As you may be aware, from 11 August 2022 changes were made to the South Australian workers’ compensation legislation, the Return to Work Act 2014 (SA) (“RTWA”).
One of those changes is that seriously injured workers may now elect to receive a lump sum payment (a prescribed sum for economic loss, reduced by an Age Factor, at the time of the election and, an Hours Worked Factor, when injured), in lieu of ongoing weekly payments until statutory retirement age and recovery/return to work services.
There is no entitlement for an election lump sum for injured workers suffering from psychiatric injury or consequential mental harm or noise induced hearing loss. The election for economic loss lump sum is also not open to seriously injured workers that is attributable to trauma that occurred before 1 July 2015.
The election for economic loss lump sum is not available to “interim” seriously injured workers.
The election for economic loss lump sum may also be reduced by any weekly payments received after the first 104 weeks of weekly payments received by the seriously injured worker and as from 17 October 2022.
Who is a “seriously injured worker”?
At present, a seriously injured worker under the RTWA is a worker who has undergone an assessment of their degree of whole person impairment that is 30% or more under section 22 the RTWA. Impairment arising from physical injuries or psychiatric injuries cannot be combined to achieve the 30% WPI threshold.
As from 1 January 2023, the threshold for workers with physical injuries to be considered a “seriously injured worker” increases to 35% WPI.
The transitional provisions of the amending legislation to the RTWA provides 2 categories of seriously injured workers:
Category 1 seriously injured worker means a worker who, at any time commencing on 11 August 2022 and ending on 31 December 2022 is (or becomes) an interim seriously injured worker.
Category 2 seriously injured worker means a worker who, at any time during 1 January 2023 and ending on 31 December 2023, becomes an interim seriously injured worker.
By operation of the transitional provisions to the RTWA, Category 1 (interim) seriously injured workers who undergo the actual whole person impairment assessment (or at least one of the final whole person impairment assessments) before 1 January 2024, are eventually determined to be a seriously injured worker, will be entitled to make an election for economic loss lump sum.
Greatest seriously injured workers
For seriously injured workers who are suffering a 50% WPI or more, their election to receive, economic loss lump sum must be referred to the South Australian Employment Tribunal, who may approve the making of an election for economic loss lump sum by the worker.
First decision of the Tribunal for 50% WPI or more seriously injured workers
In the case of Kluciejasz, His Honour Deputy President Judge Crawley had to consider whether the worker’s election to receive economic loss lump sum was in his best interests.
As Mr Kluciejasz had reached 67 years of age at the time of his election to receive economic loss lump sum, there was no ongoing entitlement to weekly payments which could reduce the election for economic loss lump sum. Mr Kluciejasz was essentially foregoing any ongoing entitlement to gardening services as they are considered recovery/return to work services under the RTWA.
Mr Kluciejasz wanted to use part of the modest election economic loss lump sum he would receive, if approved, towards renovations to his home as well as trip back to his homeland of Ukraine. Those desires were supported by his treating medical team and Mr Kluciejasz received competent legal advice and financial advice.
Mr Kluciejasz demonstrated to the Tribunal a clear understanding of the effect of his election to receive an economic loss lump sum and was not inhibited by any legal incapacity to make decisions in his own interest.
Consequently, the Tribunal approved the worker’s election.
Workers compensation claims are complicated. Injured workers are generally better off by proactively seeking legal advice. Seriously injured workers, or those that become a seriously injured worker are likely to receive an offer of election for economic loss lump sum from their compensating authority between now and 1 January 2024.
Because of the increase to the seriously injured worker threshold for physical injuries as from 1 January 2023, there will naturally be some urgency of injured workers to be assessed prior to 31 December 2022.
For those who do receive offers of an election for economic loss lump sum, the worker if interested in the election for lump sum, is required by legislation to obtain legal advice, financial and medical advice. The regulations require the compensating authority to pay up to a certain amount for those professional advices and, if referred to the Tribunal for 50% WPI or more seriously injured workers, up to $2,464 (indexed) for costs in obtaining legal representation.
Seriously injured workers will suffer lifelong injuries. Elections to receive economic loss lump sum, in lieu of weekly payments and/or recovery/return to work services, must be considered carefully. Elections to receive a lump sum, instead of ongoing benefits, might be of interest to seriously injured workers who:
- have reached retirement age at the time of their election but are still within their first 104 weeks of incapacity; or
- have made a return to work, or alternative work, earning above their notional earnings entitlement.
Successfully navigating a workers compensation claim can make a significant difference to your quality of life and how you provide for your family.
If you’re wondering whether you have a claim, you need to be aware that time limits can apply. Contact us as soon as possible while the claim is still current. We’ll arrange an obligation-free first interview with you