Changes to Workers Compensation in NSW

In June 2012 there were some significant legislative changes made by the O’Farrell Government that has enormous implications for all involved in the system.  The objectives although primarily cost cutting by targeting injured workers compensation entitlements significantly affects other stakeholders such as treatment providers and employers as well. 

 

Workers are affected  in the following areas:

 

• Weekly payments
• Lump sums for permanent impairment (and pain and suffering where applicable)
• The way your injury and employability may be assessed
• Whether your medical bills are paid or not
• Provision of legal assistance to pursue a claim
• The right to rehabilitation assistance

 

  

Treatment providers are affected in how they must request formal treatment from insurers /  agents or risk not being paid

 

Employers are affected:

 

• In how and when they are to provide suitable duties
• The penalties that may be imposed if they don’t comply

 

 

• In what services they can now provide to injured workers
• How they get funded
• New Work cover registration requirements

 

This web site will make give you the information you need or guide to where you need to go to find out.

In the following sections the changes will be discussed as it affects all stakeholders either directly or indirectly. More specific information to individual stakeholders will be provided in in coming articles. The implications for specific individuals and companies will be explored more fully with the goal of helping you to best adapt to the new workers compensation environment.

 

 

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We are very interested in gauging the experiences of people involved in the system whether they are an injured worker, employer or treatment provider.  We will be encouraging people to contribute to our forum sections and to completing one of our tailored online surveys (see latest surveys and register for our online forum).

 

The changes

 

For Employees/Workers

 

1.     WEEKLY PAYMENTS

On the surface there are improvements in the amount of compensation injured workers will receive , particularly in the second period of benefits from week 13 to 130 (if he or she is not back at their preinjury job undertaking full duties). 

 

The Workcover website pdf brochure on weekly is summarised below The new entitlements are dependent on:

• the period (in aggregate weeks) for which you have been receiving weekly payments
• your capacity for work – as assessed by the insurer – and your work status.

Workcover summarise the changes as follows

 

Benefits

 

Benefits for new claims are now based more closely on your real earnings prior to injury – incorporating overtime and shift allowance in the initial 52 weeks of weekly payments:

For the first 13 weeks of a claim, an injured worker will receive up to 95 per cent of your pre-injury earnings.

In weeks 14–130, benefits will be made up to 95 per cent of your pre-injury average weekly earnings if you return to work for at least 15 hours a week. Otherwise, you will receive up to 80 per cent.

After 130 weeks, if you have capacity to work but are not working at least 15 hours a week and earning at least $155 per week then your benefits will cease. If you are working at least 15 hours and earning at least $155, or have no capacity to work, your benefits will continue.

For most workers, weekly payments are limited to five years from the date of your claim (or when you reach retirement age, if that is sooner – at which stage you may receive commonwealth benefits).

Benefits cover medical and related expenses for up to 12 months after you cease to be entitled to weekly payments (or 12 months after you made your claim if you do not receive weekly payments).

If you were claiming prior to these reforms, from 1 January 2013 a ‘transitional amount’ (which is significantly higher than the old statutory rate) will be used as your deemed pre-injury earnings.

It is worthy of comment however that these benefits are contingent upon the outcome of Work capacity assessments that will be conducted between weeks 13 and 130 and then again every 2 years. The methods that can be used for this assessment, as well as the appeals processes available (and not available) are discussed in following sections. 

*we note the maximum compensation amount from 1/10/2012–31/3/2013 is $1868.50.

 

Special requirements for continuation of weekly payments after second entitlement period (after week 130) Section 38, 1987 Act –

 

A worker’s entitlement to weekly payments after the expiry of the second entitlement period ceases unless they are entitled to compensation under s38, of the 1987 Act.  A worker has an entitlement to receive weekly compensation after week 130, if:

• The worker is assessed as having no current work capacity[1] and likely to continue to have no capacity indefinitely: s38(2)

 

• The worker is assessed as having a current work capacity[2] [s38(3)] only if:

(a)    The worker has applied in writing in approved form to insurer within 52 weeks of end of week 130 for continuation of payments (so week 78 to 130); and

(b)   the worker has returned to work for at least 15 hours per week and is earning at least $155p/w; and

(c)    The worker is assessed by insurer as being incapable of undertaking work to increase current weekly earnings, and this likely to continue indefinitely.

 

 

2. COMPULSORY WORK CAPACITY ASSESSMENTS

 

Under the new Workers Compensation Bill the insurer must, for the purpose of assessing a worker’s entitlement to weekly payment after the second entitlement period, ensure that a Work Capacity Assessment is conducted during week 78-130; and at least once every 2 years.   The insurer can conduct a work capacity assessment of a worker at any time.

 

 “Work capacity decisions” under s 43, 1987 Act 

The following decisions are “work capacity decisions”:

(a) A decision about a worker’s current work capacity,

(b) A decision about what constitutes suitable employment[3] for a worker

(c) A decision about the amount an injured worker is able to earn in suitable employment,  Suitable employment- means employment in work for which the worker is currently suited having regard to:

(i)   nature of the worker’s incapacity and details provided in medical information

(ii)  the worker’s age, education, skills and work experience

(iii)  return to work plan or injury management plan etc.

(iv)  any occupational rehabilitation services that are being, or have been, provided.

(v)   any other matters as the WorkCover Guidelines may specify

 

It excludes the following:

(i)   Whether the work or employment is available

(ii)  Whether the work or the employment is of a type of nature that is generally available in the employment market; and

(iii)  The nature of the worker’s pre-injury employment, and

(iv)  The worker’s place of residence. [4]

(d) A decision about the amount of an injured worker’s pre-injury average weekly earnings[5] or current weekly earnings[6]

(e) A decision about whether a worker is unable to engage in employment of a certain nature, without substantial risk of further injury, because of the nature of the employment,

(f) Any other decision of an insurer that affects a worker’s entitlement to weekly payments of compensation, including a decision to suspend, discontinue or reduce the amount of weekly payments of compensation payable to a worker

Under the new act a work capacity decision of an insurer is final and binding and not subject to appeal or review( except review under s44 or judicial review by the Supreme Court: s43(1), 1987 Act).

 

How are Work Capacity Assessments Performed ?

There is no particular procedure or method/s recommended as to how an insurer may go about assessing a workers work capacity.  A number of methods may be employed, however the discression is with the insurer about how they go about making the assessment and what information they choose to use or leave out. 

 

 

Some of the methods may include:

• A request from the Nominated Treating Doctor for information in the form of a report
• A referral of the worker to an “independent” medical specialist of the insurers choosing to assess the worker and make recommendations concerning work capacity
• A referral of the worker to a specialist the injured worker has seen or been treated by to reassess the worker and make recommendations concerning work capacity
• Referral for a functional assessment -  an assessment which assesses specific tasks,  and activities the worker can do and for how long in relation to specific work activities of particular jobs and/ or in carrying out activities of daily living such as house work, driving 
• A vocational assessment - to look at specific occupations the worker may be able to do in context of their developed skills, work experiences, skills affected by injury and transferable skills - what skills can be carried on into a new work area.
• A file review organised by the insurer and performed by the insurer taking into consideration assessments on record, employment history, and medial certificates.
• The insurer may use any of these  methods and may or may not choose to have the injured worker assessed in person

There is no specific background, professional expertise required or skills and qualifications needed of the staff who will decide what method is used for undertaking the Work Capacity Assessment, and in evaluating findings .

 

Review of Work Capacity Decisions under Section 44, 1987 Act

 

The only rights of review of an insurer’s work capacity decision,( other than judicial review by the Supreme Court) are:

(a)             review by the insurer (an “internal review”) subject to the WorkCover Guidelines. The review must take place within 30 days after an application for internal review is made by the worker.

(b)            After an internal review, by the Authority, as a merits review of the decision;

(c)             A review only of the insurer’s procedures in making the work capacity decision, by the Independent Review Officer (“IRO”), but not of any judgment or discretion exercised by the insurer in making the decision. 

 

There are restrictions set out on the right to review of a work capacity decision –and are outlined in the attached appendices.  According to  Kasarne Robinson  Anthony Scarcella in their August 2012  paper [1] Drastic changes to the workers compensation scheme nsw , there are a number of concerns with this aspect of the legislation.  

 

They include:  

1. The insurer does not appear to have to give reasons on their internal review.
2. The reviewer (the Authority or IRO) doesn’t appear to have to give reasons for the findings, only reasons for the recommendation if the reviewer chooses to make a recommendation, which it appears they aren’t bound to do, but “may” do.  Presumably if the finding is that the insurer should reconsider the work capacity decision they would make recommendations the insurer do so.
3. There appears to be no time frame in which the Authority or IRO has to make “findings” or a “recommendation”.
4. The new act prevents a legal practitioner from being paid or recovering any costs incurred in connection with a review under this section.  Hence, workers will need to firstly be aware of their rights to lodge a review, the time restrictions placed on making such an application and prepare the application opposing the decision all by themselves.

 

3. There is no permanent impairment compensation unless greater than 10% ie:

• For a “claim” made after 19 June 2012 Act now provides that only a worker who receives an injury that results in a degree of permanent impairment greater than 10% is entitled to receive compensation for permanent impairment.  (section 66 of the 1987 Act)
• Workers' s66 permanent impairment dollar entitlements between 11% and 100% whole person impairment and related formulas remain the same.
• S69A, 1987 Act (no compensation for less than 6% hearing loss) has been omitted as has s69B.
• Only one claim for permanent impairment  - S66 (1A) provides that “Only one claim can be made under this Act for permanent impairment compensation in respect of the permanent impairment that results from the injury” for “claims” made after 19th June 2012 this removes a worker’s entitlement to claim any further lump sum compensation if their condition deteriorates.

• No pain and suffering  - Section 67 has been repealed, so for “claims” made on or after 19 June 2012 There is no entitlement to pain and suffering compensation. 

 

 

4.       Payment of medical and treatment expenses

The worker’s employer is not liable under this section to pay the cost of any treatment or service (or related travel expenses) If the treatment or service is given or provided without the prior approval of the insurer (not including treatment provided within 48 hours of the injury happening and not including treatment or service that is exempt under the Workcover Guidelines from the requirement for prior  insurer approval), or

• The treatment or service is given or provided by a person who is not appropriately qualified to give or provide the treatment or service, or
• The treatment or service is not given or provided in accordance with any conditions imposed by the Workcover Guidelines on the giving or providing of the treatment or service, or
• The treatment is given or provided by a health practitioner  whose registration as a health practitioner under any relevant law is limited or subject to any condition imposed as a result of a disciplinary process, or who is suspended or Disqualified from practice
• The worker’s employer is not liable under this section to pay  travel expenses related to any treatment or service if the treatment or service is given or provided at a location that necessitates more travel than is reasonably necessary to obtain the treatment or  service.

• WorkCover guidelines may specify things such as qualifications, limiting the amount and conditions for giving treatments  -  examples  billing attending conferences irrespective of time

 

5: Provision of Legal Assistance to Pursue a Claim and Common Law

No legal costs for acting for a worker in relation to review of a work capacity decision 

Currently revisions of the Workers Compensation Act prevents a legal practitioner from being paid or recovering any costs incurred in connection with a review.  Hence, workers will need to firstly be aware of their rights to lodge a review, the time restrictions placed on making such an application and prepare the application opposing the decision all by themselves.

Claiming a Lump sum

 

• Workers can still access lawyer to assist with their application for a lump sum payment.  Only lawyers who are registered and accredited with Workcover can be accessed and subsided.
• Approved lawyers must ascertain whether the workers injuries are likely to be greater than 11% for a claim to be successful and before acting for the worker.
• Provisions for top up payments have been removed - i.e. if an injury deteriorates there will be no further compensation.   This also removes the access to later common law claims if the percentage whole body impairment was to reach 15%.

 

There are no changes to the conditions for Common Law claims –

 

For a Common Law Claim to be lodged the worker:

• Must have a  whole body impairment greater than 15%
• Must be able to demonstrate negligence by the employer 

 

6.  Treatments and Intensive Rehabilitation Assistance

 

Workers retain the right to:

 

• Choose their own doctor -  Nominated Treatment Doctor (NTD) if a worker wishes to change NTD’s a written request must be made citing reasons -  “acceptable” reasons  include worker or doctor has moved locations and extensive travel involved, doctors retiring or unwell, Reasons such as poor rapport, doesn’t listen, won’t refer, may not be considered acceptable reasons by the insurer.
• Choose the therapist - i.e. physiotherapist, psychologist, chiropractor, however recommendations may be made from a rehabilitation provider to use one of their in house treatment providers.  This should be discussed with the NTD first.  All referrals must be made by the NTD and unless is a specific WorkCover guideline for that type of therapist –approval needs to be obtained prior to any assessment or treatment. 
• Choose their own rehabilitation provider when their insurer or employer has instigated a referral to a rehabilitation provider.

 

Employers who have injured workers with more complex injuries, and / or do not have their own return to work coordinator may need to access an external rehabilitation provider.  They can choose to do thise themselves, or request a rehabilitation provider from their insurer. All insurers have their own “preferred providers” who have an agreement concerning how they manage claims and the cost structures that are used.

 

A worker may choose a provider of their own however, providing that provider is accredited with WorkCover NSW if they are not happy with the services of the provider chosen by the insurer or employer.  It is necessary to put a request in writing to the insurer. 

The new alternative provider can usually assist in the process:

• Have travel costs reimbursed for travelling to and from treatment providers and to specialists they are sent to by the insurer or employer.  Under the new legislation however insurers can refuse to pay for travel costs if the travel involved to the nominated treatment provider is deemed excessive. It is at the discression of insurers however to decide what is excessive.
• Workers medical expenses continue to be covered - i.e. costs for medications bandages appliances
• Support at home while convalescing - i.e. after surgery with such things as cleaning costs continue to be covered. Rehabilitation providers can and should be should be accessed to provide home assessments and recommendations concerning the type and level of support needed.  

For Treatment Providers  -  Payment of medical and treatment expenses

 

There are some changes to the way treatment may be accessed by workers and the providers service reimbursed.  A summary of the new legislation and relevant comments as it pertains to treatments is as follows:

• The worker’s employer is not liable under this section to pay the cost of any treatment or service (or related travel expenses) If the treatment or service is given or provided without the prior approval of the insurer (not including treatment provided within 48 hours of the injury happening and not including treatment or service that is exempt under the Workcover Guidelines from the requirement for prior insurer approval),

 

 

Several of the accredited WorkCover para medical service providers - i.e. psychologists and physiotherapists have conditions imposed by Workcover Guidelines on the provision of treatment or services that appears to override this sweeping requirement of service providers.  For example psychologists are NOT required to get formal approval for commencement of treatment after they have received a referral from the NTD, provided there is a valid claim for up to 6 treatment sessions.  They are however, encouraged to notify the insurer of “commencement of treatment” and check there is valid claim.  After the 6 sessions, a treatment plan must be lodged with the employer if additional sessions are required.  If the insurer does not respond then approval is considered to be given. 

 

The recent legislative changes have not changed this arrangement. Similar arrangements occur for physiotherapists and chiropractors:

• The treatment or service is given or provided by a person who is not appropriately qualified to give or provide the treatment or service, or
• the treatment or service is not given or provided in accordance with any conditions imposed by the Workcover Guidelines on the giving or providing of the treatment or service, or
• The treatment is given or provided by a health practitioner whose registration as a health practitioner under any relevant law is limited or subject to any condition imposed as a result of a disciplinary process, or who is suspended or disqualified from practice.

 

There are no significant alterations in these areas to what was required before the recent legislative changes

• The worker’s employer is not liable under this section to pay travel expenses related to any treatment or service if the treatment or service is given or provided at a location that necessitates more travel than is reasonably necessary to obtain the treatment or service.

 

Although travel costs have always been monitored and challenges made about what is “reasonably necessary” this issue has now been revisited.  It is anticipated that there will be challenges to the enforcement concerning issues of “reasonably necessary” , particularly in situations such as psychological treatment after an injured worker or therapist has moved locations - particularly where therapist / patient relationship is critical for outcomes and the changing to a new unknown therapist is requested.

 

• Workcover guidelines may specify things such as qualifications, limiting the amount and conditions for giving treatments  -  examples  billing attending conferences irrespective of time

 

There is evidence that there is a crackdown on travelling to and from case conferences without prior approval being gained in writing by the insurer.  This can prove problematic when the conference is organised by a 3^rd party’s such as an insurer who requests the conference and attendance of particular professional’s.  The insurer may at later date choose not to pay for the travel involved to and from the conference venue to the professionals usual Workplace unless they have given their written approval in advance.

 

 

Appendix 1.

Restrictions set out on the right to review of a work capacity decision 

Restrictions set out on the right to review of a work capacity decision s44 (2) and (3), 1987 Act as follows:

• The application for review must be made in the form approved by the Authority and specify the ground on which the review is sought
• The worker must inform the insurer if they are making an application for review to the Authority or the IRO: s44(2).

 

For a review to the Authority or IRO:

(a)               the application for review must be made within 30 days after the worker receives the decision on the internal review (for a review to the Authority), or within 30 days of receipt of the Authority’s decision on a review (when the review is to the IRO);

(b)              the worker may make an application for review to the Authority without an internal review if the insurer has failed to conduct an internal review and notify the worker of the internal review in accordance with s44(1)(a).

(c)               the reviewer can decline to review a decision if the application for review is frivolous, vexatious, or because the worker has failed to provide information requested by the reviewer.

(d)              Worker and insurer must provide any information reasonably requested by reviewer.

(e)               Reviewer is to notify the worker and insurer of the finding of the reviews and may make recommendations to the insurer based on those findings (giving reasons for any such recommendation).

(f)                The IRO must also notify the insurer of the findings and the Authority may make recommendations (giving reasons for the recommendations) to the insurer based on those findings.

(g)               Recommendations made by the Authority are binding on the insurer and must be given effect to by the insurer.

(h)              Recommendations by the IRO are binding on the insurer and the Authority.

 

 

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