Australia’s workers comp systems should be streamlined: report


Australia’s workers comp systems should be streamlined: report

Australia’s 10 different workers compensation schemes should be streamlined rather than replaced with one national scheme, a federal government report has recommended.


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Australia’s 10 different workers compensation schemes should be streamlined rather than replaced with one national scheme, a federal government report has recommended.

The House of Representatives Employment and Workplace Relations Committee today tabled 'Back on the job', its investigation of workers compensation schemes, in particular fraud, safety records, claims profiles and rehabilitation programs. 

In recommending a national framework, the committee noted: ‘The level of cover for injured workers should not depend on where in Australia they are employed.’ In addition, a ‘national framework could remove complexity, deal with cross-border issues, and lesson potential for fraud and/or non-compliance.’

Streamlining the workers compensation systems would include adopting a national framework, implementing best practice, and improving communications between stakeholders, according to the report.

The inquiry was initiated in June last year by Tony Abbott, the Employment and Workplace Relations Minister.

The report makes it clear this would not mean a single national workers' compensation scheme, saying ultimate responsibility for the schemes should remain with the States and Territories.

The level of employee workers compensation fraud is very difficult to quantify, but ‘is generally considered to be low’, the report notes. ‘Fraud by exaggeration is more prevalent than deliberate initiation of a claim to commit fraud’.

Most injured workers are committed to an early return to work, and the adversarial system – along with a perception that workers are automatically suspected of fraud – can mean the workers is effectively ‘doubly injured’, the report said.

The Committee said streamlining the different workers compensation systems would be more financially beneficial than allocating more resources to detecting fraud, the report said.

Better data collection

The Committee recommends the Commonwealth examine the pros and cons (including privacy concerns) of establishing a national database to aid consistency, comparisons and, possibly, interjurisdictional fraud detection.

The report also called for an investigation into a national database on workers’ compensation claims that identifies injured workers, employers, service providers and insurance companies.

Lawyer’s advice often not in worker's best interest

The Committee recommends making improved educational materials available to injured workers on the various legal options available to them.

The Committee said lawyers often provide advice to injured workers that may not always help them achieve their goal of a timely return to work. ‘Workers are often led to believe that a lump sum payment would set them up for life. They usually end up on social security and are supported by Australian taxpayers’, the Committee said.

Investigators need national code of practice

The Committee recommends a national code of practice be developed for investigators, and expressed concern over reports of inefficient, unethical and inappropriate actions by investigators engaged to monitor an injured worker's behaviour.

Eliminate vertical integration in insurance companies

The report recommends that vertical integration (where insurance companies own and operate rehabilitation and 'return to work' providers) be eliminated. The report noted the financial incentive for the insurer to process claims expediently may not match the best possible long-term outcome for the injured worker.

Other recommendations

  • The Workplace Relations Ministers’ Council (WRMC) study the extent to which workers are currently not covered by any workers compensation system, with a view to adopting a national standard that covers the widest possible number of workers.
  • The WRMC should also develop a process for identifying and implementing best practice initiatives, such as the Queensland Government’s approach of educating and maintaining a close relationship with doctors and requiring them to fill out a form declaring that the injury is work related.
  • An investigation into amending the Australian and New Zealand Standard Industrial Classification in relation to its applicability to workers compensation systems and interjurisdictional consistency should be carried out.
  • A study of injured workers who have received a lump sum or who have been in receipt of workers compensation benefits for twelve or more continuous months should be carried out to identify if they have subsequently accessed income support entitlements, and to determine if this system is subsidising the workers’ compensation industry.
  • An urgent investigation into the extent to which current taxation legislation is inhibiting initiatives of workers compensation schemes initiatives that may benefit the injured workers, such as structured settlements.
  • The Commonwealth Government should determine the extent to which Medicare is meeting injured workers’ medical expenses, and the extent to which this system is subsidising the workers’ compensation industry.
  • The Commonwealth, State and Territory governments develop a program to implement the National Occupational Health and Safety Commission 'Guidance notes for best practice rehabilitation management of occupational injuries and disease' nationally.
  • The Commonwealth, State and Territory governments investigate the potential interface of Commonwealth employment schemes with State re-employment programs to develop more effective ways to assist injured workers to return to work.

Comments from Committee chair

‘Many of the issues raised in this inquiry reflect inadequate communication. In all sectors there is misinterpretation, misunderstanding and a lack of understanding of the process’, said the inquiry chair De-Anne Kelly MP.

‘The need for implementation of best practice has never been more important. Moves toward greater national consistency, as recommended by this inquiry, can only benefit this outcome.’

The full report is available on the Committee's website. 


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