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Thursday, 8 February 2007
Page: 8

Mr McClelland asked the Treasurer, in writing, on 9 October 2006:

(1)   In respect of the New South Wales Workers Compensation Act 1987, which provides for the termination of weekly payments on retiring age, and of which section 52 defines retiring age as the age at which a person would otherwise be eligible to receive an aged pension under the Commonwealth’s Social Security Act 1991, does this provision effectively shift the burden of payment to injured workers from workers’ compensation insurance companies onto the Commonwealth; if so, has he obtained any advice as to whether the legislation is consistent with the federal Government’s stated intention of encouraging employees to remain in the work force for as long as is reasonably possible.

Mr Costello (Treasurer) —The answer to the honourable member’s question is as follows:

All workers’ compensation schemes in Australia have limits on weekly income replacement payments. These range from time or dollar limits, to age limits. Schemes operate on the basis of paying compensation for the loss of ability to earn an income so, by extension, payments would cease at a retirement age that was in line with community expectations. However, as the traditional notion that all workers will retire by age 65 becomes less relevant, there is increasing pressure on schemes to change. There are movements to amend the arrangements of schemes to allow for coverage for workers injured near to, or after, reaching age 65. It should be noted that as most schemes provide continuing coverage for medical and related costs, it is only income replacement which ceases.

The Workplace Relations Ministers’ Council (WRMC) has looked at the issue of the impact of an ageing workforce on workers’ compensation schemes in Australia. WRMC has specifically requested that the Australian Safety and Compensation Council (ASCC) examine this issue and, in particular, examine any potential barriers which occupational health and safety or workers’ compensation schemes present to labour force participation by mature age workers. The Office of the ASCC in the Department of Employment and Workplace Relations is conducting research on both topics and is due to report back to WRMC in 2007.