SIRA Logo

Appendix 2: Practice guidance - payments to workers with highest needs

Overview

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

June 2012 workers compensation reforms

The Workers Compensation Legislation Amendment Act 2012 introduced a number of changes to workers compensation benefits.

This included new weekly payment arrangements in which a worker’s entitlements to weekly payments were made by reference to their pre-injury average weekly earnings (PIAWE). The changes to weekly benefits came into effect on 1 October 2012 for new claims, and 1 January 2013 for existing claims.

Workers with a permanent impairment of more than 30 per cent (‘seriously injured workers’) were entitled to additional benefits, which came into effect on 17 September 2012.

2015 benefit reforms

In 2015, the Workers Compensation Amendment Act 2015 (the 2015 Amending Act) introduced amendments providing additional benefits to properly meet the needs of the most seriously injured workers.

The 2015 amendments also replaced the definition of ‘seriously injured worker’ with that of ‘worker with highest needs’. As outlined in section 32A of the 1987 Act, a worker is a ‘highest needs’ worker if they have an injury which has resulted in permanent impairment, and:

  • the degree of permanent impairment has been assessed by a trained assessor of permanent impairment as being more than 30 per cent, or
  • an assessment is pending - an examination has been made by an approved medical specialist and the specialist has declined to make the assessment because maximum medical improvement has not been reached and the degree of permanent impairment is not fully ascertainable, or
  • the insurer is satisfied that the degree of permanent impairment is likely to be more than 30 per cent.

Special provision was made for workers with ‘highest needs’ as they were now able to access a minimum weekly payment amount.

Special provision for workers with highest needs

Section 38A of the 1987 Act commenced on 4 December 2015 and provides that the minimum amount of weekly compensation that a worker with highest needs will be eligible to receive will be the amount of $788.32, as adjusted bi-annually.

Note: the minimum weekly payment amount is indexed in April and October each year, with the applicable rate found in the Workers Compensation Benefits Guide (the rate as at 1 October 2018 is $831.00).

The minimum weekly payment acts as a safety net for workers with highest needs, particularly those who had a lower PIAWE.

The minimum amount will be payable by the insurer, regardless of earnings.

Note: This is consistent with the current interpretation of section 38A of the 1987 Act: refer to the decision in Vostek Industries Pty Limited v White [2018] NSWWCCPD 47.

When the special provision does not apply

Transitional provisions (clause 35 of Schedule 8 to the Regulation) provide that in certain circumstances, section 38A of the 1987 Act does not apply.

This includes the determination of the compensation payable in respect of any period of incapacity occurring before 17 September 2012 (when seriously injured workers were first transitioned).

This also includes where a worker whose PIAWE have been deemed to be equal to the transitional amount for the purposes of the application under clause 9 or 10 of Part 19H of Schedule 6 to the 1987 Act of the weekly payments amendments. These workers are entitled to 80 per cent of the transitional amount (indexed) as prescribed in clause 2(1) of Part 19H of Schedule 6 to the 1987 Act.

The table below outlines the differences between the minimum safety net amount provided by Section 38A of the 1987 Act, and the amount available to existing recipients being 80 per cent of the transitional rate as indexed twice per year.

From

To

Transitional rate

80% of Transitional Rate

Section 38A minimum

1/10/2015

31/03/2016

$993.70

$794.96

$788.32

1/04/2016

30/09/2016

$1,006.90

$805.52

$793.00

1/10/2016

31/03/2017

$1,014.40

$811.52

$796.00

1/04/2017

30/09/2017

$1,027.60

$822.08

$808.00

1/10/2017

31/03/2018

$1,035.90

$828.72

$814.00

1/04/2018

30/9/2018

$1,049.10

$839.28

$826.00

1/10/2018

31/3/2019

$1,057.40

$845.92

$831.00

Entitlement to weekly payments

A worker becomes eligible for the minimum weekly payment amount from the date they are a ‘highest needs’ worker as outlined in section 32A of the 1987 Act.

For instance, this may be the date they were assessed by a trained assessor of permanent impairment to have greater than 30 per cent permanent impairment or the date the insurer is satisfied that the degree of permanent impairment is likely to be more than 30 per cent, provided they meet the preconditions which are outlined below.

To be entitled to the special compensation for workers with highest needs, certain preconditions[1] need to be satisfied:

  • there must be a determination made of the amount of weekly payments of compensation payable,
  • there must be an amount of weekly payments of compensation payable, and
  • the amount of compensation must be less than $788.32 (indexed).

Note: Insurers should note that the matter of Hee v State Transit Authority of NSW [2018] NSWWCPD 6, which considers the application of section 38A of the 1987 Act, is under consideration by the NSW Court of Appeal, decision reserved. Insurers will be required to apply section 38A of 1987 Act in a matter consistent with the Courts interpretation.

Insurers should also note:

  • a work capacity assessment of a worker with highest needs is not to be conducted unless the insurer thinks it appropriate to do so and the worker requests it (section 44A(4) of the 1987 Act).
  • a work capacity decision can be made for a worker with highest needs, however only workers with a ‘current work capacity’ or ‘no current work capacity’ (as defined under section 32A of the 1987 Act) have an entitlement to weekly payments.

All workers who meet the above definition of a worker with highest needs are entitled to the special provision for workers with highest needs, but only for periods of incapacity on and from 17 September 2012.

Example

A worker with highest needs is currently working 30 hours per week, and their current weekly earnings are $1,260.00 per week.

Their PIAWE was calculated at $1,596.00 per week. They are in the second entitlement period.

To calculate their weekly payment:

($1,596.00 x 95%) - $1,260.00 = $256.20

The worker is entitled to the special compensation as they are a worker with highest needs; weekly payments of compensation are payable, and the amount of compensation is less than $788.32 (indexed).

In this scenario, the worker would receive the minimum amount, in addition to their earnings.

[1] Relevant matter Hee v State Transit Authority of NSW [2018] NSWWCPD 6 under consideration by the NSW Court of Appeal, decision reserved.