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Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury) Bill 2017

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2016-2017

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

COMCARE AND SEACARE LEGISLATION AMENDMENT

(PENSION AGE AND CATASTROPHIC INJURY) BILL 2017

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment,

Senator the Hon Michaelia Cash)

 

 

 

 

 

 

 

 



COMCARE AND SEACARE LEGISLATION AMENDMENT

(PENSION AGE AND CATASTROPHIC INJURY) BILL 2017



OUTLINE

The Comcare scheme is established by the Safety, Rehabilitation and Compensation Act 1988 (‘SRC Act’) to provide compensation and rehabilitation support for injuries suffered by employees of the Australian Government, the Australian Capital Territory Government and 34 licensed corporations. The SRC Act also applies to injuries suffered by members of the Australian Defence Force in relation to certain defence service rendered prior to 1 July 2004.

The Seacare scheme is established by the Seafarers Rehabilitation and Compensation Act 1992 (‘Seafarers Act’) to provide compensation and rehabilitation support for injuries suffered by employees in a small, defined section of the Australian maritime industry.

This Bill amends the SRC Act and the Seafarers Act to ensure that injured employees in receipt of weekly compensation payments for incapacity can continue to receive those payments until they reach ‘pension age’ as defined in the Social Security Act 1991 . The qualifying age for the age pension under the Social Security Act 1991 will begin to increase on 1 July 2017. By linking compensation for incapacity with the pension age rather than age 65, these amendments will ensure there is no gap between the cessation of compensation for incapacity and eligibility for receipt of the age pension.

This Bill also amends the SRC Act and the Seafarers Act to align these Acts with minimum benchmarks for catastrophic workplace injuries in the National Injury Insurance Scheme. The Bill removes the cap on weekly compensation payable for household services and attendant care services for employees with a catastrophic injury. An employee with a catastrophic injury will also be eligible to receive compensation for household services from the day of the injury without the current 28-day waiting period.

 



FINANCIAL IMPACT STATEMENT

 

N/A.



Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury) Bill 2017

The Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury) Bill 2017 (‘Bill’) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

The Comcare scheme is established by the Safety, Rehabilitation and Compensation Act 1988 (‘SRC Act’) to provide compensation and rehabilitation support for injuries suffered by employees of the Australian Government, the Australian Capital Territory Government and 34 licensed corporations. The SRC Act also applies to injuries suffered by members of the Australian Defence Force in relation to certain defence service rendered prior to 1 July 2004.

The Seacare scheme is established by the Seafarers Rehabilitation and Compensation Act 1992 (‘Seafarers Act’) to provide compensation and rehabilitation support for injuries suffered by employees in a small, defined section of the Australian maritime industry.

This Bill amends the SRC Act and the Seafarers Act to ensure that injured employees in receipt of weekly compensation payments for incapacity can continue to receive those payments until they reach ‘pension age’ as defined in the Social Security Act 1991 . The qualifying age for the age pension under the Social Security Act 1991 will begin to increase on 1 July 2017. By linking compensation for incapacity with the pension age rather than age 65, these amendments will ensure there is no gap between the cessation of compensation for incapacity and eligibility for receipt of the age pension.

This Bill also amends the SRC Act and the Seafarers Act to align these Acts with minimum benchmarks for catastrophic workplace injuries in the National Injury Insurance Scheme. The Bill removes the cap on weekly compensation payable for household services and attendant care services for employees with a catastrophic injury. An employee with a catastrophic injury will also be eligible to receive compensation for household services from the day of the injury without the current 28-day waiting period.

Human rights implications

The Bill engages the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and the rights of people with disability under Article 26(1) of the Convention on the Rights of Persons with Disabilities .

Article 9 of the ICESCR states that ‘States Parties … recognize the right of everyone to social security, including social insurance’. General Comment 19 by the Committee on Economic, Social and Cultural Rights sets out the essential elements of the right to social security, including that ‘States parties should … ensure the protection of workers who are injured in the course of employment or other productive work’. [1]

The Bill promotes the right to social security by ensuring that injured employees covered by the SRC Act or the Seafarers Act will not be left without financial support prior to becoming eligible for the age pension.

The Bill also recognises the greater care requirements of persons with a catastrophic injury and aims to enable these employees to attain and maintain maximum independence. This promotes Article 26(1) of the Convention on the Rights of Persons with Disabilities, which requires States Parties to ‘take effective and appropriate measures, including through peer support, to enable persons with disabilities to attain and maintain maximum independence, full physical, mental, social and vocational ability, and full inclusion and participation in all aspects of life’.

Conclusion

The Bill is compatible with human rights because it promotes human rights.

Minister for Employment, Senator the Hon Michaelia Cash

 

 



N OTES ON CLAUSES

In these notes on clauses, the following abbreviations are used:

Bill

Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury) Bill 2017

NIIS

National Injury Insurance Scheme

Seafarers Act

Seafarers Rehabilitation and Compensation Act 1992

Social Security Act

Social Security Act 1991

SRC Act

Safety, Rehabilitation and Compensation Act 1988

 

Clause 1 - Short title

1.              Clause 1 provides for the short title of the Act to be the Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury) Act 2017 .

Clause 2 - Commencement 

2.              The table in this clause sets out when the provisions of the Bill commence. Provisions concerned with the ‘pension age’ amendments commence on 1 July 2017 to coincide with the first increase to the pension age under the Social Security Act. Provisions concerned with the ‘catastrophic injury’ amendments commence the day after the Act receives the Royal Assent.

Clause 3 - Schedule(s)

3.              Clause 3 of the Bill provides that an Act that is specified in a Schedule to the Bill is amended or repealed as set out in that Schedule, and any other item in a Schedule to the Bill has effect according to its terms.

4.              There are 2 schedules to the Bill:

·         Schedule 1 makes amendments to the SRC Act and the Seafarers Act; and

·         Schedule 2 contains application and transitional provisions.



Schedule 1 - Amendments

Part 1 - Comcare scheme

Division 1 - Catastrophic injury

Safety, Rehabilitation and Compensation Act 1988

5.              Division 1 amends the SRC Act to insert a definition of ‘catastrophic injury’ and remove the cap on weekly compensation payable for household services and attendant care services obtained as a result of catastrophic injury.

6.              The NIIS is being developed as a federated model of separate, state-based no-fault schemes that provide lifetime care and support for people who have sustained a catastrophic injury caused by four types of accidents: motor vehicle accidents, workplace accidents, medical accidents and general/other accidents. The NIIS builds on existing accident compensation schemes - for example, for workplace accidents - to complement the National Disability Insurance Scheme.

7.              The amendments in this Part will align workers’ compensation arrangements under the SRC Act with minimum benchmarks proposed for the workplace accidents stream of the NIIS by:

·         inserting a new definition of ‘catastrophic injury’;

·         providing for the payment of uncapped weekly compensation for household services and attendant care services obtained as a result of catastrophic injury; and

·         removing the current 28-day waiting period for household services compensation .

Item 1 - Subsection 4(1)

8.              A ‘catastrophic injury’ will be an ‘injury’ (which has the meaning given by section 5A) which satisfies the conditions specified in the legislative rules. It is intended that these conditions will mirror those in the definition of ‘catastrophic injury’ set out in the NIIS minimum benchmarks.

9.              The ‘legislative rules’ means the rules made under section 122A, which is a new provision allowing for the making of legislative rules.

Item 2 - Subsection 29 (heading)

Item 3 - Subsections 29(1) and (3)

10.          These items limit the application of section 29 to household services and attendant care services obtained as a result of an injury that is not a catastrophic injury.

Item 4 - After section 29

11.          New section 29A provides for the payment of weekly compensation for household services and attendant care services obtained as a result of a catastrophic injury. The criteria for determining whether household services and attendant care services are reasonably required and the qualification requirements for attendant care services remain the same as those under section 29, but the amount of compensation payable is such amount as is reasonable in the circumstances. Further, section 29A does not exclude compensation for household services for the first 28 days after the day of the injury, meaning that compensation under section 43A for household services is available from the date of injury. There is also no limit on the length of time household services and attendant care services remain compensable.

Item 5 - Subsection 60(1) (definition of determination )

12.          This item amends subsection 60(1) to insert new section 29A in the definition of ‘determination’ for the purposes of reconsideration of determinations and reviews of decisions by the Administrative Appeals Tribunal ( see Part VI of the SRC Act).

Item 6 - At the end of Part IX

13.          New section 122A enables the Minister to make legislative rules by legislative instrument.

Division 2 - Pension age

Safety, Rehabilitation and Compensation Act 1988

14.          Division 2 amends the SRC Act to replace or remove references to age 65 and make consequential amendments to ensure there is no gap between the age on which compensation for incapacity payments cease under the SRC Act and the ‘pension age’, being the qualifying age for the age pension under the Social Security Act .

Item 7 - Subsection 4(1) (definition of employee )

Item 8 - Subsection 4(1)

15.          Item 7 removes a redundant reference to ‘ persons 65 years of age or older’ in the definition of ‘employee’ in subsection 4(1).

16.          Item 8 provides that ‘pension age’ has the meaning given by subsection 23(5A), (5B), (5C) or (5D) of the Social Security Act. Defining ‘pension age’ by reference to the Social Security Act allows the definition to keep pace with any amendments to that Act.

Item 9 - Subsection 23(1)

Item 10 - Subsections 23(1A) and (1B)

17.          These items align the cut-off provisions in section 23 of the SRC Act with the qualifying age for the age pension in the Social Security Act.

18.          Currently, subsection 23(1) provides that weekly compensation for incapacity payments are not payable to an employee who has reached 65 years - the standard retirement age when the SRC Act commenced in 1988. Current subsections 23(1A) and (1B) allow for employees who suffer an injury when they are 63 years or more to receive incapacity payments for a maximum of 104 weeks while they are incapacitated.

19.          The policy behind ceasing weekly compensation for incapacity payments at 65 years is that once the employee has reached 65 years he or she may become eligible for age pension payments. The policy behind limiting payments to 104 weeks, where an employee suffers an injury at age 63 or more, is to provide older, injured employees with sufficient time to recover and return to work or, if they are unable to recover, to transition into retirement.

20.          However, the qualifying age for the age pension under the Social Security Act for both men and women will rise incrementally from 65 years to 67 years between 1 July 2017 and 1 July 2023.

21.          These amendments are necessary to ensure that there is no gap for injured employees aged 65 years or more who would otherwise be unable to receive weekly compensation for incapacity payments due to section 23 and unable to access the age pension until he or she reached ‘pension age’ under the Social Security Act.

Item 11 - Subsection 30(3) (paragraph (a) of the definition of number of days )

Item 12 - Subsection 30(3) (paragraph (b) of the definition of number of days )

22.          A redemption of weekly compensation for incapacity is payable to an employee as a lump sum in accordance with section 30. These items amend subsection 30(3) so that when calculating the amount of the lump sum payable under section 30, the formula will take into account the number of days ending on the day immediately before :

·         the day on which the employee reaches pension age (if the employee is injured before reaching the age that is 2 years before pension age); and

·         the employee would cease to be entitled to receive compensation under section 19, 20, 21 or 21A (if the employee is injured on or after reaching the age that is 2 years before pension age).

Item 13 - Section 134 (heading)

Item 14 - Subsection 134(1)

23.          Part X of the SRC Act contains transitional provisions which apply to certain former employees.

24.          These items replace references to age 65 with references to ‘pension age’, with the effect that section 134 will only apply to reduce the amount of compensation payable per week to a former employee when that employee reaches their pension age, instead of when he or she reaches 65.

25.          The formula has also been updated to replace the reference to ‘65’ with a reference to ‘pension age’. This is for consistency in referencing only, and has no practical effect on the amount which would be payable to a former employee under this section.

Item 15 - Subsection 137(5) (definition of number of days )

26.          A redemption of weekly compensation for incapacity is payable to a ‘former employee’, as defined in section 123, in accordance with section 137. This item amends subsection 137(5) so that when calculating the amount of the lump sum payable under section 137, the formula will take into account the number of days ending on the day immediately before the day on which the employee reaches pension age.



Part 2 - Seacare scheme

Division 1 - Catastrophic injury

Seafarers Rehabilitation and Compensation Act 1992

27.          Division 1 amends the Seafarers Act to insert a definition of ‘catastrophic injury’ and remove the cap on weekly compensation payable for household services and attendant care services obtained as a result of catastrophic injury.

28.          The amendments in this Part will align the workers’ compensation arrangements under the Seafarers Act with minimum benchmarks proposed for the workplace accidents stream of the NIIS by:

·         inserting a new definition of ‘catastrophic injury’;

·         providing for the payment of uncapped weekly compensation for household services and attendant care services obtained as a result of catastrophic injury; and

·          removing the current 28-day waiting period for household services compensation.

Item 16 - Section 3

29.          A ‘catastrophic injury’ will be an ‘injury’ (which has the meaning given by section 3) which satisfies the conditions specified in the legislative rules. It is intended that these conditions will mirror those in the definition of ‘catastrophic injury’ set out in the NIIS minimum benchmarks.

30.          The ‘legislative rules’ means the rules made under section 144, which is a new provision allowing for the making of legislative rules.

Item 17 - Section 43 (heading)

Item 18 - Subsections 43(1) and (4)

31.          These items limit the application of section 43 to household services and attendant care services obtained as a result of an injury that is not a catastrophic injury.

Item 19 - At the end of Division 5 of Part 2

32.          New section 43A provides for the payment of weekly compensation for household services and attendant care services obtained as a result of a catastrophic injury. The criteria for determining whether household services and attendant care services are reasonably required and the qualification requirements for attendant care services remain the same as those under section 43, but the amount of compensation payable is such amount as is reasonable in the circumstances. Further, section 43A does not exclude compensation for household services for the first 28 days after the day of the injury, meaning that compensation under section 43A for household services is available from the date of injury. There is no limit on the length of time household and attendant care services remain compensable.  

Item 20 - Subsection 76(1) (definition of determination )

33.          This item amends subsection 76(1) to insert new section 43A in the definition of ‘determination’ for the purposes of reconsideration of determinations and reviews of decisions by the Administrative Appeals Tribunal ( see Part 6 of the Seafarers Act).

Item 21 - At the end of Part 9

34.          New section 144 enables the Minister to make legislative rules by legislative instrument.

Division 2 - Pension age

Seafarers Rehabilitation and Compensation Act 1992

35.          Division 2 amends the Seafarers Act to replace or remove references to age 65 and make consequential amendments to ensure there is no gap between the age on which compensation for incapacity payments cease under the SRC Act and the ‘pension age’, being the qualifying age for the age pension under the Social Security Act .

Item 22 - Section 3

36.          Item 22 provides that ‘pension age’ has the meaning given by subsection 23(5A), (5B), (5C) or (5D) of the Social Security Act. Defining ‘pension age’ by reference to the Social Security Act allows the definition to keep pace with any amendments to that Act.

Item 23 - Subsections 38(1) and (2)

37.          This item aligns the cut-off provisions in section 38 of the Seafarers Act with the qualifying age of the age pension in the Social Security Act.

38.          Currently, subsection 38(1) provides that weekly compensation for incapacity payments are not payable to an employee who has reached 65 years - the standard retirement age when the Seafarers Act commenced in 1992. Current subsection 38(2) allows employees who suffer an injury at age 64 or more to receive incapacity payments for a maximum of 12 months from the date of injury, while they are incapacitated.

39.          The policy behind ceasing weekly compensation for incapacity payments at 65 years is that once the employee has reached 65 years he or she may become eligible to apply for age pension payments . The policy behind limiting payments to 12 months, where an employee suffers an injury at age 64 or more, is to provide older, injured employees with sufficient time to recover and return to work or, if they are unable to recover, to transition into retirement.

40.          However, the qualifying age for the age pension under the Social Security Act for both men and women will rise incrementally from 65 years to 67 years between 1 July 2017 and 1 July 2023.

41.          These amendments are necessary to ensure that there is no gap for injured employees aged 65 years or more who would otherwise be unable to receive weekly compensation for incapacity payments due to section 38 and unable to access the age pension until he or she reached ‘pension age’ under the Social Security Act.

Item 24 - Subsection 44(2) (definition of y [number of years] )

42.          A redemption of weekly compensation for incapacity is payable to an employee as a lump sum in accordance with section 44. This item amends subsection 44(2) so that when calculating the amount of the lump sum payable under section 44, the formula will take into account the number of years ending on the day immediately before:

·         the day on which the employee reaches pension age (if the employee is injured before reaching the age that is 2 years before pension age); and

·         the employee would cease to be entitled to receive compensation under section 31, 33, 34, 35 or 36 (if the employee is injured on or after reaching the age that is 2 years before pension age).





Schedule 2 - application and transitional provisions

Part 1 - Comcare Scheme

Division 1 - Catastrophic injury

Item 1 - Application - catastrophic injury

43.          The amendments to sections 29 and the insertion of new section 29A of the SRC Act made by the Bill only apply in respect of a week beginning after the commencement of the first legislative rules made for the purposes of the definition of ‘catastrophic injury’ in subsection 4(1) of that Act.

Division 2 - Pension age

Item 2 - Application - pension age

44.          The amendments of section 23 and 134 of the SRC Act made by the Bill only apply in respect of a week beginning after the commencement of this item, which is expressed to be 1 July 2017 ( see Clause 2 above) being the date on which the qualifying age for the age pension will increase from 65 years to 65 and 6 months.

45.          The item also allows the number of weeks of compensation for incapacity payments to be increased beyond 104 weeks to ensure that an employee who has already reached 63 years and who was injured before 1 July 2017 continues to receive payments to bridge any gap after the 104 weeks are exhausted before the employee’s relevant pension age (subject to ongoing eligibility determined in accordance with the SRC Act).

46.          The amendment of section 137 of the SRC Act made by the Bill applies in relation to a determination made by the relevant authority after the commencement of this item, which is expressed to be 1 July 2017 ( see Clause 2 above). 

Part 2 - SEACARE scheme

Division 1 - Catastrophic injury

Item 3 - Application - catastrophic injury

47.          The amendments of section 43 and the insertion of new section 43A of the Seafarers Act made by the Bill only apply in respect of a week beginning after the commencement of the first legislative rules made for the purposes of the definition of ‘catastrophic injury’ in section 3.

Division 2 - Pension age

Item 4 - Application - pension age

48.          The amendments of section 38 of the Seafarers Act made by the Bill only apply in respect of a week beginning after the commencement of this item, which is expressed to be 1 July 2017 ( see Item 2 above) being the date on which the qualifying age for the age pension will increase from 65 years to 65 and 6 months.

49.          The item also allows the number of weeks of compensation for incapacity payments to be increased beyond 52 weeks to ensure that an employee who has already reached 64 years and who was injured before 1 July 2017 continues to receive payments to bridge any gap after the 52 weeks are exhausted before the employee’s relevant pension age (subject to ongoing eligibility determined in accordance with the Seafarers Act).

Part 3 - Miscellaneous

Item 5 - Constitutional safety net

50.          This item ensures that the Bill complies with the requirements of paragraph 51(xxxi) of the Constitution by requiring the Commonwealth to pay reasonable compensation if the operation of the Bill would result in the acquisition of property otherwise than on just terms .

 




[1] Committee on Economic, Social and Cultural Rights, General Comment 19: The Right to Social Security (art. 9) , U.N. Doc E/C.12/GC/19 (2008), [17].