We recently had a query from an insurer with two scenarios for
accepting an application for compensation and their
obligations.
Scenario 1: The insurer accepts an application for
compensation for an injury different from the injury nominated in
the application.
Scenario 2: The insurer accepts an application for
compensation for an injury on the basis of an over a period of time
event that commenced later than the over a period of time event
nominated in the application.
The queries for each scenario are:
1. Is the decision subject to internal review under section
538?
2. Is the insurer obliged to provide reasons for decision in the
first instance?
3. Are the decisions reviewable by Q-COMP according to section 540,
and if so within which provision of section 540(1)(b) do they
fall?
Question 1
Section 538 of the Workers' Compensation and Rehabilitation Act
2003 (the Act) states that an insurer must undertake an internal
review of a proposed decision to reject an application for
compensation or to terminate compensation.
In both scenarios, the insurer makes a decision to accept the
application for compensation. Therefore, section 538 does not
require the insurer to undertake an internal review.
Question 2
In relation to the insurer making a decision about an application
for compensation in the first instance, section 134(4) provides
that the insurer must provide written reasons for decision (as
prescribed under section 120 of the Workers' Compensation and
Rehabilitation Regulation 2003 (the Regulation)) if the
insurer rejects the application.
In both scenarios, the insurer makes a decision to accept the
application for compensation. Therefore, section 134(4) is not
applicable.
However, as will be discussed in the answer to question 3 below,
the insurer's decisions in both scenarios are reviewable under
section 540 of the Act. For decisions to which section 540 and
Chapter 3 Part 2 of the Act apply, section 540(2) states that the
insurer must give written reasons for decision. Section
540(3) provides the decisions (those mentioned in section
540(1)(a)(ii) or (iii)) for which an insurer does not need to
provide reasons. Section 540(4) of the Act provides that the
reasons must address the matters prescribed under section 120 of
the Regulation.
Section 542(4) provides that a review applicant may request reasons
for decision if the insurer's written notice did not state the
reasons, providing the applicant makes the request within 20
business days. However in my view, this provision does not create
the circumstance that for decisions reviewable according to section
540, the insurer is only obliged to provide reasons for decision if
the applicant requests them. This is because section 542 is largely
concerned with the arrangements for the applicant lodging the
application for review within the three-month timeframe, including
when this timeframe commences. In my view, section 542(4) does not
override section 540(2), which is concerned with imposing the
insurer's obligation to provide reasons in relation to decisions to
which section 540 applies. Section 542(4) only applies in
circumstances where the insurer has not fulfilled the obligation to
provide reasons for decision.
Therefore, as the insurer's decisions in both scenarios are
reviewable under section 540 of the Act, according to section
540(2) the insurer is obliged to provide reasons for decision. This
view is supported by section 540(3), which specifically states the
insurer decisions (issuing a premium notice or reassessment premium
notice) for which reasons are not required.
However, it is unlikely that an insurer's failure to provide
reasons, or reasons complying with the Regulation, invalidates the
decision. A failure to provide reasons will most likely have
implications for the timeframe for applying under section 542(1),
which states that the timeframe runs from the receipt of the
written notice and reasons for decision.
Question 3
In relation to self-insurers, the decisions in both scenarios are
decisions to allow an application for compensation under section
540(1)(b)(ii) of the Act, and are therefore reviewable.
Section 541 of the Act states that a claimant or worker aggrieved
by an insurer's decision (under section 540) may apply for review.
There is nothing in the Act to state that a claimant or worker
cannot be considered to be aggrieved by a decision to accept their
application. The insurer decision in either scenario may have the
effect of limiting the claimant's or worker's entitlement to
compensation, and this would be a legitimate basis for a grievance
that founds an application for review.
