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Appendix 2: Practice guidance - weekly payments after the second entitlement period

Overview

Section 38 of the 1987 Act details special requirements for the continuation of weekly payments to workers after the second entitlement period (after 130 weeks).

Application to exempt workers
This information does not apply to exempt workers

Work capacity assessment

To assess a worker’s entitlement to weekly payments after 130 weeks, an insurer must  conduct a work capacity assessment during the last 52 weeks of the second entitlement period (from 78 weeks), and thereafter at least once every 2 years.

An insurer is not to conduct a work capacity assessment of a worker with highest needs unless the insurer thinks it appropriate to do so and the worker requests it. However an insurer can make a work capacity decision about a worker with highest needs without conducting a work capacity assessment.

No current work capacity

A worker who is assessed by the insurer as having no current work capacity, and this is likely to continue indefinitely, is entitled to compensation after the second entitlement period.

Current work capacity

A worker (other than a worker with high needs) who is assessed by the insurer as having current work capacity is entitled to weekly payments of compensation after the second entitlement period only if:

  • the worker has applied to the insurer after receiving 78 weeks of weekly payments, and
  • the worker has returned to work 15 hours or more per week and is in receipt of current weekly earnings of at least $155 per week (indexed annually on 01 July; currently $190), and
  • the worker is assessed by the insurer as being, and as likely to continue indefinitely to be, incapable of undertaking further additional employment or work that would increase the worker’s current weekly earnings.

A worker will need to satisfy each of these requirements to continue to be eligible to receive weekly payments of compensation.

Applying to the insurer

An insurer will need to provide the worker with the Continuation of weekly payments after 130 weeks application form.

An insurer should write to the worker to inform them of the requirement to submit the application form after they have received 78 weeks of weekly payments.

The insurer should include an explanation of the eligibility criteria under section 38(3)(b) of the 1987 Act that the worker must satisfy to be eligible for continuing weekly payments after 130 weeks.

A reminder to submit the application form should be provided to the worker prior to reaching 130 weeks.

Working 15 hours per week and earning at least $190 (as indexed)

Section 38(3)(b) of the 1987 Act requires that the worker has returned to work for not less than 15 hours per week and be in receipt of current weekly earnings of at least $190 (as at 01 July 2018  indexed annually).

An insurer will need to determine that both requirements have been met. The insurer may need to request payslips or other evidence from the worker to determine whether they are working.

A worker will need to be receiving some remuneration in exchange for providing a service. This can either be in self-employment or other employment.

Unpaid voluntary work or unpaid work experience is not included in hours of work for the purposes of section 38(3)(b) of the 1987 Act.

Example

Anita has received 132 weeks of weekly payments of compensation. She submits information to the insurer to confirm she is working 15 hours per week at an hourly rate of $12 per hour. The insurer assesses her current weekly earnings to be $180.00. While Anita is working 15 hours per week, she does not meet the requirements of section 38(3)(b) of the 1987 Act as she is not in receipt of at least $190 per week.

Current available evidence

SIRA’s overarching claims management principles provides that claims management decisions should be:

  • made promptly and proactively, and
  • in a manner to reduce delays and costs, and maximise efficiency by progressing claims without unnecessary investigation, disputes or litigation.

An insurer will need to make a work capacity decision about the worker’s capacity for work. The insurer may consider evidence such as:

  • certificates of capacity
  • medical reports from the worker’s nominated treating doctor and specialists
  • Independent Medical Examiner reports
  • Injury Management Consultant reports
  • functional assessment reports
  • current payslips
  • evidence provided by the worker.

Capacity for employment

Section 38(3)(c) of the 1987 Act requires the worker to secure employment up to their capacity for employment to continue to receive weekly payments of compensation after 130 weeks. This means their current work capacity, rather than the amount they are able to earn in the employment.

Note: the requirements in section 38(3)(c) of the 1987 Act do not require the worker to maximise his or her earning capacity by locating the highest paid suitable employment available.

An insurer should request copies of the most recent payslips from the worker to determine how many hours they are working each week.

An insurer should also consider whether the worker is capable of undertaking further hours of work.

To determine whether a worker is likely to continue indefinitely to be incapable of undertaking additional work that would increase their earnings, an insurer should consider:

  • stability of recent work history
  • medical opinion – in particular, from the worker’s treating practitioner/s
  • other treating practitioner reports
  • Injury Management Consultant opinion
  • workplace assessment reports.

The current labour market conditions will have no impact on the workers individual circumstances.

A work capacity assessment at a point in time does not prevent the making of another assessment at a time in the future.

Example

The insurer finds that Martin has the capacity to work 20 hours per week based on his most recent certificate of capacity. This is confirmed by a recent medical report provided by Martin’s nominated treating doctor. Martin submits payslips to the insurer that show he is only working 16 hours per week. Martin does not meet the requirements under section 38(3)(c) of the 1987 Act. Martin would need to work 20 hours per week to satisfy the requirements.

Where a worker provides more information to show they satisfy the requirements

The work capacity assessment and decision process is ongoing.

A worker who does not satisfy the requirements under section 38(3) of the 1987 Act of the 1987 Act may later provide further evidence to show that they now meet the requirements. If the worker does so, the insurer should consider this information as part of a new work capacity assessment.

Review of an insurer’s work capacity decision

The Workers Compensation Legislation Amendment Bill 2018 was passed by the NSW Parliament on 17 October 2018. The changes seek to improve current dispute resolution processes. An improved dispute resolution system will benefit injured workers, employers and insurers from 1 January 2019.

Workers can go to the Workers Compensation Commission (Commission) for all disputes, including those involving work capacity.

Workers who disagree with all or part of an insurer’s work capacity decision have the right to request a review. A worker can either ask for a review by the insurer, or lodge a dispute directly with the Commission as there is no mandatory requirement for an insurer review under the improved dispute resolution system.

Note: disputes relating to work capacity decisions will be dealt with by the Commission from 1 January 2019. Insurers will need to consider the approach taken by the Commission with respect to the application of section 38 of the 1987 Act.