NSW government releases draft amendemts to workers’ compensation laws
Compensation payments for psychological injuries will cut off two and a half years earlier unless an injured worker can prove they will be significantly impaired for life, according to draft reforms released by the NSW government. Here’s how it could affect you.
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Compensation payments for psychological injuries will cut off two and a half years earlier unless an injured worker can prove they will be significantly impaired for life under a bid to overhaul the workers compensation scheme.
Workers and employers were given their first glimpse at the potential changes after the Minns government released its exposure draft for the new Workers Compensation Legislation Amendment Bill on Friday.
A parliamentary inquiry will have until May 23 to give feedback on the draft before the final version is set in stone, which NSW Treasurer Daniel Mookhey previously said would put “prevention ahead of compensation”.
This would include enshrining reasonable management practices in law to better protect employers from unfair blowback when performance managing staff.
According to the exposure draft, payments for psychological injuries also would be cut off after two and a half years unless a worker has an “impairment” threshold greater than 30 per cent.
Unions NSW boss Mark Morey said that threshold amounted to an injured worker being “catatonic”.
“At 15 per cent you can’t hold down a job, you need assistance to maintain your hygiene, and are reticent to go outside,” he said.
“At 30 per cent, you’re basically catatonic.”
Mr Morey accused the government of “trying to fill a budget black hole by cutting workers’ mental health support rather than fixing the underlying causes of psychological injuries”.
An individual currently has to wait in the workers’ compensation scheme for five years after until they can qualify for lump sum damages and benefits for life – if they pass an “impairment” threshold greater than 15 per cent.
But the proposed change would halve this time and require people to pass a threshold greater than 30 per cent at two and a half years instead. If they do not pass, they will be able to receive medical benefits for one more year but will then be cut off.
The government claims this will help people focus on getting better faster and prevent them from being stuck in the system for years.
It comes as the government bills its proposed changes as a way to improve the “front end response” to workers’ compensation across the board to deal with matters before injury develops.
A large part of this approach would include broadening the jurisdiction of the Industrial Relations Commission to include bullying and harassment, which has been spruiked as a way for people to have their issues dealt with quickly before suffering an injury.
According to the exposure draft, compensation payments would also increase – some by more $100,000 – in line with indexation to reflect real-world increases since the last bill.
Payouts for psychological injuries now amount to more than 37 per cent of the total value of workers compensation claims – of the $6.4 billion spent on workers compensation claims annually, $2.4bn is for psychological injuries.
Mr Mookhey said the proposed reforms would help “protect” the compensation system as the current “status quo is failing workers and businesses”.
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