Contact: Nikki Lucas (01962) 813904

1 Introduction

1.1 This report covers recommendations in respect of the introduction of a formalised policy for the application of Part V of the Local Government (Discretionary Payments) Regulations 1996 which refer to employers payments (injury allowances) in respect of injuries at work.

1.2 If the County Council does not have a formal policy in relation to Injury Allowances under the above regulations it may expose itself to the risk of either an appeal to the Secretary of State, judicial review, a referral to the Pensions Ombudsman and/or a claim in the County Court.

1.3 Currently Hampshire County Council does not have a formal policy, but past practice has been to deal with each claim on a case by case basis. This approach is consistent with most other authorities. The County Council's legal section now considers this practice to be inappropriate in the long term and a formal policy is required.

2 Recommendations

2.1 The County Council adopt an injury allowance scheme based upon the table from the Firefighters Compensation Scheme and the percentage of disability assessed by the Department for Work and Pensions in respect of the payment of state benefits.

2.2 Where the assessment of an injury allowance results in a nil or negative award the County Treasurer and Director of HR have delegated powers to award up to £500 per annum dependent upon the circumstances of the case.

3 Legislation

3.1 Injury Allowance provisions are contained in The Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 1996.

3.2 Most of the provisions of these regulations were repealed in October 2006 because they were considered to be discriminatory on the grounds of age. Hence, a new discretionary compensation policy under the replacement provisions was made at the March 2007 meeting of EHCC.

3.3 However Part V of these regulations which covers Injury Allowances was not repealed. This states that `an employer shall make compensation payments in the form of an injury allowance where a person suffers a reduction in remuneration , loss of employment, loss of pension or dies as the result of an injury received, or disease contracted in carrying out his work'.

3.4 Where a reduction in remuneration occurs the allowance must not exceed the shortfall between remuneration payable if there had not been an injury or disease contracted and the remuneration actually in payment.

3.5 Where employment is lost through permanent incapacity as a result of the injury or disease the allowance shall not exceed 85 per cent of the annual rate of remuneration before the employment was lost. The employer may suspend the allowance if the person again becomes capable of work.

3.6 Where a person dies as the result of the injury or disease an annual allowance or lump sum is payable to a dependent, spouse or civil partner.

3.7 If a pension in payment is of a lower value because the reduced remuneration arose as a result of an injury or disease then the allowance shall not exceed the shortfall between the amount that would have been paid, if remuneration had not been reduced, and the actual amount payable.

3.8 Part V of the Compensation Regulations also requires the assessment of the amount payable to take account of all the circumstances of the case including any benefits from the Department for Work and Pensions (DWP), any other right to benefit or compensation, any right to receive pension benefits (whether payable under an enactment or otherwise) and any damages recovered and any sum received by virtue of a contract of insurance.

3.9 However, a method of assessment of the injury allowance is not stipulated, although any amount payable must be paid by the employer or former employer.

4 Method of assessment

4.1 Other Statutory pension schemes such as The Firefighters Pension Scheme have specific compensation arrangements which contain provisions for calculating injury allowances and a table for assessing the gross award (Appendix A) based upon length of service and percentage of disability.

4.2 An employee suffering from a work related injury will be assessed by the DWP for state benefits purposes. This will involve assessing a percentage of disablement upon which DWP benefits will be based.

4.3 To use a combination of the statutory framework set out in the Fighters Scheme and the DWP percentage of disablement is suggested as a suitable method of assessing a gross injury award. All the circumstances of the case and the items listed in paragraph 2.8 above would then be used to assess the net payment.

4.4 For example, if a person with 12 years HCC service had left their employment as the result of an injury on duty with HCC, and had been assessed by the DWP as 40% disabled they would be entitled to a gross injury award of 50% of pay less the items listed in paragraph 2.8.

4.5 It is possible that the assessment can produce a net award of a nil or even negative amount. However, the regulations state an injury award `shall' be paid. Every case must, therefore, receive a payment. In cases where the assessed award is nil or a negative figure a nominal amount agreed by the County Treasurer and Director of HR can be paid. Past practice has been to use an amount in the region of £100 per annum which is subject to inflation increases.

4.6 If death results from the injury any award to a spouse or civil or nominated partner could be assessed on the same basis but using 50% of the deceased persons pay as the start point for the calculations. The figure of 50% is recommended as spouses pensions within occupational pension schemes are normally 50% of the deceased persons pension.

Section 100 D - :Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

None

Appendix A

SCHEDULE 1

Part 2

INJURY AWARDS AND DUTY-RELATED COMPENSATION

PART 1

CALCULATION OF AWARDS FOR FULL-TIME SERVICE

1.

(1) Subject to Part 2 of this Schedule, the amounts of the injury gratuity and the injury pension shall be calculated by reference to the Table below.

(2) In the headings in the Table references to relevant service are references to service which either was, or would but for an election under rule G3 of the Pension Scheme or a failure to elect under rule G2A of that Scheme have been, reckonable as pensionable service.


Table

2.

(1) The amount of a person's injury pension under rule 1 of Part 2 shall be reduced by three quarters of the amount of any other pension referable to his service as a firefighter (including, if rule 4 of Part 10 applies in his case, the aggregate of the pension to which he is entitled under rule B3 of the Pension Scheme and the amount of the difference referred to in rule 4(3) of Part 10).

(2) The amount of a person's injury pension calculated in accordance with paragraph 1 shall be reduced by three quarters of the amount of any other pension calculated by reference to pensionable service reckonable by virtue of the period of service during which he received the qualifying injury or, where an election under rule G3 of the Pension Scheme had effect or the person failed to make an election under rule G2A of that Scheme, by the amount of any other pension which would otherwise have been so calculated.

(3) For the purposes of sub-paragraphs (1) and (2), any reduction of the other pension:

(a) under rule B7 (commutation) or B9 (allocation) of the Pension Scheme,

(b) under Part VIII of Schedule 2 to that Scheme, or

(c) by virtue of a pension debit, shall be disregarded.

3.

(1) In respect of any week for which the person is entitled to an additional benefit mentioned in sub-paragraph (2) the amount of his injury pension calculated in accordance with paragraph 1 shall, subject to sub-paragraph (6), be reduced by the amount of the benefit.

(2) The additional benefits are:

(a) so much of any disablement pension under section 57 of the Social Security Act 1975[26] ("the 1975 Act") as relates to the qualifying injury, together with any relevant increase,

(b) so much of any reduced earnings allowance under section 59A of the 1975 Act as relates to the qualifying injury, and

(c) until the material date, any benefit mentioned in sub-paragraph (3), together with any relevant increase.

(3) The material date for the purposes of sub-paragraph (2)(c) is the first day after the person's retirement which is not, or is deemed not to be, a day of incapacity for work within the meaning of section 14 or 15 of the 1975 Act, or, as the case may be, a day on which he is incapable for work within the meaning of section 36 of the 1975 Act, and the benefits are:

(a) any sickness benefit under section 14 of the 1975 Act, including one to which he is only entitled by virtue of section 50A of that Act, and

(b) any invalidity pension under section 15 of the 1975 Act, including any additional component comprised in it in pursuance of section 14 of the Social Security Pensions Act 1975, and

(c) any severe disablement allowance under section 36 of the 1975 Act.

(4) In relation to the additional benefit mentioned in sub-paragraph (2)(a), relevant increases comprise any increase in the benefit attributable to an increase in the pension:

(a) by way of unemployability supplement under section 58 of the 1975 Act, excluding any increase under section 59 in the supplement,

(b) under section 60 of the 1975 Act (special hardship), or

(c) under section 64 or 66 of the 1975 Act (dependants), and so long as the person is receiving treatment as an in-patient at a hospital as a result of the qualifying injury, any increase in the pension under section 62 of the 1975 Act (hospital treatment).

(5) In relation to the additional benefits referred to in sub-paragraph (2)(c), any increase under any provision of Chapter III of Part II of the 1975 Act (dependants) is a relevant increase.

(6) Where the provisions governing scales of additional benefits have changed after the person ceased to be a regular firefighter, the amount of the reduction in his injury pension in respect of any week on account of a particular benefit shall not exceed what it would have been if those provisions had not changed; where the benefit includes an amount attributable to an increase under section 60 of the 1975 Act (special hardship), it is to be assumed that the increase would have borne the same relationship to the former maximum for increases under that section.

(7) Where a person has become entitled to a disablement gratuity under section 57 of the 1975 Act in respect of the qualifying injury, this paragraph has effect as if he were entitled under that section during the relevant period to a disablement pension of the amount that would be produced by converting the gratuity into an annuity for that period; the relevant period is the period taken into account, in accordance with section 57 of the 1975 Act, for the purpose of making the assessment by reference to which the gratuity became payable.

4.

No payment shall be made in respect of an injury pension for any week in which the aggregate reductions under paragraphs 2 and 3 equal or exceed the amount of the pension calculated in accordance with paragraph 1.