The O’Farrell Government has announced that it intends to dramatically cut benefits and workplace compensation entitlements in response to the NSW workplace compensation scheme’s financial troubles.
Slater and Gordon passionately believes that this is wrong, unnecessary, and avoids the real cause of the scheme's problems and as such it is not a real solution to these problems.
We ask the NSW State Government to instead deal with the real cause of WorkCovers' current financial position – beingexcessive administrative costs, poor scheme management and investment returns.
Slater and Gordon urges the O’Farrell Government to exercise compassion – not cuts – when dealing with the state’s workers.
Find out who your local NSW MP is.
Find out more on Unions NSW' campaign on the issue.
See the Workplace Comp Inquiry's committee report.
On 21st June, the State Government forced through Parliament a range of changes to the NSW workplace compensation scheme that have effectively levelled the entire blame for WorkCover’s $4B deficit with workers across NSW.
The new laws are very concerning and mean compensation for pain and suffering and medical expenses have been slashed for all but the most workers in severe incidents. The changes have also put a cap on the length of time most workers can receive benefits, regardless of their ability to return to work.
Significantly, other than police and some emergency workers, incidents suffered on the way to and from work will no longer be covered by workplace compensation.
Slater and Gordon have consistently said that poor financial management is to blame for WorkCover’s deficit, not NSW workers.
Virtually none of the NSW Workplace Compensation reforms address WorkCover's red tape and the way insurance companies manage claims.
The Joint Select Committee (Parliamentary Inquiry) into NSW Workplace Compensation tabled its report in the NSW Parliament on June 13, 2012. Slater and Gordon lawyers attended the Committee and presented our submission on Monday the 28th June, 2012. Our lawyers argued strongly before the Committee that it is unfair to cut the benefits of already vulnerable workers.
The report tabled by the Parliamentary Committee on 13th June 2012 has recommended dramatic cuts to workplace compensation benefits in NSW. These include;
- Abolishing completely the right to claim for pain and suffering under common law, a right that has existed for over two centuries
- Abolishing completely claims for permanent impairments under 10%, and reducing rights to claim when an impairment has deteriorated
- Abolishing claims by workers involved in an incident on the way to or from work (except police)
- Abolishing claims by families of deceased workers for nervous shock and trauma
- Capping weekly payments, particularly for workers with a partial incapacity
- Capping medical and treatment expenses to one year after weekly payments stop
Proposed abolition of compensation for pain and suffering
The recommendation to abolish pain and suffering compensation, if implemented, would render NSW the only state that does not recognize pain and suffering as a category of compensation at common law. It will widen the already unfair gap that exists in NSW common law workplace compensation compared to Victoria and QLD. It will also widen the compensation gap between compensation for NSW workers compared to people involved in an motor vehicle incident.
Permanent Impairment lump sums
The proposed threshold of 10% Whole Person Impairment (WPI) would make the NSW workplace compensation scheme the harshest in the country when considered together with other related benefit types.
The proposed recommendation is not justified because this benefit has had a relatively limited impact on the scheme's liabilities.
An additional threshold of 5% deterioration for further claims is grossly unfair and will exclude very serious impairments from just compensation.
Work capacity testing will create red tape for workers and add to the costs of the system by providing a new income stream/mini industry for those conducting the testing.
The proposed use of doctors to determine the question of “causation” will also create a costly new field of work and add a process layer. We note here with respect that medical practitioners in this State are not qualified in any genuine sense to determine causation.
A proposal to introduce work as a “main contributing factor” test for cases of illness and disease is not necessary or justified and will lead to additional disputation.
You can take a look at the Committees report and all of its recommendations (click here).
It is expected that the Government will announce any changes it decides to make shortly. We think this is likely because the Premier, the Hon Barry O'Farrell has said that he wants legislation passed before Parliament rises for the winter break. We will keep you up-dated through this website.
Lawyers from Slater and Gordon's offices have written to local MP's asking to speak with them to explain why workplace compensation benefits should not be cut and to describe the impact of the proposed changes on workers.
Slater and Gordon argued strongly that there is no policy basis for taking away the rights and entitlements of workers and that workers should not bear the brunt of poor administration of the workplace compensation scheme.
We will seek urgent meetings to get MPs not to support the extreme recommendations of the committee.
We highlighted the challenges that workers in NSW already face, and the fact that they are currently disadvantaged in significant benefit categories, most notably common law, when compared to other States.
We have written to our NSW workplace compensation clients to keep them informed of the changes that the State Government is considering and as soon as any decisions are known, we will provide a further up-date.
We wish to re-iterate to those who do not believe workplace compensation benefits should be cut - write to your local Member of Parliament, the Minister responsible for WorkCover, the Hon Greg Pearce and members of the Joint Select Committee to remind them that workers in NSW are already disadvantaged in many areas compared to workers in other States. Tell them that politicians should be fixing the administration of WorkCover, not cutting benefits to vulnerable workers who are not to blame for the problems.
People who share our concerns should also go to the Unions NSW workplace compensations campaign website for further information on the NSW Unions campaign and how to get involved.
How you can get involved:
Phone or write to your local State MP. Tell him or her to support workers and their families, and stop the O’Farrell Government’s moves to cut support for vulnerable workers. To find your local State MP and their contact details, click here.
Phone or write to the Minister for Finance and Services (responsible for WorkCover), and the Premier, and ask them to reconsider the Government’s plans.
You can also contact the Chair of the Parliamentary Inquiry, the Hon Robert Borsak MLC, or committee member the Hon Paul Green MLC - click here for details.
Email us and tell us about your problems dealing with workplace compensation in NSW. We hope to collate this feedback to provide 'real experiences to NSW parliamentarians and heighten their understanding of the real impacts of their proposed strategies.
We also recommend that you visit Unions NSW's website: nswforall.org.au and learn more about the possible changes.
It is unfair to make vulnerable workers and their families pay the price of poor administration, rising insurance agent costs and poor investment investment returns.
Workers in NSW, including those who have lost their lives, are already suffering by receiving considerably less workplace compensation than workers in other States.
The NSW Government has set up a Parliamentary Inquiry into the scheme, and you can find out more on this Inquiry here. We have made a submission to the inquiry, which you can read here.
The facts about WorkCover in NSW:
The following facts taken from WorkCover's own publications demonstrate that the cause of cost blow outs is primarily bureaucracy and administration -
The public cost of managing WorkCover has increased since the late 1990's, from approximately $70 million $630 million by 2010 . This cost is separate from the compensation amounts paid to workers.
Over the same period payments to insurance companies sky-rocketed from approximately $200 million in 2002 to almost half a billion - $476 million in 2010
Over the last 10 years, all workplace incident rates have declined by 51%. Major workplace incidents have decreased by 29% between 1999 -2000 to 2009-2010
In 2008 the scheme was fully funded. PWC, the Scheme Actuaries, attribute that approximately 50% of the 4 billion deficit has emerged due to "external influences impacting investment returns" and changes to the methodology for financial forecasting of future income and liabilities.
The recommendations of the Parliamentary Committee are extremely harsh on those who have lost their income and their ability to work and provide for their families simply because they went to work.
Premier Barry O’Farrell MP
Governor Macquarie Tower
Level 36, 1 Farrer Place,
SYDNEY, NSW 2000
(02) 9228 5239
Minister The Hon. Greg Pearce MLC
Governor Macquarie Tower
Level 36, 1 Farrer Place,
SYDNEY, NSW 2000
(02) 9228 5287
The Hon. Robert Borsak, MLC
Sydney NSW 2000
(02) 9230 2850
The Hon. Paul Green, MLC
Sydney NSW 2000
(02) 9230 3484