EXPLANATORY STATEMENT
Safety, Rehabilitation and Compensation Act 1988
Issued by the authority of the
Minister for Employment and Workplace Relations
Notice of Declaration under Section 26(3)
The purpose of this notice is to specify a rate of interest to apply under the Safety, Rehabilitation and Compensation Act 1988 (the Act) to payments for permanent impairment which are made after the due date.
The Act provides for lump sum payments to claimants for injuries which result in permanent impairment. The amount of compensation is assessed under section 24 or 25 of the Act. Provision exists under section 26 for payment of interest to a claimant in limited circumstances. If payment is not made to the permanently impaired person within 30 days after the date of assessment of the amount, interest is payable for the period from the 31st day to the day on which the amount is paid.
This notice seeks to set the mechanism for determining the rate of interest payable for the purposes of subsection 26(3) of the Act. The notice specifies the rate of interest payable to be the weighted average yield of 90 day bank accepted-bills settled immediately prior to the last day of the 30 day settlement period. The Reserve Bank of Australia publishes the rate of 90 day bank-accepted bills, and also outlines the 30 day settlement period for the rate.
Bank-accepted bills cover similar periods and have returned comparable rates to Treasury note tenders, which were previously used to set the rate of interest under section 26(3) but which the Reserve Bank of Australia has ceased to provide. Applying the rate of 90 day bank-accepted bills has the advantage of maintaining for any future payments a rate comparable to the rate for payments calculated using the ninety day Treasury note tenders.
An existing notice, the Notice under Section 26(3)(No 4 of 2003) (2003 notice), made on 9 June 2003, currently sets the same mechanism for the rate of interest payable for the purposes of section 26(3). As the 2003 notice amends and revokes previous instruments that are not required to be backcaptured, it is appropriate that this notice be remade as a stand-alone document. Remaking the 2003 notice will avoid the need to refer back to old instruments which remain effective in part only, and will simplify and expedite the process for meeting the Department’s obligations under the Legislative Instruments Act 2003. This instrument remakes the 2003 notice to satisfy registration obligations under the Legislative Instruments Act 2003. This instrument will be registered on the Federal Register of Legislative Instruments (FRLI), which aims to be a complete repository of up-to-date and operative instruments.
Consultation was not undertaken as the redrafted notice does not alter the coverage of the 2003 notice, and does not change the existing entitlements of or impose any additional obligations on any party. An exemption from the preparation of a Regulation Impact Statement was also granted by the Office of Regulation Review on this basis.
This declaration will take effect upon registration on the FRLI.
This Notice is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Safety, Rehabilitation and Compensation Act 1988 was enacted to provide for compensation and rehabilitation for workers who have sustained injuries resulting in permanent impairment. The legislation aims to ensure that injured workers receive appropriate financial support and medical care to facilitate their rehabilitation and return to the workforce. The Act was passed by the Commonwealth Parliament to address gaps in worker compensation and rehabilitation, particularly for those who suffer permanent impairments as a result of their employment. This notice, issued under section 26(3) of the Act, specifies the rate of interest payable on lump sum payments for permanent impairment, ensuring that any delay in payment is compensated fairly. The policy objective of this notice is to maintain a consistent and predictable interest rate mechanism that aligns with current financial practices, thereby protecting the rights of claimants while simplifying the administrative process for the Department of Employment and Workplace Relations.
Scope and Application
The Safety, Rehabilitation and Compensation Act 1988 applies to individuals who have suffered permanent impairments due to injuries sustained in the workplace, entitling them to lump sum payments as compensation. This Act primarily concerns itself with the procedural and financial aspects of compensating injured workers, including the payment of interest on overdue compensation payments as outlined in section 26. The Act is of Commonwealth jurisdiction and thus applies across Australia, regulating conduct and transactions pertaining to workplace injuries and their compensation. The Act does not specify exclusions or exemptions, and its application is governed by the terms and conditions set out within the Act and further defined by subordinate instruments such as the Notice of Declaration under Section 26(3). This notice, which is remade to comply with the Legislative Instruments Act 2003, specifies the rate of interest to be applied to overdue compensation payments based on the weighted average yield of 90-day bank-accepted bills, thereby ensuring consistency with past practices using Treasury note tenders.
Key Provisions
The Safety, Rehabilitation and Compensation Act 1988 (the Act) provides for compensation payments for injuries resulting in permanent impairment, with the amount assessed under sections 24 or 25. Section 26 allows for interest payments in certain circumstances, specifically when a payment is not made to the claimant within 30 days of the assessment date. The explanatory statement outlines a notice under section 26(3) specifying the rate of interest payable on such delayed payments. This notice, F2005L04063, sets the interest rate at the weighted average yield of 90 day bank accepted-bills settled immediately prior to the last day of the 30 day settlement period. This rate is published by the Reserve Bank of Australia and is intended to maintain comparability with previous interest rates based on ninety day Treasury note tenders.
The Act imposes certain obligations on the parties involved, particularly on the entity responsible for making the compensation payments. The primary obligation is to ensure that payments are made within 30 days of the assessment of the compensation amount. If this deadline is not met, interest must be paid from the 31st day until the payment is actually made. The interest rate is determined by the weighted average yield of 90 day bank accepted-bills, as specified in the notice. This notice, by remaking an earlier one from 2003, aims to simplify the process and ensure compliance with the Legislative Instruments Act 2003.
Failure to comply with the requirements set out in the Act and the notice can result in civil consequences for the entity responsible for the delayed payments. The primary consequence is the obligation to pay interest at the specified rate, which could potentially increase the total amount payable to the claimant. The notice ensures that the interest rate is consistently applied and that the process for determining this rate is transparent and based on published data from the Reserve Bank of Australia. There are no criminal penalties associated with breaches of the interest payment provisions, but the financial implications for non-compliance can be significant.
The notice was remade to comply with the Legislative Instruments Act 2003, which requires that legislative instruments be registered on the Federal Register of Legislative Instruments (FRLI). This ensures that the notice is a complete and up-to-date document, avoiding the need to refer to outdated instruments. No consultation was undertaken as the redrafted notice does not alter existing entitlements or impose additional obligations on any party, and an exemption from the preparation of a Regulation Impact Statement was granted by the Office of Regulation Review. The notice will take effect upon registration on the FRLI, ensuring that it is readily accessible and enforceable.