EXPLANATORY STATEMENT
Issued by the authority of the Minister for Employment
Safety, Rehabilitation and Compensation Act 1988
Subsections 97L(3), 97M(7) and 97P(1)
Safety, Rehabilitation and Compensation (Rates of Interest Payable) Notice 2016
The Safety, Rehabilitation and Compensation Act 1988 (‘the Act’) establishes the Commonwealth workers’ compensation and rehabilitation scheme for employees of the Commonwealth, Commonwealth authorities and licensed corporations.
Rate of interest payable under subsections 97L(3) and 97M(7)
Section 97L of the Act provides that if an Entity or Commonwealth authority pays an amount of premium or regulatory contribution in accordance with a direction of the Safety, Rehabilitation and Compensation Commission, and the amount that is payable is later reduced as a result of a review under section 97J or 97K, Comcare must repay the amount of the overpayment. Interest is also payable on that amount, at a rate specified by the Minister (see subsection 97L(3)).
Similarly, section 97M of the Act provides that if the amount of premium or regulatory contribution payable by an Entity or Commonwealth authority is varied in accordance with that section so that the amount paid by the Entity or Commonwealth authority is greater than the amount that is payable, Comcare must repay the amount of that overpayment. Interest is also payable on that amount, at a rate specified by the Minister (see subsection 97M(7)).
This notice specifies that the rate of interest payable for the purposes of subsection 97L(3) and 97M(7) is the rate of interest published by the Reserve bank of Australia for 6 month overnight indexed swaps for each of those days.
This notice remakes, in the same terms, the Safety, Rehabilitation and Compensation Act 1988 - Notice under subsection 97L(3) and subsection 97M(7) (‘ss 97L(3) and 97M(7) notice’) which would be repealed due to sunsetting under section 50 of the Legislation Act 2003.
Rate of interest payable under subsection 97P(1)
Subsection 97P(1) of the Act imposes a financial penalty for the late payment of premium or regulatory contributions by an Entity or Commonwealth authority by way of imposing interest on the late payment.
This notice specifies the rate of interest for the purposes of subsection 97P(1) is the monthly average yield for 90 day Bank Accepted Bills for the May preceding the date when the premium or regulatory contribution is payable, plus 7% per annum.
This rate is set to discourage late payment. Comcare sets premiums, regulatory contributions and exit contributions on the basis that agencies will pay by the due date. Late payment affects the return on funds received and increases administrative costs for Comcare.
This notice remakes, in the same terms, the Safety, Rehabilitation and Compensation Act 1988 - Notice under section 97P (‘section 97P notice’) which would be repealed due to sunsetting under section 50 of the Legislation Act 2003.
Repeal of instruments
To provide certainty that there will be no concurrent operation of this instrument and:
- the ss 97L(3) and 97M(7) notice; or
- the section 97P notice
this instrument repeals those notices. Those notices were due to sunset as a result of the operation of section 50 of the Legislation Act 2003 on 1 October 2016.
Consultation, Regulation Impact Statement and Commencement
Consultation was undertaken with Comcare regarding the making of this instrument in the same terms as the sunsetting instruments. Comcare has advised that there have been no concerns reported by employers or employees under the scheme regarding the operation of the current instruments.
Consultation was undertaken with the Attorney General’s Department, which advised that this instrument is of legislative character. This is because it creates new law in specifying the rate of interest payable for the purposes of the enabling provisions, and is of broad application, rather than applying to an individual case. This is despite the requirement for Gazettal in the empowering provisions of s 97L(3) and 97M(7).
The Office of Best Practice Regulation has confirmed that a regulation impact statement is not required. (OBPR ID 20997)
This instrument will commence on 1 October 2016.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Safety, Rehabilitation and Compensation (Rates of Interest Payable) Notice 2016
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Safety, Rehabilitation and Compensation Act 1988 (‘the Act’) establishes the Commonwealth workers’ compensation and rehabilitation scheme for employees of the Commonwealth, Commonwealth authorities and licensed corporations.
This instrument sets various rates of interest payable in respect of:
- overpayment of premium or regulatory contributions by an Entity or Commonwealth authority; and
- late payment of premium or regulatory contributions by an Entity or Commonwealth authority.
An Entity is defined in section 4 of the Act as an Agency, within the meaning of the Public Service Act 1999, that is not a Commonwealth authority; a Parliamentary Department within the meaning of the Parliamentary Service Act 1999; or a person, body, organisation or group of persons prescribed to be an Entity for the purposes of the Act. Those prescribed are Commonwealth statutory authorities.
A Commonwealth authority is defined in section 4 of the Act as, broadly, a body corporate incorporated for a public purpose by a law of a Commonwealth or a Territory or, a corporation in which the Commonwealth or a Territory has a controlling interest. The Australian Capital Territory is a Commonwealth authority by force of a legislative instrument made under the Act.
Comcare is established under section 69 of the Act and includes as one of its functions the determining of premiums and regulatory payable by Entities and Commonwealth authorities.
Human rights implications
The interest rates set in respect of overpayment or late payment of premium or regulatory contributions by an Entity or Commonwealth authority do not engage human rights. They are regulatory and compliance mechanisms for the administration of the Comcare scheme, and are paid by either Comcare, an Entity or a Commonwealth authority.
Conclusion
This Legislative Instrument is compatible with human rights because it does not negatively impact on human rights.
Senator the Hon. Michaelia Cash
Minister for Employment