Use space to open navigation items

Income support

For: Claimants Advocates Information seekers

You may be entitled to receive income support while you are unable to work or are on a rehabilitation program. This is known as incapacity payments.


Incapacity payments explained

In general, workers’ compensation is designed to keep you in the same financial position you would have been in should you not have been injured or become ill from work.

This means, if your claim is accepted, you are entitled to receive compensation for the costs and expenses reasonably incurred as a result of your injury or illness. This includes loss of income resulting from an incapacity to work.

Incapacity payments are periodic payments which compensate you for loss of income until you recover or while you are on a rehabilitation program.

Incapacity payments are not a pension and they do not include any superannuation entitlements.

Income tax is deducted based on individual income tax rates before your incapacity payment is processed.

How to claim incapacity payments

There is not a separate form to apply for incapacity payments.

If your employer accepts your claim for workers’ compensation, your employer should pay you incapacity payments as soon as possible.

Speak with your employer to find out how you will receive incapacity payments and how often payment is made.

Amount of payment

Incapacity payments in the first 45 weeks

Incapacity payments received in the first 45 weeks are payable at 100 per cent of your normal weekly earnings—less any amount you actually earned or have the capacity to earn in suitable employment.

The first 45 weeks begins at the date when you were left on shore at, or returned to, your proper port.

Your normal weekly earnings is an amount which is intended to fairly represent what you would have earned in a week, had you not been injured. It is calculated based on your salary at the time of injury and may include overtime and allowances if relevant.

The first 45 weeks of incapacity payments are calculated cumulatively, not consecutively.

This means:

  • if you take a single day off for medical treatment during a week, only a single day is counted toward your total 45 weeks
  • if you take a single day off for three weeks, this equals three days, or 0.6 weeks, toward the 45 weeks of incapacity.
  • if you are unfit for work for one full week this equals one week towards the 45 weeks of incapacity.

Incapacity payments after 45 weeks

Incapacity payments are calculated differently if you are unable to work at your pre-injury capacity after 45 weeks.

From 45 weeks, incapacity payments are calculated based on the percentage of actual hours worked during the week.

Payments are capped between 75 and 100 per cent of normal weekly earnings depending on how many hours a week you work.

See Table 1 for the percentages and compensation payable.

Table 1: Compensation payable after 45 weeks
Per cent of normal weekly hours worked during that weekCompensation payable
Not employed during that week75 per cent of normal weekly earnings
25 per cent or less80 per cent of normal weekly earnings minus actual earnings
More than 25 per cent but not more than 50 per cent85 per cent of normal weekly earnings minus actual earnings
More than 50 per cent but not more than 75 per cent90 per cent of normal weekly earnings minus actual earnings
More than 75 per cent but less than 100 per cent95 per cent of normal weekly earnings minus actual earnings
100 per cent100 per cent of normal weekly earnings minus actual earnings

Lump sum redemption payment

An employer must pay the employee who is receiving incapacity payments a single lump sum redemption payment in certain circumstances.

These circumstances are where:

  • the employer is making weekly incapacity payments to an employee
  • the amount of these payments is less than a certain amount (the amount is indexed annually), and
  • the employer is satisfied that the degree of the employee’s incapacity is unlikely to change.

The prescribed formula for determining this lump sum redemption payment is provided in section 44 of the Seafarers Rehabilitation and Compensation Act 1992 (Seafarers Act).

An employee who has received a lump sum redemption of their weekly incapacity compensation is still entitled to regular incapacity payments where the:

  • employee is not able to engage in suitable employment because they are incapacitated for work as a result of their injury, and
  • incapacity is likely to continue indefinitely.

The amount payable to the employee is the same as they would usually receive for an injury, less the amount per week that was redeemed as a lump sum at the date of determination.

If you disagree with the determination

Generally, employees have the same rights of review of determinations on entitlements as they do for the initial claim for workers’ compensation.

If you disagree with a determination, you can request that it be reconsidered.

For more information about this process, see If you disagree with a claim determination.

Page last reviewed: 22 April 2021
Mental health
resource centre
Access supports and guidance if you or someone you know has mental health concerns.

Find out how to support yourself and others.

Seacare
GPO Box 9905, Canberra, ACT 2601
1300 366 979 | www.seacare.gov.au

Date printed 21 Oct 2021

https://www.seacare.gov.au/claims-rehabilitation/income-support