsection 8(1) of the Act provides that an employee`s normal weekly earnings are
calculated by multiplying the employee`s average ordinary rate of pay by the average
number of hours worked in each week during the relevant period` (defined in section 9
of the Act to be the last 2 weeks before the injury), plus any allowance paid to the
employee in respect of expenses incurred or likely to be incurred by the employee; and
subsection 8(2) of the Act provides for an additional amount where an employee is
required to work overtime on a regular basis.
334. Sections 8 and 9 of the Act currently contain provisions which allow for the relevant
period or the normal weekly earnings formula to be disregarded, or recalculated, if their
application would result in an unfair calculation:
subsections 8(4) and (5) of the Act allow for an alternate calculation of normal weekly
earnings where, because of the shortness of the relevant period, it is impracticable to
calculate the normal weekly earnings of an employee before an injury or if using the
relevant period defined in section 9 of the Act would not fairly represent the weekly
rate at which the employee was being paid;
where there is a variation to the employee`s minimum rates of pay during the relevant
period, subsections 9(2) and (3) of the Act allow for the part of the relevant period
before the variation to be disregarded or, where that would not produce a fair result, for
the deeming of the new rate of pay to have been in effect from the beginning of the
relevant period; and
subsection 9(4) of the Act allows for a part of the relevant period to be disregarded if an
employee did not receive any earnings, or their earnings were reduced due to absence
from employment during the relevant period.
335. Section 8 of the Act also contains provisions which adjust the way in which normal
weekly earnings` may be calculated (for example, substituting another period for the relevant
period) as well as adjusting the final value of the normal weekly earnings so that it is not
below or above a particular amount.
336. When the Act commenced in 1988, the majority of employees covered by the scheme
were Commonwealth public servants whose conditions of employment were governed by the
then Public Service Act 1922. Conditions of employment for most employees covered by the
Act were therefore markedly similar - that is, they were generally paid a consistent salary or
wage on a fortnightly basis - and the formula used for calculating normal weekly earnings
was practicable. Since that time, the employment conditions and industrial profile of the
employees covered by the Act have changed significantly; however, the provisions for the
calculation of weekly incapacity payments remain largely unchanged. Many employees have
terms and conditions that do not fall within the prescribed formula, which makes it difficult to
calculate normal weekly earnings in a way that fairly represents the employee`s lost earnings.
337. The current methods of calculating normal weekly earnings result in various inequities,
for example:
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where an employee`s remuneration is based on productivity, distance driven, a fly-in-
fly-out roster, etc.; or
where an employee works irregular patterns, including a 9-day fortnight, or has
fluctuating earnings due to commissions or seasonal work.
338. The amendments to section 8 of the Act adopt a broader view of what can constitute
average weekly remuneration` by averaging, over the relevant period, all income earned plus
overtime and specified allowances payable for the first 104 weeks of incapacity. The
amendments also adopt a more flexible approach to determining the relevant period so that it
fairly reflects an employee`s remuneration.
339. These amendments give effect to recommendations 7.1 and 7.2 of the Review with
some modifications.
340. New subsection 8(1) provides that the average weekly remuneration` of an employee
before an injury is calculated by dividing the total remuneration (defined in new section 8A -
see item 27 below) of the employee for the relevant period (defined in section 9 of the Act as
amended - see items 28 to 30 below) by the number of weeks in the relevant period.
341. New subsection 8(2) enables the total remuneration of an employee to include income
from other employment the employee was engaged in throughout the 6-week period before
the injury. Previously, only part-time employees could have income from other employment
counted towards their normal weekly earnings`. New subsection 8(2) provides that other
employment can only be counted towards an employee`s total remuneration if the employee
complied with any terms and conditions of their employment with the Commonwealth or
licensed corporation in engaging in that other employment, for example, by notifying their
employer of their other employment, or seeking permission to engage in the other
employment.
342. Subject to amendments reflecting the use of new terminology, the provisions that allow
for an adjustment to average weekly remuneration in subsections 8(6) to (10) remain largely
unchanged.
Item 24 - After subsection 8(9G)
343. This item inserts new subsection 8(9H) which excludes a location allowance from an
employee`s average weekly remuneration if the employee no longer resides at the location in
respect of which the allowance was payable.
Illustrative example
Ben suffers an injury resulting in incapacity for work. One component of his total
remuneration is a location allowance payable while Ben is posted to, and resides in, Hong
Kong. After Ben`s injury, he remains in Hong Kong for 2 weeks before returning to
Australia. Upon Ben`s return to Australia, because his primary place of residence is no longer
Hong Kong, the location allowance will be deducted from the calculation of Ben`s total
remuneration.
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Item 25 - Subsection 8(10)
Item 26 - At the end of section 8
344. These items repeal and substitute a new subsection 8(10) of the Act and clarify the
operation of the cap on average weekly remuneration.
345. Subsection 8(10) of the Act currently provides that if the amount of an injured
employee`s average weekly remuneration calculated under subsection 8(1) of the Act would
exceed the amount that would be the employee`s average weekly remuneration before the
injury if he or she were not incapacitated for work, the amount will be reduced by the amount
of the excess. Subsection 8(10) of the Act currently contains 2 different tests, depending on
whether an employee continues to be employed or has ceased to be employed:
where the employee continues to be employed, paragraph 8(10)(a) of the Act provides a
broad but for` test which requires an enquiry as to his or her earnings if he or she had
not been incapacitated for work;
where the employee has ceased to be employed, paragraph 8(10)(b) of the Act provides
a narrow test based on the actual position of the injured employee at either the date of
injury or the date that he or she left employment.
346. Item 25 substitutes a new subsection 8(10) which provides a single but for` test that
applies to both ongoing and former employees. This amendment addresses the Federal Court
decision in Comcare v Simmons [2014] FCAFC 4 where a former employee was able to
continue to receive an allowance as part of his ongoing workers` compensation incapacity
payments even though he had previously left the position that attracted the allowance for
reasons unrelated to his injury and would not have been entitled to receive that allowance on
a continuing basis if he had remained an employee.
347. Item 26 inserts new subsections 8(11) and (12) which clarify the application of
subsection 8(10) of the Act.
348. New subsection 8(11) provides that a suspended employee is taken to be employed
during the suspension for the purposes of subsection 8(10) of the Act. Where an employee is
suspended without pay, the cap would not be prevented from operating simply because the
employee has failed to earn an amount. This amendment addresses the Federal Court decision
in Comcare v Burgess [2007] FCA 1663 which ruled that paragraph 8(10)(a) of the Act -
which is expressed to apply to an injured employee who continues to be employed during his
or her incapacity - does not contemplate the situation where an employee continues to be
employed but is suspended from that employment without pay and therefore does not apply
to an employee who is suspended without pay. In other words, an employee who would not
have earned anything if free from incapacity (because he or she is suspended without pay) is
able to receive an income because of his or her incapacity.
349. This amendment gives effect to recommendation 7.11 of the Review.
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Illustrative example
Matt suffers an injury which results in incapacity for work, and remains employed by his
employer. His weekly incapacity payments are calculated to be $500 a week. However, Matt
is then suspended from work due to misconduct. Subsection 8(10) of the Act operates to
reduce Matt`s average weekly remuneration to the amount that he would have received had
he not been incapacitated for work. As Matt would not have received any payment had he not
been incapacitated for work due to his suspension for misconduct, subsection 8(10) of the Act
operates to reduce Matt`s average weekly remuneration to $0. Subsection 8(11) of the Act
operates to ensure that subsection 8(10) of the Act operates even where Matt remains
employed, but is suspended from work.
350. New subsection 8(12) provides that subsections 8(6), (7), (9), (9H) and (10) of the Act
operate from time to time for the purposes of working out compensation payable under the
Act to an employee for a particular week of incapacity. This means, for example, that
subsection 8(10) may operate in respect of a particular week of incapacity so that an
employee`s average weekly remuneration is reduced for that week and increased in later
weeks.
351. This amendment gives effect to recommendation 7.10 of the Review.
Illustrative example
Jordan suffers an injury which results in incapacity for work. Her average weekly
remuneration is calculated to be $1200, and one component of that amount is an allowance
for being on-call during weekends. While Jordan is incapacitated for work, her team is
restructured and no longer required to be on-call during weekends, and the allowance is
removed from their entitlements. Subsection 8(10) of the Act operates to remove that
allowance from the calculation of Jordan`s average weekly remuneration. A month later,
Jordan`s team is restructured again, and the requirement for being on-call, and the on-call
allowance, is reinstated. New subsection 8(12) operates to ensure that Jordan`s average
weekly remuneration is adjusted again to include the on-call allowance.
Item 27 - After section 8
New subsection 8A - Total remuneration
352. This item inserts new section 8A which specifies the types of payments and benefits
that may be included in an employee`s total remuneration` for the purposes of calculating the
employee`s average weekly remuneration.
353. Reportable employer superannuation contributions are those made by the employer on
behalf of an employee, such as salary sacrifice contributions, or extra super contributions.
Contributions not regarded as reportable employer superannuation contributions are super
guarantee contributions or contributions made by an employer under a collectively negotiated
industrial agreement.
354. Overtime and specified allowances may be included in the calculation of average
weekly remuneration for the first 104 weeks (2 years) of incapacity. Overtime may be
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included if, but for the employee`s injury, it would have been likely that the employee would
have worked paid overtime at any time during those 104 weeks of incapacity.
355. The weeks referred to are weeks during which the employee is incapacitated. That is,
any week in which the employee is incapacitated for work is a week for the purposes of
counting the 104 weeks.
Illustrative example
Sarah suffers a compensable injury and provides a medical certificate demonstrating
incapacity for work resulting from that injury. As Sarah is incapacitated for her pre-injury
duties, her employer gives Sarah a new role with suitable duties she can perform, at the same
hours as her pre-injury role. Sarah`s pre-injury role included working in dangerous situations,
which was reflected in a danger pay` allowance. Sarah`s new role does not include working
in any dangerous situations, or a danger pay` allowance. The danger pay` allowance formed
part of Sarah`s total remuneration for the relevant period and would therefore be included in
the calculation of Sarah`s average weekly remuneration for the first 104 weeks during which
Sarah is incapacitated for work. In this example, Sarah is incapacitated for work during a
week in respect of which she has a medical certificate demonstrating that she is incapacitated
for her pre-injury role.
Item 28 - Subsection 9(1)
Item 29 - Subsection 9(3)
Item 30 - At the end of section 9
356. These items amend the definition of relevant period` in section 9 of the Act.
357. Relevant period` is defined in section 9 of the Act to mean the latest period of 2 weeks
before the date of injury during which the employee was continuously employed by the
Commonwealth or a licensed corporation. Section 9 of the Act also contains provisions which
would alter the relevant period` in particular circumstances.
358. The amendments to section 9 of the Act retain this as the default position, but enable
the relevant authority to determine an alternative relevant period (consisting of a single week
or 2 or more weeks, whether consecutive or otherwise) provided that the total remuneration
attributable to the employee`s employment during that period is a fair representation of the
total remuneration that was attributable to the employee`s employment before the date of the
injury.
Item 31 - Subsections 19(2) to (3)
359. This item repeals subsections 19(2), (2A), (2B), (2C), (2D) and (3) of the Act, and
substitutes new subsections 19(2), (2A), (2B) and (2C) which introduce structured reductions
(commonly referred to as step downs`) in the calculation of weekly incapacity payments
based on the period of incapacity.
360. Step-downs provide an incentive for employees to return to work as quickly as
possible. Step-downs also take into account any savings that an injured employee makes by
virtue of not attending work, such as not paying for travel costs.
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361. Currently under the Act there is only one step down point at approximately 45 weeks
after the injury is suffered. Such a late step-down creates a disincentive for early return to
work by injured employees.
362. Under current subsection 19(2) of the Act an employee`s weekly incapacity payments
are worked out by a formula which reduces the employee`s normal weekly earnings (as
calculated under current section 8 of the Act) by the employee`s average earnings, defined as
greater of either the amount that the employee is actually earning or has been deemed able to
earn in suitable employment. This formula is used for the first 45 weeks after the injury. After
45 weeks of incapacity, compensation is paid at an adjusted rate of between 75% and 100%
of the injured employee`s normal weekly earnings: current subsection 19(3) of the Act. A
week for the purposes of these provisions is a maximum rate compensation week` as defined
in current subsection 19(2A) of the Act, that is, a week in which the employee is receiving
compensation rather than a calendar week. An employee who has an intermittent injury may
reach 45 maximum compensation weeks` over a period of time greater than 45 calendar
weeks.
363. The amendments to section 19 of the Act provide for the following step down points:
for the first 13 weeks of incapacity an employee will be entitled to receive weekly
incapacity payments worked out by a formula which reduces the employee`s average
weekly remuneration (as calculated under section 8 of the Act as amended) by the
employee`s applicable earnings`, defined as the greater of the amount that the
employee is actually earning in any employment (including self-employment) and the
amount the employee has been deemed able to earn in suitable employment;
after 13 weeks of incapacity, compensation will be paid at an adjusted rate of 90% of
the employee`s average weekly remuneration less the employee`s applicable earnings;
after 27 weeks of incapacity, compensation will be calculated using the formula of 90%
of the employee`s average weekly remuneration less the employee`s applicable
earnings and paid at an adjusted rate of no more than 80% of the employee`s average
weekly remuneration; and
after 53 weeks of incapacity, compensation will be calculated using the formula of 90%
of the employee`s average weekly remuneration less the employee`s applicable
earnings and paid at an adjusted rate of no more than 70% of the employee`s average
weekly remuneration.
364. An employee who is receiving weekly incapacity payments will never receive more
than 90% of their pre-injury take home pay (comprised of their weekly incapacity payments
and applicable earnings) after their first 13 weeks of receiving weekly incapacity payments.
The only way an employee would be able to take home more than 90% of their pre-injury
pay, after the first 13 weeks, would be to earn that amount from employment undertaken by
the employee during that week.
365. The step down periods will no longer be based on hours worked by reference to the
maximum compensation week. Instead of being tied to the number of hours worked, step
down points will be determined on weeks during which an employee is incapacitated for
work as a result of the injury.
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366. These amendments give effect to recommendation 7.13 of the Review with some
modifications.
Illustrative example
Jenny suffers an injury which results in incapacity for work. Her average weekly
remuneration is $2000. Jenny is deemed able to earn $250 a week in suitable employment,
and actually earns $100 a week in suitable employment, making Jenny`s applicable
earnings` amount equal to $250.
For the first 13 weeks of incapacity for work, Jenny`s weekly incapacity payments are
calculated using the formula:
(100% x $2000) - $250 = $1750
The amount of compensation payable to Jenny is $1750 per week.
For weeks 14 to 26 of incapacity for work, Jenny`s weekly incapacity payments are
calculated using the formula:
(90% x $2000) - $250 = $1550
The amount of compensation payable to Jenny is $1550 per week.
For weeks 27 to 52 of incapacity for work, Jenny`s weekly in capacity payments are
calculated using the formula:
(90% x $2000) - $250 = $1550,
capped at 80% x $2000 = $1600
Since $1550 is less than the cap of $1600, the amount of compensation payable to Jenny
continues to be $1550 per week.
After 52 weeks of incapacity for work, Jenny`s weekly incapacity payments are calculated
using the formula:
(90% x $2000) - $250 = $1550,
capped at 70% x $2000 = $1400
Since $1550 is greater than the cap of $1400, the amount of compensation payable to Jenny is
capped at $1400 per week.
Note: sections 8, 9 and 19 of the Act contain provisions which may affect the calculation of
an employee`s weekly incapacity payments. This example demonstrates the operation of the
step down provisions only.
Item 32 - Before subsection 19(3A)
Item 33 - Subsection 19(3A)
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Item 34 - Before subsection 19(4)
Item 35 - Subsection 19(4)
367. These items make consequential amendments to subsections 19(3A) and (4) of the Act
as a result of the new step down provisions.
Item 36 - Subsections 19(5), (6) and (7)
368. This item substitutes new subsections 19(5), (6) and (7).
369. New subsection 19(5) provides that the current reduction of compensation where
weekly incapacity payments exceed 150% of Average Weekly Ordinary Time Earnings of
Full-time Adults applies after 13 weeks. This aligns the reduction with the first step down
point.
370. New subsection 19(6) provides that the final 2 step down provisions do not apply where
90% of the employee`s average weekly remuneration is less than the minimum earnings - as
defined in new subsection 19(7).
371. New subsection 19(7) is a consequential amendment as a result of the new minimum
earnings protection provision as set out in new subsection 19(6).
Item 38 - Subsection 20(3) (formula)
Item 39 - Subsection 20(3) (definition of amount of compensation)
Item 40 - Subsection 20(4)
Item 41 - Subsection 21(3) (formula)
Item 42 - Subsection 21(3) (definition of amount of compensation)
Item 43 - Subsection 21(4)
Item 44 - Subsection 21A(3) (formula)
Item 45 - Subsection 21A(3) (definition of amount of compensation)
Item 46 - Subsection 21A(4)
372. These items amend sections 20, 21 and 21A of the Act to remove the 5% deduction
from weekly incapacity payments to retired employees who are receiving superannuation
benefits, that is, a pension, a lump sum benefit or both.
373. These provisions were enacted when it was compulsory for public servants to
contribute to their own superannuation accounts. However, this requirement no longer exists
in the Australian Public Service superannuation schemes; nor does it exist in the
superannuation schemes used by employees of licensed corporations.
Item 47 - Subsection 23(1)
Item 48 - Subsections 23(1A) and (1B)
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374. These items amend subsection 23(1) to provide that weekly incapacity payments cease
when an injured employee reaches his or her pension age`. The term pension age` is defined
in subsection 4(1) of the Act by reference to the Social Security Act 1991.
375. Currently, subsection 23(1) of the Act provides that weekly incapacity payments are not
payable to an employee who has reached 65 - the standard retirement age when the Act
commenced in 1988. Current subsections 23(1A) and (1B) allow for employees who suffer an
injury when they are 63 or more to receive incapacity payments for a maximum of 104 weeks
(that is, 2 years) while they are incapacitated.
376. The policy behind ceasing weekly incapacity payments, or limiting them to 104 weeks,
is that once the employee has reached retirement age they can move off weekly incapacity
payments and on to other means of financial support, such as the age pension or
superannuation. However, the pension age` as defined in the Social Security Act 1991 has
risen beyond 65 for people born after 1 July 1952. One consequence of this is that an injured
employee who is aged 65 will not only be unable to receive weekly incapacity payments
under the Act but will also be unable to access the age pension until he or she reaches his or
her pension age.
377. There is no age limit to compensation for medical treatment.
378. The amendment aligns the age cut-off provisions in section 23 of the Act with the
qualifying age for the age pension as set out in the Social Security Act 1991.
379. This amendment gives effect to recommendation 7.16(a) of the Review.
Item 49 - Section 23A (heading)
Item 50 - Paragraph 23A(1)(b)
Item 51 - Paragraph 23A(1)(b)
Item 52 - Subsection 23A(2)
Item 53 - Subsection 23A(3) (note)
Item 54 - Paragraph 23A(6)(a)
Item 55 - Subsection 23A(6)
Item 56 - Subsection 23A(9)
Item 59 - Subsection 33(1)
Item 60 - Paragraph 33(2)(e)
Item 62 - Subsection 97F(1)
Item 63 - Subsection 112A(4) (note)
Item 64 - Subsection 112B(4) (note)
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380. These items amend sections 23A, 33, 97F, 112A and 112B to replace the term salary,
wages or pay` with monetary remuneration`, a new term defined in subsection 4(1) of the
Act to include a wider range of remuneration.
Item 57 - Subsection 30(3) (paragraph (a) of the definition of number of days)
Item 58 - Subsection 30(3) (paragraph (b) of the definition of number of days)
381. These items amend the definition of number of days` in subsection 30(3) of the Act as
a consequence of the amendments to section 23 of the Act that align the age cut-off
provisions to the qualifying age for the age pension as set out in the Social Security Act 1991.
Item 61 - Subsection 60(1) (definition of determination)
382. This item amends the definition of determination` in subsection 60(1) of the Act to
enable determinations of an alternative relevant period under section 9 of the Act to be
reviewable under Part VI of the Act.
Item 65 - Subsection 131(2)
Item 66 - Subsection 131(2)
Item 67 - Subsection 131(2A)
Item 68 - Subsection 131(2A)
Item 69 - Subsection 131(3)
Item 70 - Subsection 131(3A)
Item 71 - Subsection 131(3A)
Item 72 - Subsection 131(4)
Item 73 - Paragraph 131(5)(b)
Item 74 - Subsection 131(6)
Item 75 - Subsection 132(2)
Item 76 - Subsection 132(2)
Item 77 - Subsections 132(3) and (4)
Item 78 - Subsection 132(4)
Item 79 - Subsection 132(5)
Item 80 - Subsection 132(5)
Item 81 - Paragraph 132A(3)(b)
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383. These items make consequential amendments to sections 131, 132 and 132A of the Act
as a result of the amendment to section 8 of the Act which replaces normal weekly earnings`
with average weekly remuneration`.
Item 82 - Subsection 137(5) (definition of number of days)
384. This item amends the definition of number of days` in subsection 137(5) of the Act as
a consequence of the amendments to section 23 of the Act that align the age cut-off
provisions to the qualifying age for the age pension as set out in the Social Security Act 1991.
Part 2 - Application and transitional provisions
Item 83 - Application of amendments
385. This item provides that the main amendments made in Schedule 9 to the Bill apply in
relation to a payment of compensation in respect of a week that began after commencement.
386. The amendments of section 23A (items 49 to 56), paragraph 33(2)(e) (item 60) and
sections 112A (item 63) and 112B (item 64) of the Act apply in relation to a payment made
by the Commonwealth after commencement.
387. The amendment of section 97F of the Act (item 62) applies in relation to an estimate
given by the principal officer of a premium payer after commencement.
388. The amendment of section 137 of the Act (item 82) applies in relation to a
determination made after commencement.
Item 84 - Transitional - weekly compensation payments
389. This item contains transitional provisions in relation to the application of the new step
down provisions in section 19 of the Act as amended to employees entitled to, or receiving,
incapacity payments at commencement of this item.
390. Subitem 84(2) applies in relation to an employee who at commencement of item 84 is
entitled to, or has received, weekly incapacity payments for 13 weeks or less. In this case the
following transitional step down rules apply:
for the first 13 weeks after commencement an employee will be entitled to receive
weekly incapacity payments worked out in accordance with new subsection 9(2);
after 13 post-commencement weeks, incapacity payments will be adjusted to 90% of
the amount calculated in accordance with the formula in new subsection 9(2);
after 27 post-commencement weeks, incapacity payments will continue to be paid at the
adjusted rate of 90% of the amount calculated in accordance with the formula in new
subsection 9(2) but capped at 80% of the employee`s average weekly remuneration
before the injury;
after 53 weeks, incapacity payments will continue to be paid at the adjusted rate of 90%
of the amount calculated in accordance with the formula in new subsection 9(2) but
capped at 70% of the employee`s average weekly remuneration before the injury.
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Illustrative example
Stephen suffered an injury before the commencement of Schedule 9 to the Bill, and has been
receiving weekly compensation for 12 weeks when the Schedule commences.
As, pre-commencement, his weekly incapacity payments would have been calculated by
reference to normal weekly earnings`, his relevant authority will need to calculate Stephen`s
average weekly remuneration` in order to apply the transitional provisions.
Stephen`s average weekly remuneration is worked out to be $2000. Stephen is deemed able
to earn $250 a week in suitable employment, and actually earns $100 a week in suitable
employment, making Stephen`s applicable earnings` amount equal to $250.
For the first 13 weeks of incapacity for work from the commencement of Schedule 9 to the
Bill, Stephen`s weekly incapacity payments are calculated using the formula:
(100% x $2000) - $250 = $1750
The amount of compensation payable to Stephen is $1750 per week.
For weeks 14 to 26 of incapacity for work from the commencement of Schedule 9 to the Bill,
Stephen`s weekly incapacity payments are calculated using the formula:
(90% x $2000) - $250 = $1550
The amount of compensation payable to Stephen is $1550 per week.
For weeks 27 to 52 of incapacity for work from the commencement of Schedule 9 to the Bill,
Stephen`s weekly compensation is calculated using the formula:
(90% x $2000) - $250 = $1500,
capped at 80% x $2000 = $1600
Since $1550 is less than the cap of $1600, the amount of compensation payable to Stephen
continues to be $1550 per week.
After 52 weeks of incapacity for work from the commencement of Schedule 9 to the Bill,
Stephen`s weekly incapacity payments are calculated using the formula:
(90% x $2000) - $250 = $1500,
capped at 70% x $2000 = $1400
Since $1550 is greater than the cap of $1400, the amount of compensation payable to Stephen
is capped at $1400 per week.
Note: sections 8, 9 and 19 of the Act contain provisions which may affect the calculation of
an employee`s weekly incapacity payments. This example demonstrates the operation of the
step down provisions only.
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391. Subitem 84(3) applies in relation to an employee who at commencement of item 84 is
entitled to, or has received, weekly incapacity payments for at least 13 weeks but less than 27
weeks. In this case the following transitional step down rules apply:
for the first 13 weeks after commencement an employee will be entitled to receive
weekly incapacity payments worked out in accordance with new subsection 9(2);
after 13 post-commencement weeks, incapacity payments will be adjusted to 90% of
the amount calculated in accordance with the formula in new subsection 9(2) but
capped at 80% of the employee`s average weekly remuneration before the injury;
after 27 post-commencement weeks, incapacity payments will continue to be paid at the
adjusted rate of 90% of the amount calculated in accordance with the formula in new
subsection 9(2) but capped at 70% of the employee`s average weekly remuneration
before the injury.
Illustrative example
Abbey suffered an injury before the commencement of Schedule 9 to the Bill, and has been
receiving weekly incapacity payments for 26 weeks when the Schedule commences.
As, pre-commencement, her weekly incapacity payments would have been calculated by
reference to normal weekly earnings`, her relevant authority will need to calculate Abbey`s
average weekly remuneration` in order to apply the transitional provisions.
Abbey`s average weekly remuneration is worked out to be $2000. Abbey is deemed able to
earn $250 a week in suitable employment, and actually earns $100 a week in suitable
employment, making Abbey`s applicable earnings` amount equal to $250.
For the first 13 weeks of incapacity for work from the commencement of Schedule 9 to the
Bill, Abbey`s weekly incapacity payments calculated using the formula:
(100% x $2000) - $250 = $1750
The amount of compensation payable to Abbey is $1750 per week.
For weeks 14 to 26 of incapacity for work from the commencement of Schedule 9 to the Bill,
Abbey`s weekly incapacity payments are calculated using the formula:
(90% x $2000) - $250 = $1500,
capped at 80% x $2000 = $1600
Since $1550 is less than the cap of $1600, the amount of compensation payable to Abbey
continues to be $1550 per week.
After 27 weeks of incapacity for work from the commencement of Schedule 9 to the Bill,
Abbey`s weekly incapacity payments are calculated using the formula:
(90% x $2000) - $250 = $1500,
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capped at 70% x $2000 = $1400
Since $1550 is greater than the cap of $1400, the amount of compensation payable to Abbey
is capped at $1400 per week.
Note: sections 8, 9 and 19 of the Act contain provisions which may affect the calculation of
an employee`s weekly incapacity payments. This example demonstrates the operation of the
transitional step down provisions only.
392. Subitem 84(4) applies in relation to an employee who at commencement of item 84 is
entitled to, or has received, weekly incapacity payments for at least 27 weeks but less than 46
weeks. In this case the following transitional step down rules apply:
for the first 13 weeks after the injury (or such lesser period worked out in accordance
with subitem 84(4)(a)(i)) an employee will be entitled to receive weekly incapacity
payments worked out by a formula which adjusts the employee`s average weekly
remuneration (as calculated under amended section 8 of the Act as amended) by the
employee`s applicable earnings;
after that period compensation will be reduced to 90% of the amount calculated in
accordance with the formula in new subsection 9(2) but capped at 70% of the
employee`s average weekly remuneration before the injury.
393. Under the current section 19, the only step down occurs after 45 weeks of weekly
incapacity payments. These transitional step down provisions reflect in part that current step
down point, by ensuring that the final step down does not occur until after the employee has
received weekly incapacity payments for 45 weeks of incapacity for work.
Illustrative example
Henry suffered an injury before the commencement of Schedule 9 to the Bill, and has been
receiving weekly incapacity payments for 42 weeks when the Schedule commences.
As, pre-commencement, his weekly incapacity payments would have been calculated by
reference to normal weekly earnings`, his relevant authority will need to calculate Henry`s
average weekly remuneration` in order to apply the transitional provisions.
Henry`s average weekly remuneration is worked out to be $2000. Henry is deemed able to
earn $250 a week in suitable employment, and actually earns $100 a week in suitable
employment, making Henry`s applicable earnings` amount equal to $250.
The length of the first stage of Henry`s transitional step down is 2 weeks (2 weeks being the
lesser of (45 weeks - 43 weeks) and 13 weeks).
For the first 2 weeks of incapacity for work from the commencement of Schedule 9 to the
Bill, Henry`s weekly incapacity payments are calculated using the formula:
(100% x $2000) - $250 = $1750
The amount of compensation payable to Henry is $1750 per week.
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After receiving weekly incapacity payments for those 2 weeks after the commencement of
Schedule 9 to the Bill, Henry`s weekly incapacity payments are calculated using the formula:
(90% x $2000) - $250 = $1550,
capped at 70% x $2000 = $1400
Since $1550 is greater than the cap of $1400, the amount of weekly incapacity payments
payable to Henry is capped at $1400 per week.
Note: sections 8, 9 and 19 of the Act contain provisions which may affect the calculation of
an employee`s weekly incapacity payments. This example demonstrates the operation of the
transitional step down provisions only.
394. Subitem 84(5) applies in relation to an employee who at commencement of item 84 is
entitled to, or has received, weekly incapacity payments for 46 weeks or more. In this case
the employee will be entitled to receive weekly incapacity payments at the rate of 90% of the
amount calculated in accordance with the formula in new subsection 19(2) to a maximum of
70% of the employee`s average weekly remuneration.
Illustrative example
Justine suffered an injury before the commencement of Schedule 9 to the Bill, and has been
receiving weekly incapacity payments for 100 weeks when the Schedule commences.
As, pre-commencement, her weekly incapacity payments would have been calculated by
reference to normal weekly earnings`, her relevant authority will need to calculate Justine`s
average weekly remuneration` in order to apply the transitional provisions.
Justine`s average weekly remuneration is worked out to be $2000. Justine is deemed able to
earn $250 a week in suitable employment, and actually earns $100 a week in suitable
employment, making Justine`s applicable earnings` amount equal to $250.
From the commencement of Schedule 9 to the Bill, Justine`s weekly incapacity payments will
be calculated using the formula:
(90% x $2000) - $250 = $1550,
capped at 70% x $2000 = $1440
Since $1550 is greater than the cap of $1400, the amount of compensation payable to Justine
is capped at $1400 per week.
Note: sections 8, 9 and 19 of the Act contain provisions which may affect the calculation of
an employee`s weekly incapacity payments. This example demonstrates the operation of the
transitional step down provisions only.
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Item 85 - Transitional - average weekly remuneration
395. This item provides that an employee`s average weekly remuneration before an injury
will be increased on 1 July following 6 months from commencement.
Item 86 - Transitional - indexation
396. This item provides that the minimum earnings of an employee (including any
additional amounts payable in respect of dependents and prescribed children) will be indexed
on 1 July following 6 months after commencement.
Item 87 - Transitional - certain former employees
397. This item provides that the amendments of sections 131, 132 and 132A of the Act
(which contain special transitional provisions in relation to former employees under 65) do
not apply if it is not practicable to calculate the former employee`s average weekly
remuneration.
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SCHEDULE 10 - REDEMPTION OF COMPENSATION
Overview
398. Schedule 10 to the Bill amends sections 30 and 137 of the Act to increase the
compulsory redemption threshold from $110.65 (as at 1 July 2014) to $208.91 (indexed
annually) to align it with the Military Rehabilitation and Compensation Act 2004.
399. Redemption of compensation involves the payment of a lump sum amount to an
employee in lieu of the employee`s ongoing weekly incapacity payments. Under sections 30
and 137 of the Act Comcare must make a lump sum incapacity payment in lieu of weekly
incapacity payments where:
Comcare is liable to make weekly incapacity payments of $50 or less; and
Comcare is satisfied that the degree of the employee`s incapacity is unlikely to change.
400. The current low maximum weekly rate of incapacity payments that can be redeemed
under section 30 of the Act means that there are very few employees who qualify for
redemption.
401. This amendment gives effect to recommendation 7.19 of the Review.
Commencement
402. The amendments in Schedule 10 to the Bill commence on the day after Royal Assent.
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Paragraph 30(1)(b)
Item 2 - Paragraph 137(1)(b)
403. These items amend paragraphs 30(1)(b) and 137(1)(b) of the Act to increase the
compulsory redemption threshold to $208.91 per week. This amount is in line with the
redemption threshold in the Military Rehabilitation and Compensation Act 2004.
Part 2 - Transitional Provisions
Item 3 - Transitional - indexation
404. This item ensures that the amount specified in paragraphs 30(1)(b) and 137(1)(b) of the
Act will be indexed on 1 July following 6 months from commencement.
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SCHEDULE 11 - LEGAL COSTS
Overview
405. Schedule 11 to the Bill amends the Act to:
empower Comcare to prescribe, by disallowable legislative instrument, a Schedule of
Legal Costs that provides for the maximum amount of costs that may be awarded or
reimbursed to a claimant in certain circumstances;
empower relevant authorities to reimburse costs incurred by a claimant in connection
with the favourable reconsideration of a determination after commencement, subject to
certain conditions; and
require all parties to a proceeding (including employers and third parties) to disclose
any evidence that they intend to adduce at least 28 days prior to the first day of hearing
(recommendation 9.12 of the Review).
406. The purpose of these amendments is to:
control, and thereby reduce, the overall amount of costs that may be awarded or
reimbursed to a claimant in certain circumstances, as currently provided in other
Australian workers` compensation schemes;
avoid potentially lengthy and expensive merits review proceedings by introducing an
incentive and mechanism to resolve claims before proceedings are commenced and, if
proceedings are commenced, earlier in the proceedings; and
limit the need for and length of hearings before the AAT, noting that disputes in the
Comcare scheme take longer to resolve than disputes in other Australian workers`
compensation schemes (see pages 172-174 of the Review).
Commencement
407. The amendments in Schedule 11 to the Bill commence on a day to be fixed by
Proclamation, but no later than 12 months after Royal Assent. The extended period for
Proclamation is necessary to enable Comcare to prepare a Schedule of Legal Costs in
consultation with the legal profession.
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
408. This item amends subsection 4(1) of the Act by inserting a new definition of Schedule
of Legal Costs` consequential on the enactment of new section 67A (see item 8 below).
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Item 2 - After section 62
New subsection 62A - Reimbursement of costs incurred by a claimant in connection with
reconsideration of a determination
409. This item inserts new section 62A which will enable a determining authority to
reimburse costs reasonably incurred by a claimant in connection with a reconsideration, for
example, reasonable legal fees and medical report costs, where:
the determining authority has received a request for reconsideration in respect of a
determination under subsection 62(2) of the Act;
the reconsideration has resulted in either a variation of the determination in a way that
is more favourable for the claimant, or the revocation of the determination; and
the claimant gives the determining authority a written undertaking not to seek a review
of the decision by the AAT.
410. Where an undertaking is given, and costs are reimbursed, the claimant is not entitled to
seek review of the decision by the AAT unless the undertaking is withdrawn, by written
notice given to the determining authority, and the reimbursement amount is repaid to the
determining authority.
411. The purpose of this provision is to provide an incentive and mechanism to resolve
claims before potentially lengthy and expensive merits review proceedings are commenced.
Item 3 - After subsection 66(1)
412. This item inserts new subsection 66(1A) which prevents any party (other than the
claimant) from presenting any evidence in proceedings before the AAT which has not been
disclosed to the AAT at least 28 days before the hearing date, except with the leave of the
AAT. A similar restriction currently applies in relation to claimants under section 66 of the
Act.
413. This amendment is consistent with the AAT`s practice, procedural fairness, the
obligation to act as a model litigant and the requirement for respondents to use their best
endeavours to assist the AAT to make its decision in relation to the proceeding.
Item 4 - Subsection 67(8A)
Item 5 - Subsections 67(8B) and (9)
Item 6 - Subsection 67(10)
414. These items amend section 67 of the Act to enable the AAT to make partial costs orders
- subject to the Schedule of Legal Costs - where it is appropriate to do so in all the
circumstances.
Item 7 - After subsection 67(10)
415. This item inserts new subsections 67(10A) and (10B).
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416. New subsection 67(10A) requires the AAT to comply with the Schedule of Legal Costs
prescribed under new section 67A (see item 8 below).
417. New subsection 67(10B) gives the AAT the discretion to make orders requiring a
claimant to pay the costs of another party to the proceedings, but only if:
the claimant instituted the proceedings under Part VI of the Act;
those proceedings were dismissed under section 42B of the Administrative Appeals
Tribunal Act 1975; and
another party to the proceedings has applied for an order that the costs of the
proceedings incurred by that party be paid by the claimant.
Item 8 - At the end of Part VI
New subsection 67A - Schedule of Legal Costs
418. This item adds new section 67A empowering Comcare to prescribe a Schedule of Legal
Costs limiting:
the costs that can be ordered by the AAT under subsections 67(8), (8A), (8B) and (9) of
the Act as amended; and
the amount a determining authority can reimburse a claimant under new section 62A.
419. New subsections 67A(4) and (5) provide that different amounts may be specified in, or
ascertained in accordance with, the Schedule of Legal Costs in different circumstances,
including where:
an agreement is reached between the parties to a proceeding instituted after
commencement as to the terms of a decision of the AAT in the proceeding or in relation
to a part of the proceeding or a matter arising out of the proceeding in accordance with
section 42C of the Administrative Appeals Tribunal Act 1975; and
the agreement was reached as the result of a process set out in the Schedule of Legal
Costs (for example, a formal settlement offer process).
420. Comcare will be required to take all reasonable steps to ensure that a Schedule of Legal
Costs is in force at all times after commencement.
421. The Schedule of Legal Costs will be a legislative instrument for the purposes of the
Legislative Instruments Act 2003.
Part 2 - Application Provisions
Item 9 - Application of amendments
422. This item provides that:
new section 62A applies in relation to a decision made after commencement of this
item; and
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the amendments to sections 66 and 67 of the Act, and new section 67A, apply in
relation to proceedings instituted after the commencement of this item.
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SCHEDULE 12 - PERMANENT IMPAIRMENT
Overview
423. Compensation for permanent impairment and non-economic loss is paid as a lump sum.
The compensation is separate from, and additional to, weekly incapacity payments payable to
an injured employee under the Act:
weekly incapacity payments are paid to replace an employee`s regular salary or wages
and are referred to as compensation for economic loss; and
lump sum compensation is paid to compensate for permanent impairment resulting
from an injury (that is, the loss of the use, or damage or malfunction, of any part of the
body or of any bodily system or function or part of such system or function) and for
loss or damage of a non-economic kind suffered by the employee (including pain and
suffering, a loss of expectation of life or a loss of the amenities or enjoyment of life)
resulting from that injury or impairment and of which the employee is aware.
424. Schedule 12 to the Bill amends the Act to:
combine the compensation payable for permanent impairment under section 24 of the
Act and compensation payable for non-economic loss under section 27 of the Act into a
single permanent impairment payment under section 24 and increase the maximum
benefit payable for permanent impairment to $350,000;
provide a new method for calculating permanent impairment compensation that permits
a more equitable distribution of compensation based on the level of permanent
impairment (recommendation 8.5 of the Review);
treat associated injuries as a single injury so that the impairment resulting from that
deemed single injury can be combined to achieve a whole person impairment value
(recommendation 8.2 of the Review);
require relevant authorities to discount the pre-existing degree of permanent
impairment (both compensable and non-compensable) when assessing the level of
permanent impairment resulting from an injury; and
exclude access to permanent impairment compensation for secondary psychological or
psychiatric ailments and injuries.
Commencement
425. The amendments in Schedule 12 to the Bill commence on a day to be fixed by
Proclamation, but no later than 12 months after Royal Assent. The extended period for
Proclamation is necessary to enable Comcare and licensees to establish systems and
processes to give effect to the new permanent impairment requirements.
Part 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
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Item 1 - Subsection 4(1) (definition of non-economic loss)
Item 2 - Subsection 13(1) (definition of relevant amount)
426. These items repeal and amend certain definitions as a consequence of the repeal of
section 27 of the Act by item 11.
Item 3 - At the end of subsection 24(1)
427. This item adds a note to the end of subsection 24(1) of the Act to refer to new sections
28A, 28B and 28C which impact on the assessment of the degree of permanent impairment.
Item 4 - Subsection 24(3)
428. This item makes a consequential amendment to subsection 24(3) of the Act (see item 5
below).
Item 5 - Subsection 24(4)
429. This item amends section 24 of the Act to substitute a new subsection 24(4) and insert
new subsection 24(4A) which introduces an algorithmic formula based on multiplying factors
that must be used to determine the amount of compensation payable for permanent
impairment assessed at less than 75% of the whole person.
430. The amount of compensation currently payable for permanent impairment is assessed
as a percentage of the maximum amount payable under section 24 of the Act based on the
degree of permanent impairment determined by Comcare expressed as a percentage. For
example, an employee with a 50% permanent impairment receives 50% of the maximum
amount payable.
431. New subsection 24(4) provides that an employee with a permanent impairment
resulting from an injury (or deemed single injury under new section 28B - see item 20 below)
of 75% or more will receive the maximum amount payable under section 24 of the Act.
432. New subsection 24(4A) provides that an employee with an impairment of 74% or less
will receive compensation calculated in accordance with an algorithmic formula based on
multiplying factors specified in the table in clause 1 of Schedule 1 to the Act (see item 26
below).
433. These amendments give effect to recommendation 8.5 of the Review and ensure that
those employees with the greatest level of impairment receive the greatest compensation.
Illustrative examples
Under the provisions of the current approved Guide and using the statutory maximum rate of
$350,000:
1. A 5% permanent binaural hearing loss resulting from a compensable injury would be
assessed at 2.5% whole person impairment--this should be rounded to the nearest whole
integer in the multiplying factors table in Schedule 1 to the Act, which in this example is
3.0%:
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0.03 x 0.18 x $350,000 = $1890
2. A complete loss of taste resulting from a compensable injury would be assessed at 10%
whole person permanent impairment:
0.10 x 0.25 x $350,000 = $8750
3. A compensable compression fracture of one vertebral body of more than 50%, with
unilateral neurological compromise, would be assessed at 50% whole person impairment:
0.50 x 1.00 x $350,000 = $175,000
4. A compensable mesothelioma would be assessed at 85% whole person impairment:
= $350,000.
Item 6 - After subsection 24(8)
434. This item inserts new subsections 24(8A) and (8B).
435. New subsection 24(8A) provides that where 2 or more injuries are treated as a single
injury under new section 28B, the thresholds in subsections 24(7), (7A) and (8) of the Act do
not apply.
436. New subsection 24(8B) provides that where 2 or more injuries are treated as a single
injury under new section 28B and Comcare determines that the degree of permanent
impairment resulting from the deemed single injury is less than 10%, an amount of
compensation is not payable to the employee under section 24 of the Act.
Item 7 - Subsection 24(9)
437. This item amends subsection 24(9) of the Act and substitutes the existing maximum
amount prescribed for the purposes of section 24 of the Act with the amount of $350,000.
This amount is to be indexed annually in accordance with section 13 of the Act.
Item 8 - After subsection 25(3)
438. This item inserts new subsection 25(3A) and provides that subsection 25(3) of the Act
has effect subject to new section 25A (see item 10 below). New section 25A provides for the
reduction of compensation payable for permanent impairment where the employee makes a
subsequent claim for permanent impairment compensation under Division 4 of Part II of the
Act.
439. Subsection 25(3) of the Act will continue to apply, subject to new section 25A, where
Comcare makes a final determination of the degree of permanent impairment of the employee
after an amount of compensation has been paid to an employee following the making of an
interim determination.
Item 9 - At the end of section 25
440. This item inserts new subsections 25(6) and (7).
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441. New subsection 25(6) provides that where 2 or more injuries are treated as a single
injury under new section 28B, the thresholds in subsections 25(4) and (5) of the Act do not
apply.
442. New subsection 25(7) provides that where 2 or more injuries are treated as a single
injury under new section 28B, and Comcare has made a final assessment of the degree of
permanent impairment of the employee resulting from the single injury, no further amounts
of permanent impairment compensation are payable to the employee in respect of a
subsequent increase in the degree of impairment, unless the increase is 10% or more.
Item 10 - After section 25
New section 25A - Reduction of compensation
443. This item inserts new section 25A which provides for the reduction of compensation
payable for permanent impairment where the employee has previously been paid permanent
impairment compensation and makes a subsequent claim for compensation under Division 4
of Part II of the Act.
444. New subsection 25A(1) provides that the amount of permanent impairment
compensation payable to the employee on the determination of the subsequent claim is to be
reduced (but not below zero) by the total amount of permanent impairment compensation
previously paid to the employee in respect of the injury.
445. New subsection 25A(2) provides that where 2 or more injuries are treated as a single
injury under new section 28B, a claim or determination in relation to any of the individual
injuries is taken to be, and to have been, a claim or determination in relation to that deemed
single injury, and compensation paid in respect of any of the individual injuries is taken to be,
and to have been, compensation paid in respect of that deemed single injury.
Illustrative example
Robyn suffers compensable lower back, neck and shoulder injuries and each of those injuries
is an associated injury in relation to each other of those injuries. In 2004, the whole person
impairment resulting from Robyn`s lower back injury was finally determined by Comcare to
be 10% and she received $20,000. In 2012, the whole person impairment resulting from
Robyn`s neck injury was finally determined by Comcare to be 10% and she received
$23,000.
Robyn subsequently gives an undertaking to Comcare in accordance with the transitional
provisions and makes a claim for permanent impairment compensation. The whole person
impairment resulting from Robyn`s deemed single injury (that is, the combined impairment
from all associated injuries) is determined to be 30%. Using the statutory maximum rate of
$350,000, the amount of compensation payable to Robyn is calculated as follows:
0.30 x 0.50 x $350,000 = $52,500
$52,500 - $20,000 - $23,000 = $9500
In the above example, if Robyn had been awarded $25,000 in 2004 and $28,000 in 2012, the
calculation would be as follows:
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0.30 x 0.50 x $350,000 = $52,500
$25,000 + $28,000 = $53,000
$52,500 < $53,000 = nil compensation.
Item 11 - Section 27
446. This item repeals section 27 of the Act which deals with compensation for non-
economic loss. There will be a single permanent impairment payment under section 24 of the
Act.
Item 12 - At the end of paragraph 28(1)(a)
Item 13 - Paragraph 28(1)(b)
Item 14 - Paragraph 28(1)(c)
447. These items make amendments to section 28 of the Act as a consequence of the repeal
of section 27 of the Act by item 11 above.
Item 15 - After subsection 28(1)
448. This item amends section 28 of the Act by inserting new subsections 28(1A) to (1E).
449. New subsection 28(1A) enables Comcare to prepare a Guide to the Assessment of the
Degree of Permanent Impairment` under subsection 28(1) of the Act (the approved Guide) to
include methods by which the degree of permanent impairment resulting from an injury
(expressed as a percentage) is to be reduced where an employee has a pre-existing
impairment that is permanent immediately before the injury. This might include methods that
concern the permanent loss, loss of the use, or damage of malfunction, of any part of the body
or of any bodily system or function or part of such system or function resulting from any
previous injury (regardless of whether the impairment results from a compensable injury),
pre-existing condition or abnormality.
450. New subsection 28(1B) provides that if the pre-existing degree of permanent
impairment cannot be determined under the approved Guide, the degree of permanent
impairment resulting from the injury is to be reduced by 10%. If, for example, the degree of
permanent impairment is assessed as 20% and new subsection 28(1B) operates to require a
10% reduction in that impairment, the degree of permanent impairment is reduced from 20%
to 18% (a reduction of 10%). In the case of a deemed single injury under new section 28B,
new subsection 28(1B) is to be applied to each individual injury before the impairment
ratings are combined.
451. New subsection 28(1C) provides that the approved Guide may set out criteria and
methodology for determining the pre-existing degree of permanent impairment.
452. New subsection 28(1D) clarifies that that the reduction of permanent impairment
compensation on account of a pre-existing permanent impairment may be a reduction to 0%.
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453. New subsection 28(1E) clarifies that it is immaterial whether compensation has been
paid, or is payable, in respect of the pre-existing permanent impairment.
454. These amendments will align the Comcare scheme with provisions in other Australian
workers` compensation schemes, for example, section 323 of the Workplace Injury
Management and Workers Compensation Act 1998 (NSW).
Item 16 - Subsection 28(4)
Item 17 - Subsection 28(5)
Item 18 - Subsection 28(6)
Item 19 - Subsection 28(6)
455. These items amend section 28 of the Act to remove references to non-economic loss as
a consequence of the repeal of section 27 by item 11 above.
Item 20 - At the end of Division 4 of Part II
456. This item adds new sections 28A, 28B and 28C.
New section 28A: Combined values - single injury
457. New section 28A provides that where a single injury to an employee results in 2 or
more permanent impairments, the relevant authority must, first, work out the degree of
permanent impairment for each of those permanent impairments and, second, ascertain the
degree of the permanent impairment of the employee resulting from that injury (expressed as
a percentage) in accordance with the combined values chart set out in the approved Guide.
New section 28B: Combined values - multiple injuries
458. Most workers` compensation schemes in Australia are event-based or accident-based
and, in the case of multiple injuries, use a combined values chart to determine one overall
impairment value so that, regardless of the number of injuries or impairments, the combined
value does not exceed 100% of the whole person. This was the original intention of the Act.
459. However, in Canute v Comcare [2006] HCA 47; (2006) 226 CLR 535 the High Court
decided that where an employee sustains 2 injuries (in that case, a physical injury to the back
and a secondary psychological injury), the permanent impairment resulting from each injury
must be assessed separately, and the permanent impairment from each injury must
individually satisfy the relevant statutory threshold. The High Court`s decision has produced
anomalous, and in some cases unfair, results in practice. For example:
an injured employee who has suffered multiple injuries resulting in permanent
impairments each of which fall below the statutory threshold will receive no permanent
impairment compensation even if the combined impairment value would meet the
threshold; and
conversely, multiple injuries arising from one incident which reach the applicable
threshold will be separately compensable, resulting in the total compensation payable
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being greater than the compensation that would have been payable had the resulting
impairments been combined.
460. To address that anomaly and inequity, new subsection 28B(1) provides that associated
injuries resulting in permanent impairment are to be treated as a single injury and that the
deemed single injury is taken to have resulted in each of those permanent impairments. When
assessing the degree of permanent impairment resulting from the deemed single injury, the
relevant authority must, first, work out the degree of permanent impairment for each of those
permanent impairments and, second, ascertain the degree of permanent impairment of the
employee resulting from that deemed single injury (expressed as a percentage) in accordance
with the combined values chart set out in the approved Guide.
461. This amendment gives effect to recommendation 8.2 of the Review.
New section 28C: Psychological or psychiatric ailments etc. that are secondary injuries
462. Under the Act permanent impairment payments for psychological injuries (whether
primary or secondary) are currently higher than for any other type of injury. New section 28C
will provide that permanent impairment compensation is not payable for psychological or
psychiatric ailments or injuries that are secondary injuries. This will closer align the Comcare
scheme with provisions in other Australian workers` compensation schemes, for example,
section 65A of the Workers Compensation Act 1987 (NSW).
463. New section 28C provides that where an employee suffers a primary injury (of any
kind) and the primary injury results in a secondary injury to the employee (being a
psychological or psychiatric ailment, injury or aggravation), Division 4 of Part II of the Act
does not apply to the secondary injury and, consequently, the secondary injury must be
disregarded in determining the degree of the permanent impairment of the employee.
464. The effect of this amendment is that compensation for permanent impairment will
continue to be payable for primary psychological or psychiatric injuries, for example, a major
depressive disorder that was contributed to, to a significant degree, by a traumatic incident at
work. However, no compensation will be payable for permanent impairment where the
psychological or psychiatric injury is a secondary injury, for example, a major depressive
disorder that was the latent result of a compensable back injury. All other forms of
compensation, including incapacity payments, and access to rehabilitation, will continue to be
available for secondary psychological or psychiatric injuries.
Item 21 - Paragraph 45(1)(a)
Item 22 - Subsection 45(1)
Item 23 - Paragraph 45(2)(b)
Item 24 - Subsection 55(4)
Item 25 - Subsection 60(1) (definition of determination)
465. These items make minor technical amendments to a number of provisions as a
consequence of the repeal of section 27 of the Act by item 11 above.
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Item 26 - At the end of the Act
Schedule 1 - Multiplying factors for calculating compensation for injuries resulting in
permanent impairment
466. This item adds new Schedule 1 to the end of the Act which includes a table of
multiplying factors for calculating permanent impairment compensation under new
subsection 24(4A) (see item 5 above).
Part 2 - Application and transitional Provisions
Item 27 - Application of amendments
467. This item provides that the amendments made by Schedule 12 to the Bill apply in
relation to the determination of a claim for permanent impairment made after commencement
of this item.
Item 28 - Transitional - claims
468. This item contains transitional rules in respect of the treatment of claims for permanent
impairment compensation made by an employee who had made a claim prior to
commencement of this item - referred to in this item as an old claim` - in respect of the
same injury.
469. Subitem 28(2) provides that an employee is not entitled to make a claim for permanent
impairment - referred to in item 28 as a new claim` - unless the old claim has been finally
determined and the employee gives the relevant authority a written undertaking not to request
reconsideration of, or apply to the AAT for review of, or institute legal proceedings (other
than in the High Court) in relation to, a determination or decision made in respect of the old
claim.
470. Subitem 28(4) provides that where an employee institutes proceedings in the High
Court in relation to the determination of an old claim, the relevant authority may defer
considering and determining any new claim until those proceedings have been finally
determined, and the timeframes in new subsections 61(1A) to (1D) do not apply to the new
claim.
471. Subitem 28(5) imposes a threshold of 10% permanent impairment in relation to all new
claims where compensation was previously paid in respect of an old claim.
472. Subitem 28(6) reduces the amount of permanent impairment compensation in respect of
a new claim by the total amount of compensation previously paid to the employee in respect
of the injury.
473. Subitem 28(7) provides that new sections 28A, 28B and 28C are to be applied when
determining transitional claims under item 28. Subitem 28(8) provides that, in the case of a
deemed single injury under new section 28B, a claim or determination in relation to any of
the individual injuries is taken to be, and to have been, a claim or determination in relation to
that deemed single injury, and compensation paid in respect of any of the individual injuries
is taken to be, and to have been, compensation paid in respect of that deemed single injury.
These subitems ensure that item 28 applies to every old claim relating to the deemed single
injury, and that compensation will only be payable in respect of a new claim if the amount of
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compensation exceeds the total amount of compensation paid to the employee in respect of
any old claim relating to the deemed single injury.
Item 29 - Transitional - indexation
474. This item ensures that the maximum benefit payable for permanent impairment
specified in subsection 24(9) of the Act will be indexed on 1 July following 6 months from
commencement of this item.
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SCHEDULE 13 - LICENCES
Overview
475. Schedule 13 to the Bill amends the Act to clarify that a single employer licence for an
eligible corporation or group employer licence must authorise acceptance of liability and
management of claims, and that a single employer licence for a Commonwealth authority
must authorise acceptance of liability or management of claims, or both.
476. When enacted, the Safety, Rehabilitation and Compensation Amendment Bill 2014
(which is currently before Parliament) will amend the Act to allow for group employer
licences to be issued. Schedule 13 to the Bill makes amendments to clarify the operative
effect of those amendments in so far as they relate to authorising the acceptance of liability
and management of claims.
Commencement
477. The amendments in Schedule 13 to the Bill commence on either the day after Royal
Assent or the commencement of Schedule 2 to the Safety, Rehabilitation and Compensation
Legislation Amendment Act 2015, whichever is the later.
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(10A)
Item 2 - At the end of subsection 4(10A)
478. These items make technical amendments to subsection 4(10A) of the Act to provide
that, where an employee is employed by a corporation covered by a group employer licence,
certain references in the Act to Comcare are to be read as references to a corporation that is
designated as a relevant authority for that group employer licence.
Item 3 - After section 104A
479. This item adds new sections 104B, 104C and 104D.
New section 104B - Single employer licence granted to a corporation must authorise
acceptance of liability and management of claims
480. New section 104B requires a single employer licence granted to a corporation to
authorise both acceptance of liability and management of claims. Sections 108 and 108B of
the Act (as amended by the Safety, Rehabilitation and Compensation Legislation Amendment
Bill 2014) empower the Commission to determine the scope of a licence holder`s liability and
claims management responsibilities.
New section 104C - Single employer licence granted to a Commonwealth authority must
authorise acceptance of liability or management of claims, or both
481. New section 104C requires a single employer licence granted to a Commonwealth
authority to authorise either acceptance of liability or management of claims, or both.
Sections 108 and 108B of the Act (as amended by the Safety, Rehabilitation and
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Compensation Legislation Amendment Bill 2014) empower the Commission to determine the
scope of a licence holder`s liability and claims management responsibilities.
New section 104D - Group employer licence must authorise acceptance of liability and
management of claims
482. New section 104D requires a group employer licence to authorise both acceptance of
liability and management of claims by each relevant authority designated for the licence.
Sections 108AA and 108CA of the Act (as added by the Safety, Rehabilitation and
Compensation Legislation Amendment Bill 2014) empower the Commission to determine the
scope of each relevant authority`s liability and claims management responsibilities.
Item 4 - At the end of section 108D
483. Section 108D of the Act (as amended by the Safety, Rehabilitation and Compensation
Legislation Amendment Bill 2014) provides that the Commission may grant a single
employer licence on conditions. This item adds new subsection 108D(3) which clarifies that
the application of the Act is subject to the conditions of a single employer licence.
Item 5 - At the end of section 108DA
484. Section 108DA of the Act (as added by the Safety, Rehabilitation and Compensation
Legislation Amendment Bill 2014) provides that the Commission may issue a group
employer licence on conditions. This item adds new subsection 108DA(6) which clarifies that
the application of the Act is subject to the conditions of a group employer licence.
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SCHEDULE 14 - GRADUAL ONSET INJURIES
Overview
485. Schedule 14 to the Bill provides that compensation responsibilities for gradual onset
injuries and associated injuries (including for incapacity, impairment and death resulting from
such injuries) will rest with the most recent employer where employment by 2 or more
employers covered by the Act have significantly contributed to the gradual onset injury, and
provides a mechanism for recovery of compensation payments made in relation to gradual
onset injuries and associated injuries.
Commencement
486. The amendments in Parts 1 and 3 of Schedule 14 to the Bill commence on the day after
Royal Assent.
487. The amendments in Part 2 of Schedule 14 to the Bill commence immediately after the
commencement of Part 1 or immediately after the commencement of Schedule 2 to the
Safety, Rehabilitation and Compensation Legislation Amendment Act 2015, whichever is the
later.
Part 1 - General Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
488. This item inserts a number of new definitions into subsection 4(1) of the Act of terms
that are defined in new section 7B (see item 2 below) for the purposes of new Division 5A of
Part VIII of the Act (see item 4 below) and related provisions.
Item 2 - Before section 8
489. This item inserts new section 7B that defines the terms gradual onset injury`,
contributory employment` in relation to a gradual onset injury and financial authority` in
relation to a gradual onset injury.
490. New subsection 7B(1) defines a gradual onset injury` generally as a disease of gradual
development or the result of a disease of gradual development. However, new paragraph
7B(1)(b) also deems a permanent hearing loss injury caused by a gradual process to be a
gradual onset injury for the purposes of the Act.
491. New subsection 7B(2) defines contributory employment` in relation to a gradual onset
injury as employment by a premium payer (that is, an Entity or Commonwealth authority,
other than a licensed authority, as those terms are defined in the Act) or a licensee which has
contributed (to a significant degree) to the gradual onset injury. New subsection 7B(2) also
identifies the responsible financial authority` - that is, the employer who is liable to pay
compensation in respect of the gradual onset injury - in relation to each type of contributory
employment. In particular:
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Comcare is liable to pay compensation for a gradual onset injury suffered by an
employee if the injury was contributed to, to a significant degree, by the employee`s
employment by a premium payer; and
a licensee is liable to pay compensation for a gradual onset injury suffered by an
employee if the injury was contributed to, to a significant degree, by the employee`s
employment by the licensee.
492. New subsection 7B(3) provides that new subsection 7B(2) does not apply to the liable
employer - basic rule` in new section 35 (see item 50 in Schedule 2 to the Bill). This ensures
the concept of liable employer` in the substantive provisions relating to rehabilitation
responsibilities set out in Schedule 2 to the Bill are kept separate and distinct from the issues
going to compensation responsibilities in Schedule 14 to the Bill.
Item 3 - After subsection 97A(1)
493. This item inserts new subsection 97A(1A) that allows Comcare to have regard to the
proportion of the contribution to a gradual onset injury made by 2 or more premium payers
who are responsible for the contributory employment when setting premiums under
section 97 of the Act.
Item 4 - After Division 5 of Part VIII
494. This item inserts new Division 5A into Part VIII of the Act that:
allocates primary responsibility for the payment of compensation in relation to a
gradual onset injury (or an associated injury) suffered by an employee; and
provides a mechanism for the recovery of compensation payments made in relation to a
gradual onset injury (or an associated injury).
New Division 5A - Gradual onset injuries
New section 108DB - Application of this Division
495. New section 108DB provides that new Division 5A of Part VIII of the Act applies to a
gradual onset injury (or an associated injury) if there are 2 or more contributory employments
and at least one is employment by a licensed corporation.
496. New subsection 108DB(2) provides that the most recent contributory employment` for
the purposes of applying the new Division is to be ascertained as at the time when the gradual
onset injury was notified under section 53 of the Act.
New section 108DC - Liability of Comcare
New section 108DD - Liability of a licensee
497. New sections 108DC and 108DD allocate primary responsibility for the payment of
compensation under the Act for a gradual onset injury (or an associated injury) to the
employer responsible for the most recent contributory employment. In particular:
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new section 108DC provides that Comcare has primary responsibility for the payment
of compensation where the most recent contributory employment was employment by a
premium payer; and
new section 108DD provides that the licensee has primary responsibility for the
payment of compensation where the most recent contributory employment was
employment by the licensee.
498. These provisions ensure that employees (or their dependants) have full recourse under
the Act against the relevant authority responsible for the last employment that made a
significant contribution to the gradual onset injury without the need to claim against all
potentially liable relevant authorities.
New section 108DF - Shared liability
499. New section 108DF contains provisions relating to the recovery of compensation
payments made by a financial authority for a gradual onset injury or an associated injury
where it has paid compensation under the Act and another financial authority also has a
liability under the Act for the injury. It also contains provisions requiring the first financial
authority to re-pay an amount to the other financial authority (in proportion to its contribution
to the gradual onset injury) if it receives any compensation or damages under the Act.
500. New subsection 108DF(1) provides that new section 108DF applies where a financial
authority has paid compensation or another amount under the Act in respect of a gradual
onset injury or an associated injury and another financial authority is responsible for another
contributory employment.
501. New subsection 108DF(2) provides that financial authorities may enter into an
agreement regarding the reimbursement of a part of the compensation or other amounts paid
under the Act. New subsection 108DF(3) provides that if the financial authorities do not enter
into such an agreement, the financial authority that has paid the compensation or other
amounts under the Act in respect of a gradual onset injury or an associated injury may
recover a proportion of the compensation or other amounts it has paid by action in a court of
competent jurisdiction. The amount to which the financial authority is entitled to recover is to
be calculated with reference to the proportion of the contribution to the gradual onset injury
made by any other contributory employment for which another financial authority is
responsible.
502. New subsections 108DF(4) and (5) provide that where a financial authority has
recovered compensation or other amounts paid under the Act from another financial
authority, and the first financial authority receives an amount under section 48, 50, 50A, 113,
114, 118 or 119 of the Act in relation to the gradual onset injury or associated injury, the first
financial authority must pay to the other financial authority an amount equal to the amount
received multiplied by the proportion of the contribution to the gradual onset injury made by
the other contributory employment. If the payment is not made by the first financial authority
within 30 days after receiving the amount, the payment (plus a penalty amount to be
calculated in accordance with the regulations) may be recovered by the other financial
authority by action in a court of competent jurisdiction.
503. New subsection 108DF(6) provides that an amount payable under new
subsection 108DF(3) is to be reduced by an amount paid under new subsection 108DF(4).
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New section 108DG - Constitutional limits
504. New section 108DG is a constitutional safety net which provides that new Division 5A
of Part VIII of the Act has no effect to the extent (if any) to which it imposes taxation or
results in an acquisition of property otherwise than on just terms.
Illustrative example
John worked for a Commonwealth department from 1951 to 1960 and then another
Commonwealth department from 1961 to mid-1975. John then worked for an employer that
is now a licensed corporation from mid-1975 until his retirement in 1985. During the course
of each of those employments, John was exposed to asbestos dust and fibres. In 2013 John
was diagnosed with an asbestos-related disease.
Expert evidence showed that John`s asbestos-related disease was a gradual onset injury that
was contributed to, to a significant degree, by his first and third periods of employment, but
not by his second period of employment. Consequently, the financial authority responsible
for the third period of employment is liable to pay compensation or other amounts under the
Act in respect of the asbestos-related disease and any associated injuries.
The financial authorities responsible for the first and third periods of employment
subsequently agree that the contribution from the first period was 60% and from the third
period was 40%. The financial authority responsible for the first period of employment agrees
to reimburse the financial authority responsible for the third period of employment an amount
equal to 60% of the compensation and other amounts paid under the Act.
Part 2 - Amendments contingent on the commencement of Schedule 2 to the Safety,
Rehabilitation and Compensation Legislation Amendment Act 2015
Safety, Rehabilitation and Compensation Act 1988
Item 5 - Paragraph 7B(2)(c)
Item 6 - After paragraph 7B(2)(c)
Item 7 - Paragraph 7B(2)(f)
Item 8 - At the end of subsection 7B(2)
Item 9 - At the end of section 7B
Item 10 - Paragraph 108DB(1)(d)
Item 11 - Section 108DD (heading)
Item 12 - Subsection 108DD(1)
Item 13 - Subsection 108DD(1)
Item 14 - After section 108DD
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Item 15 - At the end of section 108DF
505. These items make consequential amendments to new section 7B (see item 2 above) -
and new Division 5A of Part VIII of the Act (see item 4 above) - contingent on the
commencement of Schedule 2 to the Safety, Rehabilitation and Compensation Legislation
Amendment Act 2015.
Part 3 - Application provisions
Item 16 - Application of amendments
506. This item provides that new Division 5A of Part VIII applies in relation to an injury
sustained by an employee after commencement of this item.
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SCHEDULE 15 - SANCTIONS
Overview
507. Schedule 15 to the Bill amends the Act to streamline and enhance the existing regime
of sanctions by:
identifying key requirements of the Act that an injured employee must comply with as
obligations of mutuality`; and
where obligations of mutuality have been breached, providing for the application of
sanctions in stages, culminating in a cancellation of compensation rights.
Breaches of obligations of mutuality
508. An employee`s failure to comply with key requirements of the Act is a breach of an
obligation of mutuality`. A breach of an obligation of mutuality is defined as an act or
omission that is declared by the Act to be a breach of an obligation of mutuality. There are 2
types of breaches:
a breach of the obligations relating to suitable employment in new section 29L (see
item 14 below). A breach of this kind cannot be remedied by the employee under the
Act as it is contingent, in some cases, on an offer of employment being made by a third
party which may lapse or be withdrawn by the potential employer if the offer is refused
by the employee; and
a breach relating to any other requirement, which the employee can be directed to
remedy. These are a failure, without reasonable excuse, to:
o undergo a medical examination under section 57 of the Act (new section 29M);
o produce a medical certificate when absent from work when receiving income
replacement payments (new section 29N);
o follow a reasonable medical treatment advice (new section 29P);
o undergo an assessment for the need of household or attendant care services (new
section 29Q);
o fulfil responsibilities under a workplace rehabilitation plan (new section 29R);
o undergo a work readiness assessment (new section 29S);
o comply with information requests under sections 58 and 120A of the Act (new
section 29T);
o comply with a requirement under section 50 of the Act in relation to the conduct
of a common law claim against a third party (new section 29U); and
o provide a statutory declaration under section 118 of the Act (new section 29V).
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Sanctions regime
509. Employees who breach an obligation of mutuality in relation to the same injury or an
associated injury (as defined in new section 6B; see Schedule 17 to the Bill) will be subject to
a 3-stage sanctions regime:
for the first breach, the relevant authority must determine that the employee is subject
to the level 1 sanctions regime. In the case of a breach covered by new section 29L, the
employee`s weekly incapacity payments will be reduced by the amount that the
employee is able to earn in suitable employment in accordance with subsection 19(4) of
the Act. In the case of a breach that the employee has been directed to remedy, the
employee`s rights to compensation (other than compensation for medical treatment)
and to institute or continue any proceedings in relation to compensation (other than
proceedings in the AAT in relation to the sanctions regime) are suspended until the
breach is remedied;
for a second breach, or a failure to remedy the first breach (other than a breach covered
by new section 29L) within the period determined by the relevant authority (being no
less than 30 days), the relevant authority must determine that the employee is subject to
the level 2 sanctions regime. In the case of a breach covered by new section 29L, the
employee`s weekly incapacity payments will be reduced by the amount that the
employee is able to earn in suitable employment in accordance with subsection 19(4) of
the Act. In the case of a breach that the employee has been directed to remedy, the
employee`s rights to compensation (other than compensation for medical treatment)
and to institute or continue any proceedings in relation to compensation (other than
proceedings in the AAT in relation to the sanctions regime) are suspended until the
breach is remedied; and
for a third breach, or a failure to remedy the second breach (other than a breach covered
by new section 29L) within the period determined by the relevant authority (being no
less than 30 days), the relevant authority must determine that the employee is subject to
the cancellation regime. Under the cancellation regime the employee`s rights to
compensation and to institute or continue any proceedings in relation to compensation
(other than proceedings in the AAT in relation to the sanctions regime) in respect of all
current and future associated injuries are permanently cancelled. This will also have the
effect of permanently cancelling the employee`s right to rehabilitation. However, the
cancellation of an employee`s right to compensation and rehabilitation will not affect
the right of the employee`s dependants to claim compensation if the employee
subsequently dies as a result of an injury in respect of which compensation has been
cancelled.
Commencement
510. The amendments in Part 1 of Schedule 15 to the Bill commence on the day after Royal
Assent.
511. The amendments in Part 2 of Schedule 15 to the Bill commence on a day to be fixed by
Proclamation, but no later than 12 months after Royal Assent. The extended period for
Proclamation is necessary to enable Comcare and licensees to establish systems and
processes to give effect to the new sanctions regime.
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Part 1 - Amendments commencing on the day after Royal Assent
Division 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 1 - After Division 5 of Part II
512. This item inserts a new Division 5A into Part II of the Act - dealing with the
suspension of rights to compensation in certain situations.
Division 5A - Suspension of rights to compensation
New section 29G - Requirement for the purposes of a common law claim against a third
party
513. New section 29G suspends an employee`s (or a dependant`s) right to compensation
(other than the employee`s right to compensation for the cost of medical treatment) where the
employee (or dependant) fails to comply with a requirement made by Comcare under
subsection 50(5) of the Act in relation to a common law claim against a third party. This
amendment relocates existing provisions in subsections 50(5) and (6) of the Act.
514. New section 29U (see item 14 below) provides that an employee`s refusal or failure,
without reasonable excuse, to comply with a requirement under subsection 50(5) of the Act,
is a breach of an obligation of mutuality. Breaches of obligations of mutuality are subject to
the sanctions regime in new Subdivision B of Division 5A of Part II of the Act and may result
in the cancellation of compensation rights (see item 14 below).
New section 29J - Requirement to give a statutory declaration
515. New section 29J suspends a claimant`s right to compensation (other than the right to
compensation for the cost of medical treatment) where the claimant fails to give a statutory
declaration under subsection 118(3) of the Act. This amendment relocates existing provisions
in subsections 118(4) and (5) of the Act.
516. New section 29V (see item 14 below) provides that an employee`s refusal or failure,
without reasonable excuse, to comply with a requirement under subsection 118(3) of the Act
is a breach of an obligation of mutuality. Breaches of obligations of mutuality are subject to
the sanctions regime in new Subdivision B of Division 5A of Part II of the Act and may result
in the cancellation of compensation rights (see item 14 below).
517. Amendments made by Part 2 of Schedule 15 to the Bill add further suspension
provisions into new Division 5A of Part II of the Act (see item 11 below).
518. An employee`s right to weekly incapacity payments will also be suspended if the
employee is absent from Australia on non-work related purposes for 6 weeks or more - new
section 29K (see item 1 of Schedule 7).
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Item 2 - Subsections 50(5), (5A) and (6)
Item 3 - Subsections 118(4) and (5)
519. These items make a number of minor technical amendments that are consequential
upon the amendments made by item 1.
Division 2 - Application and transitional provisions
Item 4 - Application of amendments
Item 5 - Transitional provisions
520. These items provide that:
the suspension provisions contained in new sections 29G and 29J apply in relation to
requirements made after commencement; and
the previous suspension provisions in repealed sections 50 and 118 of the Act continue
to apply in relation to requirements made by Comcare or a relevant authority, as the
case may be, before commencement.
Part 2 - Amendments commencing on Proclamation
Division 1 - Amendments
Safety, Rehabilitation and Compensation Act 1988
Item 6 - Subsection 4(1)
521. This item inserts a number of new definitions into subsection 4(1) of the Act.
Item 7 - Subsection 4(10) and (10A)
522. This item makes technical amendments to subsections 4(10) and (10A) of the Act as a
consequence of new section 29H (see item 11 below). The amendments ensure that only
Comcare can approve specified mental health training for the purposes of new paragraph
29H(6)(c).
Item 8 - Paragraph 29G(1)(b)
Item 9 - Subsection 29G(1)
Item 10 - Subsection 29G(2)
523. These items make consequential amendments to new section 29G (see item 1 above) as
a result of amendments made by Part 2 of Schedule 15 to the Bill.
Item 11 - After section 29G
524. This item inserts a new section 29H into new Division 5A of Part II of the Act.
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New section 29H - Confirmation diagnosis not obtained for a psychological or psychiatric
ailment or injury
525. New section 29H provides that weekly incapacity payments for a psychological or
psychiatric ailment or injury (or aggravation of a psychiatric ailment or injury) are not
payable beyond an initial 12 week period unless the diagnosis is confirmed by a mental
health practitioner` - defined in new subsection 29H(6) as a psychiatrist, clinical psychologist
or a general practitioner who has completed mental health training, being training that is
approved by Comcare. The confirmation diagnosis must be certified by the mental health
practitioner in a form approved by Comcare - new section 29H(9).
526. Paragraph 29H(1)(c) makes it clear that this requirement for a confirmation diagnosis
does not apply where the initial medical examination was conducted and certified by a mental
health practitioner.
527. At present, compensation for psychological injuries can be paid on the basis of a
general practitioner`s report and can be paid for significant periods of time without any
confirmation of that diagnosis by a specialised practitioner. This amendment recognises that
the diagnosis of psychological injuries calls for relevant expertise. The purpose of requiring
the confirmation diagnosis is to ensure that the employee has been examined by a fully
qualified mental health practitioner, so as to encourage the employee to seek effective
treatment. By allowing weekly incapacity payments to be made for psychological injuries for
an initial period of 12 weeks without confirmation of diagnosis by a mental health
practitioner, the provision strikes an appropriate balance between ensuring appropriate
diagnosis on the one hand and issues of access and equity, particularly for employees in rural
and regional areas, on the other.
528. This amendment gives effect to recommendation 9.4 of the Review.
529. New subsections 29H(2) and (3) suspend an employee`s right to weekly incapacity
payments (including the right to institute or continue proceedings in relation to weekly
incapacity payments) where the employee refuses or fails, without reasonable excuse, to
undergo an examination by a mental health practitioner.
530. New subsections 29H(4) and (5) require the relevant authority to pay costs associated
with an examination, including reasonable travel costs.
531. New subsection 29H(7) enables Comcare to approve specified mental health training.
For the avoidance of doubt, new subsection 29H(8) clarifies that an approval under new
subsection 29H(7) is not a legislative instrument within the meaning of section 5 of the
Legislative Instruments Act 2003. This provision is declaratory of the law and does not
amount to an exemption from the Legislative Instruments Act 2003.
Item 12 - Subsection 29J(1)
Item 13 - Subsection 29J(2)
532. These items make consequential amendments to new section 29J (see item 1 above) to
disapply the section to employees. Instead, upon commencement of Part 2 of Schedule 15 to
the Bill, new section 29V (see item 14 below) provides that an employee`s refusal or failure,
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without reasonable excuse, to comply with a requirement under subsection 118(3) of the Act
is a breach of an obligation of mutuality.
Item 14 - Before Division 6 of Part II
533. This item inserts a new Division 5B into Part II of the Act dealing with obligations of
mutuality and sanctions in respect of breaches of obligations of mutuality.
New Division 5B - Obligations of mutuality
New Subdivision A - Breach of obligation of mutuality
New section 29L - Suitable employment
534. New section 29L establishes an obligation of mutuality in relation to:
a failure, without reasonable excuse, to accept an offer of suitable employment;
a failure, without reasonable excuse, to engage, or to continue to engage, in suitable
employment; and
a failure, without reasonable excuse, to seek suitable employment.
535. The regulations can provide for exceptions to the breach of obligation of mutuality
provisions.
New section 29M - Medical examination
536. New section 29M provides that a refusal or failure, without reasonable excuse, to
undergo a medical examination under subsection 57(1) of the Act, or obstruction of a medical
examination, is a breach of an obligation of mutuality.
New section 29N - Employee absent from work without a medical certificate, etc
537. New section 29N applies to an injured employee who is in suitable employment and,
under the terms and conditions of the suitable employment, is required to produce a medical
certificate that covers an absence from work. New subsection 29N(2) provides that a refusal
or failure, without reasonable excuse, to produce a medical certificate is a breach of an
obligation of mutuality.
New section 29P - Employee does not follow medical treatment advice
538. New section 29P applies to an injured employee who has received reasonable medical
treatment advice from a legally qualified medical practitioner or dentist and refuses or fails,
without reasonable excuse, to follow that advice.
539. New subsection 29P(2) provides that a refusal or failure, without reasonable excuse, to
follow that medical treatment advice is a breach of an obligation of mutuality.
540. New subsections 29P(3)-(5) set out the circumstances that constitute a reasonable
excuse for the purposes of subsection 29P(1).
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New section 29Q - Assessment of need for household services and attendant care services
541. New section 29Q provides that an injured employee`s refusal or failure, without
reasonable excuse, to undergo an assessment under new subsection 29B(1), or an obstruction
of such an assessment, is a breach of an obligation of mutuality.
New section 29R - Workplace rehabilitation plan
542. New section 29R provides that an injured employee`s refusal or failure, without
reasonable excuse, to fulfil his or her responsibilities under a workplace rehabilitation plan is
a breach of an obligation of mutuality.
New section 29S - Work readiness assessment
543. New section 29S provides that an injured employee`s refusal or failure, without
reasonable excuse, to undergo a work readiness assessment, or an obstruction of such an
assessment, is a breach of an obligation of mutuality.
New section 29T - Information notices
544. New section 29T provides that an injured employee`s refusal or failure, without
reasonable excuse, to comply with the requirements to provide information or a document
under new subsections 58(1) and 120A(1) (see items 6 and 26 of Schedule 3 to the Bill) is a
breach of an obligation of mutuality.
New section 29U - Requirement for the purposes of a common law claim against a third
party
545. New section 29U provides that an injured employee`s refusal or failure, without
reasonable excuse, to comply with a requirement made by Comcare under subsection 50(5) of
the Act in relation to a common law claim against a third party is a breach of an obligation of
mutuality.
New section 29V - Requirement to give a statutory declaration
546. New section 29V provides that an injured employee`s refusal or failure, without
reasonable excuse, to provide a statutory declaration when required to do so under subsection
118(3) of the Act is a breach of an obligation of mutuality.
New Subdivision B - Sanctions
547. Breaches of obligations of mutuality are subject to the sanctions regime in new
Subdivision B of Division 5B of Part II of the Act and may result in the cancellation of rights
under the Act.
New section 29W - Level 1 sanctions regime
548. New section 29W establishes the level 1 sanctions regime which applies to the first
breach of an obligation of mutuality. If the relevant authority is satisfied that an obligation of
mutuality has been breached at any time in the past 12 months, the relevant authority must
determine that the employee is subject to the level 1 sanctions regime in relation to the injury
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(and each associated injury). This determination must be made even if the breach has been
rectified.
549. A determination comes into force at a time specified in the determination which must
not be earlier than the date of the breach and must not be later than the day on which the
determination is given to the employee.
550. A determination remains in force indefinitely unless the employee becomes subject to
the level 2 sanctions regime.
551. In the case of a breach of an obligation of mutuality (other than a breach covered by
new section 29L relating to suitable employment) that has not been rectified, the relevant
authority must also determine that, if the breach continues for longer than the amount of time
specified in the notice (being 30 or more days), the continuing breach will be treated as
another breach. This will enable the relevant authority to determine that the employee is
subject to the level 2 sanctions regime in relation to the injury (and each associated injury).
552. The consequence of a level 1 sanctions determination while the employee is in breach
of an obligation of mutuality (other than a breach covered by section new 29L relating to
suitable employment) is the suspension under new section 29Y of the employee`s rights:
to compensation (other than compensation for medical treatment); and
to institute or continue any proceedings in relation to compensation (other than
proceedings in the AAT in relation to the sanctions regime)
in so far as those rights relate to that injury (and each associated injury).
New section 29X - Level 2 sanctions regime
553. New section 29X establishes the level 2 sanctions regime which applies to an employee
who is subject to the level 1 sanctions regime. If the relevant authority is satisfied that an
obligation of mutuality in relation to an injury or an associated injury has been breached at
any time in the past 12 months, the relevant authority must determine that the employee is
subject to the level 2 sanctions regime in relation to the injury (and each associated injury).
554. This determination must be made even if the breach has been rectified.
555. A determination comes into force at a time specified in the determination which must
not be earlier than the date of the breach and must not be later than the day on which the
determination is given to the employee.
556. A determination remains in force indefinitely unless the employee becomes subject to
the cancellation regime.
557. In the case of a breach of an obligation of mutuality (other than a breach covered by
new section 29L relating to suitable employment) that has not been rectified, the relevant
authority must also determine that, if the breach continues for longer than the amount of time
specified in the notice (being 30 or more days), the continuing breach will be treated as
another breach. This will enable the relevant authority to determine that the employee is
subject to the cancellation regime in relation to the injury (and each associated injury).
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558. The consequence of a level 2 sanctions determination while the employee is in breach
of an obligation of mutuality (other than a breach covered by new section 29L relating to
suitable employment) is the suspension under new section 29Y of the employee`s rights:
to compensation (other than compensation for medical treatment); and
to institute or continue any proceedings in relation to compensation (other than
proceedings in the AAT in relation to the sanctions regime)
in so far as those rights relate to that injury (and each associated injury).
New section 29Y - Suspension of compensation - employee subject to the level 1 sanctions
regime or the level 2 sanctions regime
559. Where an employee is subject to either the level 1 sanctions regime or the level 2
sanctions regime in relation to an injury, and the employee is in breach of an obligation of
mutuality in relation to the injury or an associated injury (other than a breach covered by new
section 29L relating to suitable employment), new section 29Y provides for the suspension of
the employee`s rights:
to compensation (other than compensation for medical treatment); and
to institute or continue any proceedings in relation to compensation (other than
proceedings in the AAT in relation to the sanctions regime)
in so far as those rights relate to that injury (and each associated injury).
560. These rights will be suspended until the breach has been repaired.
561. A breach an obligation of mutuality covered by new section 29L relating to suitable
employment is unable to be repaired by the employee as it is contingent on an offer of
employment being made by a third party that may be withdrawn by the employer if the offer
is refused by the employee. In this case, an employee`s weekly incapacity payments will be
reduced under the provisions of subsections 19(2), (2A), (2B) and (4) of the Act rather than
suspended.
New section 29Z - Cancellation regime
562. New section 29Z establishes the cancellation regime which applies to an employee who
is subject to the level 2 sanctions regime. If the relevant authority is satisfied that an
obligation of mutuality in relation to an injury or an associated injury has been breached at
any time in the past 12 months, the relevant authority must determine that the employee is
subject to the cancellation regime in relation to the injury (and each associated injury).
563. This determination must be made even if the breach giving rise to the level 2 sanction
determination has been rectified.
564. A determination comes into force at a time specified in the determination which must
not be earlier than the date of the breach and must not be later than the day on which the
determination is given to the employee.
565. A determination that an employee is subject to the cancellation regime is irrevocable.
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New section 29ZA - Cancellation of compensation - employee subject to cancellation regime
566. Where an employee is subject to the cancellation regime in relation to an injury, new
section 29ZA provides for the cancellation of the employee`s rights to compensation under
the Act and to institute or continue any proceedings in relation to compensation (other than
proceedings in the AAT in relation to the sanctions regime) in so far as those rights relate to
that injury (and each associated injury).
567. New section 29ZA also has the effect of cancelling the employee`s right to
rehabilitation under the Act. That is because subsection 4(8) of the Act provides that a
reference to an injury` is a reference to an injury in respect of which compensation is
payable. Compensation is not payable under the Act unless the employee dies as a result of a
cancelled injury and until a claim for compensation under sections 17 or 18 of the Act has
been accepted by the relevant authority.
568. The cancellation of compensation does not affect:
compensation for injuries resulting in death (section 17 of the Act);
compensation in respect of funeral expenses (section 18 of the Act); or
the operation of section 44 of the Act.
569. Section 44 of the Act does not prevent a dependant from bringing an action for
damages against the employer in respect of the death of the employee.
New section 29ZB - Liable employer to inform relevant authority of breach of obligation of
mutuality
570. New section 29ZB requires a liable employer to inform a relevant authority of any
breach by the employee of an obligation of mutuality of which the liable employer becomes
aware.
New section 29ZC - Recovery of overpayments
571. New section 29ZC enables a relevant authority to recover an overpayment where a
determination under new subsection 29W(1), 29X(1) or 29Z(1) came into force before it was
made. For example, if a relevant authority becomes aware of a breach of an obligation of
mutuality one month after the breach occurred and subsequently issues a determination, the
determination is taken to have been made at the time of the breach and any compensation
paid to the employee from the date of the breach is recoverable by the relevant authority
under section 114 of the Act.
New section 29ZD - Qualifying occasion on which employee breaches an obligation of
mutuality
572. New section 29ZD defines qualifying occasion` depending upon the nature of the
breach:
if the breach is a breach of the obligation of mutuality in relation to suitable
employment as set out in new section 29L, the qualifying occasion` is the occasion
when the breach occurred;
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for other breaches, the qualifying occasion` is the occasion when the breach first
occurred; and
if the breach continues for the amount of time (not being less than 30 days) specified in
the determination made under new section 29W or 29X, the qualifying occasion` is the
time immediately after the end of that period.
Illustrative example
Jeremy is receiving compensation under the Act for a back injury. Jeremy is incapacitated
for performing his usual duties, but he receives an offer of suitable employment which he
refuses without reasonable excuse. At this point:
Jeremy has breached an obligation of mutuality under new section 29L (the first
qualifying occasion);
Jeremy will be given a notice under new section 29W by his relevant authority,
which will determine that he is subject to the level 1 sanctions regime; and
because Jeremy committed a breach under new section 29L, his weekly incapacity
payments will be reduced by the amount that he would have been able to earn had
he engaged in that suitable employment, under subsection 19(4) of the Act.
Some time later, Jeremy`s relevant authority requires him to undergo a medical
examination under subsection 57(1) of the Act. Jeremy refuses to undergo the medical
examination without a reasonable excuse. At this point:
Jeremy has breached an obligation of mutuality under new section 29M (the second
qualifying occasion);
Jeremy will be given a notice under new section 29W by his relevant authority; and
Jeremy`s compensation rights (except for medical treatment) are suspended under
new section 29G.
The suspension is determined to take effect immediately. It affects Jeremy`s compensation
rights under the Act (other than medical treatment) and his rights to initiate or continue
proceedings under the Act in relation to compensation. This applies in relation to his back
injury and any associated injuries.
The notice under new section 29W issued by his relevant authority advised Jeremy that, in
order to stop the breach, he must undergo the medical examination within 30 days.
Jeremy continues to refuse to undergo the medical examination for 30 days (the third
qualifying occasion). At this point:
Jeremy has breached an obligation of mutuality under new section 29M (the third
qualifying occasion); and
Jeremy will receive a notice under new section 29Z from his relevant authority that
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his compensation rights are cancelled.
The cancellation is determined to take effect immediately. It affects Jeremy`s
compensation and rehabilitation rights under the Act and his rights to initiate or continue
proceedings under the Act in relation to compensation for the back injury and any
associated injuries.
Two years after Jeremy`s compensation rights are cancelled, he develops a secondary
injury as a result of the back injury. This is an associated injury in relation to the back
injury. The cancellation of Jeremy`s rights to compensation under new section 29Z will
apply in relation to the secondary injury as well.
Five years later, Jeremy suffers a new injury in an accident at work. Because this injury
arises from a separate incident, Jeremy`s rights to compensation and rehabilitation for this
injury are unaffected by the earlier cancellation determination.
Item 15 - Subsections 57(2) and (5)
573. This item makes consequential amendments to section 57 of the Act as a result of
amendments made by Schedule 15 to the Bill.
Item 16 - Subsection 60(1) (definition of determination)
574. This item amends the definition of determination` in subsection 60(1) of the Act to
enable decisions made by a relevant authority under new sections 29W, 29X and 29Z to be
reviewable under Part VI of the Act.
Division 2 - Application provisions
Item 17 - Application of amendments
575. This item provides that new sections 29G, 29H, 29J, 29M, 29N, 29P, 29Q, 29R, 29S,
29U and 29V, subsections 29L(1), (3) and (5), and subsections 29T(1) and (2), apply to
matters occurring after commencement of this item.
Item 18 - Transitional - subsections 57(2) and (5) of the Safety, Rehabilitation and
Compensation Act 1988
576. This item provides that subsections 57(2) and (5) of the Act (being the suspension of an
employee`s compensation where employee has refused to undertake a medical examination
as directed) of the Act continue to apply to requirements made by a relevant authority under
subsection 57(1) of the Act before commencement of this item. This ensures the validity of
suspensions made prior to the commencement of Part 2 of Schedule 15 to the Bill.
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SCHEDULE 16 - DEFENCE-RELATED CLAIMS
Overview
577. Schedule 16 to the Bill amends the Act to ensure that the amendments made by
Schedules 1 to 15 and 17 to the Bill, with minor exceptions, do not apply to defence-related
claims. This is because under Part XI of the Act, defence-related claims are administered by
the Military Rehabilitation and Compensation Commission and the Department of Veterans`
Affairs, rather than Comcare. Part XI also provides that the Commonwealth, not Comcare, is
liable for all claims relating to Australian Defence Force service rendered prior to 1 July
2004.
578. This exemption of defence-related claims from the vast majority of the amendments in
the Bill recognises the unique nature of military service and, in the main, retains the existing
entitlements for Australian Defence Force members and former members.
Commencement
579. The amendments in Schedule 16 to the Bill commence on the day after Royal Assent.
Safety, Rehabilitation and Compensation Act 1988
Item 1 - At the end of section 147
580. This item inserts new subsections 147(3) to 147(7) after subsection 147(2) in Part XI of
the Act. Part XI of the Act confers responsibility for defence-related claims on the Military
Rehabilitation and Compensation Commission.
581. New paragraph 147(3)(a) provides that, for the purposes of defence-related claims, the
Act applies as if the amendments made by Schedules 1 to 15 and 17 to the Bill had not been
enacted. This means that, with the exception of the changes specified in new subsections
147(4) to (7), the Act applies to defence-related claims as it existed prior to the enactment of
the Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme)
Act 2015.
582. New paragraph 147(3)(b) provides that, following the commencement of Part 1 of
Schedule 2 to the Bill, any reference in the Act to an approved program provider` is, for the
purposes of defence-related claims, to be a read as a reference to an approved workplace
rehabilitation provider`. This reflects the change in terminology made by Schedule 2 to the
Bill and will enable Australian Defence Force members and former members to be provided
with rehabilitation by Comcare approved workplace rehabilitation providers.
583. New subsection 147(4) lists a number of technical exceptions to the exemption in
paragraph 147(3)(a) that apply after the commencement of Part 1 of Schedule 2 to the Bill.
New paragraphs 147(4)(a), (b), (c) and (d) provide certainty and remove any doubt that an
approved program provider` is, for the purposes of defence-related claims, to be a read as a
reference to an approved workplace rehabilitation provider`. New paragraphs 147(4)(a) and
(b) repeal the definition of approved program provider` and insert the definition of
approved workplace rehabilitation provider` in subsection 4(1) of the Act. New paragraphs
147(4)(c) and (d) amend Part III of the Act in relation to defence-related claims to substitute
references to rehabilitation program provider` with references to workplace rehabilitation
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provider`. This enables Australian Defence Force members and former members to be
provided with rehabilitation by Comcare approved workplace rehabilitation providers.
584. New subsection 147(5) provides that, after the commencement of Part 1 of Schedule 12
to the Bill, certain specified amendments in the Bill apply to defence-related claims for
compensation for permanent impairment.
585. New paragraph 147(5)(a) provides that, after the commencement of Part 1 of Schedule
12 to the Bill, new sections 28A and 28B in Division 4 of Part II of the Act (inserted by item
20 of Schedule 12 to the Bill) apply to defence-related claims for compensation for
permanent impairment. New paragraphs 147(5)(b) and (c) provide that the concept of
associated injury` (defined by items 1 and 2 of Schedule 17 to the Bill) applies in relation to
defence-related claims for permanent impairment. In combination, new sections 28A and 28B
and the definition of associated injury` provide for the combining of degrees of permanent
impairment resulting from associated injuries. The degree of permanent impairment in these
situations is to be ascertained in accordance with the combined values chart set out in the
approved Guide. These amendments give effect to recommendation 8.2 of the Review and
restore the original intention of the Act to assess impairment on a whole of person basis
where multiple injuries are attributable (in light of the definition of associated injury`) to the
same incident or state of affairs.
586. New subsection 147(6) clarifies that new sections 28A and 28B in Division 4 of Part II
of the Act only apply to an injury sustained by member or former member of the Australian
Defence Force after the commencement of Part 1 of Schedule 12 to the Bill, unless the injury
is the result of an injury sustained before that commencement (a secondary injury`).
587. New subsection 147(7) sets out the new arrangements for calculating compensation for
permanent impairment for a defence-related injury sustained after the commencement of Part
1 of Schedule 12 to the Bill.
588. The first step is to work out, under new paragraph 147(7)(a), the amount of
compensation that would be payable under Division 4 of Part II of the Act as if subsection
147(7) had not be enacted. This means that the amount of compensation is calculated in
accordance with the provisions of the Act as it existed prior to the enactment of the Safety,
Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Act 2015 but
with the inclusion of new sections 28A and 28B and the concept of associated injury`. The
application of these provisions is authorised by new subsection 147(5).
589. The second step is to work out, under new paragraph 147(7)(b), the amount of
compensation that would be payable under Division 4 of Part II of the Act on the basis that
the amendments made by Schedule 12 to the Bill apply with the exception of item 15 of
Schedule 12 to the Bill which amends section 28 of the Act to account for pre-existing
degrees of impairment and new subsection 28C, which prevents permanent impairment
payments for secondary psychological or psychiatric ailments. Furthermore, Schedule 12 to
the Bill is to be applied as if:
Part 2 of Schedule 12 to the Bill had not been enacted;
the relevant provisions of Schedule 12 to the Bill apply in relation to an injury sustained
by a member or former member of the Australian Defence Force after the
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commencement of Part 1 of Schedule 12 to the Bill, unless the injury is the result of an
injury sustained before that commencement (a secondary injury`); and
paragraph 147(3)(a) of does not apply.
590. In accordance with new paragraph 147(7)(c), if the amount of compensation worked
out in accordance with paragraph 147(7)(b) exceeds the amount worked out in accordance
with paragraph 147(7)(a), the amount of permanent impairment compensation payable is the
higher amount worked out under paragraph 147(7)(b).
591. In accordance with new paragraph 147(7)(d), if the amount of compensation worked
out in accordance with paragraph 147(7)(b) does not exceed the amount worked out in
accordance with paragraph 147(7)(a), the amount of permanent impairment compensation
payable is the amount worked out under paragraph 147(7)(a).
592. These modifications will ensure that a member or former member of the Australian
Defence Force will not receive less compensation than an employee covered by the Comcare
scheme with the same level of impairment.
593. The assessment of permanent impairment compensation for existing injuries will
continue to be assessed by applying the Act as it existed prior to the enactment of the Safety,
Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Act 2015.
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Amendments ~ Schedule 17
SCHEDULE 17 - INTERPRETATION
Overview
594. Schedule 17 to the Bill amends the Act to define a number of terms that are used in the
amendments contained in the various schedules to the Bill.
Commencement
595. The amendments in Part 1 of Schedule 17 to the Bill commence on the day after Royal
Assent.
596. The amendments in Part 2 of Schedule 17 to the Bill commence immediately after the
commencement of Part 1 or immediately after the commencement of Schedule 2 to the
Safety, Rehabilitation and Compensation Legislation Amendment Act 2015, whichever is the
later.
Part 1 - Amendments commencing on the day after Royal Assent
Safety, Rehabilitation and Compensation Act 1988
Item 1 - Subsection 4(1)
597. This item inserts new definitions into subsection 4(1) of the Act.
Item 2 - After section 6A
598. This item inserts a new definition of associated injury`. The concept of associated
injury is relevant to new section 28B (combined values--multiple injuries), new Division 5B
of Part II (obligations of mutuality), new section 52D in new Part IVA (provisional medical
expense payments) and new Division 5A of Part VIII (gradual onset injuries).
599. New subsection 6B(1) provides that, for the purposes of the Act, where 2 or more
injuries (other than diseases) arise out of, or in the course of, the same incident or the same
state of affairs, each of those injuries is an associated injury in relation to each other of those
injuries.
600. New subsection 6B(2) provides that, the purposes of subsection 6B(1), if one or more
primary injuries arise out of, or in the course of, a particular incident or state of affairs, and
any of the primary injuries results in one or more secondary injuries, each of the secondary
injuries is taken to have arisen out of, or in the course of, that incident, or that state of affairs,
as the case may be.
601. New subsection 6B(3) provides that, for the purposes of the Act, where 2 or more
injuries (being diseases) were contributed to, to a significant degree, by the same incident or
the same state of affairs, each of those injuries is an associated injury in relation to each other
of those injuries.
602. New subsection 6B(4) provides that, for the purposes of subsection 6B(3), if one or
more primary injuries (being diseases) were contributed to, to a significant degree, by a
particular incident or state of affairs, and any of the primary injuries results in one or more
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secondary injuries, each of the secondary injuries is taken to have been contributed to, to a
significant degree, by that incident, or that state of affairs, as the case may be.
603. Subject to new subsection 6B(5), the effect of subsections 6B(1), (2), (3) and (4) is that
all primary and secondary injuries` (as defined in section 5A of the Act) that are causally
related, in a direct and substantial way, to the same incident or the same state of affairs are to
be treated as associated injuries for the purposes of the Act.
604. New subsection 6B(5) provides that new section 6B does not apply to an injury covered
by subsection 4(3) of the Act. Consequently, where an employee suffers a later physical or
mental injury or ailment as a result of medical treatment of an earlier compensable injury, the
later and earlier injuries are not taken to be associated injuries for the purposes of the Act.
Illustrative example 1
Jillian suffers a compensable permanent knee injury which makes it difficult for her to
walk without a limp. Over time, Jillian`s abnormal gait results in a hip injury. The hip
injury would be an associated injury in relation to the knee injury.
Illustrative example 2
Shane suffers a compensable shoulder injury with chronic pain. The chronic pain, along
with being unable to maintain his previously active lifestyle, results in Shane developing
clinical depression. The depression, being a secondary injury, would be an associated
injury in relation to the shoulder injury.
Illustrative example 3
Denise develops kidney disease as a result of reasonable medical treatment (medication)
for a compensable back injury. The kidney disease would be compensable due to the
operation of subsection 4(3) of the Act. However, the kidney disease in not an associated
injury in relation to the back injury because injuries covered by subsection 4(3) of the Act
are excluded from the definition of associated injury.
Part 2 - Amendments contingent on the commencement of Schedule 2 to the Safety,
Rehabilitation and Compensation Legislation Amendment Act 2015
Safety, Rehabilitation and Compensation Act 1988
Item 3 - Subsection 4(1) (definition of working day) (the definition that was inserted by
item 20 of Schedule 2 to the Safety, Rehabilitation and Compensation Legislation
Amendment Act 2015)
605. This item repeals the definition of working day` that is included in the Safety,
Rehabilitation and Compensation Legislation Amendment Bill 2014 currently before the
Parliament.
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Statement of Compatibility with Human Rights
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Safety, Rehabilitation and Compensation Amendment
(Improving the Comcare Scheme) Bill 2015
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act
2011.
OVERVIEW OF THE BILL
The Safety, Rehabilitation and Compensation Act 1988 (the Act) establishes a scheme (the
Comcare scheme) to provide compensation and rehabilitation support to injured Australian
Government and Australian Capital Territory Government employees. The Act also applies to
deemed employees and certain members of the Australian Defence Force in relation to defence
service rendered prior to 1 July 2004, as well as employees of private corporations who hold a
licence under the Act (licensees).
The Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme)
Bill 2015 (the Bill) comprises the first major review of the Comcare scheme since its
establishment in 1988. The Bill:
implements, in part, recommendations of the Safety, Rehabilitation and Compensation Act
Review (the Review) by Mr Peter Hanks QC and Dr Allan Hawke AC commissioned by
the former Government in 2012; and
makes other changes to the Act which will improve the efficiency, cost effectiveness and
viability of the Comcare scheme, and align parts of the scheme with State schemes.
The Bill aims to make the Comcare scheme sustainable over time. Broadly, the Bill:
emphasises the vocational (rather than medical) nature of rehabilitation services and
contains measures designed to improve return to work outcomes under the scheme;
promotes fairness and equity in outcomes of injured employees by targeting support for
those who need it most; and
strengthens the integrity and viability of the scheme by clearly distinguishing between
work and non-work related injuries, improving the quality of compensable medical
treatment and support services, and limiting legal and medical costs under the scheme.
The amendments contained in the Bill are organised into 17 Schedules:
Schedule 1 amends the Act to alter eligibility requirements for compensation.
Schedule 2 amends the rehabilitation and return to work requirements in the Act to
emphasise the vocational (rather than medical) nature of rehabilitation services and
improve return to work outcomes under the scheme.
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Schedule 3 makes a number of amendments to the Act to improve the integrity and
financial viability of the Comcare scheme.
Schedule 4 amends the Act to enable a relevant authority to make provisional medical
expense payments (capped at $5000) in respect of an alleged injury before a claim is
determined.
Schedule 5 amends the Act to impose more rigorous requirements in relation to
determining the amount of compensation payable under section 16 of the Act in respect of
medical expenses incurred by an injured employee.
Schedule 6 amends Division 5 of Part II of the Act (and related provisions) which deal
with the payment of compensation for household services and attendant care services to
give effect to recommendations in the Review.
Schedule 7 amends the Act to suspend compensation payments when an injured employee
is absent from Australia for non-work related purposes for a period of more than 6 weeks
and enhance the notification requirements for recipients of compensation proposing to
leave Australia.
Schedule 8 amends section 116 of the Act to provide that an employee is not entitled to
take or accrue any leave or absence provided by the National Employment Standards while
on compensation leave consistent with proposed amendments to section 130 of the Fair
Work Act 2009.
Schedule 9 amends the Act to amend provisions that determine compensation.
Schedule 10 amends the Act to increase the compulsory redemption threshold to align it
with the Military Rehabilitation and Compensation Act 2004.
Schedule 11 contains a range of amendments designed to control, and thereby reduce, costs
under the Comcare scheme associated with proceedings brought before the Administrative
Appeals Tribunal (AAT), noting that Comcare scheme disputes take longer to resolve than
disputes in other Australian workers` compensation schemes.
Schedule 12 contains a number of amendments related to compensation for permanent
impairment under the Act.
Schedule 13 amends the Act (as it will be amended by the Safety, Rehabilitation and
Compensation Legislation Amendment Bill 2014) to clarify that a single employer licence
for an eligible corporation or group employer licence must authorise acceptance of liability
and management of claims, and that a single employer licence for a Commonwealth
authority must authorise acceptance of liability or management of claims, or both.
Schedule 14 amends the Act to clarify compensation responsibilities for gradual onset
injuries (including for incapacity, impairment or death resulting from gradual onset
injuries) where employment by two or more employers covered by the Act has contributed,
to a significant degree, to the injury, and provide for apportionment of liability between
employers covered by the Act.
Schedule 15 amends the Act to streamline and enhance the existing regime of sanctions.
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Schedule 16 amends the Act to ensure that the amendments made by Schedules 1-15 to the
Bill, with minor exceptions, do not apply to defence-related claims.
Schedule 17 amends the Act to define a number of terms that are used in the amendments
contained in the various schedules to the Bill.
OVERVIEW OF CONTEXT--SOCIAL SECURITY AND WORKERS'
COMPENSATION IN AUSTRALIA
A number of measures in the Bill engage the right to social security. In Australia, the right to
social security is primarily supported by the Social Security Act 1991, public health care schemes
such as Medicare, funding of community services, and more recently the development of a
National Disability Insurance Scheme. These schemes establish a safety net that ensures that all
Australians are afforded an adequate standard of living, and have access to health care and
support when they face disability, injury and illness. Workers` compensation schemes
established by state, territory and federal governments, including the Comcare scheme, also
support the right to social security by providing for a scheme of workplace insurance and
rehabilitation support when a person is injured at work.
The Act establishes the Comcare scheme which applies to injured Australian Government and
Australian Capital Territory public sector employees, as well as employees of licenced
corporations and certain members of the Australian Defence Force in respect of service rendered
prior to 1 July 2004. The scheme ensures that where employees are injured at work, an
appropriate degree of income replacement is available, medical costs are met, and the person is
entitled to rehabilitation and support to facilitate their return to work. If, for whatever reason,
workers` compensation is not available for an injured employee the strong safety net described
above is available.
A growing body of evidence shows that work is good for health and wellbeing and the Comcare
scheme is necessarily focussed on workplace rehabilitation and the ultimate goal of returning
employees to health and suitable work as quickly as possible. For example, a 2002 actuarial
study found that if an injured employee is off work for 20 days, their chance of ever getting back
to work is 70 per cent; however, after 45 days this falls to 50 per cent and after 70 days the
chance of ever returning to work is only 35 per cent.43
Workers` compensation legislation must support these aims and measures provided for in the Act
should be targeted towards achieving early rehabilitation and sustainable return to work
outcomes. The Comcare scheme needs reform so that barriers to recovery at work are removed
and employees receive the highest standard of health care and early intervention and
rehabilitation support from their employers.
It is important to understand this context when considering the Bill`s interaction with the right to
social security and other human rights such as the right to health. These rights are broad and they
encompass all of the measures that governments pursue to support citizens who experience
disability or suffer injury or illness in life. The measures in the Bill will affect injured employees
in different ways depending on their personal circumstances and the nature of their injury or
43 Johnson, D., Fry, T. Factors Affecting Return to Work after Injury: A study for the Victorian WorkCover
Authority`. Melbourne: Melbourne Institute of Applied Economic and Social Research; 2002. Referenced by the
Australasian Faculty of Occupational & Environmental Medicine Realising the Health Benefits of Work: A Position
Statement. 2011: Royal Australian College of Physicians, page 12.
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illness. The Comcare scheme is designed to balance supports available with appropriate
incentives to achieve safe and sustainable return to work outcomes.
The Comcare scheme is one of the few remaining long tail workers` compensation schemes that
provides lifelong support to employees who are severely injured. As a scheme that is fully
funded by employers, only one of which is the Commonwealth Government, the Comcare
scheme must be sustainable into the future. Where expenditure in certain areas does not result in
improved rehabilitation and return to work outcomes the Government believes that difficult
decisions must be made.
The Comcare scheme is coming under significant pressure. Return to work rates have fallen from
a high of 89 per cent in 2008-09 to around 80 per cent in recent years. This is despite the
emergence of a growing body of evidence that work is good for health and well-being. The
Scheme creates barriers and disincentives for injured employees to recover at work, for example
by emphasising the medical rather than vocational nature of rehabilitation services. This is out of
step with prevailing community expectations that those who can work (even if part-time) should
do so to their capacity.
The Comcare scheme`s ratio of assets to liabilities has fallen below 70 per cent and the incidence
of costly psychological claims has been growing. Originally designed as a public sector workers`
compensation scheme, the Comcare scheme is no longer limited to the Australian Public Service.
Employees covered by the scheme have a broader and more diverse range of pay and work
benefits that make it increasingly difficult to calculate the correct amount of compensation to be
paid. The distinction between work and non-work related conditions has been blurred and
unreasonable constraints have been placed on how employers manage the workplace, resulting in
increased premiums and pressures on scheme sustainability.
The Bill is an important step towards modernising a scheme that has not been comprehensively
reformed since it was established in 1988. It will ensure early and effective treatment and
rehabilitation support is available, enhance the targeting of support to injured employees and put
the scheme on a more secure financial footing for the future.
HUMAN RIGHTS IMPLICATIONS
The Bill engages a number of rights which are identified and explained below to avoid repetition
in the statement. A detailed consideration of each relevant measure introduced by the Bill and
the engagement of rights is set out further below in the detailed consideration of measures.
A number of amendments in the Bill limit the right to social security because existing
entitlements may be reduced or no longer available. These amendments may also be viewed as
retrogressive measures and accordingly care has been taken to explain the legitimate objective of
the amendments, relevant safeguards and the reasons why the measures are considered
proportionate and reasonable.
International Obligations
The Bill engages the following rights under International Law:
the right to equality and non-discrimination;
the rights of persons with disabilities;
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the right to social security;
the right to work and rights at work;
the right to health;
the right to privacy; and
the right to a fair hearing.
The Right to Equality and Non-Discrimination
Article 2(1) of the International Covenant on Civil and Political Rights (ICCPR) provides:
Each State Party to the present Covenant undertakes to respect and to ensure to all
individuals within its territory and subject to its jurisdiction the rights recognized in the
present Covenant, without distinction of any kind, such as race, colour, sex, language,
religion, political or other opinion, national or social origin, property, birth or other status.
Article 26 of the ICCPR provides:
All persons are equal before the law and are entitled without any discrimination to the
equal protection of the law. In this respect, the law shall prohibit any discrimination and
guarantee to all persons equal and effective protection against discrimination on any
ground such as race, colour, sex, language, religion, political or other opinion, national or
social origin, property, birth or other status.
The rights to equality and non-discrimination in Articles 2 and 26 ensure that no one is denied
their rights because of a prohibited ground (for example race, colour or sex). The Committee on
Economic, Social and Cultural Rights (the Committee`) states that while the Covenant does not
explicitly refer to persons with disabilities ... the Universal Declaration of Human Rights
recognizes that all human beings are born free and equal in dignity and rights and, since the
Covenant`s provisions apply fully to all members of society, persons with disabilities are clearly
entitled to the full range of rights recognized in the Covenant.`
These rights of equality and non-discrimination are reiterated in Article 5 of the Convention on
the Rights of Persons with Disabilities (CRPD).
A number of measures in the Bill may impact disproportionally on persons with particular
disabilities, illnesses or injures. For example a number of measures in Schedule 1 to the Bill will
affect employees suffering from mental illnesses. Each particular measure that engages the right
is discussed in the detailed consideration below.
The right to equality and non-discrimination is engaged by:
Schedule 1
o Items 8 and 9 (conditions arising out of reasonable administrative action)
o Items 9 to 16 (significant degree test and perception)
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Schedule 7
o Item 1 (new section 29K concerns extended absences from Australia)
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Schedule 12
o Item 20 (new section 28C provides that compensation not payable for psychological
or psychiatric secondary injuries)
Schedule 15
o Item 11 (new section 29H concerns psychological and psychiatric injury and ailment,
and requires confirmation of diagnosis at 12 weeks)
o Item 14 (new section 29L concerns the obligation of an employee to find or
participate in suitable employment, even if not employment they would have chosen)
The Rights of Persons with Disabilities
The rights of persons with disabilities are set out in the CPRD. Article 4(3) of the CRPD states
that in the development and implementation of legislation and policies to implement the present
Convention, and in other decision-making processes concerning issues relating to persons with
disabilities, States Parties shall closely consult with and actively involve persons with
disabilities, including children with disabilities, through their representative organizations`.
Article 26(1) of the CRPD requires States Parties to take effective and appropriate measures,
including through peer support, to enable persons with disabilities to attain and maintain
maximum independence, full physical, mental, social and vocational ability, and full inclusion
and participation in all aspects of life`. Article 12(3) of the CPRD provides that appropriate
measures should be taken to provide access by persons with disabilities to the support they may
require in exercising their legal capacity`. Article 12 accords a person the right to be independent
and to make decisions on their own behalf.
The Comcare scheme applies to workers who have suffered an injury at work, and some of these
workers may be considered to have a disability for the purposes of international law. While the
scheme is better characterised as a scheme that provides income support for injury or illness the
rights of persons with disabilities are discussed where a person with a disability would be
particularly affected by a particular measure. Throughout the detailed consideration this right is
often discussed with the right to non-discrimination. Each particular measure that engages the
right is discussed in the detailed consideration below.
The rights of persons with disabilities are engaged by:
Schedule 1
o Items 5 to 8 and 15 (work-related injuries)
o Items 8 and 9 (conditions arising out of reasonable administrative action)
Schedule 2
o Item 9, 64 and 52 (suitable employment, work readiness assessments and employee
and employer obligations)
o Items 50 and 52 (liable employer`, employer and employee obligations, new
workplace rehabilitation plans)
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Schedule 4
o Item 4 (new subsection 52C(1) provides that a request for payment is able to be made
by another person on behalf of an employee who is physically or mentally incapable
of giving the request himself or herself).
Schedule 12
o Item 20 (new section 28C provides that compensation is not payable for
psychological or psychiatric secondary injuries)
Schedule 15
o Item 14 (new section 29L concerns the obligation of an employee to find or
participate in suitable employment)
o Item 11 (new section 29H concerns psychological and psychiatric injury and ailment,
and requires confirmation of diagnosis at 12 weeks)
The Right to Social Security
Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR)
provides for the right to social security including social insurance. The Committee provides that
the right to social security includes the right not to be subject to arbitrary and unreasonable
restrictions of existing social security coverage, whether obtained publicly or privately, as well
as the right to equal enjoyment of adequate protection from social risks and contingencies.`44
Where an employee is injured in the course of their employment, the social security system
should cover the costs and loss of earnings from the injury or morbid condition and the loss of
support for spouses or dependent suffered as a result of the death of a breadwinner.`45
The Committee note that adequate benefits should be provided in the form of access to health
care and cash benefits to ensure income security`.46 These benefits, whether in cash or in kind,
must be adequate in amount and duration in order that everyone may realise his or her rights to
family protection and assistance, an adequate standard of living and adequate access to health
care.`47 The Committee further states that [q]ualifying conditions for benefits must be
reasonable, proportionate and transparent. The withdrawal, reduction or suspension of benefits
should be circumscribed, based on grounds that are reasonable, subject to due process, and
provided for in national law.`48
The Committee states that [t]here is a strong presumption that retrogressive measures taken in
relation to the right to social security are prohibited under the Covenant. If any deliberately
retrogressive measures are taken, the State party has the burden of proving that they have been
introduced after the most careful consideration of all alternatives and that they are duly justified
by reference to the totality of the rights provided for in the Covenant, in the context of the full
use of the maximum available resources of the State party.`
44 Committee on Economic, Social and Cultural Rights, General Comment No. 19 para 9.
45 Committee on Economic, Social and Cultural Rights, General Comment No. 19 para 9.
46 Committee on Economic, Social and Cultural Rights, General Comment No. 19 para 17.
47 Committee on Economic, Social and Cultural Rights, General Comment No. 19 para 22.
48 Committee on Economic, Social and Cultural Rights, General Comment No. 19 para 24.
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The right to social security is engaged by many of the measures in the Bill. For example the Bill
makes changes to eligibility that will result in some injuries no longer being compensable under
the Act, increases the amount of compensation available for some employees, and provides for a
sanctions regime that may result in the suspension or cancellation of compensation. Each
particular measure that engages the right is discussed in the detailed consideration below.
This right to social security is engaged by the following Items to the Bill:
Schedule 1
o Items 5 to 7 (requirement that injury or aggravation be contributed to, to a
significant degree` by employment)
o Items 8 to 9 (expanding the scope of reasonable administrative action` to operational
actions and anticipation of such actions)
o Items 9 to 15 (factors to be considered under significant degree` test and perception)
o Item 16 (new section 7A which empowers Comcare to determine a Compensation
Standard)
Schedule 3
o Item 6 (new section 58 provides that the relevant authority can request a claimant to
provide information or documents within a specified period not less than 14 days;
new section 58A provides that the relevant authority can request information or
documents from a third party)
o Items 5, 8 and 10 (time limits in relation to the determination of compensation
claims)
Schedule 5
o Items 2 and 3 (requirement for therapeutic treatment` to be provided by a registered
health practitioner`)
o Items 4 and 5 (expanded requirements for medical treatment`)
o Items 7, 8, 10 and 11 (cost of medical treatment)
Schedule 6
o Items 1, 2 and 3 (allow the making of regulations about the accreditation, registration
and approval of persons as attendant care providers)
o Item 5 (introduces definition of the term catastrophic injury` which will govern the
amount and duration of compensation payable for household services and attendant
care services)
o Items 6 to 14 (payment of compensation for household services and attendant care
services for non-catastrophic injuries)
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o Item 16 (payment of compensation for household service and attendant care services
for catastrophic injuries)
Schedule 7
o Item 1 (suspension of compensation, absence from Australia for non-work related
purposes for more than 6 weeks)
Schedule 9
o Item 26 (amendments to section 8 provide a broader view of what can constitute
normal weekly earnings by averaging, over the relevant period, all income earned
plus overtime and specified allowances payable)
o Item 26 (deals with the application of paragraph 8(10) of the Act to an employee who
is suspended without pay; and clarifies the ambulatory application of subsections
8(6), (7), (9), (9H) and (10) of the Act)
o Item 27 (overtime and specified allowances may be included in calculation of
average remuneration for the first 104 weeks of incapacity)
o Item 31 (change in the step-down provisions)
o Items 47 and 48 (compensation payments cease when an injured employee reaches
his or her pension age`)
Schedule 12
o Item 5 (formula to determine the amount of compensation payable for permanent
impairment assessed at less than 75% of the whole person)
o Item 6 (increase in the maximum benefit payable for permanent impairment)
o Item 20 (combined impairment value; new section 28C - compensation not payable
for psychological or psychiatric secondary injuries)
Schedule 15
o Item 11(section 29H concerns psychological and psychiatric injury and ailment and
requires confirmation of diagnosis at 12 weeks)
o Item 14 (obligations of mutuality and sanction provisions)
Section 29Y (suspension of compensation and right to institute or continue
proceedings, etc.)
Section 29Z (cancellation of compensation and right to institute or continue proceedings,
etc.)Suspension of compensation/sanctions/breach of obligation of mutuality
Schedule 15
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The Right to Work and Rights at Work
Article 6 of the ICESCR provides for the right to work, which includes the right of everyone to
the opportunity to gain his living by work which he freely chooses or accepts`. Article 7 provides
the right of everyone to the enjoyment of just and favourable conditions of work`. The
Committee highlights the importance of work for personal development as well as for social and
economic inclusion.49 The Committee emphasises the freedom of the individual regarding the
choice of work`, and states that the right includes the right of every human being to decide
freely to accept or choose work. This implies not being forced in any way whatsoever to exercise
or engage in employment and the right of access to a system of protection guaranteeing each
worker access to employment. It also implies the right not to be unfairly deprived of
employment`.50 The Committee further note that the right to work is to be exercised without
discrimination of any kind.51 Work as specified in Article 6 of the Covenant must be decent
work.52
The Committee provides that States parties must take measures enabling persons with
disabilities to secure and retain appropriate employment and to progress in their occupational
field, thus facilitating their integration or reintegration into society`.53 Article 27 of the CRPD
reiterates the right of persons with disabilities the opportunity to gain a living by work freely
chosen or accepted in a labour market and work environment that is open inclusive and
accessible. States parties have responsibilities to, among other things, provide assistance in
returning to employment and promoting vocational and professional rehabilitation, job retention
and return-to-work programs for persons with disabilities.54
The right to work is engaged most significantly by Schedule 2 to the Bill which improves the
arrangements in place for rehabilitation of employees and will make it easier for injured
employees to remain in or return to employment. Each particular measure that engages the right
is discussed in the detailed consideration below.
The right to work is engaged by:
Schedule 2
o Item 9 (expanded definition of suitable employment`)
o Item 50 (new section 34K concerns the duty of the employer to provide suitable
employment`)
o Item 64 (Division 4 provides for work capacity assessments and promotes the
monitoring of an employee`s capacity for work)
49 Committee on Economic, Social and Cultural Rights, General Comment No. 18 para 4.
50 Committee on Economic, Social and Cultural Rights, General Comment No. 18 paras 4, 6.
51 Committee on Economic, Social and Cultural Rights, General Comment No. 18 para 19.
52 Committee on Economic, Social and Cultural Rights, General Comment No. 18 para 7.
53 Committee on Economic, Social and Cultural Rights, General Comment No. 18 para 17, citing General Comment
No. 5.
54 CERD, Article 27(1).
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Schedule 15
o Item 14 (new section 29L concerns the obligation of mutuality in relation to suitable
employment`)
The Right to Health
The right to health is contained in Article 12(1) of the ICESCR and is the right of everyone to
the enjoyment of the highest attainable standard of physical and mental health`. The Covenant in
Articles 12(2)(b) and (c) specifically provides that this includes taking steps necessary for the
improvement of all aspects of environmental and industrial hygiene` and those necessary for the
prevention, treatment and control of occupational diseases.
In addition, Article 25 of the CRPD provides for the right of persons with disabilities to the
enjoyment of the highest attainable standard of health without discrimination on the basis of
disability. Article 26 of CRPD provides that States Parties shall take effective and appropriate
measures to habilitate and rehabilitate persons with disabilities to enable them to attain and
maintain maximum independence, full physical, mental, social and vocational ability, and full
inclusion and participation in all aspects of life.
Persons with disabilities should be provided with medical and social services aimed at helping
them to become independent, prevent further disabilities and support their social integration`.
Similarly, such persons should be provided with rehabilitation services that would enable them
to reach and sustain their optimum level of independence and functioning`. All such services
should be provided in such a way that the persons concerned are able to maintain full respect for
their rights and dignity.55
The right to health is engaged in a number of different ways by the Bill. For example, the right to
health is engaged by amendments that change eligibility criteria for certain injuries because
compensation for medical costs is only payable where a person suffers a compensable injury.
The right is also directly engaged by changes that would cap the amount of compensation
payable for certain medical treatments. Each particular measure that engages the right is
discussed in the detailed consideration below.
The right to health may be engaged by the following Items:
Schedule 1
o Items 5 to 7 (requirement that injury or aggravation be contributed to, to a
significant degree` by employment)
o Items 8 and 9 (expanding the scope of reasonable administrative action` to
operational actions and anticipation of such actions)
o Items 9 to 13 (factors to be considered under significant degree` test)
Item 12 (where an injury is attributable to a belief about or interpretation of an
incident or state of affairs, the employee must have a reasonable grounds for
the belief or interpretation)
55 Committee on Economic, Social and Cultural Rights, General Comment No. 5 para 34.
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o Items 14 and 15 (Comcare to determine a Compensation Standard in relation to a
specified ailment to be taken into account in determining liability for the ailment)
o Item 16 (new section 7A which empowers Comcare to determine a Compensation
Standard)
Schedule 2
o Item 52 (new provisions relating to workplace rehabilitation plans)
Schedule 5
o Items 2 and 3 (definition of medical treatment)
o Items 7 and 8 (reasonable medical treatment and clinical framework principles)
o Items 10 and 11 (medical examination rates determination)
Schedule 6
o Items 1 to 3 (allow the making of legislative rules about the accreditation,
registration and approval of persons as attendant care providers)
o Item 5 (introduces a definition of the term catastrophic injury` which will govern the
amount and duration of compensation payable for household services and attendant
care)
o Items 6 to 14 (payment of compensation for household and attendant care services
for non-catastrophic injuries)
o Item 16 (payment of compensation for household and attendant care services for
catastrophic injuries)
Schedule 12
o Item 20 (new section 28C provides that compensation not payable for psychological
or psychiatric secondary injuries)
Schedule 15
o Item 11 (new section 29FA concerns psychological and psychiatric injury and
ailment and requires confirmation of diagnosis at 12 weeks)
The Right to Privacy
The right to privacy in Article 17 of the ICCPR prohibits unlawful or arbitrary interferences with
a person's privacy, family, home and correspondence. It also prohibits unlawful attacks on a
person's reputation. Article 17 provides for an implied permissible limitation on the right to
privacy to the extent that the limitations are not arbitrary or unlawful. In order for an interference
with the right to privacy not to be arbitrary`, the interference must be for a reason consistent
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with the ICCPR and reasonable in the particular circumstances. Reasonableness, in this context,
involves notions of proportionality, appropriateness and necessity.56
The Bill engages the right to privacy where information gathering powers are expanded or
additional permissions to disclose information are inserted. Each particular measure that engages
the right is discussed in the detailed consideration below.
The right to privacy may be engaged by:
Schedule 2
o Item 50 (new sections 34H and 34K provides that a medical practitioner may give
the liable employer information about the employee that is relevant to the
consultation`)
o Item 52 (new section 36H provides for consultation with the employee`s medical
practitioner)
o Sharing of personal information, potentially including medical records, about an
employee between the liable employer and the relevant authority where these are not
the same entity:
Item 64 (new section 38C)
Item 71 (additions to section 53)
Item 74 (addition following section 54(4))
Item 77 (new section 57A (report of medical examination etc))
Schedule 3
o Item 6 (new sections 58, 58A provide that employees are to comply with request for
information or breach obligation of mutuality (new section 58); relevant authorities
may obtain information or documents regarding an employee`s claim or an
employee`s compensation from third parties (new section 58A))
o Items 32 to 29 (new subsection 108C(11) empowers Comcare to request documents
relevant to any proceedings brought against, or instituted by, a licensee - legal
professional privilege is not affected)
o Item 26 (new sections 120A and 120B enhance a relevant authority`s information
gathering powers by enabling a relevant authority to obtain information or
documents from an employee or a third party in relation to the ongoing management
of a claim for compensation)
Schedule 4
o Item 4 (provisional medical expense payments)
56 Toonen v Australia, Communication No. 488/1992, U.N. Doc CCPR/C/50/D/488/1992 (1994) at 8.3.
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Schedule 5
o Item 13 (new sections 71A provide for the disclosure of information by Comcare to
disciplinary bodies)
Schedule 15
o Item 14 (new section 29T concern the breach of obligation of mutuality for failing to
provide information or documents)
The Right to a Fair Hearing
Article 14(1) of the ICCPR states that [i]n the determination of ... rights and obligations in a
suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent
and impartial tribunal established by law`.
General Comment No. 32 notes that the right to a fair hearing includes the right of access to the
courts in cases of determination of rights and obligations in a suit at law. The Comment further
states that [a]ccess to administration of justice must effectively be guaranteed in all such cases
to ensure that no individual is deprived of his/her right to claim justice`.
The Act provides review mechanisms for most determinations relating to employees` rights
under the Comcare scheme. Amendments to the Act engage Article 14(1) where they affect the
ability of employees to seek review of determinations about their rights. Each particular measure
that engages the right is discussed in detail below.
Items which may engage the right to a fair hearing:
Schedule 2
o Item 81 (amends section 60 of the Act to provide that the employee`s responsibilities
and obligations of a liable employer under a workplace rehabilitation plan are not
reviewable under the Act)
Schedule 3
o Items 1 and 12 (new section 70C provides for compensation for detriment caused by
defective administration is to be added to the classes of decisions which are not
decisions to which the Administrative Decisions (Judicial Review) Act 1977 applies)
Schedule 11
o Item 2 (new section 62A provides for reimbursement of a claimant`s legal costs in
connection with reconsideration of a determination only where the claimant
undertakes to not apply to the Administrative Appeals Tribunal for review of the
decision)
Schedule 15
o Item 14 (suspension and cancellation of the employee`s right to institute or continue
any proceedings under Act in relation to compensation relating to any current or
future associated injury)
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RIGHTS ENGAGED BY THE BILL--CONSIDERATION IN DETAIL
Schedule 1--Eligibility for compensation and rehabilitation
The tightened eligibility criteria introduced through Schedule 1 to the Bill will reduce the
number of injuries and diseases (including psychological diseases) that will be compensable
under the Act and, as a result, engages the right to social security and the right to health. Some
amendments also may be considered to engage the right of non-discrimination because they will
affect persons with particular disabilities.
Items 5 to 8, Item 15 - Work related injuries
Currently, the fact that the culmination of a condition, such as heart attack or stroke, occurs at
the workplace is sufficient for a workers` compensation liability to exist. Items 5 to 8 will amend
the definition of injury in subsection 5A(1) of the Act to ensure that workers` compensation is
only available where either an underlying condition or the culmination of that condition is
contributed to, to a significant degree, by the employee`s employment. This amendment will
impact on incidents that are a manifestation of an underlying disease, such as heart attacks,
strokes and spinal disc ruptures caused by degenerative diseases and similar phenomena.
Because the effect of the amendments is that some injuries will no longer be compensable under
the Act, the amendments limit the right to social security and the right to health.
The underlying purpose of workers` compensation schemes is to establish a scheme of
compensation and rehabilitation for injuries and diseases that are related to a person`s work. The
legitimate objective of the amendments is to realign the Act with this purpose and to ensure that
the scheme remains focussed on workplace injuries and diseases.
The amendments are a reasonable, necessary and proportionate approach to achieving this
objective. The amendments will ensure that eligibility criteria reflect and align with the true
purpose of workers` compensation schemes; support for workers who suffer from occupational
injury and disease. Where an employee suffers from a work-related injury or disease, they will
continue to have access to medical treatment costs, compensation, and rehabilitation. However,
an employer`s liability will not extend to diseases or injuries that are manifestations of
underlying genetic or lifestyle factors which occur in the workplace but have no significant basis
in employment.
Items 8 to 9 - Conditions arising from reasonable administrative action
The Act currently aims to prevent compensation claims from being used to obstruct legitimate
and reasonable management action by excluding from the definition of injury` any condition
(usually a psychological condition) that has arisen as a result of such action. To this end,
subsection 5A(1) currently provides that the definition of injury` does not include a disease,
injury or aggravation suffered as a result of reasonable administrative action taken in a
reasonable manner in respect of the employee`s employment. Subsection 5A(2) provides a non-
exhaustive list of matters that are administrative action`.
This exclusion has been the subject of a considerable amount of litigation, for the most part in
the AAT but also in the Federal Court. In Commonwealth Bank of Australia v Reeve [2012]
FCAFC 21; (2012) 199 FCR 463 the Full Federal Court drew a distinction between
administrative` and operational` actions of an employer. The effect of this decision is that
operational decisions of employers, such as corporate restructures or instructions to employees to
perform work at a particular location, or to perform particular duties, are not administrative
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action and do not trigger the exclusionary provision, so that any injury to an employee resulting
from such actions is compensable.
Items 8 to 9 will remove the distinction between administrative and operational actions of an
employer, further specifying that administrative action includes reasonable management actions
such as corporate or organisational restructures, or reasonable directions about the performance
of duties. In addition, item 7 will ensure that an injury arising from an employee`s belief that
they may be subject to reasonable management action will not be compensable. The right to
social security and the right to health are limited because it is foreseeable that a small number of
injuries that may currently be compensable under the Act will no longer be compensable. The
right to non-discrimination is also engaged because these amendments will mostly affect persons
with a particular kind of disability - mental illness.
The legitimate objective of the amendments is to ensure the Act applies as intended, and to
ensure that employers can take reasonable action in managing their workplaces.
The amendments are reasonable, necessary and proportionate for a number of reasons.
First, the amendments are necessary to ensure that there is clarity around the scope of the
exclusion following decisions such as Commonwealth Bank of Australia v Reeve [2012] FCAFC
21; (2012) 199 FCR 463.
Second, the amendments are reasonable and proportionate because employees will remain
eligible to be compensated for their condition if it arose because of an unreasonable operational
action, or the expectation of unreasonable management action. The amendment will allow
employers to engage in the reasonable management of their business, including takeovers,
restructures and other operational matters, without concern that these actions may consequently
form the basis of workers` compensation claims.
Employers need to be able to give fair and constructive feedback on an employee`s performance,
make necessary decisions to respond to poor performance or changing operational requirements
and, if necessary take disciplinary action and be able to effectively direct and control the way
work is carried out.
To the extent that the amendments will disproportionately affect employees suffering from
psychological injuries, the right to non-discrimination is indirectly engaged. However, the
indirect differential treatment of employees with psychological injuries is permissible as the
amendments are justified by a legitimate aim and are an appropriate, objective and necessary
approach to achieving that aim.57 First, the amendments respond to a real need. As explained
above, the Act must be amended to ensure that it applies as intended and to provide clarity
around the scope of the exclusion. Secondly, the amendments are necessary to achieve the
legitimate objective. The underlying purpose of workers` compensation schemes is to establish a
scheme of compensation and rehabilitation for injuries and diseases that relate to a person`s
work. The amendments are necessary to realign the Act with this purpose. Thirdly, the
amendments are proportionate as there is no other means of achieving the objective that impose
57 European Court of Human Rights and European Union Agency for Fundamental Rights, 2010. Handbook on
European non-discrimination law. Available at: http://fra.europa.eu/sites/default/files/fra_uploads/1510-FRA-
CASE-LAW-HANDBOOK_EN.pdf; European Union non-discrimination directives: Racial Equality Directive
Article 2(2)(b); Employment Equality Directive Article 2(2)(b); Gender Goods and Services Directive Article 2(b);
Gender Equality Directive (Recast) Article 2(1)(b).
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less interference with the right to non-discrimination. Finally, the amendments are objective as
they apply equally to all employees and all types of injuries suffered as a result of reasonable
administrative action.
Items 9 to 16 - Significant degree test and perception
Items 9-14 amend subsection 5B(2) to enable additional matters be taken into account in
determining whether an ailment or an aggravation of an ailment was contributed to, to a
significant degree, by an employee`s employment:
Item 16 inserts a new section 7A which empowers Comcare to determine a Compensation
Standard that relates to a specified ailment and sets out the factors that should, as a
minimum, exist before it can be said that an employee is suffering from the ailment.
Item 12 will insert a new paragraph 5B(2)(d) to ensure that an employee`s perception of a
state of affairs will only provide a connection with employment where that perception has
a reasonable factual basis. Currently, an employee`s perception of a work-related event is a
sufficient basis to connect a mental stress claim to employment, regardless of whether the
perception was reasonable or reflected the reality of a situation.
The right to social security and the right to health are limited because it is foreseeable that a
small number of injuries that may currently be compensable under the Act will no longer be
compensable.
The legitimate objective of the amendments is to ensure that an employer`s liability will not
extend to diseases or injuries that are manifestations of underlying mental health conditions
which manifest in the workplace but have no significant basis in employment.
The amendments are reasonable, necessary and proportionate for two reasons.
First, the amendments will ensure that eligibility criteria better align with the purpose of
workers` compensation schemes; compensation for workers who suffer from occupational injury
and disease. There are examples in the AAT of cases involving the acceptance of claims arising
from a perception of an event or state of affairs that have a very limited connection to an
employee`s work or employment.
Second, an employee`s perception of a state of affairs will only be compensable where that
perception has a reasonable basis in fact. In cases where there is a clear connection with an event
or state of affairs at work, compensation will be payable.
To the extent that the amendments will affect employees suffering psychological injuries more
than those suffering physical injuries, the right to non-discrimination will be indirectly engaged.
The amendments are permissible as they respond to the need to realign the Act with its purpose:
to provide compensation for employees who suffer from an occupational injury. As discussed
above, the amendments are a reasonable, necessary, and proportionate response to achieving this
objective. In particular, the amendments are proportionate as there is no other mechanism that
will lessen the effect on the right to non-discrimination while also achieving the legitimate
objective.
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Schedule 2 - Rehabilitation
Schedule 2 to the Bill amends the rehabilitation framework under the Act to emphasise the
vocational nature of rehabilitation services and strengthen the rehabilitation obligations of
employers and employees to improve return to health and work outcomes under the workers`
compensation scheme. The amendments:
combine the current two-step process for the development of rehabilitation programs into a
single process to ensure that workplace rehabilitation is delivered on a service continuum
of assessment of need, planning, active implementation, review and evaluation
(recommendation 6.13 of the Review)
clarify rehabilitation responsibilities by combining the roles of rehabilitation authority`
and employer` into one concept, the liable employer`. A liable employer will have a duty
to ensure the rehabilitation of an injured employee and to provide the employee (or assist
the employee to find) suitable employment and to maintain the employee in suitable
employment
expand the existing definition of suitable employment` to include any employment with
any employer, including self-employment (recommendation 6.16 of the Review)
provide relevant authorities (Comcare or self-insured licensees) with the discretion to
perform work readiness assessments.
Schedule 2 to the Bill generally engages and promotes the right to work and the right to
habitation and rehabilitation by providing for early access to rehabilitation and clarifying the
duties and responsibilities of employers and employees. Amendments in Schedule 2 to the Bill
also engage the rights of persons with disability, the right to a fair hearing and the right to
privacy, which are discussed below.
Items 50 and 52 -Rehabilitation - liable employer` employer obligations, responsibilities of
employees, new workplace rehabilitation plans
Liable employer
New Division 2A introduces the concept of a liable employer` to replace the concept of
rehabilitation authority` and Division 2B sets out the duties of liable employers.
The concept of a liable employer is introduced to clarify who is the employer responsible for
rehabilitation and return to work responsibilities. The amendments address uncertainty,
confusion and duplication of responsibilities under the current scheme, in particular for
Commonwealth employees. The identity of the rehabilitation authority can be difficult to
establish for employees who have changed employers, been affected by machinery of
government changes or where the liable employer` no longer exists. This can result in difficulty
for employees in accessing rehabilitation benefits or workplace programs. The amendments
clarify that the liable employer` will always be responsible for providing suitable employment
and vocational rehabilitation to injured employees.
Employer's duty to ensure the rehabilitation of an employee
New section 35J will require a liable employer to take all reasonably practicable steps to ensure
the rehabilitation of an employee who suffers an injury. Currently, there is a lack of clarity about
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when the rehabilitation obligations of an employer commence and in practice there can be delays
in commencing rehabilitation activities until a claim for workers` compensation is accepted. The
amendments provide for rehabilitation to commence following notification of an injury.
Notification of an injury will include the making of a provisional medical expense payment
request under the amendments made by Schedule 4 to the Bill.
Workplace rehabilitation plans
Item 52 repeals sections 35, 36 and 37 of the Act and substitutes new provisions relating to
workplace rehabilitation plans. These amendments will ensure that workplace rehabilitation is
delivered on a service continuum of assessment of need, planning, active implementation, review
and evaluation that is responsive to changes in an employee`s injury and any resulting
incapacity.
New section 36 defines a workplace rehabilitation plan. For an employee who has the potential
to engage in suitable employment, the plan is directed towards returning the employee to suitable
employment as soon as practicable. If an employee is in suitable employment, the plan is
directed towards maintaining the employee in suitable employment. If an employee does not
have the potential to be in suitable employment, the plan is directed towards maximising the
employee`s independent functioning.
In order to assist a liable employer to make a decision about the formulation, variation or
revocation of a workplace rehabilitation plan, item 76 amends section 57 to empower the
relevant authority (such as Comcare) to require an employee to undergo a medical examination
by a nominated medical practitioner, a suitably qualified person (such as an occupational
therapist or a physiotherapist approved by Comcare to be a rehabilitation provider under
Division 2, Part III of the Act), or a nominated panel. The ability to require this type of medical
examination is currently a power of the rehabilitation authority; the relevant authority can
currently also only require a medical examination by a nominated medical practitioner. The
amendment will mean that there will be only one type of medical examination and only one body
that can require them. This amendment is intended to reduce the fragmentation of medical
information received by the liable employer and the relevant authority. It will also assist in
streamlining the rehabilitation process to facilitate the timely rehabilitation of injured employees.
Employee responsibilities under a workplace rehabilitation plan
New section 36A provides for responsibilities imposed on an employee by a workplace
rehabilitation plan to be known as employee responsibilities. Item 81 amends section 60 to
provide that an employee`s responsibilities and obligations of a liable employer under a
workplace rehabilitation plan are not reviewable under the Act. The formulation (and any
variation of) a workplace rehabilitation plan will be reviewable.
New section 29R in Schedule 15 to the Bill provides for an employee`s responsibilities under a
workplace rehabilitation plan to be an obligation of mutuality to which sanctions may apply.
This builds on existing sanctions available under the Act (for example, under sections 37 or 57,
if an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program
or undergo a medical examination). The operation of the sanctions framework, in respect of an
employee`s responsibilities under a workplace rehabilitation plan, or in respect of an employee`s
requirement to undergo a medical examination, is discussed in this statement in relation to
Schedule 15 to the Bill.
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Rights engaged
The amendments generally promote the right to habilitation and rehabilitation in article 26 of the
CRPD. Article 26 of the CRPD provides, inter alia, that States shall organize, strengthen and
extend comprehensive habilitation and rehabilitation services and programs, particularly in the
areas of health, employment, education and social services` for people with disabilities. States
parties are required to ensure that habilitation and rehabilitation services are available at the
earliest possible time and are locally based, including in rural areas. The article stresses the
multidimensional nature of habilitation and rehabilitation by requiring that service delivery is
based on the multidisciplinary assessment of the person`s needs and strengths. The article makes
it clear that habilitation and rehabilitation cannot be imposed coercively by insisting that
participation must be voluntary.
To the extent that the amendments could be viewed as narrowing the scope of medical
rehabilitation, that is, rehabilitation for the purpose of increasing independent functioning, the
amendments may limit the right to rehabilitation. Article 26 provides that States parties shall
organise, strengthen and extend rehabilitation services to ensure that [p]ersons with disabilities
... attain and maintain maximum independence, full physical, mental, social and vocational
ability, and full inclusion and participation in all aspects of life.` Consequently the amendments
may also indirectly limit the right to health contained in Article 12 of the ICESCR and Article 25
of the CRPD.
The legitimate objective of these amendments is to enable the Comcare scheme to more
effectively pursue one of its core purposes: to, as far as possible, provide for early intervention
and rehabilitation support for injured employees to stay in or return to suitable employment. This
objective is important for three main reasons. The first is that for most people, work is good for
their health and wellbeing. This is supported by the fact that Comcare is a signatory to the
Australian Consensus Statement on the Health Benefits of Work which emphasises the benefits
of work for health and wellbeing. The second reason is that the Consensus Statement confirms
that long-term absence from work has a negative impact on health and wellbeing. Thirdly,
improved return to health and work outcomes will ensure the long term sustainability of a
scheme that supports injured employees for life.
The amendments are a reasonable, necessary and proportionate approach to achieving the
objective of returning employees to work for a number of reasons.
First, the amendments are reasonable and necessary as they clarify and strengthen existing
rehabilitation obligations and responsibilities of employers and employees and provide for early
access to rehabilitation support which underpins an effective workers` compensation system. It is
reasonable to require employees to fulfil their responsibilities under a workplace rehabilitation
plan because active participation in rehabilitation is essential for an employee`s recovery.
Second, by emphasising the vocational nature of rehabilitation and returning and maintaining
employees in work, the amendments positively engage the right to work under both the ICESCR
and the CRPD. Article 27 of the CRPD emphasises that States parties must safeguard and
promote the realisation of the right to work by taking appropriate steps to promote employment
opportunities and enable persons with disabilities to have access to technical and vocational
guidance programs, placement services and vocational and continuing training. Article 6 of the
ICESCR also promotes the right to work stating that it [i]ncludes the right of everyone to the
opportunity to gain his living by work...`
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Third, the amendments are reasonable and proportionate because, while these plans have an
increased focus on returning and maintaining an employee in suitable employment, rehabilitation
remains directed towards maximising the employee`s independent functioning if the employee
does not have the potential to be in suitable employment (new subsection 36(1)(d)).
The extent to which the new workplace rehabilitation plans are more vocationally directed must
be viewed in the context of other measures designed to enable early access to medical treatment
costs through provisional medical expense payments provided in Schedule 4 to the Bill and
amendments in Schedule 5 to the Bill that strengthen the framework for medical support and the
quality of medical treatment to achieve better health outcomes.
Finally, the amendments are reasonable and proportionate as they only emphasise vocational
rehabilitation for those who are able to work in some capacity. The new duty on liable employers
to take all reasonably practicable steps to ensure the rehabilitation of an employee (new section
35J) makes it clear that for employees who do not have the potential to be in suitable
employment, the rehabilitation for that employee must be directed towards maximising the
employee`s independent functioning. This new section promotes the right to rehabilitation and
indirectly, the right to health, contained in the CRPD and ICESR.
Item 81 limits the right to a fair hearing. The legitimate objective of the amendment is to avoid
frustration of the purpose of these provisions which is to promote compliance with rehabilitation
plans rather than arguments regarding particular employee responsibilities and obligations of the
liable employer. The amendment is a reasonable, necessary and proportionate approach to
achieving this objective for a number of reasons.
Firstly, there are substantial safeguards in place to ensure that employee responsibilities are
tailored and appropriate to the individual circumstances of an employee. The plans are developed
in consultation with the employee and his or her medical practitioner which will ensure that the
workplace rehabilitation plan reflects the capacity and abilities of an individual employee.
Secondly, the formulation (and any variation of) a workplace rehabilitation plan will be
reviewable by Comcare and the AAT. In practice this means that the development of the plan or
the objectives and main components of a workplace rehabilitation plan will be reviewable.
Items 9, 50 and 64 - Broadened definition of suitable employment`, work readiness assessments
and employer and employee obligations
Under section 40 of the Act, employers currently have a duty to provide suitable employment to
employees who have undertaken or are undertaking a rehabilitation program. Item 12 will
broaden the definition of suitable employment` in subsection 4(1) so that employment with any
employer who is not the Commonwealth or a licensee (including self-employment) can be
considered suitable`. This gives effect to recommendation 6.16 of the Review. Suitable
employment will be defined to include employment to which the particular employee is suited
having regard to a number of factors, including the personal circumstances of the employee and
the employee`s suitability for rehabilitation or vocational retraining as well as the availability of
suitable employment.
Employer's duty to provide suitable employment
New section 34K requires a liable employer to take all reasonably practicable steps to provide an
injured employee with suitable employment or assist the employee to find such employment. An
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employer`s duty in relation to suitable employment only applies if an employee has the potential
to be in suitable employment.
In circumstances where an employee is injured and the employee is in suitable employment, the
section will also impose a duty on the liable employer to take all reasonably practicable steps to
maintain the employee in suitable employment.
The obligation to provide suitable employment will apply when the employer is formally notified
of the injury rather than when an employee is undertaking, or has completed, a rehabilitation
program as is currently the case.
A failure of a liable employer to fulfil these obligations may result in a deemed delegation of
liable employer functions and powers to Comcare under new section 35F.
Work readiness assessments
In order to determine an employee`s capacity to work in suitable employment, item 64 inserts a
new Division 4 which empowers the relevant authority (for example, Comcare) to require an
injured employee to undergo a work readiness assessment or examination by a nominated
medical practitioner, a suitably qualified person nominated by the relevant authority or a panel of
medical practitioners and suitably qualified persons nominated by the relevant authority. New
section 38C provides that a copy of the report of the assessment must be given to a liable
employer.
Amendments made in Schedule 15 to the Bill introduce an obligation of mutuality in relation to a
work readiness assessment. Breaches of obligations of mutuality may be subject to the sanctions
framework and are discussed in this Statement in relation to Schedule 15 to the Bill.
Employee obligations in respect of suitable employment
New section 29L in Schedule 15 to the Bill establishes an obligation of mutuality in relation to:
a failure to accept an offer of suitable employment
a failure to engage, or to continue to engage, in suitable employment
a failure to seek suitable employment.
Regulations can provide for exceptions to the breach of obligation of mutuality provisions. An
employee`s obligations of mutuality and the operation of the sanctions framework with respect to
suitable employments are discussed in this Statement in relation to Schedule 15 to the Bill.
Rights engaged
The amendments positively engage the right to work by imposing stronger obligations on
employers with respect to facilitating suitable employment and providing greater opportunities
for injured employees to participate in employment outside of employment by a liable employer.
By positively engaging the right to work, the amendments also indirectly positively engage the
right of persons with disabilities to earn an adequate standard of living and to live independently,
which are rights protected in Articles 28 and 29 of the CRPD respectively. The Committee has
commented that that States Parties must take measures enabling persons with disabilities to
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secure and retain appropriate employment and to progress in their occupational field, thus
facilitating their integration or reintegration into society.`58 As employment is considered to be
good for a person`s health and wellbeing, the amendments also indirectly promote the right to
health contained in Article 12(1) of the ICESCR and Article 25 of the CRPD.
However, it could also be argued that the amendment may indirectly limit the right to freely
choose one`s work which is a key aspect of the right to work. Article 27 of the CRPD reiterates
the right of persons with disabilities to have the opportunity to gain a living by work freely
chosen or accepted in a labour market and work environment that is open, inclusive and
accessible. States parties have responsibilities to, among other things, provide assistance in
returning to employment and promoting vocational and professional rehabilitation, job retention
and return-to-work programs for persons with disabilities.59
Where suitable work` is available employees have an obligation to engage in that work and
sanctions may apply where they do not do so including the reduction of compensation (excluding
medical expenses) and escalating to the cancellation of compensation. The sanctions regime for
failing to engage in suitable employment is discussed in this Statement in relation to Schedule 15
to the Bill. In some cases the amendment may result in employees being induced to undertake
employment in circumstances where they are not otherwise willing to perform the new role.
The legitimate objective of these amendments is to strengthen the obligations of employers to
provide greater opportunities for injured employees to engage in suitable employment and
thereby improve health and return to work outcomes for injured employees. Under the current
Act, an employee may have some capacity to work but be prevented from doing so due to a lack
of suitable employment with their pre-injury employer. The amendments could therefore provide
more employment options for some injured employees.
The amendments are a reasonable, necessary and proportionate approach to achieving this
objective for a number of reasons.
First, the amendments are necessary for supporting injured employees to stay in, or return to,
suitable employment. The amendments clarify and strengthen the obligations of employers and
employees to support employees to remain in or engage in suitable employment if they have the
potential to be in suitable employment. The amendments will be supported by the ability of
Comcare to implement an incentive scheme for employers under new section 70D as inserted by
Item 84 to provide for employment opportunities outside of the employment which gave rise to
their injury.
Second, the amendments are reasonable and proportionate in that there are substantial safeguards
in place to ensure that suitable employment is appropriate to the individual circumstances of an
employee. Relevant considerations include the capacity of an employee to remain or engage in
suitable employment which must be assessed in consultation with the employee and their
medical practitioner to ensure that employment reflects the capacity and abilities of an individual
employee. If necessary, a relevant authority is empowered to arrange a work readiness
assessment to determine an employee`s capacity to return to work and the medical and
rehabilitation support needed to help achieve a safe and sustainable return to work.
58 Committee on Economic, Social and Cultural Rights, General Comment No. 18 para 17, citing General Comment
No. 5.
59 CERD, Article 27(1).
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Third, in assessing the potential to engage in suitable employment (including self- employment),
it is necessary to have regard to the employee`s age, experience, training, language and other
skills, and the employee`s suitability for rehabilitation or vocational retraining. If employment is
available at a place that would require the employee to change his or her place of residence -
regard must be had as to whether it is reasonable to expect the employee to change his or her
place of residence. Also, any other relevant matter may be taken into account.
The amendments will provide safeguards and additional support for employees who suffer from
injuries resulting in ongoing disability by expanding the definition of suitable employment and
providing additional incentives to employers. The incentives are provided for employers through
strengthened obligations on employers that are more capable of regulation by Comcare.
Financial incentives are provided through premiums that are tailored to the incidence of injury,
and through rehabilitation frameworks which promote return to health and work outcomes. In
addition, the National Disability Insurance Scheme now provides access to support for
employees who have suffered injuries resulting in permanent impairment and this further
promotes opportunities for social inclusion.
Finally, in complying with its rehabilitation obligations and duty to provide suitable
employment, it is important to note that an employer is bound to comply with its obligations
under the Work Health and Safety Act 2011 to ensure, as far as reasonably practicable, the health
and safety of an employee. Appropriate work health and safety obligations will also be imposed
on employers who provide suitable employment under applicable Commonwealth, state or
territory work health and safety laws.
Items 50, 52, 64, 71, 74, 77 - information sharing arrangements
There are a number of items in Schedule 2 to the Bill that provide for the exchange of
information about an employee between the relevant authority, liable employer, current
employer and the employee`s medical practitioner. The relevant items include:
Item 50 (section 34K - in providing an employee with suitable employment, the liable
employer must consult the employee`s medical practitioner who may give the liable
employer information about the employee that is relevant to the consultation.)
Item 52 (section 36H - the liable employer must consult with the employee`s medical
practitioner and the current employer (where applicable) in relation to the workplace
rehabilitation plan.)
Items 64, 71, 74 and 77 provide for the sharing of personal information about an employee,
potentially including medical records, between the liable employer and the relevant
authority where they are not the same entity.
Because information sharing powers are extended by these items, the right to privacy in Article
17 of the ICCPR is engaged. This right prohibits unlawful or arbitrary interferences with a
person`s privacy, family, home and correspondence.
The legitimate objective of these amendments is to ensure that the liable employer, current
employer and relevant authority have access to pertinent medical information about the
employee that may impact on the employee`s ability to participate in rehabilitation or engage in
suitable employment. The amendments are a necessary, reasonable and proportionate approach
to achieving the legitimate objective for a number of reasons.
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The amendments are necessary to provide a mechanism for the exchange of relevant information
between the parties that are responsible for ensuring that an injured employee is provided with
suitable employment and rehabilitation. Without the amendments the bodies will not be able to
fulfil their obligations to an employee.
The amendments are also necessary to ensure that employees who change jobs or are subject to
machinery of government changes have access to suitable employment and rehabilitation on an
equal basis to others under the scheme. Without these amendments the relevant entities would
not have access to pertinent information about the employee and would not be able to effectively
and efficiently fulfil their obligations under the amendments made by Schedule 2 to the Bill.
The amendments are proportionate as they only allow for the exchange of information between
bodies that have obligations to the employee under the Act and only relate to notices or medical
information which is pertinent to the employee`s claim, employment or rehabilitation.
Further laws exist to protect the information when it is received by the relevant authority, liable
employer or current employer. The Commonwealth and most non-Commonwealth licensees are
covered by the Privacy Act 1998 (Cth) which protects privacy by regulating the collection, use
and disclosure of private information, including health information. Whether or not the Privacy
Act 1998 (Cth) applies, state and territory privacy laws and guidelines further operate to protect
privacy. Importantly, this means that each specified party or agency to which information will be
disclosed has its own legal obligations concerning the collection, storage and use of personal
information.
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Schedule 3 - Scheme Integrity
Items 1 and 12 - Compensation for defective administration
Item 12 introduces a new section 70C. This section empowers Comcare to compensate persons
who have suffered a loss as a result of defective administration on Comcare`s part. Under the
Safety, Rehabilitation and Compensation Act 1988, there is no lawful ground for Comcare to
compensate those who have suffered financial loss as a result of defective administration. The
Bill`s amendments replicate the Scheme for Compensation for Detriment caused by Defective
Administration (the CDDA Scheme) which is generally available to non-corporate
Commonwealth entities.
This amendment gives effect to recommendation 9.20 of the Review and aims to place people
dealing with Comcare in the same position as those dealing with other non-corporate
Commonwealth entities.
Item 1 provides that decisions made under section 70C are not subject to judicial review under
the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act). The power under section
70C, as in the CDDA scheme, is discretionary and permissive, and does not oblige the decision-
maker to approve a payment in any particular case.
The legitimate objective of Item 1 is to ensure that Comcare is not subject to potentially lengthy
and expensive AAT disputes with claimants seeking payments for defective administration.
To the extent that the amendment engages the right to a fair hearing, it is a reasonable, necessary
and proportionate approach to achieving the legitimate objective for a number of reasons.
First, the amendment is necessary to ensure that decisions made in relation to payments under
section 70C are not reviewable under the ADJR Act. The power to make payments under section
70C is discretionary and as such it would be incongruous to allow for review of a decision where
there is no obligation on the decision maker to approve a payment. Further, decisions to provide
a payment under section 70C are intended to be approved on the basis that there is a moral rather
than legal obligation to compensate a claimant. As was said in the report Putting Things Right:
Compensating for Defective Administration` (August 2009), the spirit of legalism and legal
doctrine in a court or tribunal would blur the distinction between the moral and legal obligation
that is central to the scheme. The report also noted that the scheme could become mired in
adversarial disputes and legal principles which are fundamentally inconsistent with the purpose
of the scheme as an avenue of last resort.
Second, the amendment is proportionate as claimants of payments under section 70C will be able
to seek reconsideration by Comcare and may complain to the Ombudsman if they are dissatisfied
with how their claim is handled. Claimants can also access review under section 75 of the
Constitution or under section 39B(1) of the Judiciary Act 1903.
Finally, it is intended that the Minister for Employment will issue directions and guidelines to
Comcare in relation to making payments under section 70C. This incorporates recommendation
9.20 of the Review and aims to ensure the integrity of the scheme is maintained.
Items 5, 8 and 10 - Timeframes
Items 5 and 8 will improve the timeliness of the determination of new claims by imposing
statutory timeframes which must be met. The items promote the right to social security and the
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right to health by facilitating quicker access to the scheme and entitlements associated with
income replacement and medical treatment.
Under Item 5, employers will be required to forward claims to the relevant authority within 3
working days of receiving the claim from an injured employee to avoid delay on the part of an
employer in submitting claims to Comcare. Item 8 provides that after a claim has been lodged,
the determining authority will have either 30 days (where the claim relates wholly to a physical
injury) or 70 days (where the claim does not relate wholly to a physical injury) to determine the
claim. If the determining authority does not determine the claim within those timeframes, the
claim is deemed to have been rejected.
While Item 8 provides for claims to be rejected if not determined within the timeframe, deeming
the claim to have been rejected is intended to crystallise the point in time at which a claimant
may seek reconsideration of their claim. A request for reconsideration of a determination will be
subject to a 60 day timeframe, and the determination will be deemed to be affirmed if the claim
is not reconsidered within the timeframe. These amendments will ensure that injured workers are
provided with advice on whether their claim is ultimately accepted or rejected within a
reasonable timeframe and will allow them to exercise their appeal rights in a timely manner.
Evidence indicates that delays in the determination of claims and lengthy disputation contributes
to poorer return to health and employment outcomes.60
It is also important to note that during the initial determination period for a new claim, an
employee may be eligible to receive medical treatment costs under the new provisional liability
scheme, which commences when an employee makes a provisional liability payment request or a
claim for compensation. Medical treatment costs are payable unless the relevant authority has a
reasonable excuse and are payable while an employee`s claim is being determined.
It would be not be feasible for the scheme to deem the acceptance of all claims which are not
determined within the statutory timeframes because in most cases these claims will be very
complex and there is a high risk of acceptance being overturned when the determination is
finalised. This would adversely affect injured employees in the event their claim was rejected on
reconsideration as it would result in an overpayment and recovery action.
In addition to access to the provisional liability scheme for medical costs, an employee will, for
the first time, be entitled to access rehabilitation support when an employer is notified of an
injury either through notice of injury, requesting a provisional medical expense payment or
submitting a workers` compensation claim.
Item 6 - Relevant authority may obtain information or documents related to claim
Item 6 builds on existing information gathering provisions in the Act. Section 58 enables
relevant authorities to request information from a claimant if it is satisfied that a claimant either
has information or a document that is relevant to their claim or may obtain such information or a
copy without unreasonable expense or inconvenience. Section 71 provides Comcare with a
power to request information that relates to a claim or a person`s rehabilitation from an
employer.
60 See for example:
https://www.comcare.gov.au/__data/assets/pdf_file/0006/126393/2013_Qualitative_Research_Consolidated_Report.
pdf.
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The items improve information gathering powers by:
shortening the timeframe within which information must be provided to avoid delays
providing for information to be requested directly from third parties
providing for a power to request information relevant to the administration of liabilities
under the Safety, Rehabilitation and Compensation Act 1988.
Because information gathering powers are expanded Item 6, the right to privacy may be limited.
Improving information gathering powers at the initial claim assessment stage (new section 58)
pursues the legitimate objective of improving the timeframes within which claims are processed
and determined. Extending information gathering powers so that they apply through the life of a
claim pursues the legitimate objectives of better administration and fraud prevention. The
inability to gather information quickly and efficiently can result in needless delays to payments
and medical treatment, creates unnecessary tensions for those already suffering the stresses of
illness or injury, and leads to an increase in the number of disputed claims decisions. It is
considered that Item 6 is necessary and that the amendments pursue these objectives in a
reasonable and proportionate way. Each power is discussed in turn below.
New section 58
New section 58 provides that a relevant authority may request information from a claimant by
giving them written notice and specifying in that notice a period within which the information
must be provided. If the person fails to comply with the notice within the relevant timeframe the
relevant authority may refuse to progress their claim. The main difference between existing
section 58 and new section 58 is that the minimum period for compliance will be 14 days rather
than 28. It will still be possible for the relevant authority to extend the specified timeframe if
requested.
The Review found that allowing a minimum of 28 days for information to be provided delays the
determination of claims; shortening the timeframe will result in claims being processed more
quickly (see recommendation 9.17). Importantly, a person will also be able to seek an extension
if they need it. The 14 day timeframe achieves the right balance between ensuring information is
provided quickly without harsh outcomes where timeframes are not met.
New section 58A
New section 58A will give relevant authorities a new power to request information and
documents that are relevant to a claim from third parties. This will allow the relevant authority to
take responsibility for obtaining information from third parties, rather than asking the claimant to
do so. This will be very useful where a claimant is particularly unwell and will result in
information being obtained more quickly because the claimant does not need to facilitate the
provision of information.
The amendment is considered to be proportionate and reasonable because the third party cannot
be coerced into providing information; this is a request power only. The failure of a third party to
provide the requested information won`t result in a person`s claim being put on hold, and section
58A provides that the third party may be paid an amount for providing the information. The new
section is reasonable and proportionate because it facilitates the provision of information and
provides some incentives, but it cannot be used to force a person to provide information.
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Further, protections exist to protect the information when it is received. The Commonwealth and
most non-Commonwealth licensees are covered by the Commonwealth Privacy Act 1998 which
protects privacy by regulating the collection, use and disclosure of private information, including
health information. Whether or not the Commonwealth Act applies, State and Territory privacy
laws and guidelines further operate to protect privacy. Importantly, this means that each
specified party or agency to which information will be disclosed has its own legal obligations
concerning the collection, storage and use of personal information.
Item 26 - New sections 120A and 120B
New sections 120A and 120B provide for equivalent information gathering powers to new
section 58 and 58A, which will apply where a person`s claim has been accepted and the person is
receiving compensation under the Act. A relevant authority will be able to request information
about the level of a person`s work activity or their remuneration for the purposes of
administering compensation. It is important that relevant authorities are able to access
information to ensure that overpayments don`t occur and fraud is identified in the rare cases it
occurs.
New section 120A includes the same safeguards as new section 58; there must be a minimum of
14 days to provide the information, extensions may be requested, and if a payment is suspended
because of non-compliance it resumes as soon as the information is provided.
New section 120B includes the same safeguards as new section 58A; it is a request power only,
failure to provide information won`t affect a person`s payments, a payment may be made to the
third party to cover costs. Further disclosures will also be prohibited by relevant privacy
legislation.
Items 32 to 39 - New subsections 108C(8A), 108C(11) and 108CB(4)
The new subsections inserted by Items 32 to 39 require licensees (and a relevant authority for a
group employer licence) to notify Comcare of any proceedings they commence under the Act
and empower Comcare to request documents relevant to any proceedings brought against, or
instituted by, a licensee (or a relevant authority for a group employer licence). A notice or
documents may contain personal information (for example a person`s name and a description of
their injury) and these provisions limit the right to privacy.
The legitimate objective of the provisions is to ensure that Comcare is aware of relevant
proceedings and is able to monitor the way that the Act is applied. It is also important that
Comcare is able to intervene in proceedings where appropriate to ensure that the Act is
interpreted as intended and to assist relevant tribunals or courts.
The amendments are a reasonable, necessary and proportionate approach to achieving this
objective for two reasons.
First, not all notifications will contain sensitive personal information and the only personal
information that would be disclosed is a person`s name. The notification may only mention
specific sections or issues that are to be clarified, which would be enough information for
Comcare to assess whether the matter is significant. Comcare would exercise discretion and
would only seek more detailed information where a matter is of interest.
Second, where documents containing personal information are sought by Comcare and provided,
the Privacy Act 1998 (Cth) will operate to protect that information and to restrict the way that it
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is stored and used. This will safeguard the information and ensure that further disclosures do not
occur unless permitted under privacy law.
Schedule 4 - Provisional Medical Expense Payments
Schedule 4 to the Bill amends the Act to enable a relevant authority to make provisional medical
expense payments (capped at $5000 and indexed annually) in respect of an alleged injury before
a claim for compensation is determined. This will assist injured employees to obtain medical
treatment in the critical early stages of an injury.
Schedule 4 to the Bill promotes the right to social security and the right to health by providing
for early access to compensation for medical treatment. Amendments in Schedule 4 to the Bill
also engage the rights of persons with disability and the right to privacy, which are discussed
below.
Item 4 - New sections 52B and 52C
Item 4 inserts a new Part IVA which provides for provisional medical expense payments in
respect of an alleged injury to allow injured employees to access up to $5000 in medical costs
before their claim for compensation is determined by the relevant authority. Section 52B
provides that a request for a provisional medical expense payment may be made by another
person on behalf of an employee who is physically or mentally incapable of giving the request
himself or herself. Section 52C(4) states that a person is not entitled to give a provisional
medical expense payment request on behalf of an employee unless the employee is physically or
mentally incapable of giving the request himself or herself.
Providing for another person to submit the request on behalf of an employee may engage the
rights of persons with disability to equal recognition before the law.
Article 12 of the CRPD affirms that persons with disabilities have the right to recognition as
persons before the law, which includes recognition that persons with disability enjoy legal
capacity on an equal basis with others. General Comment No. 1 states that Article 12 is to be
read in light of the Convention`s general principles which emphasise individual autonomy,
including the freedom to make one`s own choices. These amendments may also engage the right
to privacy in Article 17 of the ICCPR.
The legitimate objective of the amendments is to ensure that people who suffer from a physical
or mental injury that impairs their ability to submit a request are able to access provisional
medical expense payments on the same basis as others under the scheme.
The amendments are a necessary, reasonable and proportionate approach to achieving this
objective for a number of reasons.
First, the amendments are reasonable as they provide for supported decision-making and not
substituted decision-making. That is, they do not enable a third party to make decisions on behalf
of an injured employee; they simply provide that a third party may assist the employee to carry
out their wishes where they are not able to make the request themselves. In this way the
amendments positively engage the right of persons with disabilities to equal recognition before
the law. This is because the amendments create measures to provide access to persons with
disability to the support they may require to exercise their legal capacity.
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Second, the amendments are reasonable as they only impose a minor limitation on the person`s
right to privacy. It is intended that the amendments will allow an injured employee to ask a
family member, friend or carer to make a request for a provisional medical expense payment on
their behalf if they are unable to make the request themselves. In this way, the provision of the
employee`s personal information will be shared only with a person of their choice for the
purposes of requesting a provisional payment.
Finally, the amendments are proportionate as the request may only be made on behalf of an
employee where the employee is not capable of making the request themselves. This ensures that
the involvement of third parties is kept to a minimum.
Item 4 - New section 52J
New section 52J requires a relevant authority, when requested to do so, to provide documents
relating to provisional medical expense payment requests to any of:
the employee;
the Commonwealth or a Commonwealth authority;
a licensed corporation.
Because the disclosure of personal information is permitted by new section 52J the right to
privacy is limited.
The legitimate objective of the amendment is to ensure transparency and to assist the effective
administration of employer managed early intervention programs. It is appropriate for an
employee to be able to request documents that relate to their own request for a payment and in
some cases a relevant authority will not be the person`s employer. It is appropriate for an
employer to have access to this information where employers have established an early
intervention program that enables initial costs to be met. Without the information double
payments may occur. Further, the costs associated with payment of provisional medical expense
payments will be passed on to employers though premiums and it is important that employers are
able to access information about payments made.
The amendment is a necessary, reasonable and proportionate approach to achieving this
objective. The provision is a logical measure to include alongside the new provisions that will
provide for provisional medical expense payments. It is important that all relevant parties are
able to access information for the reasons outlined above.
Further, protections exist to protect the information when it is received. Commonwealth
employers and most non-Commonwealth licensees are covered by the Commonwealth Privacy
Act 1998 which protects privacy by regulating the collection, use and disclosure of private
information, including health information. Whether or not the Commonwealth Act applies, State
and Territory privacy laws and guidelines further operate to protect privacy. Importantly, this
means that each specified party or agency to which information will be disclosed has its own
legal obligations concerning the collection, storage and use of personal information.
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Schedule 5 - Medical Expenses
Schedule 5 to the Bill amends the Act to impose more rigorous requirements in relation to
determining the amount of compensation payable under section 16 of the Act in respect of
medical expenses incurred by an injured employee. The amendments engage the right to social
security, the right to health and the right to privacy. Each amendment is discussed further below.
Items 2 and 3 - Therapeutic treatment
The amendments made by these items ensure that therapeutic treatment` will only be
compensable if it is provided by a registered health practitioner` (as defined). The effect of these
amendments is that medical practitioners will no longer be able to direct employees to obtain
therapeutic treatment from health care providers who are not registered health practitioners.
The amendments limit the right to social security (and potentially the right to health) by limiting
the types of therapeutic treatment that will be compensable. In some cases, employees that
currently receive compensation for particular treatments will no longer be able to do so.
The primary legitimate objective of these amendments is to improve health outcomes under the
scheme by ensuring that compensable therapeutic treatment is provided by appropriately
qualified medical practitioners and is evidence-based. Additional objectives also include
ensuring consistency and equity so that what is compensable treatment is the same for all
employees and aligning the list of health practitioners with the recent introduction of the Health
Practitioner Regulation National Law.
The amendments are considered to be reasonable, necessary and proportionate.
The amendments are necessary because currently treating practitioners have considerable scope
to refer employees to different treatments which may not be provided by appropriately qualified
persons or have any proven therapeutic value. Requiring compensable therapeutic treatment to
be provided by medical practitioners who meet national registration standards is a reasonable
approach to ensuring compensable medical treatment is evidence-based and effective.
Comcare`s ability to accredit healthcare practitioners who may not meet national registration
standards (for example, because national standards have not been developed) provides a measure
of flexibility that ensures proportionality. It is envisaged that Comcare would accredit certain
groups of practitioners on a case by case basis where groups are subject to appropriate
professional regulation and provide evidence based treatment.
Items 4 and 5 - Medical treatment
The amendments made by Items 4 and 5 expands on the requirements currently contained in
paragraph (h) of the definition of medical treatment` so that:
only nursing care provided by a registered nurse will be compensable
the provision of medicines (including schedule 8 medicines) will be compensable only
when prescribed and dispensed or provided by appropriately qualified persons
medical treatment provided to an employee outside Australia may be compensable.
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The amendments promote the right to social security and the rights of equality and non-
discrimination by expanding the categories of compensable medical treatment. Including
treatment and maintenance as a resident in a nursing home, and medical treatment provided
outside Australia when approved under section 71C will ensure that high needs employees and
employees with connections overseas are not disadvantaged. The amendments build in flexibility
that will allow for compensation in cases where it is not currently available.
However the amendments also limit the right to social security (and potentially the right to
health) by imposing additional requirements in relation to the compensability of nursing care and
the provision of medicines, including schedule 8 medicines (drugs of addiction).
The legitimate objectives of the amendments is to ensure that the Comcare scheme does not
enable abuse of schedule 8 medicines and to ensure that compensable nursing care received by
injured employees is provided by appropriately qualified professionals.
The restrictions on schedule 8 medicines are reasonable and necessary because some prescription
medicines, particularly schedule 8 medications, are addictive and therefore subject to misuse and
abuse that may result in death or serious damage to health. In addition, there have been cases of
some injured employees visiting multiple general practitioners in order to obtain more
prescription medicines than is clinically necessary for the treatment of their condition. Allowing
an employee to designate a medical clinic to be able to prescribe compensable schedule 8
medications permits flexibility in access to doctors when an employee`s primary care physician
is on leave or unavailable, while still providing oversight through the systems of the medical
clinic. The amendment is a proportionate way of protecting employees because it addresses the
risk of abuse by providing for oversight by one medical practitioner, or a medical clinic, without
affecting the availability of the medicines when they are required.
Limiting compensable nursing care to that provided by a registered nurse is reasonable and
necessary. Firstly, the amendment will address a current deficiency in the legislation which was
identified by the Review (see recommendation 7.27). Secondly, requiring compensable nursing
care to be provided by a nurse who is registered under the National Health Practitioner
Regulation Law is a reasonable way to ensure that care is of a high standard. Lastly, the amount
of compensation payable for nursing care is not restricted or reduced.
Items 7 and 8, Items 10 and 11 - Cost of medical treatment
Items 7 and 8 set out the factors that Comcare (or a licensee) must have regard to in determining:
whether it was reasonable for an injured employee to obtain medical treatment
the amount of compensation payable in respect of medical treatment provided to an injured
employee.
Items 10 and 11 limit the costs payable in respect of medical examination reports.
One objective of these amendments is to improve the sustainability of the scheme by focussing
limited scheme resources on medical treatment that is reasonable in the circumstances having
regard to objective standards contained in the Clinical Framework Principles. Another objective
is to contain medical costs under the scheme.
The amendments may limit the right to social security (and potentially the right to health) by
circumscribing a relevant authority`s broad discretion to pay compensation for the cost of
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medical treatment. It is possible that the Clinical Framework Principles developed under section
16A will constrain a relevant authority`s discretion in determining whether particular items of
medical treatment are reasonable in the circumstances. The amendments may also limit the right
to health by limiting an employee`s choice of practitioner where the practitioner is unwilling to
charge at the rates prescribed in the medical services table.
At present, relevant authorities have a broad discretion to determine whether an item of medical
treatment is reasonable for the employee to obtain in the circumstances. While relevant
authorities also have a discretion in relation to the amount of compensation payable, they can
only apply administrative controls to the amounts paid, for example by linking to rates endorsed
by the Australian Medical Association from time to time, and these rates and guidelines cannot
be enforced by Comcare. The amendments are necessary to contain medical costs under the
scheme and limit disputation. The amendments are reasonable and proportionate because they
promote greater transparency and consistency in Comcare`s decision-making.
Item 13 - Disclosure of information to disciplinary authorities
Item 13 enables Comcare to disclose medical treatment information to a professional disciplinary
authority where Comcare has concerns about the adequacy, appropriateness or frequency of
medical treatment. The amendment may limit the right to privacy if referral to an authority
necessitates the disclosure of an injured employee`s personal health information.
The legitimate objective of this amendment is to ensure that compensable medical treatment
meets appropriate professional standards and, where it does not do so, provide an avenue for
action or investigation by the appropriate professional disciplinary body.
The amendment is reasonable, necessary and proportionate for a number of reasons.
The amendment is necessary as there needs to be a mechanism to address concerns about the
adequacy, appropriateness or frequency of medical treatment provided to injured employees. In
some cases, it will be impossible for Comcare to refer a matter to a professional body without
disclosing information such as an employee`s name.
The amendment is reasonable in that it ensures that the medical information is assessed and any
disciplinary action is taken by the appropriate regulatory body. The provisions are targeted and
will only allow Comcare to disclose to particular bodies (i.e. the relevant professional body).
Further, protections exist to protect the information when it is received. Many professional
bodies are covered by the Privacy Act 1998 (Cth) which protects privacy by regulating the
collection, use and disclosure of private information, including health information. Whether or
not the Privacy Act 1998 (Cth) applies, state and territory privacy laws further operate to protect
privacy. Importantly, this means that each specified party or agency to which information will be
disclosed has its own legal obligations concerning the collection, storage and use of personal
information under privacy laws. Comcare may also impose conditions to be complied with in
relation to information disclosed under the new provision. This will provide an additional
protection where necessary or appropriate (see new subsection 71A(3) inserted by item 13).
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Schedule 6 - Household and Attendant Care Services
Items 1, 2 and 3 - Compensable care services
Item 3 introduces a requirement that attendant care services are only compensable where they are
provided by a registered entity. The Bill will require an independent assessment of an injured
employee`s need for household services, attendant care services or both. It further requires
attendant care services to be provided by accredited, registered or approved providers, and
provides for the accreditation, registration and approval of providers of attendant care services
(new sections 29D, 29E and 29F respectively). The Bill will also allow Comcare to pay for or
reimburse reasonable costs incurred in relation to an attendant carer accompanying an employee
to enable to the employee to undertake an activity outside the employee`s place of residence, in
accordance with Comcare`s current administrative practice.
The registration requirements limit the right to social security and arguably the right to health, as
the care provided by some individuals may no longer be compensable.
These provisions may also indirectly have a disproportionate effect on those with language,
cultural or age barriers, Indigenous Australians or persons from rural or remote communities.
For example, injured employees who live in remote locations may have difficulty in finding a
prescribed entity or person registered with a prescribed entity to provide their attendant care.
Further, attendant care providers who, due to language skills, disability, age or other barriers are
not able to pass the requirements for registration with a registered entity (but who are capable of
providing appropriate attendant care) will no longer be able to have their services covered by
compensation. The requirements for accreditation, registration or approval may be onerous for
these groups, and result in barriers to receiving attendant care services, particularly where those
services are currently being provided by unregistered individuals.
The legitimate objective of these amendments is to ensure that individuals providing attendant
care services are appropriately trained and qualified. Under the Act, the engagement of providers
of attendant care services is the prerogative of the injured employee. Creating a register of
suitable persons to provide attendant care services will ensure that each person engaged is
suitably trained and qualified to meet the needs of the injured employee.
The amendments establish a reasonable, necessary and proportionate approach to achieving this
objective for a number of reasons.
First, requiring compensable attendant care services to be provided by appropriately qualified
persons is a reasonable approach to ensuring attendant care services are directed towards
ensuring that employees are provided with appropriate and professional care. It is important that
compensation is not being paid in respect of care which is not of an appropriate standard to
ensure the best health outcomes for the employee. Requiring that those providing post-treatment
services are appropriately qualified will ensure that injured employees have access to safe and
appropriate support, targeted to their needs, and that the scheme better meets its obligations to
injured employees. In light of the size of the Comcare scheme and its geographic span, having a
range of accreditation, approval and registration options provides a measure of flexibility that
ensures proportionality.
Second, this amendment is proportionate as it does not prevent family members from providing
care and support to an injured worker. However, for this care to be compensated, the person
providing the services must be suitably qualified and able to pass the requirements for
registration with a registered entity.
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Third, compensation may be paid to an individual who is not a registered provider of attendant
care services, without meeting the qualification requirements, where there are special
circumstances`. Special circumstances could include the remote location of the employee, or
particular language or cultural requirements of the employee. This exception will work to
counter indirect and disproportionate disadvantage of individuals with language, cultural,
remoteness and other barriers to accessing the services of registered attendant care services.
Finally, the decision to accredit, register or approve persons as providers is a determination`
which may be reconsidered and reviewed (section 60, Item 4).
Item 16 - Assessment of need for household and attendant care services
New section 29B provides that a relevant authority may require an injured employee to undergo
an assessment of the employee`s need for either household services, attendant care services or
both by a registered occupational therapist or a registered physiotherapist nominated by the
relevant authority.
The amendment arguably may limit the right to social security and the right to health by limiting
the payment of compensation for household and attendant care services to persons who are
assessed as requiring those services.
The objective of this amendment is to provide an objective mechanism to determine whether
household or attendant care services are reasonably required.
The amendment is necessary because currently there is no formal mechanism for assessing an
injured employee`s needs for these services. Comcare (and licensees) have a broad discretion to
pay compensation for household services and attendant care services that an injured employee
reasonably requires`. The amendment is reasonable and proportionate because it provides for an
objective assessment of the need for those services so that only services that are reasonably
required are compensated. This promotes greater transparency and consistency in Comcare`s
(and licensees`) decision-making.
Part 2 of Schedule 6 - Household and attendant care services
Part 2 of Schedule 6 to the Bill establishes a tiered approach to the payment of compensation for
household and attendant care services, based on whether or not the employee`s injury was
catastrophic`. Catastrophic injury` will be defined in the legislative rules (section 4, Item 5),
and will be based on the definition in the National Injury Insurance Scheme when it is settled.
The Part will remove the current weekly cap on compensation for employees with a catastrophic
injury, and will preserve the cap for employees with a non-catastrophic injury. In addition, it will
limit the period for which compensation for household and attendant care services is payable to
employees with a non-catastrophic injury to three years (section 29, Items 6-8, 14; section 29A,
Item 16). Attendant care services and household services will also be compensable for 6 months
after each instance an employee was admitted as an in-patient in a hospital as a result of their
injury (Item 14).
This amendment positively engages the right to social security and the right to health by
removing the cap on weekly payments for catastrophic injuries. As a result, employees with a
catastrophic injury will be able to access uncapped compensation for household and attendant
care services for life, or for as long as necessary. However, compensation for household and
attendant care services for employees who do not have a catastrophic injury will cease after three
years. Attendant care and household services will also be compensable for six months after any
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hospital stay as an in-patient. To the extent that the amendments reduce the duration of payments
for healthcare through the three-year limit on compensation for attendant care services, the rights
may be limited.
The legitimate objective of these amendments is to align the services available to injured
employees to their level of disability. This provides recognition of the different types of injuries
that may be sustained, and the different support that they require. The amendments aim to create
a scheme which provides the appropriate level of support to injured employees based on nature
or extent of the impairment sustained. As a result, the amendments make a distinction between
the services required by employees with injuries with varying degrees of severity.
The amendments are a reasonable, necessary and proportionate approach to achieving this
objective for a number of reasons.
First, the amendments recognise the greater care requirements of workers with catastrophic
injuries and ensure that the level of benefits paid doesn`t limit an employee from receiving the
full level of attendant care services they require. For the catastrophically injured, these services
will be provided until no longer required, reflecting the greater needs of those unable to return to
independence and work. For the non-catastrophically injured, these services will be limited to a
period of three years and will be closely tied to rehabilitative measures aimed at returning the
injured worker to work. The Review suggests that for non-catastrophically injured workers, three
years will provide sufficient time for employees to recover from most injuries, be rehabilitated
for return to the workforce and learn any coping strategies that they need to manage any residual
impairment.`61 The amendments will permit the scheme to more efficiently allocate resources
based on the need for care and to prevent service dependencies that may arise with the unlimited
provision of services.
Second, where required all employees must undergo a needs assessment to determine their level
of need for attendant care and household services (sections 29A, 29B, Item 16). The relevant
authority is then required to have regard to the needs assessment when determining the attendant
care and household services that are reasonably required by the employee (section 29, Items 10
and 13; section 29A, Item 16). This will ensure that employees needs are met.
Third, decisions and determinations about attendant care and household services are reviewable
decisions (section 60).
61 Hanks, P. 2013. Safety, Rehabilitation and Compensation Act Review, 7.419-7.420.
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Schedule 7 - Absences from Australia
Schedule 7 to the Bill amends the Act to suspend compensation payments when an injured
employee is absent from Australia for private purposes (that is, not for work purposes) for a
period of more than six weeks. Because compensation may be suspended the amendment
engages the right to social security and the right to health. It is also possible that the amendment
engages the right to non-discrimination because employees who were born overseas or have
strong links with other countries will be more affected by the amendment than others.
The legitimate objective of the amendments is to ensure that employees receive consistent
rehabilitation and medical treatment. At present, there is no limitation on payment of
compensation to a person outside Australia. A person who is receiving compensation payments
for incapacity is required under section 120 to inform the relevant authority of any overseas
travel; however, the person remains eligible to receive compensation while outside Australia,
regardless of the length of absence. Extended absences from Australia by an injured employee
may negatively impact on the employee`s access to medical treatment and rehabilitation
programs which would assist them in their return to work.
The amendments are a reasonable, necessary and proportionate approach to achieving this
objective for a number of reasons.
First, the prospect of effective assessment of an employee`s continuing incapacity for work, of
the amount that the employee is able to earn in suitable employment and of the efficacy of
medical treatment is very much diminished if the employee is outside Australia. Also, there are
significant barriers to an employer arranging an effective rehabilitation program while the
employee is outside Australia.
Second, Schedule 7 to the Bill includes important safeguards to ensure that employees are able to
remain overseas where there is a good reason for them to do so. For example, if an employee is
visiting an ill relative and the day before the employee planned to return the relative dies, it
would be appropriate to extend the period of permitted absence so that the employee is able to
remain overseas for a further period of time. New subsection 29K(9) and (10) enable the relevant
authority to extend the period of absence in limited situations. The situations in which an
absence may be extended are modelled on section 1218C of the Social Security Act 1991. A
relevant authority may also permit, in writing, an employee to leave Australia indefinitely
without their compensation rights being suspended, where the relevant authority is satisfied that
there are special circumstances that warrant giving that permission (new subsection 29K(16)).
To the extent the amendments will disproportionately affect people who are born overseas the
right to non-discrimination is engaged. However, the amendments are permissible as they pursue
a legitimate aim and are a reasonable, necessary and proportionate approach to achieving that
aim. As discussed above, the legitimate objective of the amendments is to ensure that all
employees under the scheme receive consistent rehabilitation and medical treatment. It is
therefore generally necessary to require employees to be in Australia in order to receive their
rehabilitation and medical services and to comply with their obligations under the scheme.
The amendments are proportionate as they provide two safeguards so that employees are not
unfairly disadvantaged because of their place of birth or residence (see discussion on subsections
29K(10) and 29K(16) above). The amendments are also proportionate as there is no other means
of achieving the objective which impose less interference with the right to non-discrimination.
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Schedule 9 - Calculation of Compensation
Schedule 9 to the Bill amends the method of calculating an employee`s weekly incapacity
payments to reflect changes in the employment conditions and industrial profile of the
employees covered by the Comcare Scheme and to align the scheme with state and territory
workers` compensation schemes. The amendments engage the right to social security because
they affect the amount of compensation that injured employees will receive.
Item 26 - Employees who are suspended without pay
Item 26 inserts new subsection 8(11) which provides that an employee suspended without pay is
taken to be employed during the suspension period for the purposes of paragraph 8(10)(a) of the
Act. Paragraph 8(10)(a) has the effect of capping an employee`s average weekly remuneration to
the amount that the employee would have received had they not been incapacitated to work.
The amendment limits the right to social security by reducing the current level of workers`
compensation payable to an injured employee who is suspended without pay.
The objective of this amendment is to correct an anomaly under which an employee who would
not have earned anything if free from incapacity is able to receive an income because of his or
her incapacity. There is no other way to deal with this anomaly and therefore it is considered that
the amendment is reasonable, necessary and proportionate approach to achieving this objective.
Item 27 - Total remuneration
Item 27 specifies the types of payments and benefits that may be included in an employee`s total
remuneration for the purpose of calculating the employee`s average remuneration under section
8 of the Act which is then used to calculate the employee`s weekly incapacity payments under
section 19 of the Act. Overtime and specified allowances may be included in the calculation of
average remuneration for the first 104 weeks of incapacity only. At present the Act does not limit
the duration that overtime and specified allowances can be included in an employee`s normal
weekly earnings used to calculate the employee`s weekly incapacity payments.
The amendment limits the right to social security by reducing (after 104 weeks of incapacity) the
current level of workers` compensation payable to injured workers who, prior to their injury,
received regular overtime payments and allowances.
The objective of this amendment is to contain costs in the Comcare scheme, ensuring that the
scheme remains viable and affordable in the long term.
The amendment is reasonable, necessary and proportionate. All Australian workers`
compensation schemes impose limits on the calculation, level and duration of weekly benefits.
The Comcare scheme supports injured employees to retirement age.
Where, prior to injury, an employee received a weekly allowance or was required to work
overtime on a regular basis, there is a strong case for including those payments in the initial
calculation of an injured employee`s normal weekly earnings or average weekly remuneration on
the basis that the employee should not be penalised on account of their injury. However, all
Australian workers` compensation schemes impose limits on the calculation, level and duration
of weekly benefits. Typically, compensation for lost earnings in Australian workers`
compensation schemes will start at a level that approximates an injured employee`s pre-injury
earnings and then taper down over time before reaching a minimum support level (or ceasing
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altogether). Consistent with this principle, if an injured employee is unable to return to their pre-
injury work within 2 years of their injury, there is no reason why their normal weekly earnings
(or average weekly remuneration) should continue to include remuneration elements that are no
longer payable.
The amendment attempts to strike the most effective balance between providing adequate and
fair compensation of injured employees for lost income and scheme viability and affordability,
recognising that the costs of workplace injury and illness are funded by employer contributions.
Item 31 - Step downs`
Item 31 introduces structured reductions (commonly referred to as step-downs`) in the
calculation of weekly compensation payments for incapacity based on the period of incapacity.
Currently under the Act there is a single step down point at approximately 45 weeks after which
compensation is reduced to 75% of the injured employee`s normal weekly earnings. The
amendments reduce compensation in three increments over a 52 week period. These decreases
occur at 14 weeks (to 90% of the employee`s average weekly remuneration), at 28 weeks
(calculated by reference to 90% of the employee`s average weekly remuneration, with the
incapacity payment being capped at 80% of the employee`s average weekly remuneration), and
at 53 weeks (calculated by reference to 90% of the employee`s average weekly remuneration,
with the incapacity payment being capped at 70% of the employee`s average weekly
remuneration).
The objectives of these amendments are to:
align the Comcare scheme with state and territory workers` compensation schemes
address a concern identified by the Review that a single step down point after 45 weeks
creates a disincentive for early return to work by injured employees.
The amendments limit the right to social security by reducing the current levels of workers`
compensation payable to injured workers after 13 weeks of incapacity (when staggered
reductions commence) and again after 53 weeks of incapacity when weekly compensation
payments are reduced from 75% to 70% of an injured employee`s average weekly remuneration.
The amendments are reasonable, necessary and proportionate for the following reasons.
All Australian workers` compensation schemes link compensation for lost income to an
employee`s pre-injury earning and impose limits on the calculation, level and duration of weekly
benefits. Typically, compensation for lost earnings in Australian workers` compensation
schemes will start at a level that approximates an injured employee`s pre-injury earnings and
then taper down over time before reaching a minimum support level (or ceasing altogether). All
schemes have some form of step-down arrangement (with a range of other limitations); however,
the schemes are not consistent as to the timing or the amount of the step downs. The Comcare
Scheme is unique in having a single step down point at such a late stage.
The Comcare Scheme supports injured employees to retirement age. Maintaining injured
employees on 100% of pre-injury earnings for 45 weeks and for 75% of pre-injury earnings
thereafter is out of step with state and territory workers` compensation schemes and
unsustainable in the long term. Such a late step-down creates a systemic disincentive for
employees with either full or partial work capacity to return to work any earlier or participate in
a vocational rehabilitation program.
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A staggered approach to step downs (with more step down points, occurring more frequently and
reducing compensation payable in smaller increments) introduces those limits earlier and more
gradually. Earlier step downs will encourage employees who are able to return to work to do so
as quickly as possible (or, put another way, provide a disincentive to remain on income support
any longer than is necessary); in the case of employees who are unable to return to work, a
staggered approach to step downs will ease the transition to what may be an extended period of
income support.
The Commonwealth and the two territories manage the only schemes providing income
replacement to retirement age, with the Northern Territory proposing to change its scheme`s
arrangements in this regard.
Comcare data shows a spike in people returning to work after the current step down at 46
weeks. This is consistent with the international evidence. For example, Meyer, Viscusi and
Durbin found that return to work rates decreased when Michigan and Kentucky increased the
amount they paid higher income injured workers. The rate was steady for other workers (whose
payments did not change). The authors found ...substantial labour-supply effects of workers`
compensation benefits`.62
Research by the Victorian Workcover Authority in 1993 ( authors J. Sloan and S. Kennedy) cited
in the 2004 Productivity Commission Inquiry Report into National Workers' Compensation and
Occupational Health and Safety Frameworks, indicated that the timing of changes in benefit
levels (step downs) are significant in determining the duration of a claim. The research indicated
that In both workers` compensation and social security schemes, high exit rates by beneficiaries
are typical just prior to the time at which benefits are significantly reduced`.
At all step-down stages, targeted return-to-work measures will be introduced to facilitate
recovery at work options for any injured worker possessing some capacity for work (for
example: reduced hours, revised duties).
Injured employees will also be provided with access to numerous forms of healthcare and will
continue to have access to ongoing payments including compensation for reasonable medical
expenses; rehabilitation; household and attendant care services; the provision of medical aids and
appliances; and any modifications to houses, cars or equipment necessitated by the injury.
Employees who have suffered permanent impairment as a result of their injury may also access
lump sum payments for permanent impairment of up to $350,000.
Finally, the Act ensures that low-paid, part-time or equivalent workers` income replacement
benefits will not be subject to the final two step down` provisions which cap the amount of
weekly compensation payable to 80% and 70% of the employee`s average weekly remuneration
respectively.
Items 38-46 - Superannuation benefits
Items 38-46 amend sections 20, 21 and 21A of the Act to remove the 5% deduction from weekly
incapacity payments to retired employees who are receiving superannuation benefits, that is, a
62 Meyer, Viscusi and Durbin, Workers` Compensation and Injury Duration: Evidence from a Natural Experiment`,
October 1990
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pension, a lump sum or both. These provisions were enacted when it was compulsory for public
servants to contribute to their own superannuation accounts. However, this requirement no
longer exists in the Australian Public Service superannuation scheme; nor does it exist in the
superannuation schemes used by employees of licensed corporations.
The amendments promote the right to social security by effectively increasing weekly incapacity
payments to retired employees by 5%.
Items 47 and 48 - Aligning retirement age
These items amend subsection 23(1) in the Act to provide that compensation payments cease
when an injured employee reaches his or her pension age` as defined in the Social Security Act
1991.
Subsection 23(1) currently provides that weekly compensation is not payable to an employee
who has reached 65 - the standard retirement age when the Act commenced in 1988. The one
exception to this is an employee who suffers an injury at age 63 or above. That employee is
entitled to a maximum of 104 weeks of weekly incapacity payments from the date of their injury.
The amendments promote the right to social security by allowing an injured employee to receive
weekly compensation until their pension age. Additionally, employees who are injured at any
time after two years prior to their pension age are entitled to receive weekly incapacity payments
for a period of 104 weeks.
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Schedule 11 - Legal Costs
Item 2 - Undertakings regarding AAT review
Item 2 introduces a new section 62A which enables a determining authority to reimburse a
claimant for costs they have reasonably incurred in connection with a favourable reconsideration
by the determining authority. Subsection 62A(1) states that the reimbursement is subject to the
claimant giving an undertaking not to seek a review of the reconsideration by the AAT.
To the extent that claimants will not be able to apply to the AAT for review of the
reconsideration, the right to a fair and public hearing in civil proceedings may be engaged.
The legitimate objective of the amendment is to control and reduce costs of the Comcare scheme
associated with disputes before the AAT. The Review (at 9.101) identified that the process for
resolving workers` compensation disputes before the AAT is slower than any other jurisdiction
in Australia. The legitimate objective of the amendments is to provide an incentive and
mechanism for parties to resolve disputes at the reconsideration stage and thereby reduce the
number of matters reaching the AAT. The amendments are a reasonable, necessary and
proportionate approach to achieving this objective for a number of reasons.
First, the Review identified that employees are not properly engaging in the reconsideration
process. In particular, the Review noted that the Comcare scheme [e]ncourages employees and
their lawyers to defer investing any time or energy into a case until that case reaches the AAT,
where employees` legal costs can be recouped` (at 9.58). This was reinforced by the finding that
very few applicants provide supporting medical evidence or obtain legal representation for the
reconsideration process. It is intended that the amendments will provide an incentive to
claimants to actively engage in the reconsideration process and thereby reduce the number of
matters that proceed to the AAT.
Second, the amendment provides that reimbursement is only available to claimants who receive
a favourable outcome from the reconsideration process. New subsection 62A(1) provides that a
favourable reconsideration means a decision to vary a determination in a way that results in a
more favourable outcome for the claimant or a decision to revoke the earlier determination.
Where reconsideration results in an unfavourable outcome, the claimant retains their right to
seek review from the AAT. Similarly, if the claimant is dissatisfied with a favourable outcome,
they may elect not to receive the reimbursement payment and proceed to review before the AAT.
Finally, subsection 62A(3) provides that the claimant may later apply to the AAT for review of
the determination if they withdraw the earlier undertaking in writing and repay the
reimbursement to the determining authority.
Item 7 - Costs
New subsection 67(10B) will empower the AAT to make orders requiring a claimant to pay the
costs of another party to the proceedings, but only if:
the claimant instituted the proceedings under Part VI of the Act
those proceedings were dismissed under section 42B of the Administrative Appeals
Tribunal Act 1975
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the other party has applied for an order that the costs of the proceedings incurred by that
party be paid by the claimant.
To the extent that the prospect of costs orders may discourage some claimants from pursuing
certain proceedings, the right to a fair trial may be considered to be limited.
The legitimate objective of permitting costs to be awarded where the AAT considers it is
appropriate is to remove any incentive for employees to participate in unnecessarily drawn out
proceedings and to discourage frivolous and vexatious claims. Currently, there are insufficient
disincentives to discourage claimants from pursuing vexatious claims and drawn out proceedings
impact on an employee`s recovery and rehabilitation and result in employers or Comcare
incurring unreasonable costs.
The amendments are a reasonable, necessary and proportionate approach to achieving this
objective for a number of reasons.
First, costs may only be awarded in circumstances where proceedings are dismissed, under
section 42B of the Administrative Appeals Tribunal Act 1975. That section permits the AAT to
dismiss proceedings in certain circumstances, including where an application is frivolous or
vexatious.
Second, the AAT will have full discretion in deciding whether to award costs in a particular case.
This will provide further protections for vulnerable applicants and will ensure that costs are only
awarded where warranted.
Item 8 - Capping legal costs
Item 8 will provide for Comcare to make a legislative instrument that will cap the amount of
legal costs that the AAT may award. This arguably limits the right to a fair and public hearing
because it may discourage some claimants from bringing proceedings and affect their
representation choices.
The legitimate objective of the amendment is to remove any incentives for employees to
participate in drawn out proceedings. Prolonged litigation is detrimental to an employee`s health
and wellbeing and may affect their recovery and return to work.
The amendment is a reasonable, necessary and proportionate approach to achieving this
objective for a number of reasons.
First, any schedule made under new section 67A will be a legislative instrument that is
developed in consultation with stakeholders and will be subject to parliamentary oversight and
disallowance. This will ensure that the schedule is reasonable. As a legislative instrument, a
further statement of compatibility will be required to be prepared and the exact specification of
costs will be justified.
Second, the amendment will not prevent employees from incurring legal costs that exceed the
amounts specified in the Schedule of Legal Costs if they so wish.
Third, the amendment will bring the Comcare scheme into line with some state schemes that cap
legal costs for similar reasons.
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Schedule 12 - Permanent Impairment
The amendments in Schedule 12 to the Bill will change the way in which permanent impairment
compensation is calculated.
The amount of compensation currently payable for permanent impairment is assessed as a
percentage of the maximum amount payable under section 24 of the Act based on the degree of
permanent impairment also expressed as a percentage. For example, an employee with 50%
permanent impairment receives 50% of the maximum amount payable.
In addition, the High Court`s decision in Canute v Commonwealth [2006] HCA 47; (2006) 226
CLR 535 effectively prevents combining impairments resulting from multiple injuries arising
from the same incident or state of affairs or separate impairments resulting from a single injury.
This has produced anomalous, and in some cases unfair, results in practice. For example:
an injured employee who has suffered multiple injuries resulting in permanent impairments
each of which fall below the statutory threshold of 10% will receive no permanent
impairment compensation even if the combined impairment value would meet the
threshold
conversely, multiple injuries arising from one incident which reach the applicable
threshold will be separately compensable, resulting in the total compensation payable
being greater than the compensation that would have been payable had the resulting
impairments been combined.
The objective of these amendments is to improve scheme equity by better targeting support. The
level of compensation payable for permanent impairment should reflect the severity of an
employee`s injury and the impact that it has on their life.
The amendments promote the right to social security by:
increasing the maximum total amount payable for permanent impairment from
$243,329.42 (as at 1 July 2014) to $350,000 (indexed annually)
ensuring that an employee with a permanent impairment resulting from a single injury (or
multiple injuries arising out of the same incident or state of affairs) of 75% or more will
receive the maximum amount payable
enabling an injured employee who has suffered multiple injuries resulting in permanent
impairments each of which fall below the statutory threshold of 10%, to combine the
impairment value of those injuries and, if the combined impairment value would meet the
threshold, receive permanent impairment compensation.
However the amendments may also limit the right to social security by reducing the level of
permanent impairment compensation payable to:
employees with a permanent impairment resulting from a single injury (or multiple injuries
arising out of the same incident or state of affairs) of greater than 10% and less than 40%
employees with multiple injuries arising from one incident where each of the injuries reach
the applicable threshold.
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The amendments are a reasonable, necessary and proportionate approach for a number of
reasons. First, without significantly raising the amount of compensation payable for each level of
permanent impairment, it is not possible to design a compensation regime that results in no
injured employee being worse off. It is therefore necessary to prioritise resources in the Comcare
scheme so that the amendments will achieve fairer outcomes that recognise the needs of severely
impaired employees.
Item 20 - Psychological or psychiatric injuries and ailments that are secondary injuries
Under the Act permanent impairment payments for psychological injuries (whether primary or
secondary) are currently higher than for any other type of injury. New section 28C will provide
that permanent impairment compensation is not payable for psychological or psychiatric
ailments or injuries that are secondary injuries. This will closer align the Commonwealth with
other jurisdictions, for example, section 65A of the Workers Compensation Act 1987 (NSW).
The effect of this amendment is that compensation for permanent impairment will continue to be
payable for primary psychological or psychiatric ailments and injuries, for example a major
depressive disorder that was contributed to, to a significant degree, by a traumatic incident at
work. However, no compensation will be payable for permanent impairment resulting from a
secondary psychological or psychiatric injury, for example, a major depressive disorder that was
the latent result of a spinal injury that arose out of, or in the course of, employment. All other
forms of compensation, including incapacity payments, and access to rehabilitation, will
continue to be available for secondary psychological or psychiatric ailments and injuries.
Because the amendment will prevent employees from accessing permanent impairment
payments for secondary psychological ailments and injuries, the right to social security is
limited. The right to non-discrimination is also engaged because the amendment will affect
persons with a particular kind of disability - mental illness.
The objective of the amendment is to improve scheme equity by better targeting support. The
level of compensation payable for permanent impairment should reflect the severity of an
employee`s injury and the impact that it has on his or her life.
The amendment is reasonable, necessary and proportionate for two reasons.
First, as outlined above, it is necessary to amend existing provisions in the Act to ensure that
resources are targeted appropriately.
Second, an employee`s income replacement payments will not be affected and an employee will
remain entitled to compensation for medical treatment and rehabilitation for the secondary
injury. Only access to permanent impairment payments will be restricted.
To the extent that the amendments will disproportionately affect employees suffering from
psychological or psychiatric ailments and injuries, the right to non-discrimination is indirectly
engaged. However, the indirect differential treatment of employees with such ailments and
injuries is permissible as the amendments are justified by a legitimate aim and are an
appropriate, objective and necessary approach to achieving that aim.63
63 European Court of Human Rights and European Union Agency for Fundamental Rights, 2010. Handbook on
European non-discrimination law. Available at: http://fra.europa.eu/sites/default/files/fra_uploads/1510-FRA-
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Schedule 15 - Sanctions
Overview of the schedule
Schedule 15 to the Bill amends the Act to streamline and enhance the existing regime of
sanctions by:
identifying key requirements of the Act that an injured employee must comply with as
obligations of mutuality`; and
where obligations of mutuality have been breached, providing for the application of
sanctions in stages, culminating in a cancellation of compensation rights.
For clarity, Item 12 is discussed first in this part of the statement and then obligations of
mutuality and the sanctions regime are discussed together below.
Item 12 - Confirmation of a diagnosis not obtained for a psychological or psychiatric ailment or
a mental injury
New section 29H provides that compensation for a psychological or psychiatric ailment or injury
(or aggravation of a psychiatric ailment or injury) is not payable beyond an initial 12 week
period unless the diagnosis is confirmed by a mental health practitioner` - defined in new
subsection 29H(6) as a psychiatrist, clinical psychologist or a general practitioner who has
completed mental health training to a standard approved by Comcare. The confirmation
diagnosis must be certified by the mental health practitioner in a form approved by Comcare -
new section 29H(9).
Because the amendment will operate to suspend compensation in cases where an appropriate
diagnosis is not obtained in the relevant timeframe, the right to social security is limited. The
amendment also arguably engages the right to non-discrimination because employees suffering
from a psychological or psychiatric ailment, a particular kind of illness or disability, will be
affected.
At present, compensation for psychological injuries can be paid on the basis of a General
Practitioner`s report and can be paid for significant periods of time without any confirmation of
that diagnosis by a specially qualified mental health practitioner. This amendment recognises
that the diagnosis of psychological injuries calls for relevant expertise. The legitimate objective
of the amendment is to ensure that an employee has been examined by a specially qualified
mental health practitioner, so as to encourage the employee to seek effective treatment. The
amendment gives effect to recommendation 9.4 of the Review.
The proposed amendment is considered to be reasonable, necessary and proportionate for a
number of reasons.
Firstly, by allowing compensation to be paid for psychological injuries and ailments for an initial
period of 12 weeks without confirmation diagnosis by a mental health practitioner, the provision
strikes an appropriate balance between ensuring appropriate diagnosis of psychological injuries
CASE-LAW-HANDBOOK_EN.pdf; European Union non-discrimination directives: Racial Equality Directive
Article 2(2)(b); Employment Equality Directive Article 2(2)(b); Gender Goods and Services Directive Article 2(b);
Gender Equality Directive (Recast) Article 2(1)(b).
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on the one hand and issues of access and equity, particularly for employees in rural and regional
areas, on the other.
Secondly, new subsections 29H(4) and (5) will require the relevant authority to pay costs
associated with an examination, including reasonable travel costs. This will ensure that
employees are not required to incur any costs in meeting the new requirement.
Thirdly, this amendment will only affect a small minority of employees who would have their
claim determined without a diagnosis from a clinical psychologist. In most cases a diagnosis will
already have been obtained and the provision will have no application.
Lastly, psychological injuries are often difficult to diagnose and evolve differently to physical
injuries which tend to be easier to diagnose. Because of these differences, it is appropriate that
this new requirement applies to psychological injuries and not to other injuries.
Because the amendments apply only to employees with psychological injuries, the right to non-
discrimination is engaged. However, the amendment reflects that psychological injuries are
inherently different from physical injuries and require diagnosis by a professional specialising in
that field. In this sense the amendments are permissible under the ICCPR as they aim to promote
the rehabilitation and recovery of those suffering from psychological injuries by ensuring that
they have been appropriately diagnosed. That is, the amendments require that people who suffer
psychological injuries are diagnosed by a suitable health professional in order to ensure that they
receive appropriate support through the worker`s compensation scheme. As stated above, the
amendments are a proportionate approach to achieving this objective as they only apply in
situations where the employee`s claim has been approved before they have been diagnosed by a
psychiatrist, clinical psychologist or a general practitioner who has completed mental health
training to a standard approved by Comcare.
Mutual obligations and sanctions regime
Breaches of obligations of mutuality
An employee`s failure to comply with key requirements of the Act is a breach of an obligation
of mutuality`. A breach of an obligation of mutuality is defined as an act or omission that is
declared by the Act to be a breach of an obligation of mutuality. There are two types of breaches:
Suitable employment
i) a breach of the obligations relating to suitable employment in new section 29L - see item
14 Schedule 15 to the Bill. A breach of this kind cannot be remedied by the employee as it
is contingent on a suitable offer of employment being made by a third party employer; and
Others
ii) a breach relating to any other requirement, which the employee can be directed to remedy.
These are a failure, without reasonable excuse, to:
undergo a medical examination under section 57 - new section 29M;
produce a medical certificate when absent from work when receiving income replacement
payments - new section 29N;
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follow reasonable medical treatment advice - new section 29P;
undergo an assessment of the need for household or attendant care services - new section
29Q;
fulfil responsibilities under a workplace rehabilitation plan - new section 29R;
undergo a work readiness assessment - new section 29S;
comply with information requests under sections 58 and 120A - new section 29T;
comply with a requirement under section 50 in relation to the conduct of a common law
claim against a third party - see section 29U; and
provide a statutory declaration under section 118 - new section 29V.
Sanctions regime
Employees who breach an obligation of mutuality in relation to the same injury or an associated
injury (as defined in new section 6B; see Schedule 17 to the Bill) will be subject to a 3-stage
sanctions regime:
for the first breach, the relevant authority must determine that the employee is subject to
the level 1 sanctions regime. In the case of a breach covered by new section 29L, the
employee`s weekly incapacity payments will be reduced by the amount that the employee
is able to earn in suitable employment in accordance with subsection 19(4) of the Act. In
the case of a breach that the employee has been directed to remedy, the employee`s rights
to compensation (other than compensation for medical treatment) and to institute or
continue any proceedings in relation to compensation (other than proceedings in the AAT
in relation to the sanctions regime) are suspended until the breach is remedied;
for a second breach, or a failure to remedy the first breach (other than a breach covered by
new section 29L) within the period determined by the relevant authority (being no less than
30 days), the relevant authority must determine that the employee is subject to the level 2
sanctions regime. In the case of a breach covered by new section 29L, the employee`s
weekly incapacity payments will be reduced by the amount that the employee is able to
earn in suitable employment in accordance with subsection 19(4) of the Act. In the case of
a breach that the employee has been directed to remedy, the employee`s rights to
compensation (other than compensation for medical treatment) and to institute or continue
any proceedings in relation to compensation (other than proceedings in the AAT in
relation to the sanctions regime) are suspended until the breach is remedied; and
for a third breach, or a failure to remedy the second breach (other than a breach covered by
new section 29L) within the period determined by the relevant authority (being no less than
30 days), the relevant authority must determine that the employee is subject to the
cancellation regime. Under the cancellation regime the employee`s rights to compensation
and to institute or continue any proceedings in relation to compensation (other than
proceedings in the AAT in relation to the sanctions regime) in respect of all current and
future associated injuries are permanently cancelled. This will also have the effect of
permanently cancelling the employee`s right to rehabilitation. However, the cancellation of
an employee`s right to compensation and rehabilitation will not affect the right of the
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employee`s dependants to claim compensation if the employee subsequently dies as a
result of an injury in respect of which compensation has been cancelled.
Limitation on the right to Social Security
The amendments in Schedule 15 to the Bill limit the right to social security as they provide for
the suspension of compensation other than compensation for medical treatment and access to
rehabilitation where an employee has breached an obligation of mutuality. The right to social
security, the right to health and the right to rehabilitation is also engaged by amendments that
provide for the cancellation of compensation.
Overview of legitimate objectives
Broadly, the legitimate objectives of Schedule 15 to the Bill are to improve health and
rehabilitation outcomes by ensuring that employees actively participate in their rehabilitation and
to improve the integrity of the scheme.
The Act currently provides for a number of employee obligations and for the suspension of all
compensation entitlements (including compensation in respect of medical expenses) in cases of
non-compliance (see for example sections 36, 37, 57 and 118 of the Act). These obligations
however are not effective in supporting early intervention through treatment and vocational
rehabilitation to improve health and return to work outcomes due to the lack of clarity about the
extent of the obligations, the consistency of their terms and their self-executing nature.
The Act must provide for clear obligations and appropriate consequences in cases of non-
compliance to ensure that there are mutual obligations and co-operation between employers,
employees and the scheme regulator, Comcare, to achieve the Act`s objectives. Under the Act,
employers already have specific obligations to provide rehabilitation and support to injured
employees and these obligations will be strengthened and improved by the changes made by
Schedule 2 to the Bill. Employers also have incentives to comply with their obligations because
good rehabilitation and return to work outcomes promote healthy workplaces, increase
productivity and result in lower insurance costs. For example in the case of premium payers in
the Comcare scheme Comcare is able to include a penalty amount` in its calculation of an
employer`s premium to reflect high incidences of injury and poor rehabilitation performance.
Providing for mutual obligations to be a key feature of the Comcare scheme will ensure that it
achieves the best outcomes for injured workers and workplaces. The Review noted that it is
[d]etrimental to the health outcomes of an injured employee for that employee to remain the
passive recipient of compensation. Requiring continued and ongoing engagement should lead to
better rehabilitation outcomes. An employee`s return to work will clearly be impeded if that
employee chooses not to engage in the process (at 6.153).
Reasonable, necessary and proportionate approach
The amendments are reasonable, necessary and proportionate for a number of reasons.
The obligations in Schedule 15 to the Bill are necessary to ensure effective early intervention and
vocational rehabilitation and they are central to the integrity of a modern workers` compensation
scheme .The obligations of mutuality are reasonable and consistent with existing obligations
under the Act, and include reasonable excuse and other safeguards to ensure that unfair outcomes
do not arise. Generally, an employee will only have breached an obligation of mutuality where
they have refused or failed to fulfil their responsibilities without a reasonable excuse. A
reasonable excuse relates to physical or practical difficulties in complying [per Dawson J in
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Corporate Affairs Commission v Yuill (1991)172 CLR 319 at 326] or the capacity of the person
concerned [per Roskill LJ in R v John (Graham) [1974] 2 All ER 561 at 565]. A reasonable
excuse means that the person is unable, rather than unwilling, to comply with their obligations of
mutuality. Each obligation and its relevant safeguards are discussed in detail below.
The key principle underpinning the strengthening of mutual obligations is that it is fair and
reasonable to expect that people receiving workers` compensation payments do their best to
improve their health and undertake activities that will improve their ability to work. Mutual
obligation activities include attending medical assessments, following reasonable medical
treatment advice, engaging in suitable employment and complying with obligations under a
workplace rehabilitation plan. These activities are intended to improve an injured employee`s
health and social inclusion and improve return to work prospects.
Where it is clear that a person receiving workers` compensation payments does not intend to
meet any or all of their mutual obligations, the sanction provisions should be engaged. The
sanction regime has been developed in an escalating framework so as to ensure that it is clear
and operates effectively as a deterrent. Schedule 15 to the Bill provides three levels of sanctions,
making it easy for employees to understand how their entitlements will be reduced if they breach
their obligations of mutuality. The sanction provisions represent an appropriate balance between
the obligations of employers and employees in achieving key objects of the scheme and are
capable of being applied equitably to all employees receiving compensation under the scheme.
The sanctions framework is also reasonable and proportionate in that it contains a number of
safeguards to ensure that it will not result in unjust or unreasonably harsh outcomes.
Firstly the provisions do not affect an employee`s right to compensation for medical treatment
payments until the final stage of the sanctions regime is applied. Further, the suspension of
compensation will end when the employee remedies a breach. In the case of a breach of the
suitable employment provisions, the employee`s compensation is only reduced by the amount
they are deemed able to earn and the employee is still entitled to receive compensation for
medical treatment payments. The framework for assessing an employee`s ability to earn is
responsive to changes in an employee`s circumstances and contains appropriate safeguards and
consultation requirements involving treating medical practitioners, as appropriate.
Secondly, limitations on an employee`s ability to commence proceedings under the Act are
carefully targeted; when either level 1 or 2 of the sanction regime is in place, an employee is
prevented from commencing or continuing proceedings relating to compensation. This is to
ensure that proceedings relating to their compensation do not go ahead until the employee
remedies a breach. The employee may still commence or continue proceedings in relation to
other rights under the Act, for example in respect of the determination to impose a sanction or
the development of a rehabilitation plan, while their payments have been suspended.
Thirdly, the Bill requires that employees be notified in writing of any breach of obligation of
mutuality. This will ensure that employees are provided with reasons for the imposition of a
sanction and an opportunity to provide a reasonable excuse if they have not already done so. It is
expected that in practice a relevant authority will contact the employee and undertake any other
appropriate enquiries before determining that they have breached an obligation of mutuality to
ascertain if they have a reasonable excuse for not complying with their obligations. This will
ensure that employees are aware of the breach, the consequences and how to remedy the breach
(where possible) before their payments are suspended. Notification requirements and a
requirement to provide reasons also ensure transparency.
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Fourthly, employees may seek review of a relevant authority`s decision to subject them to a
sanction. If an employee believes that a sanction has been applied other than in accordance with
the Act, for example if they believe they have a reasonable excuse that has not been properly
considered, they may seek review of that decision. The availability of reconsideration and
ultimately review by the AAT will ensure that suspensions and cancellations are not arbitrary or
unjustified, and will ensure transparency.
Finally, while the sanctions regime may result in suspension and at the highest level, cancellation
of compensation, it is a reasonable approach to ensuring that injured employees who are
receiving worker`s compensation comply with reasonable obligations. Employees who have
breached their obligations of mutuality on three qualifying occasions will have their rights to
compensation and to commence or continue proceedings in relation to an injury permanently
cancelled. Employees who are unwilling to actively engage with their obligations under the
Comcare scheme will still be able to apply for support through social security and where an
injury has resulted in permanent disability, an employee may apply for access support through
the National Disability Insurance Scheme (where eligible).
Detailed discussion of specific obligations and relevant safeguards
Obligation to accept, engage in and seek suitable employment
New section 29L provides that if an employee refuses to undertake or participate in suitable
employment when it is available, without reasonable excuse, they will be deemed to have
breached their obligation of mutuality.
The Bill provides for a number of safeguards to ensure that employees will not be subjected to
suspensions or the sanctions regime in cases where there is a reasonable explanation for their
failure to accept or engage in suitable employment.
First, for employment to be considered suitable` regard must be had to:
a) the employee`s age, experience, training, language and other skills;
b) the employee`s suitability for rehabilitation or vocational training;
c) where employment is available in a place that would require the employee to change his or
her place of residence - whether it is reasonable to expect the employee to change his or
her residence; and
d) any other relevant matter.
These requirements ensure that any suitable employment in which an injured employee is
required to participate will be appropriate to their individual circumstances which may change
from time to time.
Secondly, only those who are considered to have the potential to be in suitable employment`
will be obliged to accept an offer of suitable employment and engage in that employment. In
determining if an employee has potential to be in suitable employment, regard must be had to:
a) the potential of the employee to be rehabilitated; and
b) the potential of the employee to benefit from medical treatment; and
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c) any other relevant matters.
Finally, Australia has strong workplace relations and work health and safety systems across each
of its state, territory and Commonwealth jurisdictions, so that an employee will always be
protected in terms of work safety and remuneration regardless of the nature of their employment.
Work health and safety obligations will apply to employers in managing their rehabilitation
obligations under the Bill.
Obligation to fulfil responsibilities under a workplace rehabilitation plan
New section 29R provides that an employee will breach their obligation of mutuality where they
refuse or fail to fulfil their responsibilities under a workplace rehabilitation plan without
reasonable excuse.
It is reasonable to require employees to fulfil their responsibilities under a workplace
rehabilitation plan because active participation in rehabilitation is essential for an employee`s
recovery.
There are substantial safeguards in place to ensure that the responsibilities are tailored and
appropriate to the individual circumstances of an employee. The plans are developed in
consultation with the employee and their medical practitioner which will ensure that the
workplace rehabilitation plan reflects the capacity and abilities of an individual employee.
Further, if an employee disagrees with the development of the workplace rehabilitation plan or
the main goals or components of the plan, they may seek review by Comcare and the AAT.
The provision has also been drafted in a way to ensure that an employee who fails to comply
with an obligation in reasonable circumstances will be protected and will not be subject to the
sanctions regime. For example, if the employee`s medical condition changes and the employee`s
workplace rehabilitation plan (or part thereof) needs to be amended to factor in those changes in
consultation with their doctor it may be reasonable that the employee not comply with the
original existing plan (or part thereof) until such time as it is amended in consultation with the
employee`s doctor.
Obligation to undergo a work readiness assessment under section 38B
New section 29S provides that if a person is required to undergo a work readiness assessment
under section 38B (to determine their capacity to undertake suitable employment) and they
refuse or fail to do so, or obstruct the assessment in any way, without reasonable excuse, they
have breached their obligation of mutuality. An employee will not have breached their obligation
of mutuality to undergo a work readiness assessment, for example, when their car breaks down
and they are not able to get to the appointment on time.
Obligation to comply with a request for information under section 58(1)
New section 29T(1) provides that if an employee fails to provide information when requested
under subsection 58(1), without reasonable excuse, they have breached their obligation of
mutuality. Subsection 58(1) provides safeguards to ensure that employee`s are not unnecessarily
breaching their obligation of mutuality by failing to provide information. First, subsection 58(1)
provides that a relevant authority may only request information from the employee where they
are satisfied that the employee has information or a document that is relevant to a claim; or they
may obtain the information or a copy of the document without unreasonable expense of
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inconvenience. Secondly, if the employee cannot provide the information within the specified
timeframes, they can ask the relevant authority for further time.
Finally, the section ensures that employees will not have breached an obligation of mutuality if
their failure to provide requested information within the timeframe was reasonable in the
circumstances, for example the person could not locate the relevant document and to obtain
another copy will take some time due to factors outside of the employee`s control.
Obligation to comply with a request for information under section 120A(1)
New section 29T provides that if an employee refuses or fails to provide information as
requested under subsection 120A(1), without reasonable excuse, the employee has breached an
obligation of mutuality. Subsection 120A(1) provides safeguards to ensure that employees are
able to comply with their obligation to provide information in this regard. First, a relevant
authority may only request information from the employee where they are satisfied that the
employee has information or a document that is relevant to the claim; or they may obtain the
information or a copy of the document without unreasonable expense or inconvenience.
Secondly, if the employee is unable to provide the information to the relevant authority within
the time frame, they may ask for further time to be allowed.
Finally, the section ensures that employees will not have breached an obligation of mutuality if
they have failed to provide requested information within the timeframe for a reasonable reason,
for example the person could not locate a document with the relevant information and to obtain
another copy would subject the employee to unreasonable expense.
Obligation to undergo an assessment for the need of household or attendant care services
New section 29Q provides that an employee will breach an obligation of mutuality if they refuse
or fail, without reasonable excuse, to undergo an assessment (or obstruct the assessment) in
accordance with a requirement under subsection 29B(1). The purpose of this amendment is to
provide an objective mechanism to determine whether household or attendant care services are
reasonably required and safely provided. Section 29B provides that the relevant authority is
liable to pay for the costs of the assessment and any reasonable expenditure the employee has
incurred in getting to the assessment or staying in a place for the purposes of the assessment. It is
therefore reasonable to apply the sanction regime where the person has not undergone the
assessment, unless they have a reasonable excuse, such as the person did not attend due to
experiencing a recent death in the immediate family.
Obligation to comply with a requirement under section 50
New section 29U provides that an employee will breach an obligation of mutuality if they refuse
or fail, without reasonable excuse, to comply with a reasonable requirement made by Comcare in
relation to a claim under section 50. The obligation of mutuality in this provision only applies
where Comcare`s requirement is reasonable. Further, the provision is drafted so that employees
will not have breached an obligation of mutuality where they have a reasonable excuse, for
example, the person did not understand the requirement due to language difficulties.
Obligation to undergo a medical examination under section 57
Section 29M provides that if an employee is required to undergo an examination under
subsection 57(1) and they refuse or fail to do so, or in any way obstruct the examination, without
reasonable excuse, they have breached an obligation of mutuality. There are a number of
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safeguards to ensure that employees are able to comply with their obligations under section
57(1).
First, the relevant authority must give notice of the medical examination. Secondly, the relevant
authority is liable for paying for the examination and any amount the employee has reasonably
incurred in order to travel to the examination or stay somewhere for the purposes of the
examination.
Where an employee has a reasonable excuse for non-compliance, for example where they fail to
attend a medical examination arranged under section 57 of the Act because they have did not
receive notice of the examination, the obligation of mutuality will not be breached.
Obligation to provide a statutory declaration under section 118(3)
New section 29J provides that if an employee refuses or fails to provide a statutory declaration as
requested by a relevant authority under subsection 118(3), without reasonable excuse, they will
have breached an obligation of mutuality.
An employee will not have breached an obligation of mutuality to provide a statutory declaration
if they have failed to provide it within the time frame for example due to a genuine mistake
because the employee misunderstood the technical requirements of a statutory declaration and
did not submit a valid document. It would be reasonable in this case to inform the employee of
the error and to allow them to resubmit the document.
Obligation to produce a medical certificate under section 29N
New section 29N provides that if an employee is in suitable employment and receiving workers`
compensation, they must provide a medical certificate if they are absent from work and the terms
and conditions of their work require a medical certificate. An employee would only breach this
obligation where they fail to comply and do not have a reasonable excuse for the failure.
An employee under the Comcare scheme will only have to provide a medical certificate for
absences in the same manner as any other employee doing the same work - that is, they only
have to provide a medical certificate where their employment contract, enterprise agreement or
award mandates it (for example upon 3 days sick leave). An employee must produce the
certificate within the timeframe specified in the relevant instrument or as soon as is reasonably
practicable.
The availability of reasonable excuse provides an additional safeguard, for example an employee
would have a reasonable excuse if they failed to provide a medical certificate within the required
timeframe because they were hospitalised.
Obligation to follow reasonable medical treatment advice under section 29P
New section 29P provides that if an employee is receiving a payment (under sections 19, 20, 21,
21A, 22 or 31) and they have received medical treatment advice from a medical practitioner; and
the advice is reasonable; and the employee refuses or fails to follow that advice, they breach an
obligation of mutuality.
However, the section provides multiple safeguards to ensure that employees are able to comply
with their obligation to follow reasonable medical treatment advice. First, an employee will not
have breached an obligation of mutuality if they have simply deferred following medical
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treatment advice for a reasonable period. Second, an employee will not have breached an
obligation of mutuality if they do not follow medical treatment advice in order to obtain a second
opinion from another legally qualified medical practitioner or dentist. Third, the employee will
not have breached an obligation of mutuality if they decide to follow the medical treatment
advice of one legally qualified practitioner or dentist over another. Finally, an employee will not
have breached an obligation of mutuality if they refuse to undergo surgery or take or use a
medicine.
It is not intended that this obligation would operate to force an employee to undertake any
particular kind of treatment or that it would operate to remove their right to make decisions about
their own recovery. The obligation merely requires employees to actively participate in their own
treatment, whatever that may be.
Conclusion
The Bill is compatible with human rights because it advances the protection of human rights. To
the extent that it may limit human rights, those limitations are reasonable, necessary and
proportionate.
Minister for Employment, Senator the Hon. Eric Abetz
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