Inquiry hears how icare changes would affect a majority of impaired workers

Only 27 of the hundreds of employees impaired by workplace psychological injury a year would be eligible to claim long-term benefits under new thresholds proposed under the NSW government’s plan to radically reshape the state’s compensation scheme, a parliamentary inquiry has heard.

But Treasurer Daniel Mookhey used the snap hearing on Friday to say the scheme was increasingly unsustainable and had forced Coalition and Labor governments to inject $6.1 billion over the past six years to ensure the government’s insurer remained solvent.

Unions NSW Secretary Mark Morey and Premier Chris Minns.Credit: Flavio Brancaleone, Kate Geraghty

The one-day inquiry to consider the government’s workers’ compensation scheme heard from nearly 40 witnesses in nine hours about the shortcomings and merit of the proposal to overhaul compensation for psychological injury in NSW.

An exposure draft made public last week outlined the first tranche of the government’s proposed reforms. This included cutting off benefits for people afflicted by psychological injuries after a period of 2½ years, while medical treatment would be cut off after 3½ years.

The threshold for exemption would be lifted from a Whole Person Impairment (WPI) rating of 20 per cent to 30 per cent. The new provisions would also limit the ability for workers to claim lump-sum payments.

But of the about 200 people who now met the threshold, icare’s chief actuary Dai Liu provided evidence that modelling undertaken by icare found that figure would plunge to 27 people under the new plan. About 10,000 people make psychological claims each year.

“Based on the current data we have, we believe it is 27 injured workers who would make it past the WPI threshold,” Liu said.

Treasurer Daniel Mookhey has said the state’s workers’ compensation scheme is unsustainable.Credit: Dion Georgopoulos

The Herald has previously reported the proposed WPI threshold would make it nearly impossible for workers suffering psychological injury to claim damages, with retired Sydney psychiatrist Dr Julian Parmegiani saying the changes were so severe as to be effectively ending the scheme. Reaching a 30 per cent threshold would require someone to be “in an institution, or at home with carers”, Parmegiani said in late April.

With representatives from seven unions providing evidence during a 45-minute session, the inquiry heard the government’s proposal to limit access for psychological injury would overwhelmingly affect women. Most felt the reforms were being rushed through without the necessary consideration, they said.

NSW Nurses and Midwives’ Association acting general secretary Michael Whaites said about 85 per cent of those who suffered a psychological injury at work were women, describing the proposed changes as “abhorrent”.

“There are systems of work within health, whether it is NSW or other healthcare providers, that are injuring nurses, midwives and carers, who are predominantly women, and this proposed legislation will exclude them from compensation,” Whaites said.

NSW Teachers Federation deputy president Amber Flohm agreed that efforts to restrict access to workers’ compensation were a “significantly gendered issue”, highlighting that 80 per cent of the teaching workforce were women.

Appearing alongside Industrial Relations Minister Sophie Cotsis, Mookhey used his opening statement to underscore how the viability of the scheme had deteriorated since 2018, and said next month’s budget would include another $2.6 billion writedown of the scheme.

“Put simply – you can have the best workers’ compensation scheme in the world on paper. If it has no money – it helps no one,” he said.

As he acknowledged the state’s workers’ compensation scheme was “broken”, Unions NSW secretary Mark Morey lashed the government’s proposed bill as a “poorly drafted piece of proposed legislation”, urging delay and the establishment of a “real review”.

“There is no doubt about it. It fails workers and employers through poor claims management, needless bureaucracy and fall in return-to-work rates,” Morey said.