Stingy Tac Should Pay Super, Says Law Body
The Sunday Age
Sunday February 17, 2008
THE Law Institute of Victoria has called for superannuation to be paid to the thousands of injured Victorians living on weekly compensation benefits from the Transport Accident Commission.
Workers severely injured in road accidents receive weekly TAC payments amounting to 80% of their previous salary. But when they turn 65, the payments stop, to be replaced by the lower rate of the pension. Unlike their able-bodied former colleagues, these injured workers have no super to cushion their retirement.According to John Voyage, chairman of the Law Institute of Victoria's TAC committee, accident victims should also get the 9% superannuation payments collected by every other Australian worker.The lawyer has also called for the reversal of last year's "mean" and "penny-pinching" changes to the TAC legislation, which specifically ruled out the possibility of superannuation payouts to road accident victims. Before the passing of the Transport Accident and Accident Compensation Acts Amendment Act, personal injury lawyers had succeeded in settling several test cases in which lost superannuation was counted when injured workers' weekly benefits were calculated.Mr Voyage said many more similar test cases on superannuation for injured workers had been waiting to run. But the new act, introduced in November last year, had "broken the neck" of these challenges.Superannuation was not included in the original Transport Accident Act because it was written in 1986, six years before the 1992 introduction of compulsory superannuation contributions. Most injured workers receive TAC payments for only three years. Only road accident victims who are classified as "50%" impaired - having lost two legs, one arm, or having sustained a serious brain injury - receive these payments until retirement age.The Government's own estimate of the cost to the TAC of factoring super into its weekly payments is an immediate $126 million, with annual ongoing costs of about $8 million. Last year, the TAC announced a profit of $691 million. Mr Voyage said last year's law changes were made without the usual consultation with the "legislative working group" of personal injury lawyers. "There was no consultation, no discussion, and a very significant removal of rights," he said. "It is hard to imagine on the basis of fairness how you can say this is anything but the removal of people's entitlements. "Eighty per cent of your take-home pay is a good deal less than 80% of what the employer pays the employee - in fact, it is 9% less."Personal injuries lawyer Peter Burt said that people on TAC benefits could, in principle, make voluntary superannuation contributions, but were unlikely to be able to afford to do so.He said that the TAC had set its own precedent for making this kind of adjustment when it reacted to the introduction of the GST by increasing weekly benefit payments by 4%.Louise Perry, a spokeswoman for acting Minister for Finance, TAC and Workcover, John Lenders, said that the law was amended because employer-paid superannuation had never been included in the payments made to Workcover or TAC claimants and this was the case right across Australia. "In making this clarification, however, the Government recognises that a growing proportion of the population is reliant on the retirement savings generated by their superannuation schemes," she said. "With this in mind, the Government will give thorough consideration to the question of whether superannuation could in some way in the future be taken into account when compensating people injured in the workplace or in a transport accident."Big profits for accident body? 6100 people are on weekly income benefits after road accidents.? 1100 people have an impairment of 50% or greater and are receiving income support more than three years post-accident.? The Government estimate of the cost to the TAC of factoring super into its weekly payments is $126 million, with annual ongoing costs of around $8 million. ? TAC profit last year: $691 million.
© 2008 The Sunday Age