EXPLANATORY STATEMENT
Safety, Rehabilitation and Compensation Act 1988
Issued by the Minister for Employment and Workplace Relations
Notice of a Disallowable Instrument
Safety, Rehabilitation and Compensation
(Weekly Interest on the Lump Sum) Notice 2013 (1)
The purpose of this instrument is forthe Minister to specify the rate of weekly interest deemed to accrue on the (superannuation) lump sum of retired employees in receipt of compensation. That rate is then used in a legislated formula to calculate the incapacity benefits payable under sections 21 or 21A of the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act).
Section 21 of the SRC Act applies when the injured employee has received a lump sum benefit. Section 21A of the SRC Act applies when the injured employee has received both a lump sum benefit and superannuation pension. In both cases, the weekly amount of the incapacity benefit is reduced by the weekly interest on the lump sum.
The weekly interest amount is calculated by multiplying the value of the lump sum benefit by the interest rate specified by the Minister and dividing the result by 52.
This rate is derived by obtaining the daily 10 year Government Bond rates from the Reserve Bank of Australia, averaging them for the period 1 April 2012 to 31 March 2013 and rounding to two decimal places.
The instrument specifies a rate of 3.24% for the period 1 July 2013 to 30 June 2014.
The rate specified for the period 1 July 2012 to 30 June 2013 was 4.48%.
The instrument is a Legislative Instrument subject to the Legislative Instruments Act 2003.Consultation was not undertaken in relation to this instrument. This instrument gives effect to an existing mechanism to update an interest rate in accordance with a prescribed statutory formula. As the method of calculating the weekly interest rate has not changed and the instrument is effectively machinery in nature, consultation was unnecessary as per section 18 of the Legislative Instruments Act 2003. Comcare does advise the Department of Veterans’ Affairs of the proposed new rate so the Department is aware of the likely budgetary impact.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Safety, Rehabilitation and Compensation
(Weekly Interest on the Lump Sum) Notice 2013 (1)
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
This Legislative Instrument serves to specify the weekly interest rate on the (superannuation) lump sum of retired employees in receipt of compensation under the Safety Rehabilitation and Compensation Act 1988.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
W R Shorten 28/6/13
Bill Shorten
Minister for Employment and Workplace Relations