Changes to Workers Compensation

Summary of changes rushed through the NSW Parliament last week.

As reported last week, significant changes have now occurred to NSW workers compensation laws.  

See below a further summary of the changes that occurred during those frantic few days last week compiled by ASMOF*.   

For a detailed summary prepared by Unions NSW, click on the link below.

2012.06.29 - Unions NSW - Detailed summary of changes 2012.06.29 - Unions NSW - Detailed summary of changes (367 KB)

 If you have an existing claim or injury, click on the link below to access relevant information also prepared by Unions NSW.

2012.06.29 - Unions NSW - Implementation - existing claims-injuries 2012.06.29 - Unions NSW - Implementation - existing claims-injuries (314 KB)

Changes are retrospective
As best as can be worked out to date, the changes to weekly benefits, medical costs and duration [of payments] are to apply as soon as possible to existing claims and changes to lump sum compensation are to apply to existing claims from the date of the legislation’s introduction.  The changes to weekly payments for existing claimants will be phased in, commencing in 3 months at the earliest.  (Police, and now Paramedics and Fire Fighters following last minute changes, are exempt from the legislation.) 

Weekly payments
Most payments will cease after 2.5 years, unless there is total incapacity for work.  Payments will then cease for those with total incapacity after 5 years, unless there is 20% whole person impairment.  Previously, payments continued until you could return to work - or until retirement.  Workers will also now receive reduced payments from day one (95%), with a further drop to 80% at 14 weeks (although they retain 95% if working at least 15 hours a week).  Payments remain at 80% (or 95%) until they cut out altogether.

Cover during travel retained in limited form
Previously, workers have been covered for injuries sustained on the way to or from work.  The NSW Government proposed to abolish such claims altogether.

As reported last week, the NSW Government intention to preclude journey claims altogether was amended, albeit in the following way: 

“(3A) A journey referred to in subsection (3) to or from the worker’s place of abode is a journey to which this section applies only if there is a real and substantial connection between the employment and the accident or incident out of which the personal injury arose.”

Whilst perhaps well intentioned, this is open to interpretation and will no doubt end in litigation as to what denotes “real and substantial connection” to the workplace.  ASMOF will continue to pursue this aspect especially with the Ministry and the NSW Government, along with obtaining its own independent legal advice.  The SA experience, on which the amendment is said to be based, will also be instructive.

Cuts to cover for medical expenses
Medical and other expenses are only paid for a maximum of one year from the date a claim is made or weekly payments cease, whichever is the longer.  There is an exception for ‘seriously injured’ workers, defined as a 30% whole person impairment - which would only apply to a small number of the very worst workplace injuries.

Limits on lump sums for injury – compensation for pain and suffering cut
Lump sums payments are only available for very serious permanent injuries - here defined as a 10% whole person impairment.  Lump sum payments for pain and suffering are cut altogether.  The requirement for workers to have received legal advice before signing away their rights to weekly compensation and accepting a lump sum payment is removed - if the “employer or insurer is satisfied” that the worker has waived this right.

Limits on claims for strokes and heart attacks
Heart attacks or strokes will not be covered unless the nature of employment gave rise to significantly greater risk.

Restrictions on cover for occupational disease
Disease is only to be covered where employment is “the main contributing factor”, rather than previously where it could be one of a number of contributing factors.

Partners’ claims for nervous shock abolished
Currently the spouse, partner or direct relative of someone who has died in a workplace accident can access some cover if they are diagnosed as having nervous shock as a result, and, for example, are unable to work for a period of time.  The legislation abolishes this type of claim.

Injured workers to pay own legal costs
The attempt by the NSW Government to have workers pay the legal cost of insurers if they lost their claim before the Workers Compensation Commission was changed.  But in doing so workers now will have to pay for their own legal costs.  Previously these costs were covered by the scheme.  A real potential barrier now to litigation for workers when faced with a well resourced insurer.

Other (positive) amendments achieved to the Workers’ Compensation legislation
#  Retaining the current test for negligence for Work Injury Damages claims;
#  Slightly improving appeal rights in relation to work capacity decisions;
#  Retaining the ability to consider the risk of re-injury in any work capacity decision;
#  Ensuring workers get financial advice (paid for by WorkCover) prior to agreeing to commutations; and
#  Review of the Act in 2 years instead of 5 years.

And there may be more to come
Premier O’Farrell told Parliament on 19 June that the Bills were just the first stage and were just the matters that required legislative change.  The NSW Government has left open several areas where further changes can be made by regulation, which does not require its passage through the NSW Parliament. 

* (Acknowledgement that the above summary is based on material provided by Unions NSW.)