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Reviewing Workers’ Compensation
Gail Findlay
IA South West
Business Insurance
Workers Compensation Insurance
Professional Indemnity Insurance
General Insurance
Each state and territory has their own version of Workers’ Compensation, resulting in a mix of models that promotes confusion, rather than clarity. Whilst Workers’ Compensation is designed to assist employees to return to work following a workplace injury, Australia’s states and territories differ in their approaches. With little published evidence of quality outcomes for these various approaches, many voices have called for a more unified approach to Workers’ Compensation, resulting in a number of relevant reviews.
Recent research into Workers' Compensation
Calls for more transparency in Australia regarding Worker’s Compensation has led to a concerted effort to identify areas that can be improved, as well as practical solutions. Two of the most recent reviews, mentioned below, clearly demonstrate these problems and the willingness of agencies and governments to rectify these issues.
In 2019, following an 18-month review of the Victorian system, Ombudsman Deborah Glass found that agents were unreasonably terminating claims by ‘cherry-picking’ medical evidence. Using ‘immoral’ and ‘unethical’ to describe the outcomes of long term injured workers, Glass’s investigation focused on complex claims and determined that WorkSafe had insufficient oversight of these processes. Financial outcomes rather than fair decisions were too often the result.
The NSW system that underwent major reforms in 2015 and was reviewed in 2019 by SIRA (the State Insurance Regulatory Authority) has accepted 11 of the 13 recommendations from this review. Insurance and Care NSW (icare) have committed themselves to delivering a fairer Workers’ Compensation scheme in NSW.
The good news for businesses is that whilst insurers and governments struggle to provide a fairer system for workers, reviews such as these help providers to refocus on best practices. One other noteworthy point concerns the different rules and regulations across Australia that make it very difficult for businesses to manage Workers’ Compensation. This is one of the areas where the value of an experienced insurance adviser comes to the fore, as they can assist business owners to navigate the complexities of Workers’ Compensation.
Comparing Australia’s Workers' Compensation schemes
So to recap, Workers’ Compensation is managed in different ways across the states and territories with agents (insurers) playing a variety of roles. Australia has 11 different Workers’ Compensation schemes, all of which have been compared by Safe Work Australia. There are so many differences between them that it’s difficult to know where to start.
First of all, QLD’s Workers’ Compensation is operated by the state government, whilst private agents underwrite the scheme in the ACT, NT, WA, and Tasmania. In NSW, SA, and VIC however, agents operate on behalf of the government. However, the amount of regulation of these private insurers by each of the states and territories, and their assets, liabilities, and funding ratios vary greatly between these schemes. We also see that incidences of long term injury and disease claims are generally higher in the ACT, followed by VIC, WA, QLD SA, TAS, NSW and the NT. Then there’s the fact that SA, VIC and TAS generally have the highest proportion of disputed claims, whilst NSW, VIC and QLD have the highest percent of serious claims. Given these disparate approaches and outcomes it’s fairly easy to understand why a one-model-fits-all approach is so elusive.
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First of all, QLD’s Workers’ Compensation is operated by the state government, whilst private agents underwrite the scheme in the ACT, NT, WA, and Tasmania. In NSW, SA, and VIC however, agents operate on behalf of the government. However, the amount of regulation of these private insurers by each of the states and territories, and their assets, liabilities, and funding ratios vary greatly between these schemes. We also see that incidences of long term injury and disease claims are generally higher in the ACT, followed by VIC, WA, QLD SA, TAS, NSW and the NT. Then there’s the fact that SA, VIC and TAS generally have the highest proportion of disputed claims, whilst NSW, VIC and QLD have the highest percent of serious claims. Given these disparate approaches and outcomes it’s fairly easy to understand why a one-model-fits-all approach is so elusive.
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Gail Findlay
The take home message is that this is a very complex area with no best practice model for the whole of Australia. Governments and agents, however, are continually working towards making the processes fairer for all workers. Hopefully, we may have a more unified approach to Workers’ Compensation at some time in the future, but until then, we can rely on these reviews to keep the system moving forward – towards a system that fairer for everyone.
For more information on Workers’ Compensation for your business, contact Gail Findlay.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Gail Findlay, IA South West, AFSL 240549
QUESTIONS? JUST ASK
Gail Findlay
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