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Notes to the Financial Statements

Departmental Financial Performance

Note 1.1: Expenses

2019

$

2018

$

1.1A

Suppliers

Services supplied

Services provided by Comcare

812,942

604,959

Audit fees

15,000

14,000

Total suppliers

827,942

618,959

Accounting policy

The Seacare Authority does not employ staff. Comcare pays the expenses associated with the management of the Seacare Authority.

The value of supplier expenses represents the cost of services provided free of charge by Comcare and the Australian National Audit Office. These services are recognised as expenses. The actual cost incurred by Comcare is determined through a cost allocation process.

Note 1.2: Own-Source Revenue and Gains

2019

$

2018

$

Own-source revenue

1.2A

Resources received free of charge

812,942

604,959

1.2B

Audit services received free of charge

15,000

14,000

Total own-source revenue

827,942

618,959

Accounting policy

The value of own-source revenue represents the value of services received free of charge from Comcare and audit services received free of charge from Australian National Audit Office (ANAO).

Resources received free of charge are recognised as revenue or gain when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources are recognised as an expense.

Resources received free of charge are recorded as either revenue or gains dependent on their nature.

The ANAO did not charge for the audit of the 2018-19 financial statements. The notional amount of $15,000 was brought to account as services provided free of charge (2018: $14,000).

Income and Expenses Administered on Behalf of the Government

Note 2.1: Administered - Expenses

2019

2018

$

$

2.1A

Suppliers

Rendering of services

Seacare Authority Safety Net Fund administration

44,738

135,864

Total suppliers

44,738

135,864

2.1B

Workers' compensation claims expense

652,385

2,915,000

Total expenses

697,123

3,050,864

Note 2.2: Administered - Income

2.2A

Non-taxation revenue

Levies

153,250

114,825

Recovery in Insurance

60,771

2,063,177

Total other revenue

214,021

2,178,002

Accounting policy

Revenue from levies is recognised when:

a) the entity obtains control of the contribution or right to receive the contribution

b) it is probable the economic benefits comprising the contribution will flow to the entity

c) the amount can be measured reliably.

The workers’ compensation claim expense is recognised when:

a) the entity has a present legal or constructive obligation as a result of past events

b) it is probable that an outflow of resources will be required to settle the obligation

c) the amount can be measured reliably.

Assets and Liabilities Administered on Behalf of the Government

Note 3.1: Administered - Financial Assets

2019

2018

$

$

3.1A

Cash and cash equivalents

Cash in special accounts

1,152,034

1,210,610

Cash on hand or on deposit

-

-

Total cash held as at 30 June 2018

1,152,034

1,210,610

3.1B

Prepayments

Prepayments

73,296

-

Total prepayments

73,296

-

The 2019-20 insurance premium has been prepaid in June 2019.

3.1C

Trade and other receivables

GST Receivable

-

9,462

Insurance recovery receivable

2,123,948

2,063,177

Total receivables

2,123,948

2,072,639

Accounting policy

Cash is recognised at its nominal amount. Cash and cash equivalents include cash held in the OPA for special accounts and demand deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Receivables are measured at amortised cost.

The classification depends on the nature and purpose of the financial asset and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon ‘trade date’.

Note 3.2: Administered - Payables

2019

$

2018

$

3.2A

Workers compensation claims payable

Claims payable

3,320,945

-

Total workers compensation payable

3,320,945

Claims payable represents the payable balance for an accepted claim.

3.2B

Suppliers

Trade creditors and accruals

104,935

-

Total suppliers

104,935

-

Payables are with entities of the Australian Government and the terms are 20 days from date of invoice (2018: 30 days).

Comcare has prepaid the 2019-20 insurance premium for the Seacare Authority in June 2019 ($73,296). The Seacare Authority recognised it as a payable to Comcare as at 30 June 2019.

3.2C

Other Payables

Income received in advance

4,900

-

Total other payables

4,900

-

The income received in advance represents 2019-20 levies received in 2018-19.

Accounting policy

Other financial liabilities

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

Note 3.3: Administered - Provisions

2019

$

2018

$

3.3A

Provision for workers' compensation claims

As at 1 July

3,537,000

622,000

Additional provisions made

652,385

2,915,000

Payment made in 2018–19

(181,450)

-

Reclassify to payables

(3,352,584)

-

Total as at 30 June

655,351

3,537,000

The Fund provides coverage to persons who underwent industry training or attended the seafarers’ engagement system and any seafarer or company trainee in situations where the original employer is insolvent or no longer traceable. As such, Seacare Authority has a financial exposure to all eligible workers’ compensation claims that cannot be met by the original employer.

The value of workers’ compensation claims expenses as at 30 June 2019 was estimated and adjusted for the impact of any potential identified circumstances by management based on the independent actuarial advice provided by Taylor Fry Pty Ltd. Management has reviewed the provision and considered the current provision appropriate for 2018–19.

Accounting policy

The liability for workers' compensation claims is determined in accordance with the requirements of AASB 137 Provisions, Contingent Liabilities and Contingent Assets. Provisions for claims are recognised when: the Seacare Authority has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Where there are a number of similar obligations for each claim type, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same claim type may be small.

The value of the claims provision is measured at the present value of expected future payments against claims incurred at the reporting date plus an allowance for the significant uncertainty in estimating future claim payments. The expected future payments are discounted to present value using a risk adjusted rate.

The expected future payments include those for claims incurred but not reported (IBNR) and anticipated claims handling costs. Claims handling costs include costs that can be associated directly with individual claims, such as legal and other professional fees, and costs that can only be indirectly associated with individual claims, such as claims administration costs.

Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this Note, the Seacare Authority has made a judgement of the assumptions underlying the reported claims, incurred but not report claims (IBNR claims), and Asbestos claims for workers' compensation claims provision in the financial statements.

Funding

Note 4.1: Administered Special Account

Seafarers Rehabilitation and Compensation Account
(Administered)

2019

$

2018

$

Balance brought forward from previous period increases

1,220,066

1,355,651

Other receipts – levy receipts

158,150

114,825

Total increases

158,150

114,825

Available for payments

1,378,216

1,470,476

Decreases

(226,182)

(250,410)

Total balance carried to the next period*

1,152,034

1,220,066

*All cash is held in the Official Public Account (OPA).

Establishing instrument: Seafarers Rehabilitation and Compensation Levy Act 1992 (Levy Act); Seafarers Rehabilitation and Compensation Levy Collection Act 1992 (Levy Collection Act).

Purpose: for the receipt of all levies, the payment of expenses incurred in administering the Special Account and the payment of claims under the Seafarers Act. The Special Account is non-interest bearing.

The Special Account has the following purposes:

(a) making a payment incurred by, or attributable to the Seacare Authority that relates to:

i. the Authority’s costs in administering the Levy Collection Act and the special account

ii. the Authority’s costs in administering the Seafarers Rehabilitation and Compensation Act 1992 (Seafarers Act), so far as that administration concerns the Seacare Authority in its capacity as an employer under subsection 4(3) of the Seafarers Act

iii. a claim or other amount payable to a person under the Seafarers Act, so far as that amount is payable by the Authority in its capacity as an employer under subsection 4(3) of the Seafarers Act

iv. an insurance premium or indemnity for any amount of the Seacare Authority’s liability under the Seafarers Act

(b) repaying an amount where a court order, Act or other law requires or permits the repayment of an amount received.

People and Relationships

Note 5.1: Key Management Personnel Remuneration

Key management personnel are those persons who have authority and responsibility for planning, directing and controlling the activities of the Seacare Authority, directly or indirectly. The Seacare Authority has determined the key management personnel to be the Portfolio Minister (the Minister for Industrial Relations) and Chief Executive. The remuneration received by the Chief Executive, not employed by the Australian Government, but paid by Comcare during the period is reported in the table below.

2019

2018

$

$

Short-term employee benefits

35,318

36,281

Total key management personnel remuneration expenses1

35,318

36,281

The total number of key management personnel that is included in the above table is 1 (2018:1).

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the Seacare Authority.

Note 5.2: Related Party Disclosures

Related party relationships

The Seacare Authority is an Australian Government controlled entity. Related parties to the Seacare Authority are Key Management Personnel including the Portfolio Minister and Chief Executive.

Transactions with related parties

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the entity, it has been determined that there are no related party transactions to be separately disclosed.

Other Information

Note 6.1: Aggregate Assets and Liabilities

as at 30 June 2019

2019

2018

$

$

Assets expected to be recovered in

No more than 12 months

1,152,034

1,210,610

More than 12 months

2,123,948

2,072,639

Total assets

3,275,982

3,283,249

Liabilities expected to be recovered in

No more than 12 months

1,154,213

933,000

More than 12 months

2,931,918

2,604,000

Total liabilities

4,086,131

3,537,000