Significant Changes to Workers Compensation Pass Through Parliament...

The Workers’ Compensation Legislation Amendment Act 2012 (the Act) which passed through the NSW Parliament on 27 June 2012 makes a number of significant changes to the NSW workers’ compensation scheme.

The changes will affect all new and existing workers compensation claims with the exception of:

• police officers, paramedics, fire-fighters and emergency service volunteers (RFS, Surf Life Savers and SES volunteers);
• workers injured while in or around a coal mine; and
• dust disease claims.

The following article summarises the major changes and transitional arrangements.

Compensable Injuries

• Compensation will not be payable for:

• heart attacks, strokes and their underlying diseases unless the nature of the employment exposed the worker to significantly greater risk of suffering the injury;
• for disease injuries (including aggravations, accelerations, exacerbations or deteriorations of a disease) contracted in the course of employment, where the worker’s employment was not the main contributing factor; or
• journey claims (ie journeys to and from the workplace) except where there is a substantial connection between the injury and work eg  journeys undertaken for work, workers compensation or training purposes.

Weekly benefits

• Weekly benefits will be calculated on the worker’s pre-injury average weekly earnings (AWE) rather than the worker’s current weekly wage at the time of the injury.
• Weekly compensation will be calculated as a percentage of the pre-injury AWE (capped at $1,838.70 (indexed)), minus any current earnings or an amount the worker is able to earn in suitable employment.
• For fully incapacitated workers, the rate of compensation will reduce during three entitlement periods as follows:

• 1 – 13 weeks – up to 95% of the worker’s AWE;
• 14 – 130 weeks – up to 80% of the worker’s AWE (previously limited to 26 weeks and the rate of $432.50 per week);
• Payments of up to 80% of the worker’s AWE from week 131 onwards for totally incapacitated workers or, partially incapacitated workers who have returned to work for at least 15 hours per week.

• No weekly compensation will be payable to workers after 5 years of receiving weekly payments with the exception of injured workers with more than 20% whole person impairment or upon reaching the Commonwealth retirement age – whichever occurs first.

Medical, hospital and rehabilitation expenses

• Payment for medical, hospital and rehabilitation treatment and services will be limited to those provided within 12 months of the claim for compensation being made or, within 12 months of weekly payments ceasing (which ever is the longer period), with the exception of workers who suffer more than 30% whole person impairment, for whom medical treatment will continue.
• Payment of medical, hospital and rehabilitation services will be subject to preconditions including that it is appropriate, properly provided by qualified practitioners and approved by the insurer.

Return to work obligations

• A new dispute resolution procedure will be set up for disputes regarding work capacity decisions. This process includes:

• an internal review by an insurer of its decision;
• a merits review by WorkCover; and
• a procedural review by a WorkCover Independent Review Officer.

• New compliance measures will be introduced to ensure compliance by workers and employers with their respective return to work obligations:

• it will be an offence for employers not to provide suitable work duties where it is reasonably practicable to do so;
• WorkCover inspectors may issue improvement notices to non-complying employers; and
• workers who are able to and fail to return to work may have their weekly benefits suspended or terminated.

• Injured workers receiving benefits will be required to undertake work capacity assessment at various stages of the claim process and at least once every two years. Work capacity assessments will be used to determine a worker’s future entitlement to benefits. Workers assessed with more than a 30% whole person impairment will be exempt for work capacity assessments.

Permanent impairment, lump sums and commutation

• Lump sums will no longer include a separate component for pain and suffering.
• The minimum impairment threshold for lump sum compensation (including hearing loss) will be 10% (previously 1% in most cases). The threshold for psychological injury lump sum payment remains at 15%.
• Workers will be able to waive the requirement to obtain legal advice before agreeing to a lump sum.
• Workers are restricted to a ‘once only’ lump sum assessment for an injury. If an injury deteriorates further – workers are unable to seek a further assessment.
• The assessment of degree of permanent impairment will be binding for the purposes of commutation and common law damages claims.
• The regulations will allow insurers to commute workers compensation liabilities in cases prescribed by the regulations that do not meet the current criteria for commutation.
• Damages in favour of non-workers for nervous shock will no longer be made.

Licensing of insurers

• Existing restrictions that limit participation to the nominal insurer and specialised insurers will be removed to allow the entry of new insurers seeking to enter the workers compensation insurance market.
• A WorkCover Independent Review Officer will be appointed to deal with complaints about insurers and decisions of insurers relating to work capacity decisions.

Cost of proceedings

• The current restriction of the award of legal costs against a worker in a WorkCover Commission hearing to proceedings which were frivolous or vexatious will be replaced by a requirement that each party will bear their own legal costs.

Transitional provisions

• For weekly benefits, different transitional arrangements apply dependent on how long the worker has been receiving benefits. WorkCover have stated that workers will be given three months notice of any changes to their weekly benefits due to the amendments.
• Lump sum compensation amendments will apply to claims made on or after 19 June 2012.
• The limitation on journey claims, heart attack, stroke and disease injuries will apply to claims made on or after 19 June 2012.
• For medical, hospital and rehabilitation expenses, the amendments apply to treatments or services provided after the commencement of the amendments.

If you would like more information about the changes to workers compensation or the transitional requirements, please contact National Workplace Lawyers on +61 2 9233 3989. 

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.