‘Expedited process’ on the table but major cuts still loom for workers’ comp

The NSW Labor government has abandoned controversial plans to force workers to prove in the Industrial Relations Commission that they have a psychological injury before lodging a compensation claim, but will still clamp down on long-term support for injured workers.

With the number of psychological injury claims doubling in the past six years and return-to-work rates plummeting, the government will introduce new laws to parliament on Tuesday to overhaul workers’ compensation for injuries such as post-traumatic stress disorder.

Unions and crossbench MPs protested outside the state government’s ministerial offices on Monday over changes to workers’ compensation laws.Credit: Steven Siewert

However, with the government’s initial plans widely criticised by unions, medical experts and lawyers, it has been forced to significantly water down some aspects in a bid to get the new laws passed in parliament before the state budget.

Rather than an injured worker fronting the commission, the government will instead pursue an “expedited eight-week claims assessment process for psychological injuries caused by bullying or harassment”. This will allow a worker to receive partial payment while the claim is determined.

But the government has not departed from another controversial component of the reforms, which will dramatically lift the threshold at which people with a serious psychological injury can receive ongoing support or claim damages.

Instead, it will phase in the changes, under which the threshold – known as the whole person impairment measure – will increase from 15 per cent to 31 per cent by July next year.

Benefits for people afflicted by psychological injuries will end after 2½ years, while medical treatment would be cut off after 3½ years.

The increase to the threshold was widely criticised in a snap one-day parliamentary inquiry into the compensation changes this month. The hearing was told that only 27 of the hundreds of employees impaired by workplace psychological injury each year would be eligible to claim long-term benefits under the proposed new thresholds.

Dr Anthony Dinnen, a consultant psychiatrist, told the parliamentary inquiry that “from my patients and my clinical experience over many years … an increase in threshold from 15 to 30 per cent would eliminate virtually every patient I’ve ever seen, except for maybe one or two, from being eligible for the scheme”.

The government released a draft exposure bill to receive feedback and, as a result, it will also change the definition of vicarious trauma to ensure frontline workers who suffer from psychological injuries from repeated exposure to traumatic experiences are covered.

“Excessive work demands” will also be recognised as something that can lead to a psychological injury alongside exposure to violence, criminal conduct, bullying and harassment.

The government has maintained that its focus must be on preventing psychological injuries to stop a sharp rise in premiums if the workers’ compensation scheme is not overhauled.

Treasurer Daniel Mookhey told the parliamentary inquiry that the workers’ compensation scheme was increasingly unsustainable and had forced Coalition and Labor governments to inject $6.1 billion over the past six years to ensure it remained solvent.

As well as changes within the system, there will be $344 million for SafeWork funding for injury prevention, with more than 50 new inspectors specialising in psychological injury.

There will be psychological support services for people navigating the claims process and enhanced work, health and safety compliance and enforcement to strengthen psychosocial hazard prevention.

On Monday, Minns said substantial changes to workplace compensation laws were needed soon to ensure the health of the state insurance system, which he said was “completely uneconomic” in its current form.

“No one with a straight face is claiming that the current system, with the amount of money that it costs not just taxpayers, but also small businesses, is sustainable in the years ahead,” he said. “If you don’t do anything for two years, three years, four years, I don’t think the system will exist.”

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