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WorkCover problems within the scheme

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Media Release

Published on

Poor investment returns, blowouts in WorkCover costs and increased payments to insurance agents are at the heart of WorkCover’s $4 billion black hole not an increase in injured worker benefits, according to a leading NSW workers’ compensation lawyer.

In a submission to the NSW Government’s Parliamentary Inquiry into WorkCover, which starts today, law firm Slater and Gordon says the big problem with WorkCover is the way it has managed the delivery of benefits and support to injured workers.

Mr Hayden Stephens, General Manager, said the Inquiry is a good opportunity to get to the bottom of the problems with WorkCover.

“A root and branch review of WorkCover’s claims handling is needed to ensure the scheme works better at supporting injured workers and to provide them with their best chance to return to work.

“A well managed scheme also means employers will get value for money from their premiums.”

In its submission to the Inquiry, Slater and Gordon claim:

  • Payments to insurance companies between 2001 and 2009 have increased from $134m to $476m, almost half a billion dollars;
  • The administrative cost of running WorkCover has increased from $70m in 1999 to more than $600m recently;
  • the number of major injuries to workers has halved since 1996 (62,000 to 30,000);
  • total payments to workers have fallen by almost 20% from 2002 to 2010.

Mr Stephens said WorkCover has gone from having a $625 million surplus in 2008 to a current $4 billion deficit.

“Clearly, when the total payments to workers since 2002 have fallen by 20 percent then the Government should start looking at the problems within the scheme before it starts to attack benefits,” Mr Stephens said.