On 25 March 2015, the Hon. Luke Hartsuyker, MP, Assistant Minister for
Employment, introduced the Safety, Rehabilitation and Compensation Amendment
(Improving the Comcare Scheme) Bill 2015 (the bill) in the House of
On 26 March 2015, the Senate referred the provisions of the bill to the Senate
Education and Employment Legislation Committee (the committee) for inquiry and
report by 16 June 2015.
Conduct of the inquiry
Details of the inquiry were made available on the committee's website.
The committee also advertised the inquiry in The Australian and wrote to
key stakeholder groups, organisations and individuals to invite submissions.
The committee received 30 submissions as detailed in Appendix 1.
Purpose and overview of the bill
The Comcare Scheme (the scheme) was established by the Safety,
Rehabilitation and Compensation Act 1988 (the SRC Act) to provide workers'
compensation to Australian and Australian Capital Territory government
employees (collectively known as premium payers) and the employees of 33 licensees,
comprising current and former Commonwealth authorities and private corporations,
who self-insure under the scheme.
The SRC Act also applies to members of the Australian Defence Force
(ADF) injured during defence service before 1 July 2004. Coverage for injuries
attributable to defence service on or after this date is provided by the Military
Rehabilitation and Compensation Act 2004 (MRC Act). Defence-related claims
under the SRC Act and MRC Act are administered by the Department of Veterans'
Affairs on behalf of the Military Rehabilitation and Compensation Commission.
ADF members and veterans covered by the SRC Act will not be affected by the
reforms in the bill except for claims for permanent impairment.
Since 1988 important changes have occurred in both work and health
practices and in community expectations. The bill seeks to reform and modernise
the scheme to meet the current needs of employees, employers and workplaces.
In 2012 the previous government commissioned the SRC Act Review (the
Review) by Mr Peter Hanks, QC and Dr Allan Hawke AC. Mr Hanks reviewed the SRC
Act with respect to workers' compensation benefit structures, rehabilitation
and return-to-work provisions. Dr Hawke reviewed the performance of workers'
compensation under the SRC Act, in particular the governance and financial
The government has developed a two stage process to reform the SRC Act,
which includes recommendations made by Mr Hanks and Dr Hawke. The first stage
of reform focussed on:
expanding eligibility for companies to self-insure under the SRC
Act by removing the competition test and enabling corporations operating and
employing in two or more states and territories to self-insure under the SRC
Act and have coverage under the Commonwealth's work health and safety regime;
enabling group licences to be issued to an eligible group of
excluding compensation for injuries occurring during recess
breaks away from work and injuries resulting from serious and wilful
The first stage of reforms was included in the Safety, Rehabilitation
and Compensation Legislation Amendment Bill 2014 which is currently before the
The second stage of reforms are contained in this bill and focus on
improving the operation of workers' compensation under the SRC Act by:
improving return-to-work outcomes for injured workers;
improving the focus on early intervention and health outcomes of
injured workers; and
improving administration of the scheme.
The assistant minister stated that the reforms in the bill have a
stronger focus on rehabilitation, target support for injured employees, improve
the scheme's integrity and sustainability, and address negative public
perceptions of the scheme within the community by introducing safeguards to
protect against injured employees making claims for conditions unrelated to
work and undertaking non-evidence based treatments:
Using the recommendations from the review as a starting
point, building on feedback from stakeholders and also adopting some reforms
that have been advanced by state Labor governments, this government is
proposing a package of reforms that will rehabilitate people and get them back
to work, target support and improve the scheme's integrity and viability. The
reforms will also ensure that loopholes in the legislation that allow people to
take advantage of the scheme are closed.
The bill makes other changes to the SRC Act, including changes to improve
the efficiency and cost effectiveness of the scheme and to align the scheme
with some state and territory workers' compensation schemes.
The bill also amends the Military, Rehabilitation and Compensation
Act 2004, Safety, Rehabilitation and Compensation Act 1988 and Seafarers
Rehabilitation and Compensation Act 1992 in relation to the vocational
nature of rehabilitation services and return to work outcomes.
In addition, the bill amends the Administrative Decisions (Judicial
Review) Act 1977 to provide that decisions relating to compensation paid
for detriment caused by defective administration are not subject to review.
Structure of the bill
The bill comprises 17 schedules.
requirements for compensation and rehabilitation
return to work
compensation for household/attendant
compensation where absent from Australia
on compensation leave
calculation of incapacity
and non-economic loss
liability of single
liability for gradual onset injuries
schedules 1–15 from defence-related claims
Schedule 1: tightening eligibility
requirements for compensation and rehabilitation
Schedule 1 tightens the eligibility requirements for compensation under
the SRC Act to distinguish more clearly between work and non-work related
This change reflects the underlying purpose of a workers' compensation scheme
which is to provide support for workers who suffer from occupational injury and
Under the current scheme if the culmination of a condition occurs at the
workplace it is sufficient for workers' compensation liability to exist.
Schedule 1 alters the eligibility criteria by amending the definition of injury
in subsection 5A(1) of the SRC Act to ensure that compensation under the scheme
is only payable where either an underling condition or the culmination of that
condition is significantly contributed to by the employee's employment.
As such, an employer's liability will no longer extend to diseases or injuries,
such as heart attacks, strokes and spinal disc ruptures, that are
manifestations of underlying genetic of lifestyle factors which occur in the
workplace but have no significant basis in employment.
The committee notes the amended eligibility criteria is based on the Review
...the SRC Act be amended
so that incidents that are a manifestation of an underlying disease (such as
heart attacks, strokes, spinal disc ruptures caused by degenerative disease and
similar phenomena) will be covered for workers compensation purposes on the
same basis as a 'disease'— that is, where the incident was contributed to, to a
significant degree, by the employee's employment.
Schedule 1 also increases the threshold for perception-based disease
claims to ensure that an employer's liability does not extend to diseases or
injuries that are manifestation of underlying mental health conditions which
manifest in the workplace but have no significant basis in employment.
The committee notes that this amendment gives effect to the Review
recommendation 'that an employee's perception of a state of affairs will only
provide a connection with employment where that perception has a reasonable basis'.
The other key measure in Schedule 1 widens the scope of the 'reasonable
administrative action' exclusion. This ensures employers can take reasonable
action in managing their workplace. It also ensures that an injury arising from
an employee's belief that they may be subject to reasonable management action
will not be compensable.
The committee notes that this measure aligns the SRC Act with
'reasonable management action' in the bullying provisions in the Fair Work
and is based on the Review recommendation that:
...the SRC Act be amended so that the reasonable administrative
action exclusion in s 5A(1) operates only where the reasonable administrative
action taken in a reasonable manner in respect of the employee's employment has
contributed, to a significant degree, to the disease, injury or aggravation.
Schedule 2: enhancing rehabilitation
and return to work outcomes
Schedule 2 amends the SRC Act to emphasise the vocational rather than
medical nature of rehabilitation services under the scheme. It introduces
measures to strengthen employer and employee responsibilities to improve
employee rehabilitation and work outcomes.
These measures are based on Review recommendations 6.1, 6.5, 6.7, and 6.8.
The bill provides that a workplace rehabilitation plan may require an
employee to carry out specified activities, and that the obligation to do so
becomes part of the employee's responsibilities under the plan.
Based on Review recommendation 6.13,
Schedule 2 also combines the current 2-step process for the development of
rehabilitation programs into a single process. This ensures that workplace
rehabilitation is delivered on a service continuum of assessment, need,
planning, active implementation, review and evaluation.
Under section 40 of the Act employers currently have a duty to provide
'suitable employment' to injured employees who have undertaken or are
undertaking a rehabilitation program. Based on Review recommendation 6.16,,
Schedule 2 expands the definition of 'suitable employment'. Employment with any
employer who is not the Commonwealth or a licensee (including self-employment)
may now be considered 'suitable employment'.
In addition, Schedule 2 provides relevant authorities, including Comcare
or self-insured licensees, with the discretion to perform work readiness
assessments that assess an injured employee's capacity to undertake 'suitable
Schedule 3: improving the scheme's integrity
and financial viability
Schedule 3 contains measures to improve the integrity of the current
scheme and to ensure its financial viability into the future. Based on several
the amendments in Schedule 3 would:
require third parties to indemnify compensation payers where
circumstances give rise to both an obligation to pay compensation under the SRC
Act and a liability on the part of the third party to pay damages or State
provide more timely and responsive services and support for
injured employees by requiring employers to forward claims to Comcare within 3
days of receipt and specifying time limits in relation to the determination of
compensation claims and the reconsideration of claims;
enhance a relevant authority's information gathering powers in
relation to compensation claims and the administration of liabilities aimant to
notify their relevant authority of any change to their circumstances;
require licensees to notify Comcare of any proceedings they
commence under the SRC Act and empower Comcare to request documents relevant to
any proceedings brought against, or instituted by, a licensee;
require licensees (and corporations covered by a group employer
licence) to comply with applicable Commonwealth, State and Territory laws with
respect to the safety, health and rehabilitation of workers;
enable Comcare to recover overpayments of compensation that have
been made to an employer by Comcare; and
enable Comcare to pay compensation for detriment caused by
Schedule 4: provisional medical
Schedule 4 enables a relevant authority to make provisional medical
expense payments capped at $5 000 in respect of an alleged injury before a claim
is determined. The amendment is based on Review recommendation 6.2
as well as similar provisions in the NSW workers' compensation scheme.
Schedule 5: ensuring compensated
medical expenses are evidence-based
Schedule 5 makes several changes to the type and amount of medical expenses
covered by Comcare, and requires Comcare and licensees to consider certain
matters in determining whether medical treatment was reasonably obtained.
Schedule 5 imposes a more rigorous set of requirements to the process of
determining compensation in respect of medical expenses incurred by an injured
employee under section 16 of the SRC Act. As recommended in the Review,
the amendments tighten the current requirements to ensure medical expenses will
only be compensated for when provided by a registered health practitioner. In
addition, the provision of medicines (including schedule 8 medicines) will only
be compensated for when provided by appropriately qualified persons.
New section 16A empowers Comcare to establish Clinical Framework
Principles by legislative instrument to assist in determining whether a medical
treatment is reasonably obtained. New section 16B empowers Comcare to establish
by legislative instrument a medical services table that would limit the level
of compensation payable by a relevant authority in respect of medical treatment
and examinations to specified amounts in either a medical services table or a medical
examination rates determination.
Schedule 5 also enables Comcare to:
by legislative instrument, identify accredited healthcare
practitioners for the purposes of the SRC Act;
disclose information relating to medical treatment obtained in
relation to an injury suffered by an employee to a professional disciplinary
by legislative rules, approve specified types of medical
treatment obtained by an employee outside Australia.
Schedule 6: addressing the
shortcomings of compensation for household/attendant care services
Currently, under section 29 of the SRC Act, compensation is payable for
household services and attendant care services. 'Household services' are
services of a domestic nature (including cooking, house cleaning, laundry and
gardening services) that are required for the proper running and maintenance of
the employee's household. 'Attendant care services' are services that are
required for the essential and regular personal care of the employee (other
than household services, medical or surgical services or nursing care), such as
help with bathing and dressing.
The Review identified a number of shortcomings in the current provisions
concerning the determination of compensation payable for household or attendant
Schedule 6 seeks to implement a number of these recommendations by introducing
a requirement that attendant care services be compensable only where they are
provided by a registered provider and where there has been an independent
assessment of an injured employee's need for household services and/or
attendant care service.
Amendments relevant to household and attendant care services for
employees with catastrophic injury will comply with minimum benchmarks set for
workers' compensation with the National Injury Insurance Scheme.
As such, Schedule 6 would:
establish a tiered approach to the payment of compensation for
household and attendant care services, depending on whether the employee's
injury was catastrophic, and limit the period for which compensation is payable
for employees with a non-catastrophic injury;
require an independent assessment of an injured employee's need
for household or attendant care services; and
require attendant care services to be provided by accredited,
registered or approved providers.
Schedule 7: Compensation for
absences from Australia for non-work purposes
Currently the SRC Act places no limitations on payment of compensation
to a person outside Australia.
This stands in contrast, to the Social Security Act 1991 which imposes
quite stringent controls on payment of pensions and allowances outside
Australia and some other state and territory compensation schemes.
In order to better align the Comcare scheme with these controls, and based on Review
recommendation 7.17, Schedule 7 proposes to:
amend the SRC Act to allow for the suspension of compensation
where an injured employee is absent from Australia for non-work related
purposes for a period of more than 6 weeks; and
enhance the notification requirements for compensation recipients
proposing to leave Australia.
Schedule 8: accrual of leave or
absence entitlements while on compensation leave
Currently the SRC Act allows an employee absent from work on
compensation leave to accrue long service, sick and recreation leave
Schedule 8 amends section 116 of the SRC Act to provide that an employee is no
longer to take or accrue leave provided by the National Employment Standard while
on compensation leave.
The amendment is consistent with the proposed amendments in the Fair Work
Amendment Bill 2014 currently before Parliament.
Schedule 9: calculating incapacity
Schedule 9 ensures that the calculation of incapacity payments
accurately reflect the employee's earnings prior to injury, in part by changing
the concept of 'normal weekly earnings' in section 8 of the SRC Act to 'average
weekly remuneration' to better reflect an employee's income.
Further, pursuant to Review recommendations,
the proposed amendments introduce 'step down' provisions to taper the amount of
weekly incapacity payments an injured employee is entitled to; and link
incapacity payments to the pension age, rather than cutting off those payments
at a set age.
Schedule 9 also removes the current 5 per cent deduction from weekly
incapacity payments to employees who are accessing superannuation benefits as
public servants are no longer required to contribute to their own
As recommended by the Review,
new subsection 8(11) provides that a suspended employee is taken to be employed
during the suspension for the purposes of subsection 8(10) of the Act. The
effect of this provision is that the compensation paid to an injured worker who
is suspended without pay would be reduced to zero.
Schedule 9 also introduces the concept of 'applicable earnings' which is
the amount that an employee is deemed to be capable of earning. Applicable
earnings are used as part of a formula to reduce the amount of compensation
paid to an injured employee.
Schedule 10: compulsory redemption of
The compulsory redemption of compensation involves the payment of a lump
sum amount to an employee in lieu of the employee's ongoing weekly incapacity
Currently, the compulsory redemption threshold is $110.65.
The amendments in Schedule 10 would increase this amount to $208.91 to align it
with the Military Rehabilitation and Compensation Act 2004.
Schedule 11: legal costs
Schedule 11 proposes to make amendments to control and reduce costs
under the Comcare scheme by capping the amount of legal costs able to be
awarded by the Administrative Appeals Tribunal (AAT). The Schedule of Legal
Costs will be prescribed by Comcare by disallowable legislative instrument.
In addition, Schedule 11 would:
empower relevant authorities to reimburse costs incurred by a
claimant in connection with the favourable reconsideration of a determination
after commencement, subject to certain conditions; and
require all parties to a proceeding (including employers and
third parties) to disclose any evidence that they intend to adduce at least 28
days prior to the first day of hearing.
Schedule 12: permanent impairment
compensation to include non-economic loss
Schedule 12 makes a number of changes to the way that compensation for
permanent impairment is calculated. Certain changes would increase compensation
to particular injured workers, while other changes will result in reduced
Compensation for permanent impairment and non-economic loss is paid as a
lump sum, separate from, and additional to, weekly incapacity payments payable
to an injured employee under the SRC Act.
The amendments in Schedule 12 seek to combine the compensation payments for
and non-economic loss
into one single permanent impairment payment under section 24 of the SRC Act
and increase the maximum permanent impairment payment to $350 000.
Pursuant to Review recommendation 8.5,
Schedule 12 also introduces a new method for calculating permanent impairment
compensation that permits a more equitable distribution of compensation based
on the level of permanent impairment.
Based on Review recommendation 8.2,
the amendments would also treat multiple injuries arising out of the same
incident as a single injury so that the impairment resulting from that single
injury can be combined to achieve a whole person impairment value.
However, the amendments also reduce the level of permanent impairment
employees with a permanent impairment resulting from a single
injury (or multiple injuries arising out of the same incident or state of
affairs) of greater than 10 per cent and less than 40 per cent; and
employees with multiple injuries arising from one incident where
each of the injuries reach the applicable threshold.
Schedule 12 would also exclude access to permanent impairment
compensation for secondary psychological or psychiatric ailments and injuries.
Schedule 13: liability of single
Schedule 13 amends the SRC Act as it will be amended by the Safety,
Rehabilitation and Compensation Amendment Bill 2014.
Specifically, Schedule 13 clarifies the operative of effect of the amendments
as they relate to acceptance of liability and management of compensation
claims. The amendments provide that:
a single employer licence for an eligible corporation or
group employer licence for a Commonwealth authority must authorise acceptance
of liability or management of claims, or both.
Schedule 14: apportionment of
liability for gradual onset injuries
Schedule 14 to the Bill provides that compensation responsibilities for
gradual onset injuries will rest with the most recent employer where employment
by two or more employers covered by the SRC Act has significantly contributed
to the gradual onset injury.
Schedule 15: sanctions for employee
Schedule 15 identifies key requirements imposed on an injured worker by
the SRC Act are 'obligations of mutuality', and that a failure to meet such obligations
of mutuality might include the suspension and cancellation of workers
compensation (including on a permanent and ongoing basis).
Schedule 16: exclusion of schedules
1–15 from defence-related claims
Schedule 16 amends the SRC Act to ensure that the amendments made by
Schedules 1 to 15 and 17 to the Bill, with minor exceptions, do not apply to
defence-related claims. This is because under Part XI of the SRC Act,
defence-related claims are administered by the Military Rehabilitation and
Compensation Commission and the Department of Veterans' Affairs, rather than
Schedule 17: technical provisions
Schedule 17 amends the SRC Act to define a number of terms that are used
in the various schedules to the bill.
Compatibility with human rights
The bill engages the following human rights: the right to equality and
non-discrimination; the rights of persons with disabilities; the right to
social security; the right to work and rights at work; the right to health; the
right to privacy; and the right to a fair hearing.
The bill's statement of compatibility with human rights states that the
bill is compatible with human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Financial impact statement
The explanatory memorandum states that the bill will have no financial
The committee thanks those organisations and individuals who contributed
to the inquiry by preparing written submissions.
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