Workers’ compensation

5.32 Workers’ compensation is compensation payable to a worker who suffers an injury or disease arising from, or during, his or her employment. Workers’ compensation benefits encompass the payment of: incapacity payments to compensate for lost earnings; medical and related expenses; and lump sum payments for permanent impairment or death. The purposes of workers’ compensation include:

• providing injured workers with financial support, medical benefits and other non-economic support;

• enabling employers and workers to work cooperatively to maintain an injured worker at work; or

• achieving an early, safe and appropriate return to work.^[45]

5.33 Each state and territory in Australia has its own workers’ compensation scheme. The Commonwealth has three schemes.^[46] Under the Commonwealth schemes, mature age workers are entitled to workers’ compensation benefits.^[47] There are no age-related restrictions on the payment of medical or related expenses or lump sum payments for permanent impairment.^[48] However, ‘retirement provisions’^[49] impose some age-related restrictions on incapacity payments.^[50]

5.34 A number of states and territories have provisions similar to those under the Commonwealth scheme. However, neither Queensland nor Western Australia has age-related limits on workers’ compensation payments.^[51] Instead, these jurisdictions restrict the benefit period or maximum amount of compensation a worker can receive by way of weekly payments for loss earnings during the life of the claim.^[52]

5.35 There are two categories of mature age workers for the purposes of Commonwealth workers’ compensation. Those injured:

• before age 63 or 64 are entitled to incapacity payments until age 65; and

• after age 63 or 64 are entitled to up to one or two years of incapacity payments, whether consecutive or not.^[53]

5.36 In the course of the Inquiry, concerns were raised in relation to both categories and the effect of entitlement to workers’ compensation on mature age workforce participation. In particular, stakeholders expressed concern about the potential disincentive to workforce participation created by not being entitled to incapacity payments, or only being entitled to limited incapacity payments.^[54]

5.37 To address such concerns, the ALRC recommends a three-fold approach to reform. First, it recommends that Commonwealth workers’ compensation legislation be amended to align retirement provisions with the qualifying age for the Age Pension. This will address the impending age gap between cessation of incapacity payments and eligibility for the Age Pension and is particularly important for mature age workers injured before age 63 or 64.

5.38 Secondly, the ALRC recommends that the incapacity payment period under Commonwealth workers’ compensation legislation be extended. This would benefit the workers injured after age 63 or 64 who are currently entitled to up to one or two years of incapacity payments.

5.39 Thirdly, the ALRC recommends that there be consistency across Commonwealth workers’ compensation legislation. The ALRC also makes a number of other recommendations in relation to volunteer coverage and the interaction between superannuation and incapacity payments under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). These recommendations would benefit all mature age workers, regardless of the age at which they were injured.

Age-based restrictions on workers’ compensation

5.40 The ALRC recommends that Commonwealth workers’ compensation legislation be amended to align retirement provisions with the qualifying age for the Age Pension. The ALRC considers this approach is preferable to other possible reform options including, for example, removing all age-based restrictions or imposing benefit period or amount restrictions.

The eligibility gap

5.41 The ALRC’s recommendation involves amendments to the SRC Act,^[55] Military Rehabilitation and Compensation Act 2004 (Cth) (MRC Act),^[56] and the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (Seafarers Act).^[57]

5.42 Under the SRC Act and MRC Act, if a worker, member, or former member suffers an injury before reaching 63 years of age, incapacity payments cease when they reach age 65. A worker, member, or former member injured at any age after 63 years of age, however, may receive incapacity payments for up to 104 weeks.^[58]

5.43 Under the Seafarers Act, if a worker suffers an injury before reaching 64 years of age, incapacity payments cease when the worker reaches age 65. A worker injured at any age after 64 years of age however, may receive incapacity payments for up to 12 months after the date of injury.^[59]

5.44 In light of future changes to Age Pension age there is an impending age gap between the cessation of incapacity payments at age 65 and the qualifying age for the Age Pension.^[60] In such circumstances, an injured worker may be forced to access alternative forms of income support—such as the Disability Support Pension, superannuation or other forms of private savings. Where this results in a depletion or exhaustion of superannuation or private savings, the worker may then need to access additional income support on a long-term basis, rather than self-funding retirement.

5.45 The unavailability of workers’ compensation incapacity payments may, in some circumstances, act as a disincentive for mature age workers to remain in, or return to, the paid workforce. Access to incapacity payments ensures workers receive financial support and remain engaged with rehabilitation services and appropriate return to work programs. Where a worker does not receive such payments, he or she may decide to leave the workforce, or abandon attempts to return to work, to access superannuation or the Age Pension. As a result, there is a need for reform in this area.

5.46 Comcare has recognised that ‘present arrangements can be unfair for older workers’, highlighting the following example:

A federal worker on a 5-year contract who is injured at age 65 will have a maximum entitlement to 104 weeks’ incapacity payments, even if the compensable injury is sustained early in their contract. This means they might effectively lose several years’ worth of potential earnings as the provisions of the Act do not recognise the fact the worker would have been able to complete their contract but for the injury.^[61]

5.47 The Australian Human Rights Commission (AHRC) expressed the view that this situation is of ‘serious concern’.^[62]The Law Council of Australia noted ‘inequity in the cessation of compensation at age 65 when pension and other entitlements are increasing’.^[63] Safe Work Australia submitted that changes to Age Pension age

have the potential to increase disparities between jurisdictional workers’ compensation arrangements. Safe Work Australia views addressing age issues in workers’ compensation as a priority and is developing policy options to balance reducing barriers for older workers with ensuring that entitlements for the wider work force are not reduced.^[64]

5.48 The Advisory Panel on the Economic Potential of Senior Australians highlighted that limited access to workers’ compensation ‘increases the vulnerability of older workers, leaving them in a potential situation of being suddenly without an income for an extended time’.^[65]

5.49 The Ai Group suggested, however, that ‘the retirement provisions act as an incentive to mature age workers to recover and return to work, rather than rely on weekly benefits’.^[66] The Ai Group also noted that

studies suggest that the longer a person is away from work because of a workplace injury, the less likely the person will return back to the workplace. If mature age employees are able to access weekly benefits for an indefinite period of time, this may act as a disincentive to continued participation in the workforce.^[67]

5.50 The ALRC recognises the highlighted connection between the period of time out of the workplace and the likelihood of returning to work. This connection underscores the importance of ensuring injured workers remain engaged in the workers’ compensation system to facilitate post-injury rehabilitation and return to work programs.

Closing the eligibility gap

5.51 To close the eligibility gap, the ALRC recommends that Commonwealth workers’ compensation legislation be amended to align retirement provisions with the qualifying age for Age Pension.

5.52 This approach was supported by a range of stakeholders.^[68] For example, Comcare expressed the view that such a change is ‘consistent with the original policy intent’.^[69] This was also the approach taken and recommended by a number of other bodies. In April 2012, a bill was introduced to increase age restrictions under South Australian workers’ compensation legislation to reflect future changes to Age Pension age.^[70] In November 2012, the Safe Work Australia Strategic Issues Group (SIG) for Workers’ Compensation considered a draft options paper informed by the ALRC’s Discussion Paper which recommended that all jurisdictions legislatively tie their retirement provisions to Age Pension age.^[71]

5.53 In July 2012, a review of the Commonwealth workers’ compensation schemes, in particular the SRC Act, was announced.^[72] In September 2012, an issues paper was released for consultation as part of the review. The issues paper includes discussion of appropriate coverage arrangements when the Age Pension age is increased. It also includes discussion in relation to injured workers who receive incapacity payments and superannuation benefits.^[73] However, at the time of writing, the final report of the Review was not publicly available.

5.54 Stakeholders also acknowledged the potential flow-on effects of aligning retirement provisions with Age Pension age. For example, Comcare noted that

increasing the incapacity entitlement cut off to age 67 also increases Comcare’s outstanding claims liabilities and subsequently reduces Comcare’s reported funding ratio, something that would also affect the licensed self-insurers in the Comcare scheme. The impact of this would be increased premiums to fund the additional liability (for premium-paying employers in the scheme) or increased liabilities (for self-insurers). These scheme implications will need to be fully considered in any change to current legislative age limits.^[74]

5.55 The ALRC anticipates its recommendation would be implemented by incrementally increasing age restrictions in Commonwealth workers’ compensation legislation in line with increases in Age Pension age. Ultimately, under the SRC Act and MRC Act, if a worker suffered an injury before reaching 65 years of age, incapacity payments would cease when the worker reached age 67. However, a worker injured at any age after 65 years could receive incapacity payments for up to 104 weeks. Under the Seafarers Act as it currently operates, if a worker suffered an injury before reaching 66 years of age, incapacity payments would cease when the worker reached age 67. However, a worker injured at any age after 66 years of age could receive incapacity payments for up to 12 months. The ALRC recommends the extension of these payment periods below.

5.56 Any amendment should only operate to the advantage of workers. For example, it should not operate to disadvantage women in the period prior to 1 July 2013, at which time the Age Pension ages for men and women align. Other benefits, such as access to medical treatment, should remain unaffected.

Removing all age-based restrictions and other options

5.57 A range of stakeholders preferred the removal of all age-based restrictions under Commonwealth workers’ compensation legislation. The Australian Council of Trade Unions (ACTU) submitted that age-based restrictions are ‘exclusionary and discriminatory’ and that ‘mature age workers should have access to compensation for all injuries that arise out of, or in the course of work, including during their breaks’.^[75] Similarly, National Seniors Australia, COTA and Olderworkers, supported the removal of such restrictions.^[76] For example, COTA submitted that ‘all upper age limits on workers’ compensation should be abolished’.^[77] The AHRC has also expressed its support for the removal of age-based restrictions in workers’ compensation.^[78] Similarly, Comcare acknowledged that ‘it is increasingly becoming unrealistic to assign an arbitrary end-point to the careers of workers simply because they have reached a particular age’.^[79]

5.58 However, there are difficulties associated with removing age-based restrictions from Commonwealth workers’ compensation legislation. Some of these difficulties arise under the Commonwealth workers’ compensation system because it is a ‘long tail’ rather than a ‘short tail’ system—that is, it pays benefits for the duration of a worker’s incapacity rather than imposing a benefit period or amount restriction.

5.59 The first key difficulty is the potential for cost blow-out and cost shifting. Statistics indicate that persons aged 65 years and over record the lowest rate of work-related injuries and illnesses.^[80] However, age groups 35–44 and 65 years and over had the highest average total cost of claims for Australian Government premium payers accepted during 2010–11.^[81]

5.60 Stakeholders highlighted a number of cost-related concerns. For example, Ai Group submitted that the removal of age-based restrictions in workers’ compensation legislation ‘would have significant cost implications for employers’.^[82] The Diversity Council of Australia stated that,

given concerns that removing all age-based restrictions could lead to significant increases in costs of premiums to employers, DCA recommends that as a first step, the age at which compensation is no longer payable be pegged to the age of Age Pension eligibility.^[83]

5.61 To operate effectively, workers’ compensation schemes need to be financially viable. As a result, while the particular focus of this Inquiry is on removing age barriers, the aim in this area should be to ‘enable greater workforce participation without unduly impacting the sustainability and affordability of workers’ compensation schemes nationally’.^[84]

5.62 If age-based restrictions were removed, some form of benefit period or amount restriction would be necessary to address cost concerns. However, this may have unintended consequences for other workers, such as a reduction in entitlements for workers with a long-term reduction in their capacity to earn.

5.63 Comcare submitted that removing all age-based restrictions, but limiting the benefit period, ‘imposes risks for significant costs shifting to Commonwealth social security benefits and changes the scheme from a long tail to short tail claims model’.^[85] Similarly, Safe Work Australia said:

the introduction of time and/or payment limits to weekly incapacity payments irrespective of age would disadvantage younger workers with significant work-related injuries who may be reliant on incapacity payments for long periods and whose entitlements may be exhausted before they have recovered.^[86]

5.64 The removal of age-based restrictions and the imposition of benefit period or amount restrictions may have unintended consequences for other workers receiving incapacity payments under the scheme. In particular, any such restriction may disadvantage workers injured at a young age. Such workers may be reliant on workers’ compensation for long periods. The risk is that they may exhaust their entitlements and become reliant on Commonwealth income support, essentially transferring the cost from one Commonwealth scheme to another.

5.65 As a result, and as outlined above, the ALRC considers that the most appropriate approach to reform is to align retirement provisions with the qualifying age for the Age Pension.

Consistency across Commonwealth workers’ compensation legislation

5.66 Under the SRC Actand MRC Act, if a worker is injured at any age after age 63 they are entitled to a maximum of 104 weeks incapacity payments.^[87] Under the Seafarers Act, if a worker is injured at any age after age 64 they are entitled to a maximum of 12 months incapacity payments.^[88]

5.67 The ALRC recommends that the Seafarers Act be amended to be consistent with the SRC Act and MRC Act. This would ensure consistency across Commonwealth workers’ compensation legislation and that there are no barriers to prevent persons wishing to work beyond Age Pension age from doing so. This would mean the Seafarers Act would provide that workers who are injured at any age after two years prior to Age Pension age (rather than one year), are entitled to receive incapacity payments for up to 104 weeks. Such an approach is consistent with the Terms of Reference for the review of the Seafarers Act, which include ensuring consistency between the Seafarers Act and the SRC Act.^[89]

5.68 The Australian Shipowners Association considered that ‘as far as practicable entitlements under worker’s compensation regimes should be consistent’.^[90] However, it was concerned that, by

increasing the potential instances of eligibility for compensation and the period for which compensation is payable, the likely result would be an increase rather than decrease in the costs of premiums payable by employers under the Seacare scheme.^[91]

5.69 Other stakeholders supported this approach.^[92] For example, Comcare noted that

the Seacare scheme is also populated by an ageing workforce. In recent years, mature aged seafarers contributed the highest proportion of employees to the Seacare scheme and this proportion is increasing. These statistics are indicative of the willingness and ability of mature aged employees to participate and contribute to the workforce in the Seacare scheme and highlights the need to remove the barriers that may restrict them from doing so.^[93]

Incapacity payment periods

5.70 Under the SRC Act and MRC Act—and under the Seafarers Act if Recommendation 5–6 is implemented—a worker injured at any age after two years prior to Age Pension age is entitled to receive incapacity payments for up to 104 weeks, whether consecutive or not. The ALRC recommends that the Australian Government amend the SRC Act, MRC Act and Seafarers Act to provide that workers who are injured at any age after two years prior to Age Pension age should receive incapacity payments for a period longer than 104 non-consecutive weeks.

5.71 The focus of workers’ compensation schemes needs to be not only on appropriately supporting and compensating workers, but also ensuring access to post-injury rehabilitation and return to work programs. Aligning retirement provisions with the qualifying age for the Age Pension and the extension of incapacity payment periods is likely to encourage ongoing engagement with the workers’ compensation system. Access to rehabilitation services and supports increases the likelihood of mature age workers returning to work following work-related injury.

5.72 Comcare cautioned, however, about significantly extending the incapacity payment period. It submitted that, while it may encourage mature age workforce participation,

there would be drawbacks to the scheme more broadly. Incapacity payments are the biggest drivers of claim costs; hence any increase to a period significantly longer than 104 weeks could pose substantial scheme sustainability issues.^[94]

5.73 A number of key stakeholders opposed any extension of the incapacity payment period. For example, the Ai Group argued that it would result in increased workers’ compensation premiums.^[95] The Personal Injuries Committee of the Law Council of Australia also expressed concern about extension on the basis of cost, and argued that

a number of equity issues arise as a result of allowing a person to receive incapacity payments for more than 104 weeks in situations where they have been injured after two years prior to Age Pension age. Central to this is the fact that an injured worker would potentially receive more payment after retirement, compared to someone who had worked throughout the period.^[96]

5.74 Safe Work Australia advised that members of the SIG for Workers’ Compensation have agreed to conduct actuarial assessments on two possible reform options. These include incapacity payment periods of 104 and 130 weeks for mature age workers.^[97] The SIG for Workers’ Compensation is due to consider an options paper in early 2013.

5.75 The ALRC is conscious of the concerns expressed by stakeholders that ‘extension of coverage would impact workers’ compensation insurance premiums’.^[98] However, Safety Rehabilitation and Compensation Commission statistics indicate that for premium payers’ claims accepted in 2010–11, in only 4% of claims for injury and 10% for disease was 26 or more weeks of time lost. These figures were 1% and 2% respectively for licensed self-insurers.^[99] In terms of mature age workers, the 2009 Legislative Review of the WA workers’ compensation scheme indicated that ‘in the three years to 2007–08 only 0.02% of claims involved a worker aged more than 65 years receiving weekly compensation’ for the full year to which they were entitled.^[100]

5.76 The ALRC recommends that the SRC Act, MRC Act and Seafarers Act be amended to provide that workers who are injured at any age after two years prior to Age Pension age should receive incapacity payments for a period longer than 104 non-consecutive weeks. For example, with Age Pension age at 65, this would mean that workers and members injured at 63 or older would be entitled to receive incapacity payments for a period longer than 104 weeks. In 2023, with Age Pension age at 67, this would mean that workers and members injured at 65 or older would be entitled to receive incapacity payments for a period longer than 104 weeks.

5.77 The length by which the period should be extended should be determined following actuarial assessments and costings. Any additional period of incapacity payment would need to be accompanied by ongoing rehabilitation and return to work support to ensure the focus is on increasing workforce participation.

Supplementary payments

5.78 Some Australian jurisdictions have legislation providing that workers over age 65 are entitled to a weekly supplementary payment, after normal incapacity payments have ceased. The entitlement follows a tribunal determination that the worker would have continued working after the age of 65, had they not been injured.^[101] The entitlement is decided on a case by case basis and the supplementary amount is generally based on the amount a person receiving the Age Pension is eligible to earn before the payment is affected.

5.79 The ALRC does not consider it is necessary or appropriate to introduce a supplementary payment of this type at a Commonwealth level.

5.80 Stakeholders expressed strong opposition to the introduction of such a supplementary payment.^[102] Comcare acknowledged that, although such a provision might be useful in some circumstances, ‘it would not readily fit into the current legislative scheme of the SRC Act, particularly given the significant differences in the review processes for claims’.^[103] Comcare also noted its potentially burdensome nature and the difficulty in implementing such a provision uniformly in the Comcare scheme—‘given that certain workers in the scheme continue to be entitled to incapacity payments well after age 65 whereas others do not’.^[104]

5.81 ACCI highlighted that the provision

came about at another time and in a significantly different environment with respect to people working beyond normal retirement age and other changes some of which are already in place for a number of jurisdictions and are likely to be recommended for others (retirement age tied pension eligibility age).^[105]

5.82 The Law Council noted that ‘the main benefit of the Tasmanian legislation is that medical expenses are tied to a person’s entitlement to receive incapacity payments’.^[106] This is not an issue under the Commonwealth scheme. Further, Safe Work Australia highlighted member concerns about the ‘potential for disputation based on this provision’.^[107]

Volunteer coverage

5.83 Throughout this Inquiry, stakeholders have expressed concerns about inconsistency with respect to the coverage of volunteers under workers’ compensation legislation. The ALRC recommends that Safe Work Australia consider the definition of those categories of people covered by Commonwealth, state and territory workers’ compensation legislation.^[108]

5.84 A significant number of mature age people participate in voluntary work. Australian Bureau of Statistics figures indicate that 32.5% of Australians who volunteer are aged 55 years and over.^[109] However, there is no consistent coverage of volunteers under workers’ compensation schemes. Volunteers in some jurisdictions are eligible, either because they are deemed to be employees under the relevant legislation, or the legislation specifically provides compensation for certain categories of volunteers.

5.85 At the Commonwealth level, the SRC Act deems a number of classes of people to be employees of the Commonwealth for the purposes of being eligible to receive workers’ compensation, provided they perform certain duties.^[110] It also allows for the coverage of volunteers, by declaration of the Minister.^[111] Comcare indicated that there are a number of declarations made under the SRC Act covering volunteers, for example:

persons who, under the control or direction of a Commonwealth officer, take part, without receiving any remuneration (excluding payment of expenses incurred), in search and rescue activities or training exercises carried out by the Department of Infrastructure and Transport or the Civil Aviation Safety Authority, and persons who, under the control or direction of a Commonwealth officer, render services, without receiving remuneration (excluding payment of expenses incurred), in an institution or for a service conducted by the Department of Veterans’ Affairs.^[112]

5.86 Under the MRC Act, the Defence Minister may make a similar determination with respect to members.^[113] The Seafarers Act does not include any category of deemed employee or member.

5.87 As part of its work, Safe Work Australia’s SIG for Workers’ Compensation developed the National Workers’ Compensation Action Plan 2010–2013. Two of the key action areas are to ‘investigate and report on options for nationally consistent definitions for the purposes of workers’ compensation’ and ‘investigate and report on issues of concern for multi-state employers’.^[114] In April 2012, the SIG for Workers’ Compensation decided to defer work on a project to investigate the definition of worker. It agreed that the Definitions Temporary Advisory Group^[115] should focus its work on ‘retirement age and any barriers for older workers in workers’ compensation schemes’.^[116]

5.88 As a result, in the Discussion Paper, the ALRC proposed that the SIG for Workers’ Compensation should consider the definition of ‘worker’ under Commonwealth, state and territory workers’ compensation legislation to ensure volunteers are consistently covered.^[117]

5.89 A number of stakeholders supported this approach. For example, academics from the University of New England indicated their support, but suggested that

it is only a beginning but it is a start to an important recognition of the legislative inconsistency that exists with respect to the status of volunteers before the law as compared to the paid employee, and we would support the ALRC to go further and embrace legislative enquiry around the rights and protection of volunteers as productive workers in our society.^[118]

5.90 The Brotherhood of St Laurence expressed the view that,

while it is imperative that volunteers are eligible for compensation, it may be problematic to include them as ‘workers’ as this could raise new barriers for volunteering eligibility and so discourage the voluntary contribution of many older Australians. Volunteers are not a substitute for paid employees and should not be deployed in such positions whether full-time, part-time or casual. A compensation scheme specific to volunteers should be established which includes criteria which encourage voluntary contribution to the community.^[119]

5.91 The Ai Group submitted that volunteers should generally not be deemed to be workers for the purposes of workers’ compensation legislation.^[120]

5.92 The issues paper released as part of the review of the SRC Act raised questions about the definition of ‘employee’ under the SRC Act.^[121] However, at the time of writing, the final report of the Review was not publicly available.

5.93 In November 2012, Safe Work Australia considered the ALRC’s proposal and ‘agreed to defer a decision on whether to commence work on the definition of ‘worker’ until after the ALRC has presented its final report’.^[122]

5.94 There is inconsistent coverage of volunteers under workers’ compensation legislation and this may affect the participation of mature age volunteers. As a result, the ALRC recommends that the Safe Work Australia SIG for Workers’ Compensation should consider this matter.

Workers’ compensation and superannuation

5.95 The treatment of superannuation payments in the calculation of incapacity payments under the SRC Act creates a potential barrier to participation in the paid workforce for mature age workers. To address this barrier the ALRC recommends that the superannuation-offset provisions under the SRC Act be repealed.

5.96 Under the SRC Act, the compensation payable to an employee who is incapacitated for work as a result of an injury is reduced where that employee has ‘retired’ and ‘received’ a superannuation pension and/or a lump sum benefit. The compensation is reduced by reference to the employer’s superannuation contributions and by a further 5% of the employee’s Normal Weekly Earnings.^[123]

5.97 However, where an employee elects to preserve their superannuation, or remains employed and chooses to access his or her superannuation, the application and operation of the offset provisions is less clear and may have perverse outcomes. For example, in Re Mirkovic and Telstra, the Administrative Appeals Tribunal found that, in rolling over his superannuation, Mr Mirkovic had notionally ‘received’ the funds and had his incapacity payments reduced.^[124]

5.98 A number of stakeholders, including the Law Council of Australia, submitted that the treatment of superannuation in the calculation of incapacity payments creates a barrier to workforce participation for mature age workers:

This is particularly the case with respect to individuals who want to re-enter the workforce, where superannuation pensions would reduce incapacity payments after the first 45 weeks.^[125]

5.99 The Law Council also noted that

the Commonwealth scheme is the only scheme in Australia to deduct monies received by way of superannuation pension or, based on a formula, a lump sum received by the injured worker from incapacity entitlements. At a policy level, superannuation entitlements ought not to have any effect on compensation entitlements.^[126]

5.100 In the issues paper released as part of the review of the SRC Act, a number of broad questions were asked about whether the superannuation-offset provisions should be modernised, simplified or amended.^[127] In submissions to the Review, stakeholders emphasised the unfairness of the 5% reduction in compensation. For example, the Superannuated Commonwealth Officers’ Association submitted that

The 5% superannuation deduction should be removed to put those who are in receipt of superannuation on the same footing as those who are still in the contribution phase of a modern superannuation fund. The 5% deduction does not act to encourage severely injured and vulnerable people to return to the workforce, it merely adds to their financial and mental distress.^[128]

5.101 In its submission to this Inquiry, Comcare acknowledged that, in light of superannuation reforms since the introduction of the provisions, mature age workers are not always able—or may not choose—to access their superannuation benefit. As a result, ‘the current superannuation offset provisions in the Act are out of step with the superannuation reforms’.^[129] Comcare also noted a number of practical difficulties with the superannuation offset provisions.^[130]

5.102 However, stakeholders such as DOME expressed the view that there is no need for amendment. DOME submitted that ‘there is no evidence indicating individual’s decisions to participate in the workforce take any account of this potential impediment’.^[131]

5.103 The ALRC favours consistency across Commonwealth workers’ compensation legislation and considers that schemes should provide incentives for injured employees who choose to preserve or roll over their superannuation, rather than superannuation affecting incapacity payment entitlements. The ALRC therefore recommends that the superannuation offset provisions under the SRC Act be repealed.