5% Uplift for the back and the application of Section 66(2A)

Craig Bell, Stephanie Wigan and Andrew Gawthorne | May 2012 | Employers Liability

In accordance with Section 66(2A) of the Workers Compensation Act 1987 (WCA 1987), an injured worker is entitled to a 5% uplift for the lump sum compensation payable under Section 66 for back injuries sustained on or after 1 January 2006.

Who does this impact?

In the past, the 5% uplift has not always been applied consistently. However the recent case of The Trustee for Bradbury Shopping Centre Trust and Bruce McNair (WCC matter no. 8947/11) has confirmed the approach that the Commission has adopted in applying the 5% uplift. This is consistent with the WorkCover Authority’s Operational Instruction 1.9.

The Facts

Insurers and employers calculating the Section 66 lump sum component of a claim where a worker has been assessed as having an injury to the back on or after 1 January 2006.

What action should be taken?

The process discussed below outlines the steps to calculate the 5% uplift.

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5% Uplift for the back and the application of Section 66(2A)

Definition of the back Unfortunately the “back” is not defined in the Legislation, and case law provides no authoritative conclusion as to whether the cervical spine should be included as part of an assessment of the back and thus be afforded the 5% uplift pursuant to Section 66(2A). However the Workers Compensation Commission E-Bulletin No.46 from January 2012 exemplifies that the cervical spine is not to be included as part of the definition of the back: the back includes the lumbar spine and thoracic spine only.

The 5% uplift Section 66 (2A) of the WCA 1987 states: “To the extent to which the injury results in permanent impairment of the back, the amount of permanent impairment compensation calculated in accordance with subsection (2) is to be increased by 5%.

Note: A person suffers 10% permanent impairment. Under subsection (2), the amount of permanent impairment compensation to which he or she is entitled is $13,750 (10 x $1,375). If the whole of the impairment is to the

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back, the compensation payable in relation to the back will be the whole $13,750. Under this subsection, that $13,750 will be increased by 5%, yielding $14,437.50.

Note: A person suffers 50% permanent impairment. Under subsection (2), the amount of permanent impairment compensation to which he or she is entitled is $123,750, [$85,250 + (10 x $3,850)]. If two-thirds of the impairment is to the back, the compensation payable in relation to the back will be twothirds of $123,750, or $82,500. Under this subsection, that $82,500 will be increased by 5%, yielding $86,625. The total compensation payable for the impairment will therefore be $127,875.”

The wording of Section 66(2A) has previously created confusion and caused the uplift to be applied inconsistently.

Single assessments of impairment (Section 66(2A) note 1)

In doing so, the Commission has adopted the following process: 1. Worker had 4% WPI of the back.

2. Worker had a combined total of 6% WPI for both injuries.

3. 6% WPI equates to $8,250.

4. The worker’s back injury represents 66.67% of the overall total WPI.

5. 66.67% of $8,250 equates to $5,500 (rounded up).

6. 5% uplift on $5,500 equates to $275. This is the uplift amount to be applied.

7. Add the uplift amount of $275 to the base entitlement of $8,250.

8. The worker is entitled to the sum of $8,525.

Where the back is the only body part assessed, calculate 5% of the total sum for the assessment of impairment for the back injury and then add the 5% figure to the total sum. For instance, a worker sustained 4% WPI of the lumbar spine as a result of the work injury on 4 December 2008.

This equates to a figure of $5,500 for which a 5% increase being $275 (i.e. 0.05 x $5,500) is then applied arriving at a total figure of $5,775 (i.e. $5,500+ $275).

General Model

Multiple assessments of impairment which include an assessment of impairment for the back (Section 66(2A) note 2)

3. What is the dollar figure arrived at in (2)?

In The Trustee for Bradbury Shopping Centre Trust and Bruce McNair (WCC matter no. 8947/11) the worker had sustained 4%WPI of the lumbar spine and 2% WPI of right lower extremity (ankle) as a result of a work injury on 29 June 2010. The Commission issued a Certificate of Determination on 13 March 2012 awarding the applicant $8,525 with a reference made to the fact that a 5% uplift was applied pursuant to Section 66(2A).

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5% Uplift for the back and the application of Section 66(2A) Craig Bell, Stephanie Wigan and Andrew Gawthorne | May 2012

Thus we recommend that, to calculate the 5% uplift, the following 8 step process should be applied: 1. What is the WPI assessment of the back?

2. What is the worker’s combined WPI assessment?

4. Divide (1) by (2) to arrive at the percentage of the overall total WPI relating solely to the back injury.

5. Apply the percentage attibutable to the back injury arrived at in (4) to the total dollar figure in (3).

6. Apply a 5% uplift to the figure arrived at in (5).

This is then the uplift amount to be applied.

7. Add the uplift arrived at in (6) to the figure in (3).

8. Final entitlement.

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The WorkCover Authority has confirmed the above method of calculating the 5% uplift in its Operational Instruction 1.9.

Conclusion The 8 step process discussed above is a helpful tool when calculating a worker’s entitlement to the 5% uplift in accordance with Section 66(2A) for assessments of impairment in relation to back injuries sustained on or after 1 January 2006.

For more information, please contact:

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5% Uplift for the back and the application of Section 66(2A) Craig Bell, Stephanie Wigan and Andrew Gawthorne | May 2012

Craig Bell Partner T: 02 8257 5737 M: 0418 673 112 craig.bell@turkslegal.com.au

Stephanie Wigan Solicitor T: 02 8257 5707 M: 0417 479 920 stephanie.wigan@turkslegal.com.au

Andrew Gawthorne Solicitor T: 02 8257 5771 M: 0405 460 675 andrew.gawthorne@turkslegal.com.au

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