Home » Latest Articles » Latest Changes to Workers Compensation in NSW - What do they mean and does anybody care?
We have put together information to keep injured or ill persons informed of what to expect.
Read More »
All employers play a crucial role in the prevention and management of workplace injuries.
Read More »
Information for Psychologists, Occupational Therapists, Nurses, Exercise Physiologists and Doctors.
Read More »
Other key stakeholders are also encouraged to provide Information and comments about issues of relevance .
Read More »
Home » Latest Articles » Latest Changes to Workers Compensation in NSW - What do they mean and does anybody care?

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:

  1. SafeWork NSW, which will be responsible for work health and safety (WHS) regulation including safety inspections of work sites.
  2. Insurance & Care NSW (icare). This service will focus on improving service delivery to injured workers, including the tracking of claims processing.
  3. 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?




More Information

Useful Information

Member Login

Forget Password?