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2012 NSW Changes To Workers Compensation

In 2012 the NSW government implemented changes to workers compensation. These were major changes across the entire scheme.

The government completely re-wrote the statutory provisions relating to wages compensation for periods of unfitness for work. The provisions contain complex methods for calculating entitlements. Injured workers can be paid sums for periods of no capacity for work or some capacity for work for up to five years.

There are three entitlement periods within that five year period; 1-13 weeks, 14-130 weeks and 131-260 weeks. Application has to be made in writing, in a form approved by Workcover, to receive payments for the period 131-260 weeks. Payments beyond five years can only be made to injured workers with a whole person impairment exceeding 20%.

Insurers must perform a work capacity assessment early on in the five year period and can do so from time to time thereafter. Once the assessment is completed, insurers can make a work capacity decision and may alter payments to injured workers.

The alteration could be unfair and unsatisfactory for injured workers. For example, should an insurer’s assessment conclude that an injured worker can perform a certain job or jobs (whether or not those jobs are accessible and available to the worker or realistically within the worker’s skill and experience) and the reported earnings for that job or jobs are greater than the worker’s pre-injury earnings, the worker will be deemed to have no loss and payments will be stopped. The government has included provisions that purport to take away the Workers Compensation Commission’s power to review and overturn or amend such decisions.

Those decisions can only be reviewed by the insurer or WorkCover. The WorkCover Independent Review Officer and the Supreme Court can also review such decisions, but only on procedural grounds which may result in a reassessment by the insurer and confirmation of its original decision, albeit after complying with those procedural grounds. Should a work capacity decision to terminate payments occur early within the five years entitlement period, payments may be very brief.

These provisions have been rolled out since late 2012 and apply now.

The government amended the law on lump sums for permanent impairment and pain and suffering. For claims for permanent impairment on or after 19 June 2012, no compensation is payable unless the injured worker’s whole person impairment exceeds 10%. Only one claim can be made. There is a case of “Goudappel” in the NSW Court of Appeal in relation to the commencement date of 19 June 2012 and the definition of the word “claim”.

A test case in the Workers Compensation Commission, which is the subject of this appeal, had earlier found that the word “claim” in the context of the lump sums provisions meant a claim specifically for lump sums and not the general claim for workers compensation one makes when filing a claim form immediately following an injury (which tends to be much earlier in time than the discreet lump sums claim). The appellant, who had made his discreet claim for lump sums compensation after 19 June 2012, hopes to have the WCC decision overturned and the word “claim” redefined to mean the initial general claim.

There is another test case before the Workers Compensation Commission over the “one claim” provision. The question of law to be determined is “can a claim for deterioration (which leads to an increase in the injured workers whole person impairment) be made now, post 19 June 2012, despite earlier claims. The decision in that test case is pending.

The government has abolished pain and suffering compensation. Claims for lump sum compensation made after 19 June 2012, cannot be accompanied by claims for pain and suffering compensation no matter how high the degree of whole person impairment.

The government has amended the law on treatment expenses. Now injured workers must receive pre-approval to have treatment at the insurers’ expense. Treatment can only be approved and paid by insurers for up to twelve months post injury or period/s of incapacity for work.

To summarise, there has been a significant change to workers compensation law. It has been designed to reduce employers’ premiums and encourage a return to work. It remains to be seen whether those goals can be achieved and whether the scheme will result in fair outcomes for injured workers. AM Legal will continue to update you on the effect of these laws and the outcome of test cases from time to time.

Update Workers Compensation Commission Update – Goudappel v ADCO Constructions