Workcover premiums in NSW are set to fall by an average of 5% for 200,000 employers; and workcover premiums in Victoria are also be reduced by 2% in July… but guess who will cover the costs of these savings? Injured workers, further stripped from medical benefits and weekly payments!
The 20 May announcement of a drop in WorkCover QLD premiums for employers proves that the Newman Government’s changes to the QLD workers’ compensation scheme, which were rammed through Parliament last year, were unnecessary, says the Australian Lawyers Alliance.
The detection of fraud in Australian workers’ compensation schemes is focused on the “more easily identifiable fraud”, that of the injured worker even though the level of employee (injured worker) fraud is considered to be exremely low (1% or less).
Employer fraud and service provider fraud is much more rampant and much harder to detect. There is also less incentive to eliminate such fraud as a result of the structure of the various workcover schemes.
According to author “Dynamic Business” website, the new NSW workcover reforms appear just rosy for businesses. We could not help but cringe at the number of times the word “incentive” and “discount” are mentioned for “rapidly returning injured workers to work”. Again, guys – especially the more seriously injureds amongst you, read between the lines and make sure you sit well away from your computer screen as you may want to “smash” the screen, or puke all over it.in a write-up on the
According to the NSW Government website, The NSW Government has announced 167,000 employers will benefit from an average reduction to WorkCover premiums of 7.5 per cent, saving them more than $200 million a year.Had we not experienced the new workcover NSW reforms first hand, we’d be TRICKED to believe NSW has a most wonderful, rosy scheme. Perhaps “businesses” may be better off, however it all comes at the extreme cost of BUTCHERED injured NSW folks.
Workers in Queensland have good reason to be uneasy about the Parliamentary Committee Inquiry by the Queensland Government into the State’s workers’ compensation system whose results will be handed down soon. It is feared that there is strong agitation from the QLD government to push down the workers compensation premium further, which would be coupled with reduced entitlements to injured workers.
Interesting fact concerning this alleged cost blowout: Comcare has been dealing with a rash of controversial compo claims, many for bullying and “adjustment disorder” – a type of psychological injury due to work-related stress.
A failure to deal adequately with workplace bullying seems to be a major contributing factor surrounding this cost blow-out, perhaps?.
An open debate on the false justifications for attacking injured workers entitlements is long overdue. For example, Pearce claims that allowing the scheme to continue without reform would lead to severe premium hikes, which would negatively impact the economy.
What a complete fabrication of the facts, there is no evidence to support these wild claims!
We agree with David Shoebridge: “Any genuine inquiry would have taken at least 6 months. The committee received 353 detailed submissions and held public hearings over just three days.”
About the author: Quentin Coleman is a freelance journalist.
The scars from recent cuts to employee benefits provided by the New South Wales WorkCover scheme appear unlikely to fade in the near future. The Workers Compensation Legislation Amendment Bill 2012, which passed parliament on 22 June and assented on 27 June, introduces several changes that are harshly criticised by opponents.
Supporters of WorkCover revisions argue that the changes are necessary for preserving the long-term integrity of the scheme altogether.
Minister for Finance and Services Greg Pearce expressed his desire for the reforms in June, shortly before the bill was first introduced to parliament. He also voiced his concern that allowing the scheme to continue without reform would lead to severe premium hikes, which would negatively impact the economy.
“The workers’ compensation scheme has been costing the state up to $9 million a day and it’s time to put the plan for recovery into action,” Pearce said in a statement on 19 June. “Its $4 billion deficit is spiraling out of control and we simply cannot afford to wait around.”
While legislative changes to WorkCover in other regions took effect on 1 July, including those in South Australia and the Northern Territory, employees in New South Wales will begin to switch to the new system in a few months.
Workers injured after 1 October, 2012, will receive benefits according to the amended legislation, while workers with existing injuries will transition to the new system in January of 2013, Pearce said in a recent statement.
While the bill amended numerous sections in the scheme’s existing legislation, there are a few changes in particular that have caught the attention of the media and critics.
Among these is a reduction in the number of weeks that injured employees receive full payout, which was decreased from 26 weeks to 13 weeks to match the policies of other regions.
Also included in the bill is a provision for the cessation of all weekly payments to workers after several years, although there are exceptions for certain types of impairing injuries.
While the bill did make it through parliament, some politicians have expressed their distaste at the proceedings.
David Shoebridge, a Greens member of the NSW Upper House, claimed the bill was “rushed through the NSW Parliament in less than 72 hours”.
“The Bill was preceded by a sham Parliamentary Inquiry, dominated by the Shooters, CDP and Coalition, and which reported just 11 days after it was established,” according to Shoebridge’s website. “Any genuine inquiry would have taken at least 6 months. The committee received 353 detailed submissions and held public hearings over just three days.”
1. Greg Pearce MLC Media Release: “Government Acts on Workers Safety Reform.” 19 June, 2012.
2. Greg Pearce MLC Media Release: “Workers Compensation Changes Underway.” August 7, 2012.
3. Parliament of New South Wales: “Workers Compensation Legislation Amendment Bill 2012.”
4. David Shoebridge MLC: “Barry O’Farrell’s Cuts to Workers Compensation – Get the Facts.” June 22, 2012.
5. NT WorkSafe: “Changes to Workers Compensation Legislation.”
Workers compensation reforms will make the privatisation of state assets look like tea party stuff when the heavy lifting starts. Queensland’s reputation of charging the lowest premiums in Australia is on borrowed time… Also we were alerted that there is an inquiry into workcover Queensland operations and we would urge anyone who has experienced problems with the scheme to send a heartfelt submission to the inquiry! Submissions close on 3 September 2012.
Low cost workers compo premiums in peril
View the “low cost workers compo premiums in peril” article in a separate window (pdf)
[Sourced by Trinny with thanks!]
Workcover QLD Inquiry
Jason Dickson also kindly shared the following via our Facebook page:
There is a Workcover Inquiry in the workers comp QLD operations, send this to anybody that has had any problems with the Queensland Workers’ Compensation scheme, Q-comp, Medical professionals, solicitors, employers or anyone else that is involved in the Workcover scheme.
[popup url=’http://www.facebook.com/photo.php?v=4497367839110 ‘] MUST view Jason’s facebook page and great video here[/popup]
Workcover QLD Inquiry Submissions close on 3 September
Link to the Finance and Administration Committee:
A link to Jason Dickson’s page.
Thank you Jason for informing us about this upcoming inquiry, which was indeed not “advertised”! And thank you for standing up and yelling out! We are looking forward to collaborating with you.
We say put your submissions in and be heard!
[post dictated and entered by T on behalf of WCV]
It is interesting to look at what has been happening to the NSW Scheme and it will be interesting to see if SA follows the NSW lead, writes John Walsh in an enlightening article.
Workcover all smoke and fire
In the years 2006 to 2008 the NSW Scheme was fully funded but we now know that result was achieved by windfall investments prior to the global financial crisis and not through any structural changes in the Scheme.
In October 2011 the NSW Finance & Services Minister was reported as saying that he was “very concerned” about the Scheme’s $1.583 billion deficit.
A few weeks later in early November 2011 the deficit was acknowledged to be $2.36 billion.
In February 2012 the Chairman of NSW WorkCover, Greg McCarthy, resigned citing “continued frustration” at being “constantly ignored” when warning successive ministers about the structural problems in the Scheme. At that time he predicted that the Scheme would be in a $4 billion deficit by the time the December 2011 evaluation was finished and he warned of a blowout to $5 billion by June 2012.
In April 2012 the NSW government announced a review of the Scheme because it was in deficit by $4.1 billion and the government warned that without reform premiums were predicted to rise by about 28%.
A parliamentary inquiry reported in mid June 2012 and amongst the 28 recommendations to overhaul the Scheme it called for the introduction of a “Victorian style step-down of benefits to 95% pre injury earnings in the first 13 weeks, to 80% from 14 weeks onwards replacing the current system of 100% payout for 26 weeks” as reported in InDaily News on 14/6/12.
Legislation was passed on 22/6/12 introducing the step-downs as well as restrictions upon journey claims with the amendments modelled on the current law in South Australia and capping weekly benefits at five years unless the claimant is assessed as having a 30% whole person impairment.
Interestingly, while Rob Thomson was General Manager of the Workers Compensation Division of WorkCover NSW a ban was imposed on the payment of a lump sum to commute weekly payments of income maintenance.
That ban is now considered to have contributed to rising claim durations and increased pressure on common law, both of which are prime drivers of the blow out in liabilities. The NSW ban was formally lifted by statutory amendment last month.
In the SA Scheme the legislation allows for the payment of a lump sum to redeem weekly payments of income maintenance and medical and like expenses but WorkCover SA have effectively imposed an administrative ban upon such payments.
It will be interesting to see if SA follows the NSW lead and lifts the administrative ban so that judicious use of redemptions is mandated as a useful method of controlling claim durations in appropriate circumstances.
What can we take out of the New South Wales experience?
Firstly, investment income camouflaged the structural deficits in the NSW Scheme in the period 2006 to 2008. Those structural deficits have seen the Scheme deteriorate at an alarming rate despite “the reform of the premium system in the period 2005 to 2009”.
Secondly, a $175 million loss in the SA Scheme’s investment portfolio in the six months to December 2011 does not bode well for an improved scheme funding ratio when the end of financial year results are publicised in the annual report later this year.
When announcing the financial results for the six months to 31 December 2011 WorkCover SA Chairman Philip Bentley made the point that:
“It is important to remember the long term nature of the Scheme and that it is not designed to adjust automatically to the sorts of changes we are currently experiencing in global financial markets. We are yet to see the full impact of the 2008 legislative reforms, in part as a result of a staggered implementation”.
The problem as I see it is that investment income will likely remain subdued and, “the sorts of changes we are currently experiencing in global financial markets” are part of the new normal.
In previous reports I [Mr Walsh] have expressed scepticism that we will ever see, “the full impact of the 2008 legislative reforms”.
The most recent data available makes it clear that income maintenance claims which remain active beyond two years post injury are still high and so the “tail” still exists and the impact of the 2008 legislative amendments designed to remove all but the most seriously injured claimants from the Scheme remains muted. The ill conceived administrative ban on redemptions will likely extend claim durations as it did in NSW and help to maintain the numbers in the “tail”.
I think that anyone predicting that the average levy rate will fall “within the next couple of years” is being very hopeful indeed!
The uncertainty which remains in the Scheme will continue to make it attractive for large employers to seriously consider the viability of self-insurance.
Self-insurance remains the ultimate form of experience rating and provides the only true method of controlling risk, costs and claims administration.
Read the entire [popup url=’http://www.newsmaker.com.au/news/18540 ‘]article by John Walsh[/popup] here
To read John Walsh’s (Managing Partner, Donaldson Walsh Lawyers- based in SA) full July Update and the August, March & May 2011 Special Reports on the WorkCover Scheme please visit http://www.donaldsonwalsh.com.au.
[post pre-entered by T on behalf of WCV]