More than 700 workers lose compensation despite WorkCover surplus

More than 700 workers have stopped receiving long-term workers’ compensation payments after the Allan government limited access to mental health claims, confidential figures leaked to The Age have revealed.

Internal state government data shows that 726 workers were thrown off the scheme in the first four months after Labor struck a deal to push through contentious changes that restricted access to payments for mental health injuries, such as stress and burnout.

Premier Jacinta Allan and WorkSafe Minister Danny Pearson face calls to release modelling used to amend WorkCover laws.Credit: Wayne Taylor

It comes after WorkCover confirmed a $389 million surplus for the last financial year, prompting questions about controversial reforms which the Labor government claimed were needed to put it on a sustainable financial footing.

Despite struggling to garner support from Labor’s caucus and unions, the state government reached a deal in March with the opposition which restricted eligibility and testing requirements, aimed at reining in hefty payouts and skyrocketing premium hikes for businesses.

Under the changes, workers were instead eligible for 13 weeks of provisional payments to cover medical treatment, as well as access to enhanced psychosocial support services. Premiums for businesses were also frozen for the 2024-25 financial year, under an agreement to secure support from the Coalition.

The latest data, according to a source familiar with the figures, shows only 152 – or 17 per cent – of workers reassessed between March and July received a whole person impairment (WPI) rating above 20 per cent, allowing them to remain on weekly payments beyond 130 weeks, which was also overhauled as part of the WorkCover shakeup.

WPI is the measurement used to determine the percentage of permanent impairment resulting from a workplace injury.

During a parliamentary inquiry into the WorkCover changes, Luke Hilakari, secretary of the Victorian Trades Hall Council, provided an example of a 33-year-old emergency services worker who had witnessed multiple traumatic events, including a child being crushed to death.

Despite being diagnosed with post-traumatic stress disorder (PTSD) and struggling with suicidal thoughts, the worker had an assessed WPI of 15 per cent.

Victoria Community and Public Sector Union secretary Karen Batt accused Labor of “profiteering” off injured Victorians.

“The financial turnaround in only a few months confirms their changes went too far,” Batt said.

Community and Public Sector Union secretary Karen Batt has accused Labor of “profiteering” off injured Victorians.Credit: Eddie Jim

“If they profess to be truly Labor then they must act immediately and before Christmas to amend these new laws and reintroduce support for these families.”

The state government had previously insisted the scheme was “fundamentally broken” after pouring an extra $1.3 billion of taxpayer funds to prop up WorkCover and meet the soaring cost of compensation claims in the two years before it was curbed. In the 2022-23 financial year there were 32,780 new claims, a 14 per cent increase on the year prior.

In 2023, Labor also hiked WorkCover premiums by 42 per cent on average to fund changes, enraging both businesses and unions for hiking levies while forging ahead with amendments to limit coverage.

Cindy McLeish, the opposition’s spokeswoman on WorkCover.Credit: Paul Jeffers

But the findings of a parliamentary inquiry, released in February, warned the proposed changes were “inadequate” and called on the state government to release any modelling or data it used to help it amend the scheme.

The shadow minister for WorkCover, Cindy McLeish, said the leaked data raised questions about transparency, and she echoed calls for the government to release the modelling it used to amend the scheme.

“Whilst it was no secret that WorkCover has been on a downward trajectory for years, requiring $1.3 billion from the taxpayer to keep it afloat, modelling used to make the changes was a secret,” McLeish told The Age.

“The Allan labor government imposed massive premium hikes on businesses. If WorkSafe can turn a surplus of $389 million questions must be asked whether employers and workers have been screwed.”

A state government spokesperson said the data was based on an assessment of workers in a four-month period and did not reflect the full cohort of workers still in receipt of weekly payments.

“There are currently a total of more than 33,000 Victorian workers in receipt of weekly payments,” the spokesperson said.

“We know that the longer a person is away from work, the less likely they are to ever return.”

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