Claims and injury management

Overview

Section 39 of the Workers Compensation Act 1987 (1987 Act) provides that weekly payments are available for a maximum (aggregate) period of 260 weeks (five years). This applies unless a worker's degree of permanent impairment resulting from the injury is more than 20 per cent.

Providing early notification prior to cessation of weekly payments helps workers prepare for their benefits ceasing.

The operation of section 39 can be complex. Insurers should encourage impacted workers to seek independent legal advice early to properly understand the significance of an assessment of degree of permanent impairment on their entitlements under the Acts and at common law.

This guidance looks at the operation and application of section 39.

Calculating 260 weeks of entitlement

What does aggregate mean?

When calculating an aggregate period of 260 weeks of weekly compensation this could be either consecutive or non-consecutive weeks.

What is an entitlement week?

Any week in which a payment of weekly compensation has been made or is payable (including part of a day, or a full day), is counted as one week of entitlement.

When does an entitlement week start?

A ‘weekly payment of entitlement’ commences on the day of the worker’s first incapacity (total or partial) from a work related injury that results in a weekly payment of greater than $nil. A week is counted over the following seven-day period.

What constitutes a week will vary for each worker - there is no set period (i.e. Sunday to Saturday).

Example: a worker has no current work capacity as a result of an injury and receives weekly payments of compensation commencing from Wednesday. The worker’s week will therefore commence from Wednesday to the following Tuesday.

When does the 260 week entitlement count commence?

The weekly payment count start date depends on when the worker made the claim.

For a claim made prior to 1 October 2012 (known as an ‘existing claim’), the 260-week count commenced from 1 January 2013.

For a claim made on or after 1 October 2012, the 260-week count commences on the worker’s first day of incapacity.

Informing the worker of the total number of weeks paid

Throughout the life of the claim the insurer should communicate regularly with the worker, employer and stakeholders regarding the number of weeks paid.

Workers affected by the 260-week (five year) limit to weekly payments should be provided with appropriate notification well before the cessation of weekly payments. Communication should clearly state how the insurer has counted the entitlement weeks so that it can be easily understood.

The information provided should include:

• a summary of all payments
• how many entitlement weeks have been paid, or are payable
• when a worker’s weekly payments are projected to cease.

If there is any disagreement between the worker and the insurer as to the total number of entitlement weeks (paid or payable), this should be discussed and resolved in advance of the worker reaching 260 weeks of weekly payments.

Insurers should have appropriate systems and controls in place to ensure accurate payment of weekly payments.

Permanent impairment and section 39

Section 39(2) of the 1987 Act states that the section does does not apply to an injured worker whose injury results in a degree of permanent impairment greater than 20 per cent. To determine whether a worker satisfies the exemption in section 39(2) of the 1987 Act, insurers should engage with workers early so that any permanent impairment assessments (if necessary) are undertaken well in advance of the 260-week limit.

The permanent impairment assessor must be listed on the SIRA website as a trained assessor of permanent impairment for each body system they are assessing.

The insurer should communicate to the worker (and employer where relevant) the outcome of the permanent impairment assessment and what this means in terms of entitlement to weekly payments of compensation, as well as reasonably necessary medical treatment and services.

Where the worker needs a support person, the insurer should (where possible) provide the information verbally direct to the worker, or in person in addition to confirming in writing.

The insurer should ensure that the worker is fully informed of their right to seek independent legal advice.

Agreement

Legislation does not prevent workers and insurers agreeing on the worker's degree of permanent impairment. Insurers should encourage workers to seek independent legal advice.

Where the degree of permanent impairment is agreed to be more than 20 per cent, this can be relied on for the purposes of section 39(2) of the 1987 Act. In this instance, the worker’s entitlement to weekly payments may continue after 260 weeks, subject to meeting the requirements as outlined in section 38 of the 1987 Act.

Refer to Standard of practice S21. Negotiation on degree of permanent impairment for information regarding the negotiation of the degree of permanent impairment.

Workers living overseas and assessment of degree of permanent impairment

Workers may move overseas following a workplace injury for a number of reasons. These include access to family support or visa restrictions linked to employment.

The workers compensation legislation provides for workers who cease to reside in Australia to continue to receive weekly payments of compensation while overseas in certain circumstances (refer to section 53 of the 1987 Act).

If an assessment is considered necessary, insurers should carefully consider how and when they will assess these workers’ degree of permanent impairment for the purposes of section 39. In limited or special circumstances, examination by video consultation may be appropriate and is to be considered by the insurer on a case-by-case basis (see Part 7.4 of the Workers Compensation Guidelines).

Insurers should plan well in advance and communicate in a transparent manner with their overseas workers to ensure these workers’ entitlements are determined in accordance with the legislation.

Workers who decline to attend a permanent impairment assessment

If a worker chooses not to attend the medical examination, then the insurer may not be able to make a decision regarding their current degree of permanent impairment and the worker’s entitlement to weekly payments may cease once the 260-week limit is reached.

The insurer should provide the worker with the reasons for the appointment and the potential consequences for non-attendance at the time that the appointment is made.

The worker should also be strongly encouraged to seek independent legal advice to properly understand the significance of an assessment of the degree of permanent impairment on their entitlements under the Acts and at common law.

Deemed ‘high needs’ workers

For the purposes of section 39 of the 1987 Act, a worker’s degree of permanent impairment is to be assessed as provided by section 65 of the 1987 Act (see section 39(3) of the 1987 Act) regardless of whether the worker is deemed by the insurer to be a ‘high’ or ‘highest needs’ worker in accordance with section 32A of the 1987 Act.

This applies unless the worker is an ‘existing recipient’, that is, a worker who was in receipt of weekly payments immediately prior to 1 October 2012.

Special provisions for ‘existing recipients’ of weekly payments

Special provisions apply to workers who were in receipt of weekly payments immediately before 1 October 2012 (‘existing recipients’). These provisions took effect from 1 October 2012.

Section 39 of the 1987 Act does not apply to an ‘existing recipient’ if the injury has resulted in permanent impairment and:

• an assessment of the degree of permanent impairment is pending and has not been made because a medical assessor has declined to make the assessment (on the basis that 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 20 per cent (whether or not the degree of permanent impairment has previously been assessed).

See clause 28C, Part 2A, Schedule 8 to the Workers Compensation Regulation 2016 (2016 Regulation) – Special provisions for existing recipients of weekly payments – 2012 amendments.

A worker who is deemed to have more than 20 per cent permanent impairment or has not reached maximum medical improvement, may later cease to be entitled to weekly payments if they are subsequently assessed as having a degree of permanent impairment of 20 per cent or less.

Claims for lump sum compensation: further claims

Workers who made a claim for lump sum compensation before 19 June 2012 are also eligible to make one further lump sum compensation claim (clause 11, Part 2A, Schedule 8 of the 2016 Regulation).

Clause 28D, Part 2A, Schedule 8 to the 2016 Regulation also permits one further assessment of the degree of permanent impairment in respect of existing recipients.

The further permanent impairment assessment is for the purposes of Part 3 of the 1987 Act. Accordingly, if a further assessment takes place under this provision and determines that the worker has a particular degree of permanent impairment, then this assessment will also be relevant when determining, for example, the worker’s access to reasonably necessary medical treatment and services.

Workers with a pre-2002 date of injury

A worker with a date of injury between 30 June 1987 and 31 December 2001 is assessed for lump sum compensation using a permanent impairment compensation table commonly referred to as the Table of Disabilities.

For injuries on or after 1 January 2002, workers are assessed using the NSW Guidelines for the evaluation of permanent impairment (the Guidelines).

Workers who suffered a psychological or psychiatric injury before 1 January 2002 have no entitlement to permanent impairment compensation (section 66 lump sum compensation) under the Table of Disabilities.

In the matter of Mrinal Datta v Universal Consultancy Services Pty Limited [2018] NSWWCC 223, the Commission considered the meaning of section 39 of the 1987 Act as it applies to workers who have no entitlement to permanent impairment compensation for their injury. That is, whether the fact that the worker had no entitlement to permanent impairment compensation for the subject injury prevents the worker from being assessed in order to access weekly compensation past 260 weeks.

Cessation of weekly payments

Section 39 of the 1987 Act provides that a worker’s entitlement to weekly payments will cease when a worker has received 260 weeks of weekly payments unless the worker has been assessed as having a degree of permanent impairment of more than 20 per cent (or, for existing recipients, one of the exceptions apply).

The worker should already have been made aware of the operation of the 260-week limit throughout the life of the claim. The insurer is responsible for informing the worker (verbally and in writing) of the effect of section 39 of the 1987 Act and the impact this will have on their entitlements.

Insurers should carefully consider those workers who have been identified as high risk and what support may be required when communicating cessation of entitlements. For these workers, appropriate communication may require the involvement of a support person, and/or health or legal representative.

Section 39 notice prior to cessation at 260 weeks

Insurers should ensure the worker is informed well in advance of the cessation of entitlement to weekly payments.

Details of any support services that may help a worker adjust to the end of their entitlement to weekly payments should be provided. Where appropriate, insurers should encourage workers to inform themselves of what Centrelink payments and services may be available.

Notice after 260 weeks

Workers who previously met the requirements of the 2016 Regulation (existing recipients) and are subsequently assessed as having permanent impairment of less than 21 per cent, will no longer have an entitlement to weekly payments.

Insurers should give adequate verbal and written notice to the worker prior to the cessation of weekly entitlements due to section 39. This is to ensure that the worker is fully informed, noting that the entitlement to medical and related expenses of up to five years will commence from the date weekly payments stop being payable.

Re-commencing weekly payments after 260 weeks (five years)

If a worker’s entitlement to weekly payments ended due to the operation of section 39 of the 1987 Act, the worker may later become eligible for weekly payments following an assessment of their degree of permanent impairment greater than 20 per cent.

The NSW Court of Appeal decision in Hochbaum v RSM Building Services Pty Ltd; Whitton v Technical and Further Education Commission t/as TAFE NSW [2020] NSWCA113 considered the application and interpretation of section 39 of the 1987 Act.

One practical outcome of the Court of Appeal decision is that those workers who become disentitled to weekly compensation as a result of the application of section 39 and are later found (whether by assessment or otherwise) to have a degree of permanent impairment greater than 20 per cent may be entitled to weekly compensation from the date of the favourable assessment and for the gap period (that is, the period between when weekly benefits ceased and the date of the favourable assessment).

Note: eligibility for weekly payments may be subject to the worker meeting the requirements of section 38.