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Lump Sum Payments for Permanent Injuries

 

A lump sum payment is made if a worker suffers injuries that are of a permanent nature such as the loss or use of a limb or the loss of an eye. Section 71 of the Workers Compensation and Rehabilitation Act 1988 (Tas) sets out the formulas to be used to determine the amount. Here is an example:

{18+[6.1x(WPI-5)]} x BS
WPI is the percentage of whole person impairment
BS is the basic salary

To do the equation we need some facts. At 3rd January, 2016, Harry has been assessed as having 15% WPI. His basic salary is not what he earns but what is determined by legislation. This amount changes annually. The yearly amounts can be found here. In 2016, the BS was $826.53. To do the equation, start with the numbers inside the innermost brackets. The equation would be:

{18+[6.1x(15-5)]} x BS
15-5 = 10
6.1 x 10 = 61
18 + 61 = 79
79 x 826.53 = $65,295.87

A lump sum payment is in addition to any other benefit under the Act (s71(1)).

Workers who lose part or all of a finger or toe, or are assessed at less than 5% of whole person impairment have their lump sum assessed with a different formula:

3.2 x BS x WPI

So, Harry is again involved, but this time he has been assessed as 4% WPI:

3.2 x 826.35 x 4 = $10,577.28

Permanent psychiatric impairment of between 10% and 70% is assessed according to the first formula. Less than 10% receives no compensation. For workers who experience either permanent physical or psychiatric impairment of greater than 70%, the lump sum is the equivalent of 415 units (a unit is a BS). The current unit value is $826.53, and this is subject to yearly change. If Harry were to be assessed at 10% WPI, he would receive:

48.5 x 826.53 = $40,086.71

Other years have different values for the unit.

Assessments for WPI are deliberately kept low. Above the knee amputation is only 40% WPI.  The situation is worse for backs; paraplegics may only get 45% WPI.  Disc replacement may be 15%.

Weekly Payments of Compensation

 

Section 81 provides that compensation is now payable from the date the claim is received and must be paid within 14 days. The employer can still dispute a payment within 84 days of receiving the claim (s81A) but the worker will get payments of compensation whilst the application to dispute the matter is heard. If the employer can prove that the dispute is genuine then the payments of compensation will be suspended (s81A(3)).

Weekly payments are paid where there is total or partial incapacity for work as the result of a compensable injury or disease at the relevant compensation rate. In the case of death, weekly payments are also payable to the surviving dependents of the worker.

Where there is partial incapacity, the employer must pay the difference between the worker’s normal weekly earnings, and the amount the worker has been able to earn in employment suitable to the partial incapacity. Where a worker is partially incapacitated for work and proves to the satisfaction of the Workers Rehabilitation and Compensation Tribunal that they have taken all steps to obtain employment and cannot find employment wholly or mainly as a consequence of the injury, the Tribunal may treat the partial incapacity as a total incapacity.

The compensation rate (see section 69) is the greater of either the normal weekly earnings of the worker for the 12 month period preceding the commencement of the period of incapacity, or the ordinary time rate of pay of the worker for the work in which they were engaged immediately before the period of incapacity. The amount to be paid is that which is greater.

The worker receives:

  • 100% of the weekly compensation rate for the first 13 weeks.
  • 85% of the weekly compensation rate for up to, but not exceeding 78 weeks after the initial 13 weeks.
  • 80% of the weekly compensation rate for the period of incapacity exceeding 78 weeks.

The periods for which benefits are payable range from between 9 years to retirement age. It is:

  • 9 years where there is permanent impairment of less than 15%, or the impairment is not assessed;
  • 12 years if the impairment is between 15% and 20%;
  • 20 years if the impairment is between 20% and 30%;
  • until retirement if the impairment is assessed at 30% or more (s69B(1)(c)).

Weekly payments or compensation for claims prior to 1 July 2001 are payable for any period of incapacity arising out of an injury or disease. There is no time limit once the initial claim for compensation has been made. So for instance a person may have been injured in 1985 and been on the workers compensation for six months and then had a flare up of the same injury in 1999 and can again claim workers compensation. However when a worker has reached the maximum entitlement to weekly payments they are not entitled to any further weekly payments, although they will still be entitled to the other benefits under the Act such as payments of medical accounts. When payments of weekly compensation have been exhausted, the worker should apply for an income-support payment from Centrelink.

An employer's liability to pay compensation ceases, if the injury occurred before the worker attained the age of 64, when the worker attains the age of 65 years. If the injury occurred after the worker attains the age of 64, workers compensation weekly payments are payable for up to one year after the injury occurs (s87). It is possible for the Tribunal to order the payments of weekly compensation be continued beyond these periods if the worker would have been employed beyond the age of 65 years.

A worker who leaves Tasmania can still receive workers compensation but must provide proof of continuing incapacity and current address and identity.

Termination of Payments

Section 86 of the Act provides that an employer may terminate or diminish weekly payments of compensation in the following cases:

  • where the worker is being paid for total incapacity and has returned to work;
  • where the worker in receipt of a weekly payment in respect of partial incapacity is receiving weekly payments in excess of the amount upon which the amount of weekly payments was determined;
  • where a medical practitioner has certified that the incapacity of the worker is no longer due wholly or substantially to the injury, or that the worker has wholly or substantially recovered from the effects of the injury in respect of which compensation is paid;
  • where the worker has been paid the limit of weekly compensation under the Act.

Any and all disputes are referred to the Workers Compensation Tribunal.

Employers cannot terminate or diminish payment of compensation without notice to the worker and provides a method by which the worker can dispute a termination or the diminishing of payments (s86(3)-(4)). Workers who have their weekly payments terminated should immediately seek social security payments, as there will usually be a long delay before the issue of entitlement to compensation is determined.

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