GN 4.2 Workers living overseas

Published: 12 August 2019
Last edited: 12 August 2019

Application: This guidance applies to exempt workers.

Overview

Generally, a worker receiving (or entitled to receive) a weekly payment of compensation who ceases to reside in Australia, is not entitled to continue receiving weekly payments unless an approved medical specialist or the Workers Compensation Commission (the Commission) determines that the incapacity for work is likely to be of a permanent nature.

This guidance considers eligibility and payment of weekly payments and medical expenses for workers living overseas.

Weekly payments

To be eligible for weekly payments, the worker must apply to the Workers Compensation Commission for a declaration that their incapacity for work (total or partial) is likely to be of a permanent nature - see section 53 of the Workers Compensation Act 1987 (1987 Act).

If the worker is successful, they must continue to establish their identity and ongoing incapacity in such manner and at such intervals as required by the insurer.

The worker is entitled to receive weekly payments quarterly, in arrears. However, there is nothing in the Act that expressly prohibits an insurer paying a worker more frequently – it is a matter that can be negotiated between the insurer and the worker.

When considering whether the incapacity for work resulting from the injury is 'likely to be of a permanent nature', the Commission has held that in the context of section 53, an incapacity for work is permanent if:

‘… it is an incapacity that is lasting and likely (on the balance of probabilities) to be of an indefinite duration. It does not mean a perpetual state of affairs that will continue for all time’ (at para 52).

(Universal Consultancy Services Pty Ltd v Datta [2008] NSWWCCPD 87)

The workers compensation legislation does not define 'ceases to reside in Australia'. Each case should be considered based on its individual facts.

To determine if a worker has ceased living in Australia, insurers should consider all the relevant issues including:

  • the worker’s intention, either expressed or implied
  • the circumstances of the worker’s departure and stay outside Australia
  • the length of time the worker is outside Australia.

Tax on weekly benefits

Weekly payments of compensation made to workers living overseas remain subject to Australian income tax.

Where a worker is no longer an Australian resident (in accordance with the taxation law definition), then the rate of tax deducted from the payment may be different to the rate for an Australian resident.

Where a worker seeks an exemption from payment of income tax in Australia through a private ruling from the Australian Taxation Office (ATO), the insurer is to continue to make tax deductions until they have been provided with a copy of the ATO’s private ruling.

Private rulings often need to be renewed to remain valid. The insurer should check periodically to make sure the private ruling relied on continues to be valid.

Medical expenses

Some medical expenses may be covered for workers living overseas. This needs to be assessed on a case-by-case basis.

It is important to note that while the legislation does not prohibit the payment of medical expenses incurred overseas, the gazetted Fees Orders stipulate that medical practitioners and treatment providers (eg physiotherapists) must be qualified, registered and recognised under applicable Australian medical treatment legislation or regulations.

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