Provisional Payments

Special provisions apply with regard to commencement of weekly compensation following an initial notification of injury.

In such cases, insurers may make payments for weekly compensation and medical expenses on a provisional basis, without admitting liability, so that an injured worker is not disadvantaged by delays while waiting for a formal claim to be processed.

Initial notification means the first notification of the injury that is given to the insurer by the worker or the employer, or by some other person (e.g. a doctor) acting on behalf of the worker or the employer: section 266.

The Guidelines provide that the initial notification may be in writing, verbally (including by telephone) or electronically (by fax or email). The minimum information to be supplied to the insurer by the person giving the initial notification is:

• • worker’s name, contact details, address and date of birth
  • employer’s name and business address
  • treating doctor’s name or, if the worker is in hospital, the name of the hospital
  • date of injury, how it happened and nature of the injury
  • name of the person making the initial notification, contact details, and relationship to the worker.

The initial notification is not complete until all of the above information has been provided. If the missing information

is not ‘materially necessary’ the insurer can make a decision on provisional payments without requiring the information to be given.

If it is materially necessary, then within 3 working days of initial notification the insurer must inform the person who gave notification that the notification is incomplete and ineffective. The person may then make another initial notification.

If an incorrect insurer has been given the initial notification, that insurer must inform the person who gave the notification that it is not the relevant insurer. The insurer must then refer the notification to the SIRA Customer Service Centre, or pass the notification on to the correct insurer, if known.

The SIRA Guidelines set out particulars of further information that an insurer must gather within 7 days of the initial notification. This includes the employer’s policy number and contact details; doctor’s telephone number; details of time off work; and the worker’s earnings. Essentially, this additional information is intended to confirm:

• • an injury was sustained by the worker
  • the injury is work-related
  • the expected period of incapacity
  • the injured person is a ‘worker’ within the meaning of the Acts
  • pre-injury average weekly earnings (PIAWE).

The additional information can be obtained from the worker, the employer, a doctor or hospital, and no formality is required

– a telephone enquiry is sufficient – except information regarding earnings, which must be provided by the employer to the insurer in a PIAWE form.

If the insurer wishes to commence weekly payments but the PIAWE form has not been completed by the employer, the insurer may use available information (such as a payslip or an industrial award) to calculate an interim rate for weekly payments. The rate for weekly payments can be adjusted later, once the PIAWE form has been supplied.

If the employer believes the injury is not work-related, it must provide evidence to support the assertion, e.g. factual or medical evidence. Suspicion, anecdotal or unsupported information is not acceptable.

Sections 267 and 268 of the 1998 Act provide that within 7 days of the initial notification to the insurer of an injury to a worker, the insurer must either:

• • commence provisional payments of weekly compensation (for up to 12 weeks), or
  • if a reasonable excuse exists for not commencing weekly payments, send the worker a written notice giving details of the reasonable excuse, and advising that the worker is entitled to make a claim (and explain how that claim can be made).

Failure by an insurer to commence provisional weekly payments without a reasonable excuse constitutes an offence under the Act punishable by a penalty of up to $5,500. (See page 21 for a list of reasonable excuses.)

The insurer must commence injury management if the worker has been or is likely to be off work for more than 7 days whether or not provisional liability has been accepted.

Section 280 provides that the insurer can also approve provisional payments of medical expenses for up to $7,500. SIRA Guidelines require insurers to provisionally accept liability for medical expenses for up to $7,500 unless a reasonable excuse exists, and to pay for those expenses within 7 days after the worker requests payment. If a worker incurs travel expenses in attending medical appointments, the travel expenses are also to be paid within 7 days.

Provisional liability accepted

If an insurer commences provisional weekly payments it must, as soon as practicable, give the worker written notice that:

• • weekly payments have commenced on the basis of provisional acceptance of liability, including details of the amount to be paid each week, how the amount is calculated, whether the insurer or employer will be making the payments and what to do if the worker does not receive payment;
  • if the insurer is initially using an interim rate for weekly payments, this must be disclosed to the worker;
  • such payments will continue for a period determined by the insurer (up to 12 weeks);
  • the insurer will develop an injury management plan for the worker (if required);
  • the worker is entitled to make a claim for compensation (and explain how that claim can be made).

Maximum period

Section 267(3) of the 1998 Act allows the insurer to determine the period during which provisional liability will be accepted, up to a maximum of 12 weeks. In determining the period, the insurer can take into account the nature of the injury, whether the worker is already back at work or the likely period of incapacity, and other relevant information gathered by the insurer.

To assist insurers determine a suitable period for provisional payments, the Authority has published guidelines regarding the expected periods of recovery for commonly encountered injuries.

Payments by insurer or employer

Payments may be made by the insurer directly to the worker, or if there is a written agreement between the insurer and employer to do so, the employer may make the payments and seek reimbursement from the insurer. If the employer is to make the payments, the insurer must notify the employer in writing of the amount of the weekly payments and the period for which the employer is authorised to pay.

If provisional payments are made for at least 8 weeks, and it is likely that compensation may be paid for more than 12 weeks, the insurer must notify the worker that he or she must submit a claim for compensation.

Provisional acceptance of liability does not constitute an admission of liability: section 267(4).

Provisional weekly payments are not affected by the making of a claim for compensation and may continue to be made pending determination of the formal claim: section 271(2).

The provisions regarding recovery of an excess from an employer apply to provisional payments: section 273.

Request for a certificate of capacity

If an insurer commences provisional weekly payments the worker must provide the insurer with:

• • an approved medical certificate of the worker’s capacity for work, and
  • a signed authority authorising providers of medical, hospital or occupational rehabilitation services to provide information to the insurer: section 270(1).

We suggest that the request for a certificate of capacity and signed authority be made at the same time as, or be contained in, the notice advising of commencement of provisional payments.

Discontinuing provisional payments

The insurer can discontinue the provisional weekly payments if:

• • the worker fails, within 7 days after the request by the insurer to provide a medical certificate or a signed authority to release medical information: section 270(2);
  • the worker fails to comply with injury management plan obligations: section 48A;
  • the worker returns to work before the end of the agreed period for provisional payments;
  • the insurer receives new credible evidence that was not available at the time provisional payments began, e.g. that the claimant is not a worker as defined, or that employment was not a substantial contributing factor to the injury.

If payments are discontinued for any of the above reasons, the insurer must notify the worker in writing that provisional payments have been discontinued and the reason for the discontinuance. The insurer must also attach all documents and medical reports relevant to the decision. The employer and service providers should also be advised of the discontinuance.

If provisional payments stop because of the worker’s failure to comply with injury management, the insurer must also inform the worker what steps the worker must take for payments to resume.

The notice must also inform the worker and employer that assistance may be sought from the SIRA Customer Service Centre on 13 10 50, their union or employer organisation.

If the insurer disputes liability, the obligation to make weekly payments pursuant to the provisional acceptance of liability ceases: section 271(1). Consequently, an insurer who initially gave notice to a worker that provisional weekly payments would be made for 12 weeks, but before that period expired received sufficient information to support a decision to decline the claim, may immediately dispute the claim and at the same time cease the provisional payments. When liability is disputed, a dispute notice must be given in accordance with section 74.

If an insurer pays any weekly compensation pursuant to a provisional acceptance of liability and another employer or insurer subsequently accepts liability to pay compensation, the insurer is entitled to recover the compensation paid from that other insurer or employer: section 272.

Reasonable excuse for not commencing provisional payments

The only circumstances in which an insurer can refuse to commence provisional weekly compensation payments are where it has one of the reasonable excuses prescribed by the Guidelines:

If the insurer does not commence weekly payments because it has a reasonable excuse, within 7 days of receiving the initial notification of the injury it must give the worker a written notice that it has a reasonable excuse for not commencing weekly payments.

The employer must also be informed as soon as practicable—this can be done by forwarding to the employer a copy of the notice sent to the worker.

The notice must include:

• • details of the reasonable excuse, including copies of all information, documents, and medical reports that are relevant and that were considered in making the decision
  • a statement that the worker is entitled to make a claim for compensation which will be determined within 21 days
  • details of how a claim can be made
  • a claim form
  • a statement that the worker can seek assistance from the SIRA Customer Service Centre on 13 10 50 or their union.

An insurer does not have to commence provisional payments if it declines liability within 7 days of receiving a claim and issues a section 74 dispute notice. The form and content of a section 74 dispute notice is discussed on page 27.

DIAGRAM TO BE REFORMATTED

Pre-claim procedures – provisional payments following initial notification of injury

Minimum required information supplied regarding injury

Minimum required information

not supplied

If reasonable excuse,

insurer must send notice to worker with required details

of the excuse etc.

If declined, insurer must send section 74 dispute notice