3.8.1.3 Start of period of non-entitlement
The period of non-entitlement starts after the date the worker:
- received, withdrew or redeemed the lump sum or
- became eligible to receive weekly payments (being the date when entitlement to weekly payments started).
The later of these two dates is the date that applies.
Example 1 - Scenario
A worker:
- lodges a claim for which liability is accepted on 20 May 2008 and weekly payments start
- is classified as having no current work capacity Under the legislation, unless inconsistent with the context or subject-matter — current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment, declared training program and continues to receive weekly payments
- is retrenched by the employer in August 2013
- receives a lump sum redundancy payment on 20 August 2013.
Result
The period of non-entitlement starts from 20 August 2013, which is the date of payment of the lump sum, not the date that the worker became eligible to receive weekly payments.
Example 2 - Scenario
A worker:
- is retrenched on 2 March 2007
- receives a lump sum redundancy payment on 5 March 2007
- lodges a claim in April 2007
- has the claim disputed by the Agent but later accepted during a conciliation conference held on 12 June 2007, during which the parties agreed to accept the claim.
Result
The period of non-entitlement starts from 12 June 2007, which is the date the worker became eligible for weekly payments, even though the worker received the lump sum redundancy three months earlier. However, if weekly payments have been made after the date that the worker received the lump sum, weekly payments should immediately cease and payments made for the non-entitlement period should be recovered under the legislation.
3.8.1.4 Approved capital expenditure
Workers may access their own superannuation contributions (salary sacrifice amounts not the employer superannuation guarantee contribution amounts) from their superannuation fund, without having a non-entitlement period to their weekly payments, if they use it for approved capital expenditure.
This capital expenditure must be approved by the Agent in accordance with WorkSafe guidelines.
The ability of workers to access their own superannuation contributions is limited to exceptional circumstances, in particular, cases where workers are under extreme financial hardship and risk The probability of the worker not returning to work is known as the risk or risk factor. For example: if a worker is likely to return to work, the claim is categorised as low risk. losing the family home.
Approved capital expenditure does not include use of superannuation contributions on items such as:
- purchase or trade up of cars
- discharge of personal debts
- other investment options.
For the purposes of approval by the Agent, approved capital expenditure refers to:
- the nature of a capital outgoing as recognised by the Australian Taxation Office
- a payment to reduce debt of a capital asset
- expenditure cannot be transferred or gifted to another party
- expenditure must be used for the benefit of the worker
- expenditure that is non-speculative.
Approved capital expenditure may include:
- repayment of mortgage on the family home
- expenditure on maintenance to protect the family home, for example repairs to roofing and wiring.
WorkSafe reserves the right to exercise its discretion as to whether proposed capital expenditure meets guidelines.
Professional financial advice
The worker should be encouraged to seek professional financial advice before accessing superannuation funds.
3.8.1.5 Roll over into an approved fund
If informed by the worker that all or part of a lump sum payment received has been rolled over to an approved fund, the Agent must:
- write to the worker to request evidence that the amount of lump sum payment has been deposited into an approved fund
- inform the worker of the non-entitlement period if part of the funds initially rolled over is withdrawn
See: Process for non-entitlement
Note: It is only possible for a worker to avoid a non-entitlement period if they rollover (to an approved fund) a superannuation or retirement benefit lump sum relating to their retirement from or cessation or termination of their retirement from or cessation or termination of their injury employment.