Comparison of Workers Compensation Arrangements in Australia and New Zealand (2013)

Comparison of workers’ compensation arrangements in Australia and NewZealand

July 2013

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The information provided in this document can only assist you in the most general way. This document does not replace any statutory requirements under any relevant state and territory legislation. Safe Work Australia is not liable for any loss resulting from any action taken or reliance made by you on the information or material contained on this document. Before relying on the material, users should carefully make their own assessment as to its accuracy, currency, completeness and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances. The views in this report should not be taken to represent the views of Safe Work Australia unless otherwise expressly stated.

Foreword

The Comparison of Workers’ Compensation Arrangements in Australia and New Zealand provides information on the operation of workers’ compensation schemes in each of the jurisdictions in Australia and New Zealand.

This is the second edition of the Comparison report after it was substantially revised and reformatted in 2012. The main changes are:

Chapter 1 only includes recent developments.Information on the history and evolution of workers’ compensation schemes has been moved to Appendix 1
Chapter 2 — Schemes at a Glance has been expanded to include information of interest to employers, workers and their representatives
the sections on administrative arrangements and scheme funding arrangements have been combined into a single chapter and moved to the back of the report in Chapter 7
the comparative table of deemed diseases has been moved to Appendix 2
Chapter 5 — Return to work has been substantially revised to provide briefer, more comparable data, and
the section on Self-insurer arrangements has been separated from the scheme funding arrangements and is presented in Chapter 6.

In this edition, Table 2.13 was expanded to include information on the effect of taking leave while on compensation. A new table was created to include information on coverage for volunteers (Table 3.3).

The Comparison provides background to the evolution of workers’ compensation arrangements in Australia and New Zealand and discusses the way each scheme deals with key aspects such as the size and nature of the schemes, coverage, benefits, return to work provisions, self-insurance, common law, dispute resolution and cross-border arrangements.

The majority of tables contained in this report provide a snapshot of workers’ compensation arrangements as at 30 September 2012. However, it must be noted that the information for the ACT was currentat 30 June 2012. Information taken from the 14th edition of the Comparative Performance Monitoring report covers the 2010–11 financial year and some jurisdictions have reported recent developments to the end of December 2012. As each jurisdiction may vary its arrangements from time to time and there may be some exceptions to the arrangements described in this edition, readers wanting more up to date information should check with the relevant authority.

On behalf of the Heads of Workers’ Compensation Authorities (HWCA), the Victorian WorkCover Authority producedthis publication from 1993 to 2005. The Australian Safety and Compensation Council took over responsibility for the report in 2006 and produced it in 2006 and 2007. Safe Work Australia has been producing the report since 2008. The work of the Victorian WorkCover Authority and the Australian Safety and Compensation Council is acknowledged. Safe Work Australia thanks the representatives from each jurisdiction for the valuable assistance they have provided in producing this edition of the Comparison of Workers’ Compensation Arrangements in Australia and New Zealand.

Safe Work Australia1

Foreword...... iii

Chapter 1: Recent developments in workers’ compensation
schemes in Australia and New Zealand

Chapter 2: Schemes at a glance

Table 2.1: Jurisdictional contacts

Table 2.2 Agencies responsible for overseeing workers’ compensation
in each jurisdiction

Table 2.3: Key features of schemes

Table 2.4a: Summary of coverage (see Table 3.1a for more information)

Table 2.4b: Guidelines and information for determining coverage
of workers

Table 2.4c: Coverage of journeys and breaks

Table 2.4d: Definition of injury and employment contribution

Table 2.4e: Coverage of retirement provisions

Table 2.5: Summary of entitlements as at 30 September 2011

Table 2.6: Prescribed time periods for injury notification

Table 2.7: Prescribed time periods for claim submission

Table 2.8: Prescribed time periods for payments

Table 2.9: Dispute resolution process

Table 2.10: Definition of remuneration for the purpose of premium
calculation

Table 2.11: Employer excess

Table 2.12: Uninsured employer provisions

Table 2.13: Leave while on workers’ compensation

Table 2.14: Superannuation and workers’ compensation

Chapter 3: Coverage and eligibility for benefits

Table 3.1a: Definition of worker (see Table 2.4a for summary of
coverage of worker)

Table 3.1b: Coverage of contractors and labour hire workers
(see Table 2.4a for summary of coverage of workers)

Table 3.2: Deemed workers

Table 3.3: Workers’ Compensation coverage for volunteers

Table 3.4: Treatment of sportspersons and sporting injuries

Table 3.5: Workers’ compensation arrangements for government
employers

Table 3.6: Workers’ compensation arrangements for judges and
members of parliament

Table 3.7: Industrial deafness thresholds

Table 3.8: Definition of work — journeys and breaks

Table 3.9: Definition of injury and relationship to employment — detailed

Table 3.10: Statutory definitions of permanent and impairment and
criteria for determining whether impairment is permanent

Table 3.11: Permanent impairment guides

Table 3.12: Discounting of prior conditions

Table 3.13: Exclusionary provisions (general)

Table 3.14: Exclusionary provisions for psychological injuries

Table 3.15: Cross border provisions

Chapter 4: Benefits

Table 4.1: Income replacement

Table 4.2: Medical, hospital and other costs

Table 4.3: Permanent impairment payments

Table 4.4: Death entitlements

Table 4.5: Definitions of dependants/ spouse for death benefits

Table 4.6: Common law provisions

Table 4.7: Suspension and cessation of benefits

Table 4.8 Incapacity benefits settlements

Chapter 5: Return to work

Table 5.1: Sections of workers’ compensation Acts and guidance
material relating to return to work

Table 5.2a: Requirement to have a workplace rehabilitation/ return
to work program or policy

Table 5.2b: Return to work plans — Individual return to work plans

Table 5.2c: Suitable duties

Table 5.2d: Other requirements of employers

Table 5.3: Responsibilities of workers

Table 5.4: Injured worker placement incentives

Table 5.5: Responsibilities of authority/ insurer

Table 5.6: Functions and training of workplace rehabilitation coordinators

Table 5.7a: Responsibilities of workplace rehabilitation provider

Table 5.7b: Rehabilitation provider qualifications and fee structure

Table 5.8: Prescribed time periods to establish a return to work plan

Chapter 6: Self-insurer arrangements

Table 6.1: Workers’ compensation and self-insurance coverage

Table 6.2: Criteria for becoming a self-insurer

Table 6.3: Approval process, application and ongoing costs and
duration of licence

Table 6.4: Work health and safety requirements and auditing

Table 6.5: Bank guarantees/ prudential margins and excess of loss
requirements

Table 6.6: Self-insurance restraints on company structure

Table 6.7 Outsourcing of Case Management

Table 6.8: Other ongoing licence requirements

Table 6.9: Reporting requirements

Table 6.10: Requirements for surrendering a self-insurance licence
and penalties for exiting the scheme

Chapter 7: Scheme administrative and funding arrangements

Table 7.1: Applicable workers’ compensation legislation

Table 7.2: Transitional legislation provisions as at September 30 2012

Table 7.3a: Minor schemes — New South Wales*

Table 7.3b: Minor schemes — Victoria

Table 7.3c: Minor schemes — Western Australia

Table 7.3d: Minor schemes — South Australia

Table 7.3e: Minor schemes — Tasmania

Table 7.3f: Minor schemes — Commonwealth

Table 7.3g: Minor schemes — New Zealand

Table 7.4: Schemes’ funding positions as at 30 June 2012 and
30 June 2011

Table 7.5: Standardised average premium rates 2005–06 to
2010–11 (% of payroll)

Table 7.6: Selected industry premium rates as at
30 September 2012 (% of payroll)

Appendix 1

Appendix 2

Appendix Table 1: Occupational diseases as prescribed at
30 September 2012 — Occupational diseases caused by agents
arising from work activities

Appendix Table 2: Occupational diseases as prescribed at

30 September 2012 — Occupational cancer...... 243

Glossary

Acronyms and abbreviations

Chapter 1: Recent developments in workers’ compensation schemes in Australia and New Zealand

There are 11 main workers’ compensation systems in Australia. Each of the eight Australian states and territories has developed their own workers’ compensation schemes and there are also three Commonwealth schemes: the first is for Australian Government employees, Australian Defence Force personnel with service before 1 July 2004 and the employees of licensed self insurers under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act); the second is for certain seafarers under the Seafarers Rehabilitation and Compensation Act 1992; and the third is for Australian Defence Force personnel with service on or after 1 July 2004 under the Military Rehabilitation and Compensation Act 2004 (MRCA).

This chapter will focus on recent developments that came into effect between July 2010 and September 2011 or which will come into effect after that time. The historical section on the evolution of the workers’ compensation schemes can be found in Appendix 1.

New South Wales

In June 2012 the New South Wales Government introduced changes to the NSW workers’ compensation system. The Workers Compensation Legislation Amendment Act 2012 was assented on 27 June 2012 and amended the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998. The changes affect all new and existing workers’ compensation claims, except for claims from:

police officers, paramedics and fire fighters
workers injured while working in or around a coal mine
bush fire fighter and emergency service volunteers (Rural Fire Service, Surf Life Savers, SES volunteers), and
people with a dust disease claim under the Workers’ Compensation (Dust Diseases) Act 1942.

Claims by these exempt workers will continue to be managed and administered as though the June 2012 changes never occurred.

The changes have been scheduled to come into effect in stages.

Changes with effect on and from 19 June 2012

For permanent impairment lump sum compensation claims made on or after 19 June 2012:

-Payments for pain and suffering under s67 of the Workers Compensation Act 1987 are no longer available.

-A threshold of more than 10 percent permanent impairment for physical injury (including hearing loss) must be reached to access a permanent impairment lump sum. The threshold for psychological injury lump sum payments remains at 15 percent permanent impairment.

-Only one claim can be made for permanent impairment compensation.

Journey claims for an injury received on or after 19 June 2012 can only be made if there is a real and substantial connection between the employment and the incident out of which the injury arose.
No compensation is payable for heart attack and stroke injuries received on and after 19 July 2012 unless the nature of the employment concerned gave rise to a significantly greater risk of the worker suffering the injury than had the worker not been employed in employment of that nature.
Definition of ‘injury’ amended so that a ‘disease injury’ is a disease that is contracted in the course of employment only if the employment was the main contributing factor. ‘Disease injury’ also encompasses the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease provided the employment was the main contributing factor. This applies to all injuries received on and from 19 June 2012.
The amendments prevent a claim for damages for nervous shock where the nervous shock is not a work injury and prevent a claim for damages by relatives of an injured or deceased worker because the relative’s injuries are not work injuries. The amendments do not apply where court proceedings for nervous shock claims commenced before 19 June 2012.

Seriously injured workers

The following reforms for seriously injured workers (injured workers with a permanent impairment of more than 30 percent) came into effect on 17 September 2012:

The minimum amount used to calculate the weekly payment was increased to $736.72 gross.
There is no time cap on weekly payments except for the Commonwealth retirement age.
There is no time limit on payments for reasonably necessary medical and related expenses.
Seriously injured workers will not have to undergo a work capacity assessment every two years — unless the worker requests one to explore return to work options.

Weekly payments

The changes to weekly benefits will come into effect on:

1 October 2012 for new claims, and
1 January 2013 for existing claims.

The changes to weekly payments include:

A simplified method for calculating workers’ entitlements based on the worker’s pre-injury average weekly earnings — incorporating overtime and shift allowance in the initial 52 weeks of weekly payments.
Up to 95 percent of pre-injury average weekly earnings for the first 13 weeks of a claim.
For weeks 14 to 130, weekly payments will be 80 percent of pre-injury average weekly earnings. If a worker returns to work for at least 15 hours per week, weekly payments will be made up to 95 percent of pre-injury average weekly earnings.
130 week limit — for all workers except where workers meet specified requirements:

-workers who are fit to do some work and are not performing at least 15 hours of paid work per week and earning at least $155 per week by the 130th week of incapacity payment will not be entitled to payments after the 130th week, and

-workers who do achieve an actual return to work of more than 15 hours and earn at least $155 per week, or have no capacity for work, or have an impairment of more than 30 percent of the whole person are not subject to this time limit.

5 year limit — workers with a WPI of 20 percent or less may only receive up to 260 weeks (five years) worth of weekly payments. Workers with permanent impairment of more than 20 percent are not subject to this time limit.
Weekly payments and retirement:

-if an injury occurs before retiring age, a worker may be entitled to weekly payments until reaching retiring age, and

-if an injury occurs after reaching retiring age, a worker may be entitled to weekly payments in the period up to 12 months after the first date of incapacity.

Work capacity assessments

Work capacity assessments will be undertaken by the insurer. The assessment involves a review of the injured worker’s medical, functional and vocational status and helps to inform decisions about the injured worker’s capacity to return to work in suitable employment and entitlement to weekly benefits.
A work capacity assessment can occur at any point in the life of the claim. A decision must be made on the injured worker’s work capacity by 130 weeks and then will be reviewed at least every two years thereafter.

WorkCover Independent Review Officer

The June 2012 reforms also enabled the establishment of a WorkCover Independent Review Officer (WIRO). From 1 October 2012 the WIRO will be responsible for:

investigating complaints made by workers about insurers and making recommendations for action to be taken by the insurer or the worker
reviewing work capacity decisions by insurers
encouraging high quality complaint resolution by insurers and employers
reporting annually to the Minister and the Parliament on their responsibilities, and
administering the Independent Legal Assistance and Review Service. This service will facilitate access to free independent legal advice to injured workers, in circumstances where there is a disagreement with insurers regarding entitlements.

Medical and related expenses

The changes to payments for medical and related treatment will come into effect on:

1 October 2012 for new claims, and
1 January 2013 for existing claims.

Under the changes, payments for medical and related treatment will end at whichever occurs last:

where no weekly payments for compensation are payable, 12 months after the claim for compensation is made, or
12 months after the last payment of weekly benefits.

Victoria

New return to work rights and obligations commenced from 1 July 2010 that replaced prescriptive return to work requirements with a performance based regulatory framework. These changes were part of extensive amendments to the Accident Compensation Act 1985 assented to in March and October 2010, with the majority of changes commencing on 5 April 2010. Further information on return to work can be found at WorkSafe Victoria.

On 7 April 2011 WorkSafe Victoria announced its new panel of WorkSafe Agents to manage premiums and claims from 1 July 2011 following a comprehensive expressionofinterest and tender process which began in July 2010.

As part of the tender process, WorkSafe Victoria outlined at a high level its intent to continue to make enhancements to the claims model to further improve services to Victorian employers and injured workers while ensuring scheme viability. The enhanced claims model extends the specialist model, incorporating two new specialist roles and modifications to segmentation:

eligibility officer, and
return to workspecialist.

In addition, WorkSafe Victoria will take an active role in training and capability development and lead industry-wide training in critical areas of return to work and entitlement.

On 1 July 2011, the new ANZSIC 2006 based Workcover Industry Classification (WIC) system commenced.

Queensland

On 7 June 2012, the Queensland Parliament passed the following motion:

That the Finance and Administration Committee inquire into and report on the operation of Queensland’s workers’ compensation scheme, in particular:

(i)the performance of the scheme in meeting its objectives under s5 of the Act