Compensation Legislation Amendment Bill 2016

  • Author : Lachlan Allan - 08-11-2016

The Compensation Legislation Amendment Bill 2016 is here. You can read the Second Reading speech, made on 12 October 2016 by the Hon. Robin Scott, Minister for Finance, here. The Bill foreshadows important changes to both the TAC scheme and the WorkCover scheme.

Motor vehicle accidents - what's changing?
Loss of earnings benefits until pension age

Section 53(1)(b) of the TAA will be amended to provide that loss of earnings payments continue until pension age (rather than the previous retirement age). Under the current reprint of the TAA, loss of earnings benefits end at "retirement age", which is defined to mean 65. After age 65, an injured person can qualify for the aged pension.

However, beginning in 2017, the Commonwealth will progressively raise the aged pension qualifying age from 65 to 67 (by 2023). If the TAA was left unamended, this would leave a 2-year gap between the cessation of loss of earnings benefits and the aged pension qualifying age. This change remedies that issue. It takes effect from 1 July 2017 and applies to all accidents occurring after that date, and also to all those with an entitlement to compensation as at that date.

New impairment assessment method for spinal injuries

Section 46A(2B) of the TAA will be amended. The TAC will finally adopt its Spinal Impairment Guides Modification Document (as Gazetted on 6 October 2016). The Modification Document was first mooted in July 2014. It replaces the A.M.A. Guides with respect to the assessment of permanent impairment arising from spinal injuries, and is designed to provide assessments which are fairer and more consisent. For example, different types of spinal surgeries are specifically provided for in the Modification Document, and these will generally attract a far higher assessment under the Modification Document than had previously been the case under the A.M.A. Guides.

The Second Reading speech makes it clear that the Modification Document is designed to address the "anomalies" created by the decision in TAC v Serwylo [2011] VSCA 305.

Interestingly, it is stated in the the Second Reading speech that the Modification Document will not be adopted by WorkSafe, at least in the near future. The Minister said the following by way of justification:

"The Serwylo court decision also impacts on the WorkSafe scheme, but not significantly compared to the TAC scheme. This is mainly due to differences in the types of spinal injuries more commonly sustained in transport accidents compared with work accidents and the different legislated approaches to assessing lump sum compensation for spinal injuries. Changes to WorkSafe legislation to address the court decision are not required at this time. WorkSafe will monitor the situation and, if required, legislative changes may be considered in the future."

NB: This amendment is to take effect from the day after the day on which the Act receives Royal Assent.

Work-related accidents - what's changing?
Weekly payments and superannuation until pension age

Section 4 of the WIRCA will be amended to define "retirement age" as "the age at which the worker attains pension age within the meaning of the Social Security Act 1991 of the Commonwealth". This will have the same effect as the equivalent TAAchange discussed above, and was made for the same reason.

Section 168(1)(c) (and section 92CE(1)(c) of the ACA) will be amended to provide that superannuation payments continue until the new "retirement age" definition.

These amendments take effect from 1 July 2017 and apply to all work-related injuries occurring after that date and all those with an entitlement to compensation as at that date.

Six-year limitations period for all work-related injuries.

Section 40 of the Limitations of Actions Act 1958 will be amended to include Part 7 of the Workplace Injury Rehabilitation and Compensation Act 2013 (i.e. the provisions governing common law proceedings/serious injury applications for work-related injuries occurring on and after 1 July 2014).

Section 40 is the "carve out" provision of the LAA. It currently provides that common law proceedings under the ACA for work-related injuries are not subject to the standard three-year limitations period created by the operation of the LAA. However, as currently drafted, it does not mention the equivalent provisions in the WIRCA.

This created an anomaly whereby work-related injuries occurring on and after 1 July 2014 were subject to a three-year limitations period, rather than the six-year period which had previously been the case for pre-1 July 2014 work-related injuries.

The amendment applies retrospectively from 1 July 2014. It therefore has the effect of preserving the six-year limitations period for all work-related injuries.

Lachlan's original post can be found here -

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Lachlan Allan

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