NSW Government targets sick and injured workers


Workplace injuries can ruin people's lives. And not just by robbing the injured worker of the quality of their lives but also the quality of the lives of families and friends of injured workers. Sometimes injured workers are never able to function again as a father, mother, uncle or aunty, son or daughter, wife, husband, lover or fit and healthy grandparents providing support to their kids and that special relationship of grandparents with their grandkids.

Minister for Finance and Services Greg Pearce’s comment that "everybody gets a prize" ignores this pain, suffering and misery. It is facile and offensive and trivialises proper compensation for workplace injuries. Those of us who don’t get injured at work are the ones who get a prize. The Minister made this observation in the Legislative Council on 28 March, in a speech which sneered at long-term physiotherapy and remedial massage and took a shot at over-charging surgeons. His comments missed the point.

If the Minister really was announcing that "this government intends to clean up the scheme", then a review of Workers Compensation to better manage over-charging and over-servicing would be both predictable and reasonable.  No-one defends rorting the system. Rorting makes everyone else involved in the system suffer. Rorting is a function of the adequacy of how the system is managed and the auditing of the processes - that's what needs reviewing.  But that's not what the Government is proposing at all.

The Government has established an Inquiry to investigate significant cutbacks in compensation which have the potential to affect every employee who may have an accident at work or an accident in travelling to or from work. This is not cleaning up the system, this is making injured workers pay.

Unions NSW has come out hard against the Government announcements. And so it should. depa is affiliated to Unions NSW and will, like all other affiliated unions, happily contribute a levy of one dollar per member to fund his campaign. Make no mistake, getting injured at work devastates families as well as the quality of life of an injured worker.

The major cuts proposed by the Government to the workers compensation system are:

  • Remove workers compensation coverage for trips to and from work;
  • Reduce weekly payments to injured workers after 13 weeks;
  • stop weekly payments to most injured workers after 2 ½ years;
  • stop medical payments to most injured workers after 2 ½ years;
  • Stop lump-sum payments for pain and suffering; and
  • Make it harder to prove employer negligence in lump-sum claims.

All of these proposed considerations can potentially affect all of you. It is the targeting of what are known as "journey claims", claims arising from injuries in your normal trip to or from work, that are the biggest concern for us with the overwhelming majority of our members driving to and from work. How does it make any sense, and where is the equity in removing compensation for injuries arising in a journey, that only occurred because you were going to work, or returning home?

There is no argument that the Workers Compensation Scheme needs review and a submission filed by Unions NSW prepared by a respected academic, Central Queensland University’s Dr Kevin Purse, constructively argues for changes to the WorkCover Authority and the Scheme based on better management rather than slashing the entitlements of sick and injured workers. 

But, in a nutshell, there is no shortfall in funding of current liabilities and the capacity of the Work Cover Authority to meet its obligations is more affected by its investment income crashing during the Global Financial Crisis than compensation payments to sick and injured workers.

This morning's Sydney Morning Herald reported that the Parliamentary Inquiry yesterday heard from Michael Playford, a PricewaterhouseCoopers actuary who said that an evaluation carried out by PWC showed half the WorkCover schemes $4 billion deficit was due “to external influences impacting investment returns achieved." That's Actuary-speak for the losses are the result of investments collapsed in the GFC.

The other half of the deficit "was due to a deterioration in claims management since June 2008".

The PWC evidence is consistent with the Unions NSW submission. It's all about better management.

The Herald also reported a denial by Finance Minister Greg Pearce that he hadn't "been going on about the rorting of the scheme", but the idea that you get people back to work early by reducing their benefits is simply wrong. That process makes sick and injured workers pay when the solution is proper management of the process.

Unions NSW has identified and rebutted four significant porkies and misunderstandings being peddled by the Government in this attack:

The Myth: Cuts are needed because the workers compensation scheme has a $4 billion deficit

The Truth:

  • The workers compensation system has enough money to meet its current liabilities.
  • The size of the deficit is in large part due to poor investment returns during the Global Financial Crisis and will therefore reduce as the world economy normalises.
  • The size of the deficit is based on an estimate of future potential claims and is therefore speculative and unpredictable.
  • If the Government focuses on preventing injuries in the first place, then huge savings can be made in helping injured workers back to work and reducing the costs paid to insurers.

The Myth: Injured workers are rorting the system

The Truth

  • Only 30% of injured workers need five days or more off work.
  • After six months, most injured workers without work receive only $432.50 a week before tax. This is below the poverty line and can't realistically be reduced any further.
  • Injured workers who unreasonably refuse to return to work can have their payments terminated now.
  • Injured workers can't sue their employers for causing their injury. Lump-sum payments are only made to those who meet exacting tests of permanent impairment.

The Myth: The premiums NSW employers are paying for Workers Compensation are too high

The Truth

  • NSW employers have enjoyed a 33% reduction in workers compensation premiums since the 2005 reforms, delivering them savings of $1 billion.
  • While premiums are lower in some States and Territories, South Australia and the ACT are higher.
  • Most other States and Territories also have significantly lower rates of serious claims than NSW.
  • If NSW employers reduced the number of injuries at work, their premiums would drop.

The Myth: If you cut injured workers’ rights, they will return to work sooner

The Truth

  • The Government wants to reduce weekly payments 13 weeks after injury, then cut off weekly payments and medical bills for most of those still injured after 2 ½ years.
  • Even a 10% cut in weekly payments for workers on the minimum wage is nearly $60 less each week.
  • Making injured workers survive on lower weekly payments won't stop them being injured but will make it harder for them and their families to make ends meet.
  • Many injured workers can work but their employer can't or won't give them a suitable job. Cutting the weekly payments won't change this.
  • Many injured workers are working, but need follow-up operations or medication for many years. To cut them off from weekly benefits and medical costs is not only unacceptable but will put a huge financial strain on these families when they are already doing it tough.
  • If injured workers can't work and are cut off from weekly payments after 2 ½ years, they will be forced to move on to Centrelink payments. This will transfer costs from insurance companies to taxpayers.



What can you do?

Unions NSW has organised a demonstration outside Parliament House in Macquarie Street, Sydney at 12:30pm on Wednesday 13 June. All members are invited to attend and those of you who can do so will be most welcome. Let the office know if you are going to attend and we will keep an eye out for you.

The Parliamentary Inquiry is comprised of members from the Government, the Opposition and some of the critical and key Independents in the Upper House. If your local member is a member of the Government and you have a relationship with them already, you should go and see them and tell them you are not happy about losing coverage for your trips to and from work and from the general approach of cutting benefits.

And if you don't have a relationship with them already, ring them, e-mail them or even write a letter. This is a significant and major threat for anyone who has an accident at work and the solution is better management of the WorkCover Authority - not cutting the entitlements of sick and injured workers.

Other information

Dr Kevin Purse’s submission on behalf of Unions NSW.

Some case studies of injured workers compiled by Unions NSW.

SMH 22 May "WorkCover woes blamed on poor investments and rorters."


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