8.1 This Chapter deals with:

• the form and payment of compensation for loss of earning capacity;
• the commencement and termination of benefits; and
• assessment of permanent incapacity.

I. THE FORM AND PAYMENT OF COMPENSATION

A. Periodic Payments

8.2 Chapter 3 discussed the criticisms of the common law principle which requires compensation for future loss to be provided in the form of a lump sum assessed on a once-and-for-all basis. In the context of compensation for economic loss, including compensation for loss of earning capacity or potential earning capacity, the force of these criticisms is overwhelming. It is noteworthy that even supporters of the common law negligence action concede that the present system of once-and-for-all assessment requires change. Some of the advantages of a system of periodic payments are outlined below.

• Avoidance of delay: Compensation can be provided promptly after an application is lodged, since it is unnecessary to wait for the victim’s injuries to stabilise. This relieves the accident victim and his or her family from financial hardship during the critical period following the accident. The financial security provided by rapid compensation encourages the accident victim to undertake rehabilitation and increases the likelihood that rehabilitation will prove effective.
• Avoidance of under and over-compensation: Periodic payments can be tailored to the changing circumstances of the accident victim. Thus, for example, an injured person whose condition deteriorates some years after the accident will be entitled to compensation for loss of any earning capacity attributable to the accident. This overcomes the problem of accurately estimating the future economic losses of an injured person, and prevents the under and overcompensation which is an inherent part of the common law system.
• Investment: A system of periodic payments relieves the injured person of the responsibility and worry of managing the lump sum to provide for his or her long-term needs arising out of the accident. Participants in the Lump Sum Survey and the Traffic Accident Study referred to the anxiety which they experienced in having to manage their lump sums. ¹
• Double compensation: Periodic payments minimise the risk of the community paying “double compensation when lump sum awards are exhausted or diminished and the injured person has to resort to the social security system for support.
• Compensation which meets loss: Periodic payments provide compensation in a form which matches the actual losses suffered by the accident victim since the injured person would, if the accident had not occurred, receive wages or salary on a periodic basis rather than in the form of a lump sum.

8.3 For these reasons we recommend that compensation for loss of earning capacity, whether to earners or non-earners, should be paid on a periodic basis, preferably fortnightly in arrears. The selection of a fortnight as the relevant period for payment is designed to meet the needs of the injured person promptly, but to avoid the increased administrative costs which would follow from the adoption of a shorter period. The social security system provides for fortnightly payment. Payments should be made in arrears rather than in advance, to avoid the overcompensation which would inevitably occur if an injured person returned to work before termination of the period for which payment was made. Allowing for the five day waiting period (paragraphs 8.41-8.44) an injured person should normally receive his or her first payment approximately two weeks after the accident. We intend that the first payment should be made at the end of the first week for which the person is entitled to receive compensation rather than at the end of the second week.

B. Redemptions

8.4 A further question which arises is whether the Transport Accidents Scheme should permit the redemption of periodic, earnings-related compensation payable for loss of earning capacity. If redemption is permitted, an injured person who exercises the option to redeem would receive a sum representing the capitalised value of the periodic payments he or she would otherwise receive. Assuming that the redemption operated in a similar way to those made under the workers’ compensation system, he or she would be unable to receive any further payments for loss of earning capacity, even if his or her condition deteriorated. The Working Paper discussed three possible approaches to this issue. ² These were:

• a complete prohibition of redemptions;
• provision for redemption by agreement between the injured person and the compensation authority, without imposing any statutory restrictions; and
• provision for redemptions to be made by agreement between the injured person and the compensation authority in limited circumstances specified by statute (these could include the additional requirement of approval by an independent body).

8.5 Apart from the workers’ compensation system no-fault compensation schemes have generally taken the third approach restricting the availability of redemptions to limited situations. This approach is consistent with the criticisms of providing compensation for loss of earning capacity in the form of a lump sum assessed on a once-and-for-all basis. For example, under the New Zealand Accident Compensation Act 1982, redemptions are permitted only in “very exceptional circumstances”, ³ and in practice very few redemptions are allowed in that country. The National Rehabilitation and Compensation Bill 1977 (Cth.), allowed redemptions in a broader, although still limited, range of circumstances. Specifically the Bill provided for redemptions where:

(a) the beneficiarys incapacity was not likely to become total incapacity;

(b) the beneficiary intended to use the lump sum in a manner particularly advantageous to the beneficiary; and

(c) in all the circumstances of the case benefits should be paid by way of a lump sum payment. ⁴

8.6 The New South Wales Workers’ Compensation Act, 1926, permits redemption of claims for periodic compensation. The liability of the employer or insurer to make weekly payments

... may, with the consent of the worker, be redeemed... by the payment of a lump sum, determined by the Commission, having regard to any dispute as to liability to pay compensation under this Act, and the injury, age and occupation of the worker at the time of the occurrence of the injury, as well as to his diminished ability to compete in an open labour market. ⁵

The practice relating to redemptions in New South Wales has changed markedly in recent years, with seriously injured workers increasingly receiving lump sum compensation rather than periodic payments. During the period 1972-73 to 1981-82 the amounts paid by licensed insurers in the form of redemptions (adjusted to 1981 values) increased from $13.1 million to $95.5 million. To put the matter another way, 7.3 per cent of payments of licensed insurers in 1972-73 were by way of redemptions but this had increased to 23.7 per cent in 1981-82. ⁶

8.7 Redemptions have flourished in New South Wales for a variety of reasons. For example, by redeeming a claim in a serious case an insurer removes a potential long term liability from the books and gains certain other advantages by access to the Insurers’ Contribution Fund.⁷ The worker has the apparent advantage of a tax-free lump sum (although generally modest in size) and knows that he or she can later transfer to the social security system for income maintenance, or resume paid employment without incurring a financial penalty. The advantages from the worker s point of view may be increased where he or she is deemed to be totally incapacitated because of the employees failure to provide “light duties”, and the worker considers that he or she is likely to find other employment in the future.

8.8 While redemptions seem to offer advantages to workers and insurers, the advantages to the community are by no means as obvious. Redemptions transfer some of the cost of compensating injured workers to the social security system. This may produce savings for insurers and employers, but not for the general body of taxpayers. More importantly, redemptions often leave injured workers in an extremely vulnerable financial situation. The Lump Sum Survey, for example, showed that six years after redeeming their entitlement, approximately 60 per cent of respondents had incomes of less than $150 per week or were reliant on some form of social security. ⁸

8.9 We have discussed at length the reasons for providing compensation for loss of earning capacity on a periodic basis and for medical, hospital and rehabilitation services to be provided as and when required. If redemptions were quite freely available (with or without the consent of an independent body), it is likely that a significant proportion of victims would choose to take an immediate lump sum. The evidence from our surveys and the experience of the workers’ compensation system suggest that this choice will often be made against the long-term interests of the individual. ⁹ Moreover, redemptions in serious cases (assuming they cannot be reopened) raise virtually all the problems of speculative assessment of loss, arbitrary calculations and anti-rehabilitative effects of the current common law system.

8.10 One approach is to require the consent of an independent tribunal to redemption. But this imposes an impossible burden on a tribunal, which is faced with the task of predicting whether the injured person will manage his or her affairs successfully. In some cases the prediction will be right, in many it will be wrong. In short, the available evidence does not support the view that a consent requirement will avoid the obvious problems associated with redemptions. Accordingly, we recommend that, in general, redemption of periodic compensation for loss of earning capacity or other losses should not be permitted.

8.11 Some submissions suggested that the payment of a lump sum could help accident victims to rehabilitate themselves. Professor R Jones, for example, argued that seriously injured accident victims should be able to redeem.

Such redemption would then allow a person who in the eyes of the Board is unemployable but who, with the motivation that is so frequently seen with human endeavour, will find some remunerative employment. ¹⁰

In some cases the payment of a lump sum, for example, to assist the accident victim to establish a small business, may be in his or her interests. But he or she should not be obliged to sacrifice long-term financial security in return for receiving this lump sum. It is more appropriate for the Corporation to have power to provide loans, where this will assist in the rehabilitation of an accident victim. This issue is discussed further in Chapters 9 and 10. In addition the Scheme accepts that lump sum compensation may be appropriate for some purposes in particular in relation to compensation for permanent physical disability.

8.12 One exception to the general principle can be justified. When, for example, a person Suffers a small continuing loss of earning capacity, perhaps a few dollars per week, the cost of paying periodic compensation indefinitely may place a substantial burden on the Scheme, yet redemption would pose little threat to the long-term well-being of the injured person. In these circumstances, the Corporation should have a discretion, with the consent of the injured person, to commute the entitlement to periodic compensation The Corporation should redeem only where the physical condition of the injured person is stable. However, to protect a person who redeems his or her entitlement and whose physical condition, and therefore his or her earning capacity, subsequently deteriorates, there should be power to reopen the redemption in such circumstances. Thus we recommend that the Corporation should have power, with the consent of the injured person, to redeem its liability to pay periodic compensation for loss of earning capacity to an injured person when the amounts involved are so low that the cost of providing compensation unnecessarily burdens the administration of the scheme. Where such a redemption takes place and subsequently the injured person’s capacity for work is significantly reduced, (whether through a deterioration in physical condition or otherwise) the Corporation should be required, on application, to resume appropriate periodic compensation, making allowances for the lump sum already paid. This recommendation is consistent with the approach adopted in the Northern Territory legislation. ¹¹

C. Gross Earnings

8.13 The Working Paper suggested that compensation for loss of earning capacity should be calculated by reference to the gross (before tax) earnings of the incapacitated person, rather than his or her net (after tax) earnings. This approach was different from that taken under the Victorian motor accidents scheme, which calculates compensation for loss of earning capacity by reference to net earnings, on the assumption that payments will be free from tax in the hands of the accident victim. ¹² In Slaven v. Federal Commissioner of Taxation, ¹³ the Supreme Court of Victoria held that this assumption was correct Justice O’Bryan held that payments for loss of earning capacity were provided as compensation for the loss of a capital asset, and consequently were not taxable as income. This decision and reasoning were confirmed on appeal to the Full Court of the Federal Court. ¹⁴

8.14 By contrast, in Tasmania, under the Motor Accidents (Liabilities and Compensation) Act 1973, disability allowances paid to injured earners are calculated by reference to gross weekly earnings. Since 1 January 1983, the Motor Accidents Insurance Board has been authorised to make tax instalment deductions from the weekly compensation payments. ¹⁵

8.15 There have been few submissions criticising the proposal that compensation should be assessed by reference to gross pre-accident earnings. However, it has been criticised on the ground that it involves Commonwealth taxation of revenue which is provided through State sources of funding. ¹⁶ While the Working Paper proposal has this result, it has several advantages compared with the Victorian approach, and these are referred to in the following paragraph A more satisfactory solution to the Commonwealth-State problem would be achieved by negotiations between the State and the Commonwealth. The negotiations would need to take into account a number of financial consequences of the introduction of a transport accidents scheme in New South Wales. As discussed in Chapter 17, these include:

• savings to the Commonwealth social security system, which will no longer bear the cost of providing invalid pensions and sickness benefits to transport accident victims;
• medical, hospital, rehabilitation and other services that otherwise would have to be met by the Commonwealth; and
• Commonwealth revenue derived from taxation of earnings related benefits.

Matters of this kind can only be satisfactorily resolved on a government-to-government level and we later recommend that the State enter into negotiations with the Commonwealth to secure a contribution to the Scheme. ¹⁷

8.16 There are three main reasons for not departing from the view that payments should be calculated by reference to gross earnings.

• First, and most important, the earnings received by the incapacitated person before the accident and those which would have been received had the accident not occurred, are subject to income tax. In principle the compensation should take the same form as the income it is intended to replace. This is the approach taken in relation to New South Wales workers’ compensation weekly payments. ¹⁸
• Secondly, there is no guarantee that compensation for loss of earning capacity paid under the New South Wales Transport Accidents Scheme would be covered by the principle in Slaven v. Federal Commissioner of Taxation. The decision in that case turned upon particular features of the Victorian scheme. Even if the decision in Slaven v. Federal Commissioner of Taxation were applicable to compensation under the New South Wales scheme, the Commonwealth Income Tax Assessment Act 1936 could still be amended to make compensation for loss of earning capacity taxable. If payments were made on a net basis, and taxed by the Commonwealth, accident victims would not receive adequate compensation for their loss of earning capacity.
• Thirdly, the problems of integrating the policies of the Commonwealth and the States in areas of compensation taxation and welfare should be overcome by negotiations designed to achieve coordination rather than actions designed simply to limit the expense incurred by one Government.

8.17 Accordingly we recommend that compensation for loss of earning capacity should be assessed by reference to the gross earnings of the incapacitated person. The concept of notional earning capacity, which has been applied to non-earners, should also be treated as referring to notional gross earning capacity. We would therefore expect that periodic payments for loss of earning capacity of non-earners would, like those of earners, be taxable. We recognise, however, that it is impossible to be certain about the status of payments under the Scheme, since the administration and interpretation of the Income Tax Assessment Act is a matter for Commonwealth authorities and the courts. In particular, there may be uncertainty about the status of compensation for non-earners. This has a notional element in it and this possibly could be characterised as compensation for loss of earning capacity rather than replacement of lost earnings even though paid on a periodic basis. Clearly anomalies among different classes of claimants must be avoided. If the assumption proves inaccurate remedial action will be required, for example by adjusting the level of benefits.

D. Proportion of Loss Compensated

8.18 In the Working Paper, ¹⁹ we suggested that compensation for loss of earning capacity should be paid in respect of 80 per cent of the total loss sustained. There were two main reasons for this conclusion.

• Earners have certain work-related expenses (such as, the cost of travelling to and from work) not incurred by people unable to work. Thus, Compensation covering the total loss of earnings would make some incapacitated people financially better off than when they were working. It is a recognised principle of the common law that damages for loss of earning capacity do not include expenses saved as the result of the person no longer working.
• Although an injured person’s incentive to work may be affected by a wide variety of factors, the payment of compensation covering the total loss of earnings may, at least in some cases, discourage injured people from attempting to rehabilitate themselves and return to work.

The suggestion that compensation be provided in respect of 80 per cent of the loss was designed to give general effect to the principle of restitution, while at the same time providing an incentive for a return to the workforce.

8.19 Several other compensation schemes adopt a similar approach. The Australian Woodhouse Report favoured compensation for lost earning capacity at the rate of 85 per cent of actual lost earnings. ²⁰ The New Zealand national compensation scheme and the Tasmanian no-fault motor accidents scheme apply a rate of 80 per cent. ²¹ By contrast, the New South Wales workers’ compensation system compensates for 100 per cent of the award rate of pay lost but only for the first six months, though this may not represent full loss of earnings since the injured person’s earnings may have exceeded the award rate. ²² The Victorian no-fault motor vehicle accidents scheme also provides 100 per cent of after-tax earnings, but this is subject to a relatively low maximum. ²³

8.20 The submissions received on this proposal were divided. Some argued that the common law provides full compensation for loss of earning capacity, and criticised the suggestion that only 80 per cent of the loss should be compensated. ²⁴ These submissions did not take into account the deduction generally made for contingencies or so-called vicissitudes of life, and the effect of the discount rate which both operate in practice to reduce common law damages for loss of earning capacity below the theoretical level of “full” compensation. Nor did they consider the further reduction which frequently occurs in the high proportion of cases settled out of court.

8.21 Other submissions took the view that provision of less than full compensation would ensure that injured people out of the workforce were not better off financially than when they were working, and would provide an incentive to return to the workforce. For example, the Government Insurance Office submission commented that “the principle that the benefit should be less than the weekly wage rate... will assist rehabilitation in appropriate cases”. ²⁵

8.22 We remain of the view that the Scheme should not provide compensation for the total loss of earning capacity suffered by the incapacitated person. Accordingly, we recommend that a person who is totally incapacitated for work as a result of a transport accident should receive compensation at the rate of 80 per cent of the loss of earning capacity sustained. ²⁶ The same principle should apply to compensation paid to non-earners in respect of loss of earning capacity, although the standard of earning capacity in the ordinary case is simply a notional figure. Thus, in a case of total incapacity compensation should be paid at the rate of 80 per cent of the notional earning capacity.

8.23 If compensation is paid at the rate of 80 per cent of the loss of earning capacity there is a limited financial incentive for an incapacitated person to return to work, whether on a full-time or part-time basis. Of course there are many other factors that will influence the decision to resume employment, including the effectiveness of rehabilitation programs, the requirements of the Scheme and the desire of injured people themselves to continue their careers. Chapter 9 deals in detail with the rehabilitation program and with incentives to prospective employers and disabled people to create or take advantage of employment opportunities. Nonetheless there is room for an additional incentive whereby incapacitated people returning to the workforce are compensated for a higher proportion of their residual loss of earning capacity than 80 per cent. This would not only provide a financial incentive to resume (or take up) employment, but would also recognise the fact that someone who is in employment for a significant part of the working week incurs greater expenses than someone who remains, albeit involuntarily, out of the workforce. It is important to recognise that the resumption of employment, even on a part-time basis, may be the critical factor in rehabilitation.

8.24 Accordingly, we recommend that the Corporation should develop a program under which a person incapacitated in a transport accident, who resumes employment for a substantial part of the working week, should receive compensation for a proportion of the loss of earning capacity sustained higher than 80 percent. We suggest(without recommending) that the program could take the following form.

Where a person incapacitated in a transport accident resumes employment but has suffered a loss of earning capacity, the proportion of the loss compensated should be:

• where he or she is employed for 11-15 hours per week-85 per cent of the loss;
• where he or she is employed for 16-20 hours per week-90 per cent of the loss;
• where he or she is employed for 21-25 hours per week-95 per cent of the loss; and
• where he or she is employed for more than 25 hours per week-100 per cent of the loss.

E. The Ceiling

8.25 The decision to compensate both earners and non-earners for their loss of earning capacity raises the question of whether any limit should be placed on the amount of compensation payable. Chapter 5 referred to two competing objectives:

• the provision of full compensation for loss of earning capacity to the vast majority of transport accident victims; and
• the avoidance of the inequitable effects of the present compulsory third party insurance system, which is funded by flat-rate third party premiums, but pays earnings-related benefits.

It was pointed out there that the inequitable effects of the present system could be overcome by the introduction of a transport accidents scheme funded by earnings-related contributions (for example, a tax on income) but that in the short term this was unlikely to occur.

8.26 The Working Paper suggested a ceiling on earnings by reference to which compensation would be payable of 125 per cent of average weekly earnings. At that stage average weekly earnings were defined by reference to an index covering weekly total earnings for all New South Wales employees. This would produce a figure of $525 per week in June 1984.

8.27 Some submissions argued that there should be no limit on compensation payable. For example, the New South Wales Branch of the Australian Medical Association Submission made the following comment.

The Commission’s proposed imposition of the limit on the level of compensation payable for economic loss, ie. 125 per cent of average weekly earnings by New South Wales employees, is grossly unfair to those of the community who earn more than the average weekly wage... Some comment must be made, if only because the Branch’s members generally earn more than average weekly earnings and would be greatly disadvantaged as accident victims compensated by the proposed scheme ... A significant proportion of the community earn more than the average weekly wage and, for them, if they are injured, appropriate living standards will not be maintained, mortgages and other out goings will not be met and there will develop a major complication in the emotional well being and potential for rehabilitation of such an injured party. ²⁷

Another group of submissions, which criticised earnings-related compensation and supported a welfare or disability-based scheme, implicitly supported the imposition of a ceiling on compensation for loss of earning capacity if, contrary to their view, an earnings-related approach was adopted. ²⁸ Other submissions took the middle ground, accepting a ceiling but arguing that it should be higher. For example, the Motor Cycle Council of New South Wales argued in favour of a higher ceiling which would ensure “that very few people would suffer hardships as a result of their incapacity to earn their previous income”. ²⁹

8.28 We have maintained the view that, if the Scheme is to be funded otherwise than by earnings-related contributions, the inequity should be minimised by imposing a ceiling on compensation for loss of earning capacity. However, the ceiling suggested in the Working Paper is, in our view, too low. Several unions consulted after the release of the Working Paper commented that the ceiling which we proposed was not high enough to cover the earnings of many of their members. In part, this was a consequence of the average weekly earnings index selected in the Working Paper. The index selected, that of weekly total earnings for all New South Wales employees, includes both female and part-time earners. Since the earnings level of both groups is considerably lower than that of full-time adult male employees, ³⁰ it does not reflect the average weekly earnings of that latter group. A more appropriate index would be average weekly earnings for adult male full-time employees in Australia. The figure for Australia was selected in preference to that for New South Wales, because an Australia wide index allows benefits to be integrated nationally should the opportunity arise. Despite considerable changes in the composition of the labour force, adult male full-time workers are still in the majority. ³¹ In addition, families supported by a single male breadwinner are slightly more common than families with both partners working, and in families with two earners, the earnings of the male are generally higher than those of the female. The index selected should reflect the workforce experience of Australian families.

8.29 In addition to selecting a different index, we propose that the ceiling should be increased to 150 per cent of average weekly earnings, as defined in paragraph 8.26 ($630 at June 1984). Accordingly, we recommend that there should be a limit on the compensation payable to earners in respect of loss of earning capacity. The maximum earning capacity by reference to which compensation should be assessed should be 150 per cent of AW E. Since it has already been recommended (paragraph 8.22) that compensation should normally be paid at the rate of 80 per cent of lost earning capacity, the maximum compensation actually payable will be 120 per cent of AWE.

8.30 The ceiling of 150 per cent of AWE should be high enough to cover the vast majority of earners. Table A.15 in Appendix A indicates that only 6.2 per cent of New South Wales male full-time employees have earnings above this ceiling. An even smaller percentage-4 percent-of all employees (including female full-time and all part-time employees) receive earnings above the ceiling. This information relates only to employees. Since the earnings of the self-employed are consistently lower than those of the employed, these figures are likely to overstate the proportion of all earners who will be above the ceiling.

Top-Up Insurance

8.31 A further argument for imposing a ceiling on the loss of earning capacity in respect of which compensation is payable is that it is open to higher income earners who wish to cover themselves against loss of earnings in excess of the ceiling to take out private insurance. We had a number of discussions with insurance bodies relating to the cost of such additional cover on the private market. While earners can at present purchase lump sum disability insurance cover for a relatively low premium, the insurers were reluctant to provide estimates on the cost of indexed periodic payments for loss of earning capacity covering the shortfall between the proposed ceiling and the actual loss of earning capacity. If such insurance does not become available on the private market, it should, if possible, be offered by the Corporation. Although there may be difficulties in devising a suitable insurance program, the Corporation should be better placed than private insurers to offer coverage, since administration of the insurance program can be linked to the no-fault scheme itself and take advantage of the experience of that Scheme. We recommend that the Corporation should investigate the practicability of providing top-up insurance for people with an earning capacity in excess of the maximum in respect of which compensation is payable. The top-up insurance could be offered in the form of indexed periodic payments for loss of earning capacity or, if this is not practicable, as a lump sum. If such insurance is offered by the Corporation, arrangements could be made for a person to accept the offer and pay the premium at the same time as his or her motor vehicle is registered. If this is inappropriate, for example, because the person does not own a motor vehicle, consideration should be given to making such insurance available to anyone who wishes to take it up.

Partial Loss of Income by High Earners

8;32 A particular problem arises in the assessment of compensation for partial loss of earning capacity if earnings-related compensation is subject to a ceiling. The question is whether an injured person who suffers a partial loss of earning capacity, but whose post-accident earnings are above the limit, should be able to claim under the Scheme. There are two approaches. The first is to compensate the injured person by reference to the actual loss of earning capacity, subject only to the overall limit on the amount of compensation payable. Thus, if a person’s earning capacity is reduced from 300 per cent to 200 percent of AWE, that person would receive compensation for 80 per cent of the loss regardless of the fact that his or her residual earning capacity is above the maximum by reference to which compensation can be assessed (150 per cent of AWE). The second approach is to compensate the injured person for loss of earning capacity only when his or her earnings after the accident are reduced.

F. Indexation of Compensation

8.35 Several submissions expressed concern that compensation provided under the Scheme should maintain its real value, that is, not be eroded by inflation. Reference was made particularly to the failure of the New Zealand scheme to provide for automatic indexation of benefits and thus its failures to ensure maintenance of the real value of those benefits. ³² The Gair Report in New Zealand recognised clearly that the maintenance of the real value of benefits is of central importance both to the success and acceptability of a new statutory scheme of no-fault compensation.

[I]f the public is to have confidence in new compensation schemes ... all doubts should be removed as to the danger of benefits being eroded by changing money values. ³³

We strongly endorse this view. It is fundamental to the Transport Accidents Scheme that the legislation provides for automatic indexation of monetary benefits.

8.36 Legislative provision for automatic indexation has another advantage. Any scheme, including the common law, is not immune from political interference, should Governments decide, for example, that benefits must be reduced in order to save costs. Thus automatic indexation cannot guarantee that the Scheme will not have to reduce the benefits. However, if the policy of automatic indexation is incorporated into the legislation, with benefits being framed by reference to the standard of average earnings, real reductions in benefits will require amendments to the governing legislation. The need for amending legislation will make it more difficult for reductions in benefits to occur without preliminary debate in the community and the opportunity to assess whether the proposals are consistent with the below the maximum of 150 per cent of AWE. On this approach the injured person in the example would receive no compensation since his or her earning capacity would remain above the maximum despite the accident.

8.33 There are arguments in favour of each approach. It can be argued that the first favours partially incapacitated earners over those whose earning capacity is totally destroyed. A high income earner whose earning capacity has been destroyed will receive compensation in respect of a maximum earning capacity of 150 per cent of AWE. By contrast, a partially incapacitated person whose post-accident earning capacity is greater than the limit will receive compensation for 80 per cent of the loss of earning capacity, even though the combination of continued earnings and compensation may give him or her an income far in excess of the maximum compensation payable under the Scheme. On the other hand, the difference between the position of the totally and partially incapacitated high income earner derives from the latter’s residual earning capacity. The partially incapacitated person has still suffered a loss of earning capacity and arguably should not be denied compensation simply to equalise his or her position with that of the person suffering total incapacity.

8.34 On balance we prefer the second argument, as giving fuller effect to the restitution principle. Thus we recommend that where a person suffers a partial loss of earning capacity, irrespective of the amount of the person’s residual earning capacity, he or she should be compensated for the loss sustained, subject to the overall limit on compensation payable in respect of loss of earning capacity (paragraph 8.29).

Objectives of the Scheme. For these reasons we recommend that the legislation should embody the principle of automatic indexation. Accordingly, periodic compensation for loss of earning capacity should be indexed and adjusted at six monthly intervals by reference to changes in AWE. In assessing the extent of loss of earning capacity the Corporation should make appropriate adjustments to pre-accident earnings or other standards used in the assessment to take account of movements in AWE.

8.37 An indexation model based on average weekly earnings has been adopted in preference, for example, to the consumer price index, because the benefits provided are earnings-related rather than linked directly to the cost of living. Adjustment on a six-monthly basis is, in our view, sufficiently frequent and administratively less cumbersome than quarterly adjustments. It should be noted that the New South Wales workers’ compensation system also provides for automatic adjustment of periodic payments and some lump sums in line with a specified index of average weekly earnings. ³⁴

G. Assignability of Benefits

8.38 Compensation for loss of earning capacity, and other entitlements to continuing benefits under the Scheme, are intended to be personal to the disabled or incapacitated person. We recommend that compensation for loss of earning capacity and other benefits under the Scheme should not be capable of assignment by the person entitled to the compensation or other benefits. This is not intended to exclude the special arrangements for transport accident victims requiring protective measures, such as the appointment of a trustee to manage compensation payments for young children or people suffering mental disability. Nor does it exclude payment by the Corporation directly to the dependent spouse and children of a permanently unconscious victim (paragraph 11.56)

II. COMMENCEMENT AND TERMINATION OF BENEFITS

A. Commencement of Benefits

8.39 Under New South Wales law, children must attend school until the age of 15 years, ³⁵ although in special circumstances they may be able to leave earlier. ³⁶ In October 1983 less than 4 per cent of the Australian civilian population aged 15 years was in full-time employment The proportion increased to 15 per cent among 16 year olds and steadily rose to about 58 per cent by the age of 19 ³⁷ and 65 per cent by the age of 24 years. ³⁸ The labour force participation rates are, of course, higher because of the inclusion of people in part-time work and those who are unemployed. ³⁹ Under Commonwealth legislation only people aged 16 years or more are eligible for unemployment benefits. ⁴⁰

8.40 In accordance with policies in other areas we recommend that compensation for loss of earning capacity should not commence until the injured person has attained the age of 16 unless, at the date of the accident, the person was under that age but was in fun-time employment.

B. Waiting Periods

1. The First Five Days

8.41 As shown in the Adelaide Traffic Accident Survey, discussed in Appendix A, ⁴¹ a relatively large number of transport accidents involve either no resulting injury or only minor injuries. Fifty-six per cent of people recorded in the Survey suffered some injury, but of these some 60 per cent were only minor injuries. ⁴² This is consistent with New South Wales Traffic Accident Research Unit data which shows that of all people reported by police as injured in traffic accidents in 1983, only 28 per cent were injured seriously enough to be admitted to hospital. ⁴³ It is therefore likely that a relatively large proportion of transport accident victims suffer only very short-term incapacity. Again the Adelaide Traffic Accident Survey is consistent with this conclusion. ⁴⁴

8.42 The difficulties of compensating the large volume of victims sustaining minor injuries has been repeatedly stressed. The Australian Woodhouse Committee, for example, observed that

... if compensation were to begin as from the day an incapacity first commenced, very large numbers of minor or short-term... injuries would press down upon the fund and its administrative processes ... There would be criticism too that personal initiatives to overcome the small troubles had been taken away. Of equal importance, there would be a heavy added financial burden put upon a scheme designed to concern itself with more pressing claims. ⁴⁵

These reasons led us to suggest, in the Working Paper, that there should be a one week waiting period before benefits are payable under the Scheme. The Paper noted that the workers’ compensation system pays compensation during the first week of disability, but pointed out that arguably this could be justified on the ground that it provides an incentive to employers to improve safety standards. ⁴⁶ This argument does not apply to transport accidents as there is no identifiable group creating the risk of such accidents in the same way as employers can be said to create the risk of work-related injuries. A waiting period of one week, which applies in the Tasmanian and Northern Territory schemes, ⁴⁷ creates a relatively small burden for injured earners, most of whom will be covered by sick pay for the first few days of incapacity. ⁴⁸

8.43 Some submissions criticised the proposal for a waiting period, referring especially to the fact that the common law which was being replaced compensated for the whole period of incapacity. ⁴⁹ While common law damages, if awarded in full, cover lost earnings including those in respect of the first few days incapacity, the indisputable reality is that the waiting period for damages under the common law can usually be measured in months or years rather than days. It is true that a no-fault scheme supplementing the common law could cover loss of earnings from the first day of incapacity, although this would increase costs significantly. We adhere to the view that a departure from the restitution principle is warranted for the first week (or five working days) of incapacity. Under any compensation scheme resources are limited and priority should be given to those sustaining long-term incapacity rather than those suffering minor injury. Thus we recommend that compensation for the earner’s loss of earning capacity should not be paid in respect of the first five working days from the date of the accident or the first incapacity caused by the accident (whichever period expires later).

8.44 The period of five working days, rather than a week as in New Zealand, ⁵⁰ has been chosen because this will apply more uniformly, without regard to the fortuitous occurrence, for example, of public holidays. We recommend, however, that the waiting period should apply only once in respect of an incapacity arising from a transport accident. For example, a person who is injured in a transport accident may return to work after five working days of incapacity. Subsequently the injury may prevent that person from working for another period. In such a case the injured person should be entitled to compensation for loss of earning capacity from the first day of the subsequent incapacity. The recommendation does not affect the entitlement of a transport accident victim eligible to claim workers’ compensation for the first five days of incapacity (paragraph 14.94).

2. “Earners” Not in Workforce

8.45 The definition of earner put forward earlier includes transport accident victims who were not working at the time of the accident or perhaps for a considerable period before that a longer waiting period for compensation for loss of earning capacity should apply to such people. The major reason is to reduce the incentive for a person who is not in the workforce to maximise incapacity in order to claim relatively generous monetary compensation during a period when he or she is unlikely to have been employed in any event. We think the risks are much less significant in relation to incapacity which continues for at least four weeks. Accordingly, we recommend that where a person, although classified as an earner, has not been in employment at any time during the eight weeks preceding the accident, compensation for the earner’s loss of earning capacity should not be paid in respect of the first four weeks from the date of the accident or from the date of the first incapacity caused by the accident (whichever expires later). People in this category should not be required to wait a further five working days to receive compensation.

8.46 Some transport accident victims will be deemed to be earners solely because, at the date of the accident, they had firm arrangements to enter the workforce (paragraph 7.12).In these cases we recommend that compensation for loss of earning capacity should commence from the date on which that person, but for the accident, would have commenced employment. This should be subject to a further waiting period of five working days, but not to the four week period referred to in the previous paragraph.

C. Termination of Benefits

1. General

8.47 Compensation for loss of earning capacity should cease on:

• the termination of the incapacity; or
• the death of the incapacitated person.

2. Age Limits

8.48 The Working Paper proposed that entitlement to compensation for loss of earning capacity should generally cease at age 65. ⁵¹ It was correctly put in submissions that some people over this age continue to work. ⁵² In October 1983, about 1 per cent of the Australian civil labour force was aged 65 or over. ⁵³ The workforce participation rate of people 65 or over (including full-time, part-time and unemployed people) was 5.2 per cent. ⁵⁴ Fifty-seven per cent of those who were employed were still employed full-time in this age group. ⁵⁵ We have modified the proposals to take account of these facts. Subject to the following recommendations, we recommend that compensation for loss of earning capacity should continue until the incapacitated person attains the age of 65. This applies to benefits for loss of earning capacity for both earners and non-earners. However, subject to the recommendation in paragraph 8.50, where the incapacitated person is an earner and has attained the age of 61 but not 70 when the incapacity commences, compensation for loss of earning capacity should continue for a period of four years from the commencement of the incapacity, provided that compensation should not continue beyond the age of 72. Where the incapacitated person is an earner and has attained the age of 70 when the incapacity commences, compensation should continue for a period of two years from the commencement of the incapacity.

8.49 We appreciate that the age limit of 65 (subject to extension in certain cases) for both men and women is different from the age qualification for the age pension which is 60 in the case of women and 65 for men. There is an argument that entitlement to compensation should cease at the time when the accident victim becomes eligible for the pension. However, it is not appropriate to distinguish between males and females in relation to their entitlement under the Scheme. As equality in career opportunities and the workplace comes closer to realisation the differences in entitlement in other areas are likely to diminish. Of course compensation for loss of earning capacity will be subject to the same means test for social security purposes as other income and this will presumably reduce or eliminate the entitlement to an age pension or other benefit.

8.50 In the case of people working at the age of 65 or over, further questions arise about imminent retirement. For example, a 67 year old earner may be injured in a transport accident on the way home from his or her retirement party. Is it fair, in these circumstances, to continue earnings-related periodic compensation for a further four years? We think that it is not and we recommend that where an earner who has attained the age of 61 is injured, compensation for loss of earning capacity should not be paid or continue beyond the age of 65 or beyond the age at which he or she would have left the workforce permanently had the accident not occurred (whichever is later).

8.51 There are, of course, many people who have permanently retired before the age of 65. Under the recommendations, these people would still receive compensation for loss of earning capacity in the same manner as other non-earners. For example, a man aged 58 who has retired from his job would be entitled, after two years of total incapacity, to compensation at the minimum level applicable to all totally incapacitated adults (that is, actual payments of 40 per cent of AWE). It would, of course, have been possible to exclude these people from compensation for loss of earning capacity on the basis that they had no intention of exercising this power. However, the view has been taken that this intention is irrelevant in the case of long-term incapacity because the person has lost the capacity to choose whether to exercise his or her latent earning capacity. Accordingly to provide otherwise for people who have retired from the workforce on account of age would discriminate unfairly against older people.

III. ASSESSMENT OF PERMANENT INCAPACITY

8.52 Considerable attention has been paid to submissions which evaluated the proposals in the Working Paper in terms of the goal of rehabilitation. One important feature which received both praise and criticism was the proposal for periodic compensation for loss of earning capacity. Many submissions accepted the view that periodic payments provided future security more effectively than a single, once-and-for-all assessed lump sum. ⁵⁶ However, others made the criticism that the scheme of payments proposed in the Working Paper raised the spectre of repeated assessments and reassessments for the full period of incapacity. ⁵⁷ This was alleged to have adverse effects on rehabilitation because incapacitated people would be fearful of returning to work in case they forfeited their right to compensation. There was also the practical problem of supervening events which might cause disagreement between the injured person and the Corporation about the continuing cause of incapacity. These submissions saw one of the major benefits of the existing system as being its finalisation of the assessment process, ⁵⁸ even though that might not occur for some years after the accident.

8.53 There is great force in the argument that a person suffering long-term incapacity should be able to terminate his or her relationship with the Corporation as far as compensation for loss of earning capacity is concerned. However, periodic compensation does not necessarily require the incapacitated person to maintain a continuing relationship with the Corporation and to be subjected to continuous supervision and repeated assessments. The benefits of periodic compensation can be combined with the advantages of terminating the relationship through a system of assessment of permanent incapacity. This would involve the Corporation making an assessment of the permanent loss of earning capacity sustained by an injured person and paying compensation accordingly. The compensation would not be subject to review even if the injured person subsequently derived higher earnings from employment, although the assessment could be reviewed in favour of the injured person if, for example, his or her condition deteriorated.

8.54 In a recent paper the former Chairman of the British Columbia Workers’ Compensation Board, Professor T G Ison, suggested that assessment of permanent incapacity, which he describes as a “fixed pension system”, has great advantages over a system which pays compensation by reference to “actual loss of earnings”. ⁵⁹ The advantages of a fixed pension include the following:

• it creates the maximum incentive for rehabilitation, since the injured person can return to work without losing his or her entitlement to compensation for loss of earning capacity;
• it overcomes genuine fear of work which some incapacitated people may entertain because they are apprehensive that if they accept a job and are unable to cope, their entitlement to compensation may be prejudiced;
• it is the most consistent with civil liberties in that the incapacitated person
  
  ... can go where he likes, he can migrate if he wishes, he can do what he likes and adopt the lifestyle of his choice without fear of control or criticism from the [Corporation] ⁶⁰ ; and
• administrative costs are minimised and the system avoids the need to make ongoing determinations of the cause of incapacity.

Professor Ison acknowledges that a fixed pension system will produce overcompensation if the incapacitated person later unexpectedly returns to work. However, he argues that this is likely to occur infrequently in practice and in any event is a price well worth paying because of the advantages to be gained in relieving the incapacitated person of dependence on the administering authority.

8.55 The New Zealand Accident Compensation Act 1982 adopts the concept of assessment of permanent incapacity. Section 60(1) provides that:

where an earner who suffers personal injury by accident does not completely recover from his incapacity due to the accident, as soon as the Corporation considers that (so far as the consequences of the injury are concerned) his medical condition is stabilised and all practicable steps have been taken towards his retraining and rehabilitation, the Corporation shall review his case and make an assessment.

The assessment is to specify, in percentage terms, the permanent loss or diminution of the earner’s capacity to earn. This is done by comparing the amount the claimant would have been earning in his or her pre-accident employment at the date of the assessment and the amount he or she is now capable of earning. The percentage loss is applied to the claimant s “relevant earnings”, and compensation is paid at the rate of 80 per cent of the loss so calculated. ⁶¹ Earnings related compensation payable in accordance with the section is not to be reduced by reason of any subsequent increase in the earning capacity of the claimant. ⁶² However, if at any time after the assessment the claimants earning capacity has deteriorated as a result of the injury, the Corporation may increase the amount of compensation payable. ⁶³

8.56 The arguments of Professor Ison lead to the conclusion that the Scheme should provide for assessment of permanent incapacity. The New Zealand Act, with some variations, can provide the model for the suggested approach. However, the Corporation should not be under a duty to make an assessment of permanent incapacity as soon as the pre-conditions have been satisfied. Several reasons support this view. First, the test proposed for post-accident earning capacity is different from the test applied in New Zealand and may make the task of assessing permanent incapacity somewhat more difficult than in New Zealand. Secondly, it will be necessary for the Corporation to develop procedures to ensure that applications for assessment of compensation on the basis of potential for advancement are taken into account in assessing permanent incapacity. This may be difficult to accomplish if the Corporation is under a duty to assess for permanent incapacity at the earliest opportunity. Thirdly, it would be wise in the early stages of the Scheme to observe the workings of this procedure, with a view to determining whether it is feasible and desirable to impose a duty on the Corporation to make an assessment of permanent incapacity in all cases of apparently stable long-term incapacity. Fourthly, care must be taken to ensure that the prospect of an assessment of permanent incapacity does not cause some accident victims to prolong their incapacity to take advantage of the procedure.

8.57 The Corporation’s power to make such an assessment should be exercisable only with the consent of the incapacitated person although it should be open to the Corporation to initiate the process. An incapacitated person may, for example, prefer that the assessment of permanent incapacity await the outcome of an assessment of compensation on the basis of potential for advancement. Again, the person may be content to have his or her post-accident earning capacity assessed from time to time and compensation adjusted accordingly. In these circumstances, the incapacitated person should not be required to participate in an assessment of permanent incapacity. However, this view might well be reconsidered after some experience with the Scheme.

8.58 We recommend that where a person has sustained a permanent disability in a transport accident and

(a) his or her medical condition has stabilised;

(b) all practicable steps have been taken towards his or her rehabilitation;

(c) he or she has suffered a loss of earning capacity which is likely to continue indefinitely; and

(d) the extent of the loss is unlikely to vary substantially, taking into account reasonably foreseeable changes in economic conditions and employment opportunities,

the Corporation should have power, with the consent or at the request of that person, to make an assessment of his or her permanent loss of earning capacity. Such an assessment should be made in accordance with earlier recommendations and should take account of any assessment of compensation on the basis of potential for advancement. Clause (d) of the recommendation is designed to take account of the test of post-accident earning capacity embodied in earlier recommendations, which in turn requires reference to be made to labour market conditions.

8.59 Once an assessment of permanent incapacity is made it should not be reduced if the incapacitated person’s earning capacity subsequently increases. As was noted (paragraph 8.54), this is the price that has to be paid for achieving finality and permitting incapacitated people to be free of continuing obligations to the Corporation in relation to compensation for loss of earning capacity. Thus we recommend that, subject to the recommendation in the next paragraph, an assessment of permanent incapacity should be final and not liable to variation. This would mean that compensation pursuant to the assessment would not be reduced by reason of any subsequent increase in the earning capacity of the person concerned. Nor would the compensation be reduced if it is later ascertained that the person’s incapacity at the time of permanent assessment was not as great as had been assumed. Of course, on general principles an assessment could be set aside if it were procured by the fraud of the claimant.

8.60 While the assessment should not be reduced by reason of a subsequent increase in the disabled person’s earning capacity, the Corporation should be required to make a fresh assessment if that person’s earning capacity is substantially reduced because of a subsequent deterioration in his or her physical condition. However, we would go further than the New Zealand legislation and require a reassessment when the disabled person’s earning capacity is substantially reduced because of a loss of or change in employment. It should be necessary for the disabled person to show that the reduction in earning capacity arises out of the disability, it would not be enough, for example, if the disabled person voluntarily resigned from employment or if the change of employment was unrelated to the disability sustained in the transport accident. Accordingly, we recommend that if, at any time after an assessment of permanent incapacity has been made, the earning capacity of the disabled person is significantly reduced by reason of

(a) a deterioration in that person’s physical condition; or

(b) a loss of or change in employment,

and the continuing reduction in earning capacity arises out of the disability caused by the transport accident, the Corporation should set aside the assessment. The Corporation should have power to make a fresh assessment of permanent incapacity if the conditions required for such an assessment are satisfied. Alternatively, continuing compensation for loss of earning capacity would be assessed in accordance with the general principles stated in this Chapter.

IV. SUMMARY

Form and Payment of Compensation

8.61 Compensation for loss or impairment of earning capacity should be paid on a periodic basis (fortnightly in arrears). In general, a claimant should not be permitted to redeem his or her entitlement in return for payment of a lump sum. This compensation should be paid at the rate of 80 per cent of the loss or impairment of earning capacity, calculated by reference to gross (pre-tax) earnings. As an incentive to resumption of employment, this percentage should be increased where the incapacitated person resumes employment for a substantial part of the working week.

8.62 The maximum earning capacity by reference to which compensation is to be assessed should be 150 per cent of AWE ($630 in June 1984). Thus the maximum compensation payable should be 120 per cent of AWE ($504 in June 1984). Monetary compensation under the Scheme should be indexed and adjusted at six-monthly intervals by reference to changes in AWE.

Commencement and Termination of Benefits

8.63 Compensation for loss or impairment of earning capacity should not be paid in respect of the first five working days of incapacity. Compensation should thereafter continue for the duration of the incapacity or until the incapacitated person attains the age of 65. However, there should be special arrangements for earners over the age of 61 to allow compensation to continue, in appropriate circumstances, beyond the age of 65.

Assessment of Permanent Incapacity

8.64 The Corporation should have power, provided certain conditions are satisfied and it has the consent of the injured person, to make an assessment of his or her permanent loss of earning capacity. Such an assessment should be final and not liable to variation, except where the incapacitated person’s earning capacity is later significantly reduced. In this case a fresh assessment can be made.

1. Lump Sum Survey, pp.171-175. Traffic Accident Case Study, paras.6.15-6.17.

2. Working Paper, para.6.31.

3. Accident Compensation Act 1982 (NZ), s.71(1). No redemption is to be made if the injured person is thereafter likely to become reliant on social security; see s.71(2).

4. National Rehabilitation and Compensation Bill 1977 (Cth), cl.43(2).

5. Section 15(1). See also s.15 (1A), (1B). The liability to compensate for medical and related expenses may also be redeemed, as may the liability to pay a specified sum under the table of claims: s.16.

6. Derived from information supplied by the Workers’ Compensation Commission of New South Wales.

7. Workers’ Compensation Act 1926, part IIIA.

8. Lump Sum Survey, p.80, table 42. The table shows that 60.2 percent of workers receiving between $20,000 and $10,000 and 61.9 percent of workers receiving $40,000 or more were “vulnerable”. For the definition of vulnerability, see p.73.

9. Id., p.87, table 44. This table shows the numbers of people currently satisfied with their lump sum awards in relation to the numbers who were satisfied at the time of the award. Of workers who received $40,000 or more and had been satisfied at the time of the award 69.2 per cent were currently dissatisfied. A striking 77.8 per cent of motor vehicle victims who received $100,000 or more and had been satisfied at the time of the award were currently dissatisfied.

10. Submission W23, pp.11-12.

11. Motor Accidents (Compensation) Act 1979 (NT), s.15.

12. Prior to 1979 in Victoria, s,25 of the Motor Accidents Act 1973, provided for compensation robe provided in respect of “loss of income”. In Tinkler v. Federal Commissioner of Taxation (1979) 29 ALR 663, it was held that payments made under s.25 were taxable income. As a result of the decision, s.25 was amended to provide that payments are to be made for “deprivation or impairment of earning capacity”. In determining compensation for loss of earning capacity, the Board is required to take into account “the loss of earnings which that person has incurred and the likely loss of future earnings which that person will incur”.

13. (1983) 14 ATR 431.

14. Federal Commissioner of Taxation v. Slaven (1984) 15 ATR 242.

15. Motor Accidents (Liabilities and Compensation) Act 1973 (Tas.), schedule 1, Part V, paras.4, 5. Letter from the General Manager of the Motor Accidents Insurance Board, dated 24 November 1983.

16. Submission W28, para.2.3.2.

17. See para. 17.57.

18. Income Tax Assessment Act 1936 (Cth.), s.221A(1)(f).

19. Working Paper, paras. 5.22-5.25.

20. Australian Woodhouse Report, Vol.1, paras.374(c). 529(3).

21. Accident Compensation Act 1982 (NZ), s.59: Motor Accidents (Liabilities and Compensation) Act 1973 (Tas.), schedule 1, Part V, para.2(4).

22. Workers’ Compensation Act 1926, s.9(1) (a).

23. Motor Accidents Act 1973 (Vic.), s.25(1).

24. Submissions W52, pp.3, 8; W28, p.3.

25. Submission W17. p.2. See also Submission W28, p.29 arguing in favour of compensation for 85 per cent of the loss: Submission S46, pp.3, 5 which suggested that, particularly in the context of workers’ compensation, the injured person should not be better off than if he were not injured”; and Submission S34, p.34.

26. The selection of 80 per cent also takes into account estimates of the costs of working made for the purposes of the poverty line. For example, the poverty line estimate of the University of Melbourne’s Institute of Applied Economic and Social Research for a single person who is not working is some 20 per cent lower than that for a person who is working. ($98.30 as against $121.20 in May 1984).

27. Submission W60, p.6. See also Submissions W13, p.3: W23, p.6.

28. See eg. Submissions W1, p.1; W49.

29. Submission W59, p.4. See also Submission W34, p.3.

30. Appendix A, Table A.17.

31. Australian Bureau of Statistics, The Labour Force Australia October 1983, Cat. No.6203,0, p.1 3, table 4.

32. Submission W9, pp.8-9.

33. Gair Report para.118.

34. Workers’ Compensation Act, 1926, s.9A. The index used is that of the weighted average minimum weekly rate payable for all industry groups to adult males for a full week’s work, excluding overtime. Workers’ compensation payments are indexed every six months.

35. Public Instruction (Amendment) Act, 1916. ss.2A, 4, s.4 has been incorporated into s.55 of the Community Welfare Act, 1982, which section has yet to be proclaimed.

36. Public Instruction (Amendment) Act 1916, s.6, s.6 his been incorporated into s.56 of the Community Welfare Act 1982, which section has yet to be proclaimed.

37. See note 31 above, p.15, table 7.

38. Id., p.15, table 8.

39. Id., p.15, table 7. In the 15 year age group, 13 per cent of the Population work part-time and 8 per cent are classified as unemployed. However, in both these groups about three-quarters still attending school. The inclusion of these groups with the full-time employed gives an overall labour force participation rate among 15 year olds of 25 per cent.

40. Social Security Act 1947 (Cth.), s.107(1)(a).

41. Seventy-seven per cent of all people recorded in the Survey, either suffered no injury or minor injuries. See Appendix A, Table A.34.

42. Ibid.

41. Traffic Authority of New South Wales, Road Traffic Crashes in New South Wales, Statistical Statement Year ended December 31st 1983, p.19.

44. Appendix A, table A.35.

45. Australian Woodhouse Report, vol.1, para.377(a).

46. Working Paper, para.6.39.

47. Motor Accidents (Liabilities and Compensation) Act 1973 (Tas.), schedule 1, part V, para.4(1), Motor Accidents (Compensation) Act 1979 (NT), s.11. Cf. Motor Accidents Act 1973 (Vic.). s.17, which imposes a monetary threshold but no waiting period.

48. See Industrial Arbitration Act, 1940, s.88C(2).

49. See eg. Submission W28, p.14.

50. Accident Compensation Act 1982 (NZ), s.57.

51. Working Paper, para.6.41. There was provision to pay earnings-related compensation for one year after the date of injury when a person injured was aged 64 or more.

52. See eg. Submissions W7;, W87; and W52, p.11.

53. See note 31 above, p. 17, table 11.

54. Ibid.

55. Id., p.18, table 13.

56. See eg. Submissions S47, pp.3. 5; S49. p.1; and W85, p.4,

57. See eg. Submissions S94, pp.6-71-W75, p.6: and W69, p.2.

58. See eg. Submission W69, p.2.

59. T G Ison, “Workers’ Compensation-The Canidian Experience”, paper delivered at the conference entitled “Workers’ Compensation-New Directions”, South Australian Ministry of Labour (Adelaide, May 1984); pp.4-8.

60. Id., p.5.

61. Accident Compensation Act 1982 (NZ), s.60(1),(2).

62. Id., s.60(5).

63. Id., s.60(4).