Latest Changes to Workers Compensation in NSW - What do they mean and does anybody care?
In early August this year
the NSW Liberal Government announced it would be implementing a package worth a
billion-dollars to wind back of some of the measures that stripped New South
Wales' workers of entitlements. The 2012 overhaul of workers compensation under
the former premier Barry O'Farrell was aimed at reining in Work Cover's $4
billion deficit. At the time, the deficit was blamed on the existing scheme and
labour’s mismanagement. The changes were heavily criticised because of
the extent that they slashed medical and general benefits for workers including
people who had lost limbs and hearing, and due to the lack of legal
representation appeals mechanisms for injured workers who lost their
entitlements through the newly introduced work capacity review process.
Within a year of the changes the O’ Farrell Government was boasting that the scheme was now back in the black and “everyone was benefiting” with a more sustainable system. Subsequently workers compensation premiums were cut.
In contrast to the benefits employers experienced, most injured workers, their families and treatment providers were paying the price for these reduced premiums. Changes to the way injured workers were assessed led to the termination of income entitlements to 5000 people. At least 260 of the workers were not employed when their benefits were cut. Up to 20,000 workers with long-term injuries have also lost their entitlements to medical benefits, as a result of the 2012, cuts according to the Sydney Morning Herald.
Last year an independent report found the scheme was
skewed towards employers, because workers had more restrictions, than insurance
companies to using lawyers. The Macquarie University study commissioned by Unions NSW, found that
researchers said the NSW government's changes to regulations in September 2014,
which wound back some of the changes for people injured before 2012 "had
not gone far enough to restore fairness and equity in the NSW workers'
compensation scheme".
"A thorough rethinking of government policy in this area is
required in order to achieve the fundamental objectives of guaranteeing support
for injured workers and promoting their recovery and continued return to
work," the researchers said.
The latest changes go further but do they go far enough to provide
injured workers access to appropriate and timely treatment, particularly in the
situations they are unable to return to their preinjury jobs and have
continuing disability from their injuries.
The
changes announced include the dismantling
of Workcover and setting up of:
- SafeWork
NSW, which will be responsible for work health and safety (WHS) regulation
including safety inspections of work sites.
- Insurance
& Care NSW (icare). This service will focus on improving service delivery
to injured workers, including the tracking of claims processing.
- The third
agency is the State Insurance Regulatory Authority (SIRA), this will regulate
all state insurance schemes, including workers’ compensation and third party
insurance.
There
were also a number of changes to Injured Workers entitlements that included:
- New terminology has been introduced and injured
workers with a permanent impairment of over 30% will now be known as
"workers with highest needs". Workers who have more than 20% whole
person impairment will be referred to as "workers with high needs";
- Those workers with highest needs will receive a
minimum weekly benefit of $788.00 which will comprise the benefit paid for by
their insurer and any post injury earnings;
- Workers injured before retiring age will now
receive weekly payments for up to 12 months after reaching retirement;
- Workers will now continue to receive weekly
payments while their work capacity decision is under review by their insurer or
WorkCover;
- All workers, regardless of their level of permanent
impairment and whether or not they are in receipt of weekly payments, will
receive reasonably necessary medical expenses for a minimum of two years from
the date their claim was made;
- For workers with a permanent impairment of 11% or
more, payment of medical expenses is extended for up to five years;
- Injured workers with high needs - those with
greater than 20% whole person impairment - will receive payment of medical
expenses for life;
- For workers in receipt of weekly payments, medical
benefits will be available while those weekly payments are payable and then for
an additional two or five years depending on their level of permanent
impairment, after weekly payments cease;
- The ability to claim secondary surgery has been
clarified and must be consequential to an earlier surgery and be approved
within two years of the earlier surgery;
- As a result of different interpretations by the
Workers Compensation Commission placed upon the 2012 amendments to s59A, the
Bill clarifies that for the purposes of that section, weekly payments of compensation
are payable to a worker only while the worker actually satisfies the
requirements to be entitled to weekly payments and;
- The lump sum amount paid to dependants of a worker
who has died will increase to $750,000.00. This represents the most generous
lump sum support package in Australia for families of workers who have died at
work. Funeral expenses have also increased to reflect current market costs.
The government contends
that it is also delivering on a commitment to use one-third of annual surpluses
in the workers compensation scheme to reduce premiums for employers. Business
will benefit with approximately $170 million to $200 million being returned to
above average performing employers via a premium performance discount.
Although some money is
being directed back into the system that targets injured workers, the changes announced are merely token and by no
means go anywhere towards addressing the fundamental unfairness of the system.
If the changes are analysed carefully and the fine print read, it becomes
apparent that the criteria for accessing increased entitlements is so tight
that very few injured workers will experience any improvements at all. For example -it was stated that workers will now continue
to receive weekly payments while their work capacity decision is under review
by their insurer or WorkCover. When the details are spelt out - see
the WorkCover website - it is clearly stated that only claims made before 1st
October 2012
are eligible. Given the legislation has been extremely successful
in getting rid of tail end claims, there are now very few existing pre 2012 claims
left because the injured workers have long since been exited from the system through
work capacity assessments or through reaching the date when they are no longer
eligible for wage entitlements.
The recent changes in the wage benefits paid to workers with over 30% impairments
and the increased coverage of medical benefits for workers between 21% and 30%
is welcomed. The number of workers with those
levels of impairment; however, is incredibly small and the benefits will be experienced
by only the smallest minority of injured workers. Those workers with moderately
severe injuries, apart from receiving extended eligibility for reasonable and
necessary treatment will still be exited from the system as before through the
work capacity process or when their period of entitlement is up. This will
continue to occur, irrespective of whether the worker has been able to find another
job or is still on reduced hours in a selected duties capacity.
The fundamental unfairness and injustice of the system has not changes at
all, David She Bridge from the Greens comments:
“One of the most damaging aspects of
the 2012 amendments was the ‘Nile Amendment’ which removed injured workers’
right to legal representation. The amendment made it unlawful for lawyers to
be paid to help an injured worker review an insurer’s Work Capacity decision. Insurers have internal lawyers and specialists making
the Work Capacity decisions to deny injured workers benefits (the usual form of
the decisions is something to the effect of “despite your nasty back injury we
think you can work as a market gardener and have no ongoing wage loss – so
benefits denied’). The process of reviewing these decisions is impossibly
complex, and many injured workers have poor English, difficulty reading
and/or writing. Some have acquired brain injuries. In every case it is unlawful
for a solicitor to be paid to assist these workers. They are on their own. They
lose their benefits.”
Proponents
of the changes - The Government and some employers have continued to argue that
the previous system was unsustainable and grossly mismanaged by the previous labour
Government. This argument underpinned the largely ideological driven changes that
necessitated the most extensive changes in 25 years of workers compensation in
NSW. A report by the WorkCover
Authority’s scheme actuary, Price Waterhouse Coopers, however clearly shows
that the Coalition Government’s cuts to workers compensation benefits were
not required. The Coalition used a notional $4 billion deficit in the
scheme as at December 2011 to make the case for the slashing of workers
compensation benefits.
“As at
December 2011 the $11 billion that WorkCover had put aside to meet future
claims was receiving historically low rates of return due to the ongoing fall
out of the Global Financial Crisis and produced this notional $4 billion scheme
deficit.”
Investment
returns have now bounced back and WorkCover’s own actuary is saying it was on
track to return to surplus without any of the brutal cuts imposed on injured
workers in 2012. This report shows the Coalition’s cuts to workers compensation
were in fact an ideological attack on working people’s rights, masquerading as
economic necessity.
As well as the cuts to workers entitlement there
have been other changes that are indirectly as bad for treatment providers and
injured workers as the benefit cuts. Prior
to the changed legislation in 2012, The
NSW workers compensation system had gone
through a series of policy changes and creative
initiatives by Workcover that saw a more collaborative approach to
injury management than the adversarial litigious approach and culture workers compensation
insurers had operated with for years. These changes brought about a higher
level and skill of staff working within insurance companies with the
appointment of injury management advisors who would help case manager to manage
complex and difficult cases and to encourage cooperation and collaboration.
The changes introduced in 2012 have set the process
back years. Insurers effectively now have the power and legislation backing
them to do what they want. The system is
designed to primarily exit injured workers as soon as possible, whether the
worker is better or not. Arguments put forward by health professionals are often
ignored, paid lip service to, or treated with contempt. At the end of the day
the changes that were introduced in August are token and the fundamental
objective remains the same - to cut
costs by fair means or fowl as long as the target of the legislation is keeping
employers happy and the rest of the populations in a state of blissful
ignorance or indifference. - “unless it affects
me it doesn’t matter.”
What do you think?
http://www.hwlebsworth.com.au/component/k2/item/1748-workers-compensation-amendments-nsw-government-to-further-wind-back-2012-workers-compensation-changes.html