New workers compensation laws for ACT

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New workers compensation laws for ACT

New workers compensation statute and regulations are scheduled to commence on 1 July 2002 in the Australian Capital Territory.

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New workers compensation statute and regulations are scheduled to commence on 1 July 2002 in the Australian Capital Territory.

The proposed legislative changes are focused on reshaping the current ACT workers compensation scheme from one which is based on entitlement, to one which is based on rehabilitation, and return to work.

Amendment of the current workers compensation scheme will bring it into line with modern injury management focused workers compensation schemes.

These changes will be achieved through the improvement of injury management processes and the introduction of a comprehensive compliance model.

Effective rehabilitation will be supported by a benefit structure that encourages workers to return to work as early, and as safely, as possible.

In cases where disputes arise, the new regulations require that the parties are brought together early by the courts which will ensure the prompt settlement of dispute by either mediation, or if necessary, arbitration.

The changes proposed have been brought about through amendment to the existing Act and the improved use of regulations.

Further development of the scheme will be assisted by the use of information collected through the Accident Information Management System (AIMS) workers compensation database being developed by ACT WorkCover.

Background

This legislation builds on the exposure draft Bill that was tabled in December 2000 and on which the Government has undertaken consultation with stakeholders and the community.

The exposure draft legislation represented the first significant review of this Act since its commencement in 1951.

Draft legislation modified

The Government modified the draft legislation in several key areas to address the matter of cost. The key changes are:

  • The period from the date of injury within which a claim is to be commenced at common law for damages has been reduced to 3 years from 6 years. This brings the ACT in to line with all other common law jurisdictions and, according to the Insurance Council of Australia, will provide greater certainty in actuarial analyses of future liabilities which in turn will ease pressure on premiums.
  • The accessibility of lump sum payments under the table of maims is restricted so that they are paid only after the injured worker has returned to work for at least 3 months or after the expiration of 2 years from the date of injury, whichever occurs sooner. For those workers who have suffered a traumatic injury where return to work is clearly unlikely, then the lump sum payment remains available immediately. This change will further encourage injured workers to seek an early return to work to access the lump sum payment, thereby reducing the costs that are sometimes currently incurred should the injured worker not have incentive to complete rehabilitation.
  • The draft legislation proposed that the insurer have a maximum period of 3 months within which to accept or reject a claim. However, should the insurer reject the claim at any time in this period, they could not recover the costs incurred to that point. The current period for decision making is 21 days. Insurers indicated that this change would adversely affect premiums as the actuaries view the extended period as an opportunity for costs to accumulate substantially without the ability to recover them should liability be denied. As a consequence the period for decision making has been reduced to 28 days, in accordance with the ICA's expressed preference.
  • To ensure balance in this arrangement, if insurers seek to terminate a claim after the 28 day period but within the first 12 months they must provide the injured worker with their reasons for termination in the form of an affidavit. Any costs incurred by the insurer up to this point cannot be recovered from the injured worker. Beyond 12 months, the matter must come before a Court prior to termination.
  • Insurers supported the draft legislation's approach to the early reporting of injuries. However, they noted that the penalties applying to employers for failing to advise the insurer of an injury within 48 hours of its occurrence were of no consequence. Experience in other jurisdictions shows that employers are very poor at timely reporting. In response, the legislation now provides that the employer is liable for the injured worker's salary costs for the period after the initial 48 hours until notification to the insurer is effected.
  • The requirement for employers to report salary and wage details quarterly was in response to the findings of the Assembly Select Committee. Insurers have advocated that the amount of data to be provided would serve only to increase their administrative costs for no real premium or coverage benefits. Business also strongly objected to this, especially as the Commonwealth Government has moved to change the requirement for quarterly Business Activity Statements to be provided to the Tax Office which would have been the basis for the workers compensation returns. Instead, the legislation now provides for reporting by business on a six monthly basis.

Regulations

The Regulations drafted so far comprise all those that are necessary to commence the new arrangements. However, there are further Regulations which need to be made to complete the package. These remaining Regulations will be developed in consultation with the relevant stakeholders - to be completed before the commencement of the new arrangements.

 

 
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