WorkCover SA proposed changes – first gloomy look

workcover-sa-reforms1

As we posted earlier, the SA Government is planning to overhaul of its “buggered” WorkCover SA scheme, which is set to come into effect from 1 July 2015. Whilst we have not seen the full (and fine) details of the reforms, we know already that just about every SA injured worker will be adversely affected by the changes. Here is an overview of the main proposed changes.

WorkCover SA proposed changes – first gloomy look

WorkCover SA: overview of the main proposed changes

The new workCover SA scheme, known as “Rehabilitation and Compensation Scheme”will be called the “Return to Work Scheme”.

Definition of injury/illness

As it stands, a physical injury must arise out of or in the course of employment (work). For a secondary injury or illness, employment must be a contributing factor. For a psychiatric injury, employment must be a substantial cause.

The proposed changes is that to be eligible for workcover in SA, the employment must be a significant contributing cause of the physical injury or the significant contributing cause of the psychiatric injury.

Weekly payments

(Currently SA injured workers are paid 100% of their income (weekly pay) up to 13weeks (0-13 weeks).)

Under the new WorkCover SA scheme, injured workers will be paid 100% of their income up to 52 weeks (0-52 weeks).

(Currently SA injured workers are paid 90% of their income from 14-26 weeks).

Under the new scheme injured workers workers will be paid 80% of their income between 53 and 104 weeks.

Under the new scheme, weekly payments will cease at 104 weeks, unless the worker is SERIOUSLY injured, that is have a whopping 30% Whole Person Impairment (WPI).

Under the new scheme, if the worker is (deemed) seriously injured, weekly payments will continue at 80% until retirement age.

(Currently, from 27 weeks injured workers receive 80% of their income and have to undergo a work capacity review at 130 weeks).

Lump Sums for permanent impairment

Under the new scheme injured workers will continue to be eligible for a lump sum if they have a WPI of 5% (or more), however under the new scheme injured workers will only be allowed 1 (one) permanent impairment assessment per claim.

The new  workcover SA scheme will make statutory economic loss payments available to injured workers with a whole person impairment (WPI) loss of between 5% and 29% (example: maximum $350,000 at 25 years old and 29% WPI and $70,000 at 60 years old and 29% WPI).

Lump Sum Payment for Non-Economic Loss ( pain and suffering) and Economic Loss:

workcover-sa-wpi(Note: there is also an adjustment for part-time workers)

Redemptions

A redemption is a lump sum  payment on the basis that the injured worker forgoes his/her ongoing entitlement to weekly payments and medical expenses.

The new scheme will  remove the current limitations, allowing redemption payments when both parties agree.

Common Law Claims

Under the new WorkCover SA scheme, thankfully, injured workers will once again be able to sue their (negligent) employers (access to common law), however strict criteria will have to be met:

  • A seriously injured worker will have to choose between suing their employer or agreeing to a redemption (or staying on the Workcover scheme)
  • The injured worker will need to have a (whopping) WPI of 30% or more
  • If the worker suffered a psychiatric injury, the injury must be primarily caused by the negligence of the employer (so only primary psych injury will count, not secondary psych injuries).
  • A worker who is a working director will not be able to access common law

Rehabilitation Services

Under the new scheme, Rehabilitation programs will be combined with Return to Work plans, and will need tt be put in place at 4 weeks (instead of the current 13 weeks).

Return to Work obligations

WorkCover SA new scheme will focus on return to work. Injured workers will be obligated to return to suitable employment if they have the capacity to do so.

Employers will have an obligation to support their injured workers including participation in rehab/return to work plans.

Injured workers will be able to request WorkCover SA to investigate an employer if the injured worker believes the employer has suitable employment available. The injured worker will also be able to apply to take this matter to the Tribunal if needed.

Seriously injured workers (those with 30% WPI or more) will not have return to work obligations, unless they choose to.

Dispute resolution

Under the new scheme, workers compensation matters will be managed by the new South Australian Employment Tribunal, insead of the current Workers Compensation Tribunal.

Weekly payments can continue during relevant disputes, while currently they reduce or cease at the expiry of the notice period.

WorkCover Ombudsman

The role of the WorkCover Ombudsman will no longer exist under the new workcover SA scheme.

 

[Article based on TGB’s article titled ‘A First Look At What Could Be South Australia’s New Workers Compensation Scheme‘ ]

MP Stephanie Key speaks out against Labor’s bill for SA WorkCover changes

Thu 25 Sep 2014 | ABC

Labor backbencher Stephanie Key has spoken out in the South Australian Parliament against her own party’s legislation to change the workers’ compensation scheme WorkCover.

The bill would end payments after two years for people deemed not to be seriously injured, which Ms Key argued would be harsh on some injured workers.

“I believe these tougher provisions will make it more difficult to access workers’ compensation, resulting in more disputes and lower return to work rates through delays and refusals [of benefits],” she told the House of Assembly.

[The bill] is designed to reduce employer premiums at the expense of injured workers and their entitlements, rather than [make] genuine improvements in the scheme.”

Industrial Relations Minister John Rau said changes were needed to reign in costs and help reduce the insurance premiums employers faced.

He told State Parliament the latest reforms were expected to save taxpayers about $180 million annually.

“Something like 94-96 per cent of people entering the scheme will be better off,” he argued.

Ms Key said, despite being a vocal critic of the changes, she would vote in favour of the legislation.

Mr Rau said he respected the range of party views on changing WorkCover.

“I know there are a number of people in the ALP who have strong views about this, I respect their opinions,” he said.

“I just hope that over the course of the committee stage of the bill they’ll have a chance to ask questions about those matters that concern them and I can allay their fears.

“The workers’ compensation scheme is not a magic pudding, you can’t just pull out as much as you like and not have to pay for it. The scheme has to be tailored to what can be afforded.”

Lawyers critical of injury threshold

If someone suffers more than one type of injury, you can’t add them together to come up with the 30 per cent or greater impairment, even though in reality they may be impaired at 30 per cent or greater, so you can see the intrinsic unfairness of the bill in that regard.
Morry Bailes, Law Society

Law Society president Morry Bailes said the proposed definition of a seriously injured worker was unfair.

He said the [assessed injury] threshold for a worker to sue their employer under common law also was set being too high under the legislation.

“The threshold is 30 per cent so the question is in reality how many people are going to be able to access it,” he said.

“Previously you could aggregate injuries, here you can’t.

“If someone suffers more than one type of injury, you can’t add them together to come up with the 30 per cent or greater impairment, even though in reality they may be impaired at 30 per cent or greater, so you can see the intrinsic unfairness of the bill in that regard.”

Mr Rau said the Government had sought to achieve balanced work injury legislation.

“If the Law Society want to change that threshold and they’re happy to explain to the employers of South Australia why they should have a more expensive scheme that’s a matter for them, I guess,” he said.

Opposition Leader Steven Marshall pledged Liberal support for the rapid passage of the WorkCover changes.

“My clear message to the Government with WorkCover reform is get on with it,” he said.

 

Related Story: Two-year cut-off for injured workers in planned WorkCover reform

Related Story: WorkCover overhaul priority for new parliament

[Source: http://www.abc.net.au/news/2014-09-23/mp-speaks-out-against-sa-workcover-changes/5764274]

As Trinny commented, with thanks:

My concern is for the new workCover system in South Australia. It’s no longer Work Cover. Titled completely different along the lines of “return to work”. This is not a clichque title. Injured workers must make 30% on one injury before they continue insurance payments for more than 2 years. The normal initial six weeks payments continue if a claim is denied ( as usual ) the worker will pay back the monies WITH INTEREST! Nothing has been disclosed by the government. Only what is revealed by the South Australian law society. Their comments are scathing. South Australians have been kept in the dark about their entitlements. But I have had some legal advice that even solicitor fees, medications, rehabilitation and much more will be sacrificed….

Read a copy of the law society report>>

(Sourced by Trinny)

 

 



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5 Responses to “WorkCover SA proposed changes – first gloomy look”

  1. All states may be moving this way… Seems a trend has started, hope some common sense runs off to other states after the NSW turn around…

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  2. South Australia is run by a Labor Government, who have destroyed the economy and are grabbing at any straw to get back money they have wasted. Labor for the worker, HA HA what a joke. I know I am not alone here by going through hell and back with Work Cover SA. Just when you think you may see a little bit of light. Work Cover SA is a joke, I had a rehab officer turn up to see what and how I could be helped to return to work, and they did’nt even know what my injury was.

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  3. The Police Association says the South Australian Government’s proposed changes to WorkCover are too severe and officers might be reluctant to take risks at work.

    The Return To Work Bill, which passed the House of Assembly and must now go to the Legislative Council, would see workers lose compensation payments for all but the most serious injuries after two years.

    Police Association president Mark Carroll said the workers’ compensation changes could leave injured officers financially worse off as a result of doing their job.

    “[They could] find themselves left out in the cold if they suffer … injuries because as we know the payments under the new legislation will cease two years after the original injury,” he said.

    “We just don’t think that’s fair and reasonable for our members who have to put themselves in harm’s way to protect the community.

    Mr Carroll also told a police conference in Adelaide the union was opposed to Government efforts to absorb the police disciplinary tribunal into a new administrative tribunal.

    South Australian Premier Jay Weatherill told the conference officers would get new smartphone technology to improve their access to databases while out in the field.

    He said there would also be a review of how to reduce the paperwork police officers faced.

    Police Commissioner Gary Burns said the force was considering if corruption-related charges against six members of an Adelaide drug crime team could jeopardise any cases which had been investigated by the team.

    The officers from Operation Mantle based in the Sturt local service area were charged this week with offences including theft, property damage and abuse of public office.

    Mr Burns now must consider whether any investigations by the team might be affected, particularly if other matters are going to court.

    http://www.abc.net.au/news/2014-10-14/police-union-critical-of-sa-workcover-changes/5812032

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  4. WorkCoverSA announces strong improvement in scheme performance… but still needs a draconian overhaul…huh?

    WorkCoverSA on 15 October announced a $234 million improvement in the WorkCover scheme’s unfunded liability and a resulting 7.3% increase in the funding ratio to 71%.

    WorkCoverSA Chairman Jane Yuile commented that the Board was very pleased with the result. She noted that it reflected management’s “active” approach to managing the scheme and said this has been the catalyst behind a marked increase in return to work rates resulting in the actuarial release of $298 million.

    She also noted that WorkCoverSA’s investment strategy also delivered a strong performance with a 12.6% ($290 million) return for the 12 months to June 30.

    Ms Yuile said that although these results are positive it was clear to the WorkCoverSA Board and senior management that even with these results the South Australian scheme still needed an overhaul to achieve the desired results for workers and employers.

    “Whilst the financial performance is unprecedented, it still only delivers a break even premium rate of 2.87% which is above the current average premium rate of 2.75% we are charging, and within the existing legislative framework a premium rate below 2.75% is unlikely.” Ms Yuile said.

    “When you compare this against other jurisdictions it is simply uncompetitive and unsustainable for the 49,500 South Australian employers registered with WorkCoverSA.”

    “We see the Government’s proposed reforms announced in the Return to Work Bill 2014 currently before Parliament delivering a much more affordable average premium rate for employers while also providing more effective support and services to people who have been injured at work,” Ms Yuile said.

    WorkCoverSA Chief Executive Officer Greg McCarthy said the new active management approach to the scheme had delivered positive results.

    “The improvement in the performance shows that we can manage the scheme better than we have been and it places us on the right footing to implement any new reforms to deliver the intended results,” Mr McCarthy said.

    A key step in the active approach to managing the scheme has been the introduction of an early intervention program providing face-to-face support to workers and employers within the workplace.

    “The early intervention approach provides the right support from the beginning which has seen better and faster outcomes for workers, employers and the scheme,” Mr McCarthy said.

    “This program started with small employers in metropolitan areas and is now being expanded to include medium sized employers and in the State’s south east region,” he said. “The new legislation would enable these services to be significantly expanded.”

    Mr McCarthy said the same approach and positive results was also being taken with psychological claims, which make up an inordinate amount of the scheme’s costs.

    WorkCoverSA also increased its fraud investigation activity by 233% which has delivered a number of convictions throughout the year.

    “Our investigation activity shows all scheme participants that we are serious about uncovering and punishing those who are committing fraud so only the people who are entitled to receive benefits do so.”

    “We are continuing this focus in 2014-2015 to ensure we keep the system fair for everyone,” Mr McCarthy said.

    “We still have a very long way to go to regain the confidence of South Australian businesses and workers but I am pleased we are heading in the right direction, and the results really speak for themselves,” he said.

    http://www.brandsouthaustralia.com.au/news/member-news/workcoversa-announces-strong-improvement-in-scheme-performance

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  5. Gallagher Bassett Reports $298M Workers’ Comp Claims Savings in South Australia
    Gallagher Bassett entered the SA workers’ compensation market in early 2013 and reports an actuarial release on claims liability of $298 million in the workers’ compensation market for the 2013/2014 financial year. The release can be attributed to active claims management and a marked increase in return to work rates.
    Gallagher Bassett has focused on bringing national experience and new ideas to managing workers’ compensation. GB engaged in initiatives proposed by WorkCover SA.

    The company reports:

    -An 11 percent ($2.5 million) decrease in the Income Maintenance paid for injuries incurred in 2013/14 compared to 2012/13 injuries a year earlier

    -32 percent ($870k) decrease in Income Maintenance for injuries in the June Quarter 14 compared to injuries in the June Quarter 13 at the same time development.

    -Only 10 percent of Work Capacity Assessments were historically completed on time (2012). In excess of 95 percent are now completed on time (as of Sept Quarter 2014)

    Proactive claims management, better application of the law and a greater focus on return to work outcomes resulted in decreased workers’ compensation costs, while improving outcomes for workers, the company noted.

    Source: Gallagher Bassett

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