Workers Compensation Changes in NSW – June 2012

The NSW Worker’s Compensation Scheme has been reformed as it was over $4.1 billion in deficit and was not fulfilling its role of supporting and rehabilitating injured workers, returning them to work, where possible.

Some changes have already taken effect and others will come into effect over the next 12 to 18 months.

Worker’s Compensation Scheme

The reforms were made law on 27 June 2012 and affect all new and existing workers compensation claims, except claims from:

• Police officers, paramedics and firefighters;

• Workers injured while working in or around a coal mine;

• Emergency service volunteers; and

• People with a claim under the Workers Compensation (Dust Diseases) Act 1942.

The Reforms

• Work capacity assessments – injured workers receiving weekly benefits will undergo work capacity assessments during the life of their claim, and at least once in every two years. The results will be used to determine the worker’s future entitlements and benefits.

• Journey claims – sustained when a worker is travelling between home and work, a journey claim will now only be covered if there is a substantial connection between the person’s employment and the incident the injury arose (e.g. a nurse assisting at a car accident).

New Definitions

• Total incapacity – during the first 13 weeks, a worker that is totally unfit for all work will receive up to 95% of their pre-injury weekly earnings. For weeks 14 to 130, workers will receive up to 80% of their pre-injury weekly earnings.

• Partial incapacity – during the first 13 weeks, workers who are still able to work will receive up to 95% of their pre-injury weekly earnings.

• Partial incapacity, working at least 15 hrs per week – a worker will receive up to 95% of their pre-injury weekly earnings for up to 130 weeks. After that, the rate will be up to 80% of pre-injury weekly earnings.

• Partial incapacity, working less than 15 hrs per week – from weeks 14 to 130, a worker will receive up to 80% of pre-injury weekly earnings. Benefits will cease after 130 weeks.

Weekly Incapacity Payments

Pain and suffering – payments for pain and suffering under Section 67 of the Workers Compensation Act 1987 are no longer available.

Permanent impairment claims – a threshold of over 10% whole person impairment for physical injury must be reached to access a permanent impairment lump sum.

Assessment of whole person impairment – an injured worker can only be assessed for permanent impairment once.

Medical benefits – payment for medical and related treatment will end at whichever occurs last: 12 months after the claim for compensation is made; or 12 months after the last payment of weekly benefits.

Diseases, heart attack and stroke injuries – only covered if the nature of employment gave rise to a significantly greater risk of the worker suffering the injury or disease.

Nervous shock and death benefits – family members of deceased or injured workers cannot make nervous shock claims. The existing statutory compensation death payments will continue to apply.

Lump Sum Payments

A worker who is able to work must, in co-operation with the employer of insurer, make reasonable efforts to return to work in suitable employment. If a worker who is able to work fails to make reasonable efforts to do so, he/she may have weekly payments suspended, or even terminated.

Return to Work Obligations

For those already receiving payments, some features of the transitional arrangements are:

• Whole person impairment of more than 30% can move from $432.50 per week to $725;

• During the first 26 weeks of incapacity payments, the amount paid will be the same as under the existing rules;

• Claimants who have already received 26 weeks of payments and have an ongoing entitlement will be paid according to the transitional rate that is more than the current basic statutory rate of payment; and

• The existing weekly payment rules will continue to apply until the person has undergone an individual work capacity assessment.

Workers will be given three months’ notice of any changes to their weekly benefits due to the new laws. The most seriously injured workers will not be subject to work capacity assessments unless they wish to have one.

Existing Claims

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