House of Representatives

Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2000 (extracts only)

Explanatory Memorandum

(Circulated by authority of the Minister for Employment, Workplace Relations and Small Business, the Honourable Peter Reith MP)

Financial Impact Statement

It is estimated that the amendments to the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) will provide savings to the Commonwealth, by way of a reduction in outstanding liabilities, of at least $31 million, spread over a number of years.

The amendments to the definitions of "injury" and "disease" in the SRC Act, proposed in Part 1 of Schedule 2, are expected to produce savings in outstanding liability, over a number of years, of some $17 million. There are also expected to be savings in outstanding liability from the amendment relating to an employee's earnings, proposed in Part 3 of Schedule 2, of the order of $18 million. Again this will be achieved over a number of years.

The amendments to the method for calculating the first 45 weeks of incapacity, proposed in Part 3 of Schedule 2, are expected to have a negative impact on outstanding liability of $1 million.

The amendment to provide incapacity payments beyond age 65 in limited circumstances, proposed in Part 5 of Schedule 2, completes implementation of the policy that employees should be entitled to incapacity payments if they remain at work beyond age 65. The overall cost of implementation of this policy is expected to have a negative impact on outstanding liability of $2.7 million.

The amendment reducing the level of binaural hearing loss required before an employee is entitled to compensation, is expected to cost Comcare $0.8 million per annum but will be funded through premiums. The cost to the Australian Defence Force is expected to be $2.8 million per annum and will be budget funded.

The net savings will be spread across all Commonwealth departments and agencies covered by Comcare. Further net savings will apply to other administrators in the jurisdiction including the Australian Defence Force, which is covered by the Military Compensation Scheme under the SRC Act, and licensed authorities and corporations such as Australia Post and Telstra.

The amendments to the licensing provisions of the SRC Act are expected to be Budget neutral.

There are no financial implications for the Commonwealth arising from the amendments to the other Acts included in this Bill.

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