August 2012

Workers Compensation Update #3 - Termination of Weekly Payments on Retiring Age

Topic:  New Provisions for the Termination of Weekly Payments on Retiring Age

1. The amendments

The new section 52 (2)(a) is in Schedule 1 and will not commence until proclamation (when the other weekly payments amendments commence).

Under the new section 52 (2)(a) if a worker receives an injury before reaching "retiring age", a weekly payment is not payable to the worker for any period of incapacity occurring after they reach retiring age.

("Retiring age" is 67 for all workers born on or after 1 January 1957 and 65 for men born on or before 30 June 1952; with sliding scales applying for women born before 1 January 1957 and men born between 1 July 1952 and 31 December 1956.)

The transitional provision for this amendment is in Schedule 12, clause 7 and says:

"7 Termination of weekly payments on retiring age"

The amendment made by the 2012 amending Act to section 52 of the 1987 Act does not apply in respect of the compensation payable to a person who reached the retiring age referred to in that section before the commencement of the amendment"  (emphasis added).

However, section 52(2)(b) will not be affected by the amendments and will remain the same as follows:

"52 (2)(b) [If a person] ...receives an injury on or after reaching the retiring age - a weekly payment of compensation shall not be made in respect of any resulting period of incapacity for work occurring more than 12 months after the first occasion of incapacity for work resulting from the injury."

2.  When will the changes commence?

The amendments are expected to be proclaimed, and commence, within the next few months.

3. Tips for Insurers

Insurers should approach weekly payments claims where the injury has occurred shortly before, or after, retiring age, in the following ways:

1. For workers who have reached retiring age before the amendments commence - apply the existing provisions:

  • if the injury was received before retiring age, weekly payments are payable for up to one year after retiring age;
  • if the injury was received after retiring age then weekly payments are payable for up to one year after the first date of incapacity and wage loss resulting from the injury.

2. If a worker reaches retiring age after the commencement of the amendments:

  • if the injury is received before they reach retiring age then weekly payments are not payable for any period of incapacity occurring after they reach retiring age. (This is the real, substantive effect of the amendment. It will differ from the current situation where this category of workers can continue to receive weekly payments for up to one year after reaching retiring age);
  • if the injury is received after they reach retiring age then weekly payments are payable for up to one year after the first date of incapacity and wage loss which results from the injury (i.e. section 52(2)(b) continues to apply).
     

Author: Mark Underwood