Consultation Regulatory Impact Statement 2020-06-26¢  Consultation Regulatory Impact Statement Regulating

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    Consultation Regulatory Impact Statement Regulating re-entry to the National Injury Insurance Scheme in Queensland after accepting treatment, care and support damages

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    Table of contents

    Executive Summary ............................................................................................................ 3

    1. Scope and policy objectives .................................................................................................... 7

    1.1. Scope of the RIS ................................................................................................................. 7

    1.2. Policy objectives .................................................................................................................. 7

    2. Overview of the lifetime schemes ........................................................................................... 9

    2.1. Background ......................................................................................................................... 9 2.2. Operation of the lifetime schemes ..................................................................................... 10

    2.3. Size and funding the motor vehicle scheme for lifetime treatment, care and support ...... 13

    2.4. Size and funding of the workers’ compensation scheme for lifetime treatment, care and support .......................................................................................................................................... 14

    3. Common law damages and re-entry to the lifetime schemes ............................................ 16

    3.1. Common law damages ..................................................................................................... 16 3.2. Electing to take TCS damages .......................................................................................... 16

    3.3. Why might participants want or need to re-enter? ............................................................ 18

    3.4. Interjurisdictional comparison ............................................................................................ 19

    4. Options for regulating the preclusion period ....................................................................... 20

    4.1. Analysis of Option 1 .......................................................................................................... 20 4.2. Analysis of Option 2 .......................................................................................................... 21

    5. Options for regulating pre-conditions for re-entry .............................................................. 23

    5.1. Analysis of Option 1 .......................................................................................................... 23

    5.2. Analysis of Option 2 .......................................................................................................... 25

    5.3. Analysis of Option 3 .......................................................................................................... 26

    5.4. Aligning re-entry to the lifetime schemes .......................................................................... 27 6. Consistency with fundamental legislative principles.......................................................... 29

    7. Compliance, implementation and evaluation ....................................................................... 29

    7.1. Administration, compliance and enforcement ................................................................... 29

    7.2. Implementation .................................................................................................................. 30

    7.3. Monitoring, evaluation and review..................................................................................... 30

    Attachment A..................................................................................................................... 31

    Operation of the lifetime schemes............................................................................................. 31

    Attachment B..................................................................................................................... 32

    Information about common law damages ................................................................................. 32

    Attachment C..................................................................................................................... 39

    Proposed regulated list of considerations for determining re-entry .......................................... 39

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    Executive Summary Queensland’s National Injury Insurance Scheme (NIIS) provides for lifetime treatment, care and support needs of people who have sustained serious personal injury in particular circumstances involving motor vehicle and workplace accidents.

    In 2016, the Queensland Government introduced two separate but similar no-fault statutory lifetime treatment, care and support schemes to implement the NIIS:

    • a scheme to support people seriously injured in motor vehicle accidents, by introducing the National Injury Insurance Scheme (Queensland) Act 2016 (the motor vehicle scheme); and

    • a scheme to support workers seriously injured in workplace accidents, by amending the Workers’ Compensation and Rehabilitation Act 2003 (the workers’ compensation scheme).

    For the purpose of this Consultation Regulatory Impact Statement (RIS), these two schemes are collectively referred to as the lifetime schemes and seriously injured people and workers are referred to as participants in these schemes.

    Statutory responsibility for administration of lifetime treatment, care and support in the motor vehicle scheme lies with the National Injury Insurance Agency Queensland (the Agency), and for the workers’ compensation scheme, workers’ compensation insurers (Insurers).

    Participants in the lifetime schemes whose injuries were due to the fault (or negligence) of another party may be entitled to seek common law damages for their injury. These participants have a choice to either:

    • stay in the lifetime schemes for their lifetime treatment, care and support but pursue other heads of damages via a common law claim; or

    • elect to opt out of the lifetime schemes and take a lump sum damages payment for their lifetime treatment, care and support needs (TCS damages).

    In Queensland, the primary legislation for the lifetime schemes states that participants who have opted out of the lifetime schemes can apply for re-entry to the lifetime scheme if:

    • a period, of at least five years, as prescribed by regulation, has passed from when the participant exited the scheme (the preclusion period); and

    • the circumstances in which the participant seeks re-entry meets conditions prescribed by regulation (pre-conditions for re-entry), which currently includes considering whether the TCS damages awarded were sufficient to meet the participant’s lifetime treatment, care and support needs (workers’ compensations scheme) and if the participant is experiencing severe financial hardship (motor vehicle scheme).

    Regulations specifying the preclusion period and pre-conditions for re-entry were not made at the time of commencement of the lifetime schemes. This has allowed for the development of scheme experience. As the lifetime schemes are maturing, and more participants must choose whether to stay in the lifetime schemes or take TCS damages, appropriate regulations for re- entry are necessary to provide certainty for participants, the Agency, Insurers and other stakeholders.

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    The purpose of this RIS is to consider the benefits, costs and issues associated with regulating an appropriate preclusion period and conditions required to be satisfied in order for a participant to re-enter the lifetime schemes.

    Given the complementary legislation of the lifetime schemes, any regulatory changes arising from this RIS are proposed to be aligned for the motor vehicle and workers’ compensation schemes, as far as practicable.

    Two options are proposed for regulating the preclusion period for re-entering the lifetime schemes.

    Option 1: Prescribing a five-year preclusion period, which is the shortest preclusion period allowed by the primary legislation (preferred option).

    Option 2: Prescribing a longer preclusion period, either as a specific term or by reference to objective criteria.

    Option 1 is the preferred option. This option maintains the status quo. This option limits the potential impact on potentially vulnerable participants and other stakeholders until there is a greater evidence base to support implementing a different preclusion period.

    Three options are proposed for regulating other pre-conditions for re-entry to the lifetime schemes.

    Option 1: Re-entry at the wide discretion of the Agency or Insurer (not preferred).

    Option 2: Re-entry at the discretion of the Agency or Insurer, having regard to a regulated list of considerations when determining re-entry.

    Option 3: Re-entry based on mandatory considerations which either require or prohibit re- entry and, if these do not apply, re-entry at the discretion of the Agency or Insurer having regard to the regulated list of considerations as for Option 2.

    The key policy objective of this RIS is to ensure a clear, transparent framework which supports informed decision-making and the long-t