The Big Bang Cruel Reforms
In June 2012 the NSW Government introduced radical changes to the NSW Workcover Scheme. Whilst many of the changes that were introduced commenced from 19 June 2012, the following changes were deferred:
- the changes impacting on weekly benefit claims,
- the change of the system to a user pay system for costs where parties in a dispute are required to meet their own costs of a dispute in the Workers Compensation Commission;and
- the introduction of an enhanced role for Work Cover Inspectors to issue improvement notices requiring employers to provide suitable duties and the risk of fines for an employer for failure to comply with those notices were not proclaimed to commence.
However on 28 September 2012 the Government proclaimed that all of the provisions not commenced would commence from 1 October 2012.
Seriously Injured Workers
From 17 September 2012 seriously injured workers (with greater than 30% whole person impairment) came under the new regime and received the transitional rate of weekly compensation of $736.72 per week.
Single workers receiving weekly benefits who had their weekly payments capped at $432.50 per week would receive an increase in benefits, however those with a wife and a number of dependent children will find themselves worse off.
Weekly compensation benefits for seriously injured workers would continue until they are 67 years of age.
Changes to Weekly Benefit Scheme
More significantly workers who were claiming weekly benefits on or after 1 October 2012 would find their claims managed under the new weekly benefits regime and from 1 January 2013, workers claiming weekly benefits prior to 1 October 2012 would be transitioned to the new legislative regime which would result in work capacity assessments being conducted for each of those workers and three months after the work capacity assessments take place those transitioning workers would have their benefits regulated by the new regime.
For weekly compensation claims made after 1 October 2012 benefits will be calculated based on average weekly earnings of the worker and no weekly compensation will be payable to a worker after five years (260 weeks) of weekly payments except where the worker has a whole person impairment greater than 30%.
There will be three entitlement periods (weeks 1 to 13, weeks 14 to 130 and after week 130), with weekly payments after week 130 weeks only available to totally incapacitated workers and partially incapacitated workers who have returned to work for at least 15 hours per week.
For the first 13 weeks of incapacity injured workers will receive 95:% of their pre-injury average weekly earnings up to a maximum of $1,868.50, less any current earnings or amounts the worker is able to earn in suitable employment.
In weeks 14 to 130 totally incapacitated workers will receive 80% of their average weekly earnings and partially incapacitated workers will receive 80% of average weekly earnings, less an amount that reflects their capacity to earn. However, if a partially incapacitated worker has returned to work and is working 15 hours a week or more, they will receive 95% of their average weekly earnings less their actual earnings or amounts the worker is able to earn in suitable employment.
After week 130 weeks a worker must be totally incapacitated or partially incapacitated and have returned to work and be working more than 15 hours a week and earning more than $150.00 a week, to receive weekly compensation and be assessed by the Scheme Agent as being, unlikely to continue indefinitely to be, incapable of undertaking further additional employment or work that would increase the worker’s current weekly earnings. The worker will then receive 80% of average weekly earnings, less their residual earning capacity.
Payment of weekly compensation will be dependent on a work capacity determination made by an insurer and the insurer must conduct work capacity assessments during the life of a claim. The assessments must be conducted in accordance with WorkCover Guidelines which were also published on 28 September 2012.
A new dispute resolution process for disputes about work capacity features an internal review by an insurer of its decision on a capacity with a merit review by WorkCover and a procedural review by a WorkCover independent review officer (WIRO).
The following decisions of an insurer will be final and binding on the parties:
- a decision about a worker’s current capacity;
- a decision about what constitutes suitable employment for a worker;
- a decision about the amount an injured worker is able to earn in suitable employment;
- a decision about the amount of an injured worker’s pre-injury average weekly earnings or current weekly earnings;
- a decision about whether a worker is, as a result of injury, unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment;
- any other decision of an insurer that affects a worker’s entitlement to weekly payments of compensation, including a decision to suspend, discontinue and reduce the amount of the weekly payments of compensation payable to a worker on the basis of any decision referred to above.
A decision to dispute liability for weekly payments of compensation is not binding.
These changes will remove the role of the Workers Compensation Commission in the determination of disputes about work capacity decisions and provide an extremely restricted dispute model for workers.
Employer obligations to provide suitable duties
Chapter 3 of the Workplace Injury Management and Workers Compensation Act amongst other things imposes obligations on an employer to provide suitable duties to injured workers.
If a worker who has been totally or partially incapacitated for work as a result of an injury is able to return to work (whether on a full-time or part-time basis and whether or not to his or her previous employment), the employer liable to pay compensation to the worker under this Act in respect of the injury must at the request of the worker provide suitable employment for the worker.
The employment that the employer must provide is employment that is both suitable employment and (subject to that qualification) so far as reasonably practicable the same as, or equivalent to, the employment in which the worker was at the time of the injury.
The obligation does not apply if: it is not reasonably practicable to provide employment or the worker voluntarily left the employment of that employer after the injury happened (whether before or after the commencement of the incapacity for work), or the employer terminated the worker’s employment after the injury happened, other than for the reason that the worker was not fit for employment as a result of the injury.
The new legislation provides that WorkCover inspectors will be able to issue an Improvement Notice requiring an employer to remedy any contravention of its obligations under Chapter 3 of the Workers Compensation Act 1987.
The inspector may issue an Improvement Notice to prevent a likely contravention from occurring or remedy the things or operations causing the contravention. The Notice must state the reasons below why the inspector believes the employer is contravening a provision or has contravened a provision and the action which must be taken. It is an offence not to comply with an Improvement Notice. No mechanism for appeal has been specified in the legislation.
Improvement Notices may be used by WorkCover to ensure employers provide suitable duties to injured workers.
The workers compensation commission becomes a no costs jurisdiction. Each party is to bear the party’s own costs in or in relation to a claim for compensation. The Commission has no power to order the payment of costs or to determine by whom, to whom or to what extent costs are to be paid.
The New Regulations
On 14 September 2012 the Workers Compensation Amendment (Miscellaneous) Regulation 2012 was published. The
Regulations commenced on 17 September 2012 and dealt with the changes to weekly benefits of severely injured workers.
The Regulation provides that the changes apply to a claim for compensation in respect to a worker’s injury made before 17 September 2012 and determination of when the regime commences turns on the date the claim for compensation is made.
There may be an issue in relation to injuries occurring prior to 17 September where no claim for compensation had been made prior to 17 September and in those cases claims do not appear to fall under the new regime and will be caught up in the transitional claims with the result that those claims for seriously injured workers will come into effect from 1 January 2013.
To facilitate the commencement of the new Weekly Benefits Regime from 1 October 2012, the Workers Compensation
Amendment (Transitional) Regulation 2012 was published on 28 September 2012 and commences from 1 October 2012.
A number of important issues have been clarified. They are:
- Regulation 11 removes the application of the changes to lump sum benefits to any claim that specifically sought compensation for lump sum benefits prior to 19 June 2012. Arguably workers who made lump sum claims before 19 June 2012 are therefore not effected by the amendments to lump sum benefits and can continue to make claims for deterioration of their condition. Those who never made a lump sum claim before 189 June 2012 now only get one go at a lump sum claim.
- Lawyers will not be retained by insurers to assist with work capacity decisions as lawyers are not entitled to charge insurers for such services.
- Transitioning claims which are those made before 1 October 2012 will be subject to the new regime after 1 January 2013.
- There is an increase in the scale of costs payable to lawyers in disputes in the Commission however the new scale only applies to claims commenced in the Commission after 1 October 2012 subject to the rider that the old scale of costs will apply to claims made prior to 1 October 2012 provided proceedings are commenced in the Commission before 1 January 2012.
Importantly however the increased costs scale will act as a cap on what a worker can be charged by his lawyer and what insurers can pay their lawyers as the jurisdiction is effectively a no cost jurisdiction for proceedings commenced in the jurisdiction after 1 October 2012 unless there was a claim for compensation made before 1 October 2012 and proceedings commenced before 1 January 2013.
The changes will and have had a profound effect on the Workers Compensation Scheme in New South Wales.
New Dispute Process
The Government has also announced the establishment of a new legal assistance and review service offering a free,
independent and quick process to resolve disputes between injured workers and insurers
According to the Minister:
“Features” of the new system include:
- A free legal review service within the WorkCover Independent Review Office (WIRO) – no legal expenses need be covered by the worker;
- Reviews will be conducted by independent legal experts in the area of workers compensation;
- Where the insurer does not agree with the opinion of that independent legal advice, workers may be provided with independent legal representation to pursue matters in the Workers Compensation Commission following a merit review.
Guidelines have been issued to address the process of dealing with disputes . The guidelines are comprised of some 116 pages published in the Government Gazette and are known as the WorkCover Guidelines for Claiming Compensation Benefits, Guidelines For Work Capacity decision Internal Reviews, Guidelines on Injury Management Consultants and WorkCover Work Capacity Guidelines .
The guidelines note the following
- “ an insurer must arrange for all decisions to dispute all or part of a claim, to terminate or reduce weekly payments or to decline provisional payments on the basis of a peer review. At a minimum, the review is to be conducted by someone other than the person recommending the proposed decision and, by someone with requisite expertise,eg Technical Advisor or Senior Claims Supervisor.
- If the insurer continues to dispute the claim following a request for internal review they must issue a further dispute notice. The content of this dispute notice must comply with the requirements of section 74. Any further reports that have come into the possession of the insurer and that are relevant to the review decision are to be attached. The notice can refer to and rely on the content of the original section 74 notice and attachments, provided they remain applicable.
- a section 74 notice (setting out grounds of dispute) is not required to advise a worker of an insurer’s work capacity decision.
- there are new forms to be used including a WorkCover Certificate Of Capacity. The nominated treating doctor or treating specialist is responsible for completing the form.
- legal practitioners acting for a worker are not entitled to be paid or recover any amount for costs incurred in connection with a review under this section of a work capacity decision of an insurer.
- the Authority will provide and maintain an advisory service to assist workers in connection with the procedures for Reviews of work capacity decisions.
- an application for Internal Review must be lodged by the worker with the insurer within 30 days of receiving the work capacity decision from the insurer.
- a worker may refer a work capacity decision to the Authority for Merit Review, but only after the dispute has been the subject of an Internal Review by the insurer. The worker does not need to attach to their application all of the existing documents and information relating to the claim or the work capacity decision, as the insurer will be required to provide all relevant information to the Authority as part of their reply to the application.
- the Merit Review by the Authority is to be undertaken by a person who was not involved in the making of the original work capacity decision or the internal review by the insurer; and has the appropriate level of knowledge, expertise and skill relevant to the particular work capacity decision referred. The Merit Reviewer may determine their own procedure and is not bound by the rules of evidence and may inquire into any matter relating to the Review of the work capacity decision in such manner as they think fit.
- the Merit Reviewer is to act with as little formality as the circumstances of the matter permit and according to equity, good conscience and the substantial merits of the matter without regard to technicalities and legal forms.
- the Merit Reviewer may also make recommendations to the insurer based on their findings, which are binding on the insurer and must be given effect to by the insurer.
- a work capacity assessment undertaken by the insurer is a review of the worker’s functional, vocational and medical status and helps to inform decisions by the insurer about the worker’s ability to return to work in his or her pre-injury employment or suitable employment with the pre-injury employer, or at another place of employment.
- the insurer may conduct a work capacity assessment at any stage throughout the life of a claim. It is an ongoing process of assessment and reassessment that commences on notification of a workplace injury and continues as needed during the life of the claim.
- a work capacity assessment considers all available information which may include, but is not limited to:
- WorkCover Certificates of Capacity;
- reports from the treating doctor, treating specialist or other allied health professionals;
- independent medical reports;
- injury management consultant reports;
- the worker’s self report of their abilities and any other information from the worker;
- the injury management plan;
- reports from a workplace rehabilitation provider such as workplace assessment reports, return to work plans, functional capacity evaluation reports, vocational assessment report, work trial documents, job seeking logs, activities of daily living assessments, etc;
- information from the employer such as documents relating to return to work planning; and
- information obtained and documented on the insurer’s claim file.
- the worker must attend and participate in any evaluation required by an insurer as part of the work capacity assessment.
- at a minimum, the insurer must commence a review of the worker’s capacity for work once the worker has received a cumulative total of 78 weeks of weekly payments
- if a worker has an ongoing entitlement to weekly payments beyond 130 weeks, the insurer must conduct a work capacity assessment at least once every two years after this point.
- a work capacity decision is a discrete decision that may be made at any point in time and can be about any one of the factors described in section 43(1), such as the worker’s capacity to earn in suitable employment. This is different to a work capacity assessment which is a review process that may or may not lead to the making of a work capacity decision or another type of decision regarding a claim.
- when making a work capacity decision the insurer should:
- ensure that all reasonable opportunities to establish capacity for work have been provided to the worker
- ensure that the insurer meets their responsibility of establishing and supporting an injury management plan tailored to the worker’s injury
- evaluate all available and relevant evidence
- follow a robust and transparent decision-making process with clear, concise and understandable
- information provided to the worker giving reasons for decisions
- seek any additional information that is required to ensure the worker’s current capacity for work is fully understood
- providing opportunity for the worker to contribute additional information, especially if the decision may result in reduction or discontinuation of the worker’s weekly payments
- ensuring decision makers have the appropriate expertise, ability, and support to make the decision they are making.
- any work capacity decision should be logical, rational and reasonable. It should be a decision that is more likely than not to be correct.
- before making a work capacity decision that may result in a reduction or discontinuation of the worker’s weekly payments the insurer must, at least two weeks prior to the work capacity decision, communicate this to the worker in a way that is appropriate in the circumstances of the case, and preferably by telephone or in person.
- determining the worker’s current work capacity and the amount they are able to earn in suitable employment are work capacity decisions
- the insurer must provide 3 months notice before reducing or discontinuing the worker’s weekly payments
- the Work Capacity Decision Notice must:
- reference the relevant legislation
- explain the relevant entitlement periods
- state the decision and give brief reasons for making the decision
- outline the evidence considered in making the decision, noting the author, the date and any key information.
- All evidence considered should be referred to, regardless of whether or not it supports the decision.
- clearly explain the line of reasoning for the decision
- state the impact of the decision on the worker in terms of their entitlement to weekly payments, entitlement to medical and related treatment expenses and return to work obligations
- advise when the decision will take effect
- detail any support, such as job seeking support, which will continue to be provided during the notice period
- advise that any documents or information that have not already been provided to the worker can be provided to the worker on request to the insurer
- advise of the process available for requesting review of the decision and how to access the required form, Application for review of a work capacity decision by insurer.
- If a worker wishes to refer a work capacity decision for an internal review, they should lodge a completed Application for Review of a Work Capacity Decision form with the insurer within 30 days of receiving the work capacity decision from the insurer
- the insurer must write to the worker within 30 days of receiving the application advising of the outcome of the internal review and if the insurer fails to do so the worker may then make an application for Merit Review by the Authority
- The Authority must write to the worker and insurer within 30 days of receiving the application advising of the outcome of the Merit Review and must include the decision, its impacts, any recommendations and reasons. The notification must also advise the worker about the availability of further review options.
- The Merit Review of the Authority will be subject to judicial review in the Supreme Court where a party will be able to challenge the decision.
- The challenge to the Merit Review will be on the same terms as challenges to administrative decisions currently conducted in the Supreme Court of NSW.
The following diagram published in the WorkCover Guidelines highlights the process that applies to a review of a work capacity decision
So there we have it. Take a deep breath and off we go with a new draconian NSW workers compensation scheme …
Here are some useful resources as published on the IWSN website
Weekly payments – 2015
Weekly payments- April 2015 summary
Note: the advice given is general in nature. We would urge you to seek further advice, as your situation may be different.
Your entitlements are dependent on:
- The period for which you have been receiving weekly payments
- Your capacity for work – as assessed by the insurer – and your work status.
|0–13 weeks||95% of pre injury earnings or $1999.30-Minus current or potential weekly earnings.|
|14 weeks– 2.5 years||Working:
If you’re working 15 or more hours per week
If you’re not working 15 or more hours per week
|The lesser of 95% of pre-injury earnings or $1999.30-Minus current or potential weekly earnings||The lesser of 80% of pre-injury earnings or $1999.30.-Minus current or potential weekly earnings|
Note: after 1 year, overtime and shift allowance are excluded from pre-injury average weekly earnings.
|2.5–5 years -Note:You need to apply for ongoing weekly payments.||If you have no work capacity indefinitely, or If you’re working 15+ hours and earning $173+ per week, and are unable to increase how much you work/earn indefinitely||If you have some work capacity but are not working 15+ hours and earning $173+ per week, or If you could increase how much you work/earn|
|The lesser of 80% of pre-injury earnings or $1999.30-Minus current or potential weekly earnings||Your weekly payments cease|
Note: there is some special compensation for incapacity resulting from injury-related surgery available from 144 weeks.
|5+ years||If you are ‘seriously injured’ (20+% permanent impairment),or If you have 21–30% permanent impairment and either:· Have no work capacity, or· Are working 15+ hours and earning $173+ per week||If you have 20% or less permanent impairment, or If you have 21–30% permanent impairment and some work capacity but are not working 15+ hours and earning $i73+ per week|
|The lesser of 80% of pre-injury earnings or $1999.30-Minus current or potential weekly earnings||Your weekly payments cease|
- For workers paid under an award, industrial or enterprise agreement as 100% of the rate of remuneration for one week of work (excluding overtime, shift work, payments for special expenses and penalty rates) or
- For workers not employed under an award, industrial or enterprise agreement as 80% of their average weekly earnings (including regular overtime and allowances).
- The statutory rates from 1 April 2015 to 30 September 2015 is $470.20.
Once you reach Commonwealth retirement age, you are generally no longer entitled to weekly payments (some exemptions regarding your age at injury and if your claim is before 1 October 2012.)
Note: if you made your claim prior to 1 October 2012, then your entitlement to weekly payments will continue under the old system until the insurer conducts a work capacity assessment and makes a work capacity decision. Following that, your claim will transition to the new system, with a ‘transitional amount’ (of $938.30 – from 1/04/2013 till 30/09/2013) used as your deemed pre-injury average weekly earnings.
Based on information from WorkCover NSW website April 2015.
The Injured Workers Support Network (NSW) 2015
- What to do if you are injured at work
- Workplace bullying – A simple guide for employees
- Fact sheet 1 Workers comp policy
- Fact sheet 2 When are workers covered
- Fact sheet 3 Employers’ responsibilities
- Fact sheet 4 Injured workers’ rights
- Fact sheet 5 Employees’ responsibilities
- Fact sheet 6 Insurer’s responsibilities
- Fact sheet 7 Benefits
- Fact sheet 8 Returning to work
- Fact sheet 9 Job protection
- Fact sheet 10 Permanent injury claims
- Fact sheet 11 Additional benefits
- Fact Sheet 12 Making a claim
- Fact Sheet 13 Uninsured employers
- Fact Sheet 14 Injury Management And Return-To-Work Programs
- Fact Sheet 15 Compo and its Effect on Social Security
- Fact Sheet 16 Social Security Appeals
- Fact Sheet 17 Income Protection-Hesta
- Fact Sheet 18 List and Links to Australian Trade Unions
- Fact Sheet 19 List and Contact Details of ALL Community Health Services In NSW.
NSW Workers Compensation Fact Sheets (2015)
- 001 Weekly Payments Factsheet 2015
- 002 Work Capacity Assesment Factsheet 2015
- 003 Work Capacity Decision Factsheet 2015
- 004 Work Capacity Decision Notice Factsheet 2015
- 005Work Capacity Appeal Factsheet 2015
- 006 Independent Medical Examiners Factsheet 2015
- 007 Workcover Independent Review Office Factsheet 2015
- 008 Suitable Employment Factsheet 2015
- 009Your Rights Factsheet 2015