Insurance giant Allianz Australia has been caught up in the collapse of payday lender The Cash Store, agreeing voluntarily to refund $400,016 in insurance premiums to consumers after the payday lender was found to have acted unconscionably in selling Allianz insurance products. Needless to say that Arrrrghlianz “doesn’t think that the case was presented in the clearest light”. Continue Reading…
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 Jason Allison in a write-up on the “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.
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.
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.
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.
This is the public’s chance to be heard, so do your best to get this out there.
[popup url=’http://www.facebook.com/photo.php?v=4497367839110 ‘] MUST view Jason’s facebook page and great video here[/popup]
Jason who has an unfixable wrist has even had his medical reports FALSIFIED by Q-COMP!!!
Workcover QLD Inquiry Submissions close on 3 September
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”.
The deterioration in investment returns coupled with the failure of the 2008 legislative amendments to have any significant impact make it almost certain that the erosion of the viability of the Scheme will continue.
Hopefully we will not see such a rapid decline as that which occurred in New South Wales but if we do the government will be placed in a catch 22 situation. Further decreasing the benefits of injured workers will not be enough to retrieve the situation and raising the premium rate will be politically unacceptable.
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.
It has come to our attention that NSW employer premiums won’t be reduced for 2012/13, despite the recent workers’ compensation benefit cuts to injured workers. We also found WorkCover NSW Fact Sheet and Q&A sheets which add to the confusion to say the least…
Workcover NSW premiums stay up despite massive cuts
The NSW Government’s controversial and draconian [popup url=’http://www.parliament.nsw.gov.au/prod/parlment/nswbills.nsf/131a07fa4b8a041cca256e610012de17/5d4f0aa2626487d8ca257a22001b5a55?OpenDocument ‘]workers’ compensation amendment Bil[/popup]l, which was designed to – yes- reduce the State’s high premiums by diminishing or removing a number of injured workers’ benefits, passed through Parliament last week.
However, Mr Carapiet, WorkCover NSW Advisory Board Chair said the target premium collection rate would remain at 1.68 % of payroll in the next financial year because “the scheme has a deficit of $4 billion and needed to improve the support and services for injured workers it was set up to care for and protect”.
Mr Carapiet also stated that employers would have been faced with huge premium rises of 28% “if it wasn’t for the workers compensation overhaul”.
“This means that employers who have not had major change in their business, for example growth in wages or expansion into new industries or poor claims experience, will not experience an increase in their workers’ compensation premiums from 1 July 2012,” the WorkCover Board Chair said.
So… we understood that the massive cut to injured workers’ benefits was to reduce the employers’ premiums, duh…???!!!
WorkCover NSW released a fact sheet
WorkCover NSW has released a [popup url=’http://www.workcover.nsw.gov.au/formspublications/publications/Documents/wc-changes-fact-sheet-overview-3795.pdf ‘]fact sheet[/popup] on their website as well as a [popup url=’ http://www.workcover.nsw.gov.au/formspublications/publications/Documents/wc-faqs-3794.pdf’]FAQ [/popup]on the workers’ compensation changes.
WorkCover NSW Fact Sheet
View[popup url=’ http://www.workcover.nsw.gov.au/formspublications/publications/Documents/wc-changes-fact-sheet-overview-3795.pdf’] fact sheet in a scalable popup window[/popup]
WorkCover NSW FAQ
View[popup url=’ http://www.workcover.nsw.gov.au/formspublications/publications/Documents/wc-faqs-3794.pdf’] fact sheet in a scalable popup window[/popup]
According to these “info sheets”, injuries sustained by employees travelling between home and work are only compensable under the new laws if there is a “substantial connection between the person’s employment and the incident out of which the injuries arose”.
“For example, if a nurse en route to work stops to assist at a car accident, and is subsequently injured on her way to work, he or she would be covered by workers’ compensation insurance”.
Whilst the workcover documenst state that “workers who are injured whist travelling between home and work MAY be covered”, fact is that MP Shoebridge however stated last week that the new legislation “gives workers no protection at all” and “rules out 99% of journey claims”
We can’t help the number of times workcover NSW uses the work “MAY”…
The workcover NSW fact sheet also – rather vaguely (sorry!)- outlines new return-to-work obligations for employers and workers.
They state that “Injured workers and their employers need to work together to ensure the best possible return-to-work results”.
“The changes mean a worker who is able to work must, in co-operation with the employer or insurer, make reasonable efforts to return to work in suitable employment, and may request their employer to provide such suitable employment.”
“The employer must comply with this request so far as it is practicable. WorkCover inspectors are now authorised to issue employer improvement notices if they believe the employer is not meeting their obligations in this regard.”
“In addition, it is an offence for the employer if they fail to meet their obligations, subject to a penalty of up to $11,000.
“If a worker who is able to work fails to make reasonable efforts to do so, he or she may have their weekly payments suspended or – in extreme cases – terminated.”