Does retirement impact workers compensation?
As Injury lawyers, we are often asked questions about Workplace injury close to retirement age.
The answers lie within the Workplace Injury Rehabilitation and Compensation Act 2013 which governs the way that compensation is provided to injured workers in Victoria.
This is best explained via a recent client scenario. The RCT Injury Law team recently managed a complex case whereby a 66-year-old client approached us about his worsening workplace injuries that forced him into early retirement.
He required multiple knee surgeries which left him unable to perform his duties as a Health and Safety Officer. Shortly after his first round of surgery, he was made redundant by his employer at a Victorian construction company.
This meant the client was unable to return to work which led him to take legal action against his former employer. Together we were able to conclude that the client’s injuries had been caused at work during the past decade.
When the client met our legal team, he was struggling to make ends meet in between managing medical appointments, and the worker’s compensation has made a significant improvement to his life.
Indicative weekly compensation payments
Sometimes clients are surprised to learn that any injury that causes time off work will include an entitlement to weekly payments of compensation.
As a rule, the entitlement is for time away from work but also includes top-up provisions if the worker is able to return to work on reduced hours.
Timing is everything in relation to compensation claims
According to WorkSafe Victoria, a worker’s entitlement to weekly payments ceases once they reach retirement age, unless the worker:
- is injured within 130 weeks (or 2.5 years) before retirement age
- is injured after retirement age
- made a claim before retirement age and after retirement age required inpatient treatment in a hospital for their compensable injury.
The Act allows for weekly payments of compensation for a period of 130 weeks (2.5 years) if:
- the worker is unable to return to their pre-injury employment but cannot exceed 130 weeks unless the worker cannot return to any form of alternative employment;
- a worker is unable to return to any work, weekly payments are made until “retirement age”, which is deemed in the Act to be between 65 years and 6 months and 67 years depending on the worker’s date of birth.
It is on this basis the Act contemplates 130 weeks as the benchmark entitlement for weekly payments of compensation.
If a worker can return to their pre-injury employment earlier than 130 weeks, the entitlement is for that period. If the worker cannot return to their pre-injury employment, their capacity for alternative work is critical to the assessment of whether they have an entitlement to weekly payments beyond 130 weeks.
What is classified as retirement age?
Section 169 of the Act entitles workers who are injured within 130 weeks of the deemed retirement age, or after the deemed retirement age, to weekly payments of up to but no more than 130 weeks, whether consecutive or not.
This means that for a worker injured within 130 weeks of the retirement age, weekly payments will continue after the worker reaches the retirement age. The worker is protected from a termination of weekly payments solely on the basis that they have reached the deemed retirement age. This is essential as many people don’t retire before 67 years of age, with many workers continuing to work until aged 70 or older.
The same guarantee is extended to workers past the deemed retirement age who suffer an incapacitating injury.
Workers outside 130 weeks of retirement age
Section 171 of the Act states that a worker is not entitled to weekly payments after attaining the deemed retirement age. The only exceptions are section 169 discussed above and another provision beyond the scope of this article.
The effect of section 171 of the Act are that workers are not entitled to weekly payments of compensation after reaching the retirement age unless s.169 applies.
If a worker suffers an injury 131 weeks before the deemed retirement age, section 171 takes effect and the weekly payments will either stop at 130 weeks (if the worker is found to have a current work capacity) or will stop at 131 weeks when the worker reaches the deemed retirement age (if the worker has no work capacity).
However, what if the worker suffered an injury just prior to 130 weeks before the deemed retirement age, but returns to work doing alternative duties for the normal hours of work for a period of 6 months before having to stop work again due to the injury?
Section 171 states the weekly payments stop at the deemed retirement age but the worker has not had 130 weeks due to the period he was able to return to work on alternative duties.
If the worker had been injured within 130 weeks of the deemed retirement age, the entitlement is for 130 weeks, whether consecutive or not. But in the example above the worker’s entitlement to 130 weeks is cut short due to the date of injury and the return to work.
If the period of the return to work on alternative duties is longer than the 6 months in the example, then the adverse effect on the worker’s entitlement to weekly payments is increased.
It is unlikely that many workers will be affected in the way described, but the law covers all options. It remains a possibility that a worker close to the end of their working life could be significantly affected by this anomaly in the Workplace Injury Rehabilitation and Compensation Act.
This article was first published on February 4, 2019 and updated on September 3, 2021.
If you have any questions about payment of Worker's Compensation entitlements close to retirement, call us on 1300 366 441 for a free first consultation.