Unions urge MPs to ditch ‘appalling’ WorkCover changes as claims soar

Victorian unions warned that traumatised workers will be refused access to payments despite not being able to work as they slammed the state’s proposed WorkCover legislation as a “dog of a bill”.

A parliamentary inquiry also heard Victoria’s compensation scheme was on track for massive premium hikes if it did not address rising costs, including a 14 per cent rise in new claims in a single year.

Trades Hall secretary Luke Hilakari.Credit: Simon Schluter

Parliament’s economics and infrastructure committee heard on Tuesday from Treasury officials, WorkSafe, union secretaries and business advocates as it probed legislation the Allan government says is needed to prevent billion-dollar bailouts or massive increases in business insurance payments.

The state wants to limit claims for stress and burnout to 13 weeks of provisional payments for support and treatment, rather than weekly benefits. Another major rule change would limit benefits for workers in the “long tail” of claims stretching past 130 weeks, requiring these people to prove permanent impairment of more than 20 per cent.

Over the past three years, Victoria has spent $1.3 billion on payouts to WorkCover to make sure it kept up with the rising cost of meeting claims and providing services. Mental health claims once made up 2 per cent of all injuries but have risen to 16 per cent and are expected to reach as much as a third of all claims.

WorkSafe Minister Danny Pearson faces resistance from opposition parties to the WorkCover reforms.Credit: Martin Ollman

In the 2022-23 financial year there were 32,780 new claims made to WorkCover, a 14 per cent increase on the year before.

Interim chief executive Joe Calafiore told the inquiry it was estimated mental health claims would rise by at least 5 per cent every year until 2030, and without significant change to help the scheme break even, premiums would need to rise from 1.8 per cent to as high as 2.5 per cent.

He said that as with the National Disability Insurance Scheme, there were major differences between projections and the real demand for compensation.

“There are quite a number of significant headwinds that are facing these schemes in terms of ensuring sustainability,” Calafiore said.

But Trades Hall Council secretary Luke Hilakari called on parliament to pull the proposed legislation or amend it significantly.

“This is a dog of a bill. It is a rushed mess. It targets some of the most vulnerable Victorians, being injured workers,” he said.

“It will not fix the problems that you’re thinking it will fix, and it should be rightly rejected by the parliament.”

Hilakari said limiting claims for workers would not save money because it would push people onto other government services. He also said the impairment test was not reasonable and was critical of the government for not detailing how many people would be affected by its changes.

“It should be unacceptable to parliament that at no stage has the government said how many people will be kicked off the scheme,” he said.

“They must have those numbers, but to not come straight with Victorians on this, I think, is highly problematic.”

The Trades Hall secretary mentioned a recent example where a 33-year-old emergency services worker had attended a scene in which children had died in a car accident. The worker was diagnosed with severe post-traumatic stress disorder, could not leave the house and was on medication but would have been assessed as 15 per cent impaired in a test, below the state’s proposed threshold.

“That’s the worker who’s going to be kicked off the scheme at 130 weeks. That person has no chance of getting Centrelink; they’re not getting out applying for jobs.

“We’re saying to that person who served the state and did everything right, that person loses their house. That person is not worthy to get the support and treatment they need to get back to work. This is going to have a massive, massive impact.”

Community and Public Sector Union state secretary Karen Batt said the bill was an “appalling document” and excessive workloads were fuelling mental health demands on staff.

“The current budget ceilings are a problem in terms of reducing the number of staff to deal with the growing demands of Victoria for a number of the services that we’re delivering,” she said.

Community and Public Sector Union Victorian secretary Karen Batt.Credit: Eddie Jim

Australian Industry Group boss Tim Piper said the government needed to develop a more comprehensive system for getting people back to work, and to guarantee no premium increases for two to three years.

He said the government’s decision to increase the average premium by 42 per cent in July this year had added significant strain to businesses. Some reported paying as much as 75 per cent more than the year before.

“When you have increases at that level, obviously people are saying how can I continue to employ as many people as I want to?” Piper said.

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