Australia: A brave new world - NSW workers compensation in 2015

Last Updated: 22 December 2015
Article by Lucinda Holt

As first published in Precedent Magazine - Issue 131 - November/December 2015

On 19 June 2012, a significant overhaul of the New South Wales (NSW) workers' compensation legislation was passed by the NSW Parliament. Three years later, the legislation has again undergone another round of reforms, with both the Workers Compensation Amendment Act 2015 and the State Insurance and Care Governance Act 2015 being assented to on 21 August 2015.

Keeping up with this ever-changing and increasingly complex area of compensation law is proving a significant task for practitioners acting in this area. This article discusses the current law as at the date of publication, and provides a brief, point-by-point summary of the major changes and new terms introduced by the 2012 and 2015 reforms.

It should be noted at the outset that the 2012 and 2015 reforms do not apply to police officers, coal miners, paramedics, or fire-fighters.

Weekly Benefits

The structure of access to weekly benefits first changed in 2012, creating four distinct entitlement periods. Entitlement periods are calculated on a cumulative, rather than consecutive, basis. Calculation of benefits payable during the first entitlement period (week 1 – 13 of payments) and second entitlement period (week 14 – 130 of payments) is straightforward, and the formula for these calculations can be found at ss36 – 37 of the Workers Compensation Act 1987 (the WCA). The formula to be applied for calculating weekly benefits is dependent upon whether or not the worker is totally or partially incapacitated.

To be eligible to continue to receive weekly benefits in the third entitlement period (week 131 – 260), the worker must satisfy one of the criteria below:

  1. The worker has been assessed by the insurer as having a partial capacity to work, and as being incapable of undertaking additional work, has returned to work for not less than 15 hours per week, and is earning at least $176 per week; or
  2. The worker has been assessed by the insurer as having no work capacity and as likely to continue to have no work capacity.

To be eligible to receive weekly benefits beyond week 260, the worker must continue to satisfy one of the above criteria, as well as having a WPI of greater than 20 per cent. Workers who continue to satisfy the requirements in this category may continue to receive weekly benefits until one year after retirement age.

The Workers Compensation Amendment Act 2015 (the 2015 Act) has provided some additional protection to workers with a WPI of greater than 30 per cent. Once the 2015 Act commences, workers in this class will be eligible to receive weekly benefits of at least $788.32 per week, with this amount to be indexed periodically. If the pre-injury earnings available to workers in this class would otherwise exceed this amount, the higher amount is payable.

Medical Expenses

Reasonably necessary medical expenses continue to be claimable under s60 of the WCA. However, the following restrictions on claiming medical expenses apply:

  • Pre-approval must be sought and obtained for each medical expense, unless it falls within one of the exceptions contained at s60(2A) – 60(2B) of the WCA, or the Special Supplement to WorkCover Guidelines for Claiming Compensation Benefits.1
  • In accordance with the 2015 Act's amendment to s59A, which has not yet commenced (but which will be retrospective upon commencement), workers with a WPI of 20 per cent or less may only receive medical expenses for a set period of time. That time period commences on the date of their claim for compensation, or on the date a weekly benefit was last paid or payable, whichever is the later. These time periods are as follows:
    • If WPI is not yet assessed, or is assessed as 10 per cent or less: two years;
    • If WPI is between 11 per cent and 20 per cent: five years.
  • If WPI is greater than 20 per cent, workers are exempt from the limitations imposed by s59A, and may continue to claim reasonably necessary medical expenses for the rest of their lives.
  • In addition, the following exceptions to s59A apply:
    • If the relevant claim period elapses and the worker then becomes re-entitled to receive weekly benefits, the ability to claim medical expenses is reinvigorated, although only for as long as the weekly benefits are payable.
    • If a worker requires surgery, but is not entitled to a reinvigoration of their weekly benefits while they have the surgery and during the recovery period afterwards, due to being outside of the second entitlement period, the worker is entitled to receive special weekly benefit compensation under s41 of the WCA, at the rate prescribed by s37, for a period not exceeding 13 weeks. By enlivening weekly benefits under s41, the worker is then able to claim the expenses of that surgery in the same way as during the period of the first exception, above.
  • As to whether or not medical expenses are considered reasonably necessary, one must look to the Workcover Guidelines, which are the same guidelines that an insurer would consider in arriving at internal decisions.2In short, each treatment must be considered to:
    • alleviate the consequences of injury; or
    • maintain a worker's state of health; or
    • slow or prevent its deterioration given the injury.
  • Regardless of WPI, workers may claim the following additional medical expenses until retirement age:
    • continued access to home and vehicle modifications;
    • crutches;
    • artificial members, eyes or teeth;
    • artificial aids or spectacles (including hearing aids and hearing aid batteries);
    • any secondary surgery for the same part of the body that is directly consequential on an earlier surgery, and which is approved by the insurer within two years of the earlier surgery (or later, if the claim is disputed).

Work Capacity Decisions

One of the most controversial amendments introduced in 2012 has been the introduction of work capacity decisions.

Distinction should be drawn between a work capacity decision and a work capacity assessment. Unless the worker has a permanent WPI of greater than 30 per cent, a work capacity decision can be made at any time, with or without a work capacity assessment taking place.3

While there is no set time-limit for a worker to apply for a review of a work capacity decision, the 2015 amendments provide that a work capacity decision may be stayed for the period of the review if the worker applies to review it within 30 days of its issue.

The Workers' Compensation Commission does not have jurisdiction to make a determination on a work capacity decision, and the review process must be performed in accordance with the current s44 (to be replaced with s44BB upon the commencement of the 2015 Act).4

Although s43 of the WCA distinguishes decisions on liability as being distinct from work capacity decisions, practitioners should be wary of the fact that many s74 or s54 notices denying liability are also likely to contain a work capacity decision. If the s74 or s54 notice is simply a mislabelled work capacity decision, the worker should proceed immediately to a review,5 as recourse to the Workers' Compensation Commission will not be available in any case. However, in circumstances where the denial of liability is on varied grounds, and includes a work capacity decision within the broader denial, it may become necessary for workers first to challenge the finding on liability in the Workers' Compensation Commission and, if successful, subsequently to mount an appeal of the work capacity decision under s44/44BB.

Currently, practitioners are not entitled to recover any fees for providing advice on or assistance with reviewing work capacity decisions. However, the insertion of s44BF in the WCA, which will commence 'on a day or days to be appointed by proclamation' indicates that the Regulations may provide that practitioners can recover fees in limited circumstances for reviews after the date of the commencement of the 2015 Act.

Death Benefits and Funeral Expenses

The amount claimable for death benefits and funeral expenses has risen as a result of the 2015 amending legislation to $750,000 for lump sum death claims, and $15,000 for funeral expenses. These changes will apply to workers who die on or after 5 August 2015, regardless of the date of injury.

Ability to Claim for Re-Training and Education

Upon the commencement of the 2015 Act, employers will become liable to pay up to $1,000 for provision of education or training, transport, childcare, clothing, equipment or any similar service or assistance for workers who are unable to return to work with their pre-injury employer, and who therefore accept new employment. In addition, employers will also be liable to pay up to $8,000 towards retraining or education to assist workers with a WPI of greater than 20 per cent to return to work.

Disease Injury, Heart Attacks, Stroke and Nervous Shock

The ability to claim compensation for disease injuries has been diminished, with the worker's employment now required to be the main contributing factor to that injury. Similarly, heart attack and stroke injuries are not compensable unless the employment concerned gave rise to a significantly greater risk of the worker suffering the injury. Nervous shock claims brought by non employees, such as relatives of an injured or deceased worker, are now excluded. Workers who suffer a nervous shock injury in the course of their employment, such as a worker who witnesses a death of a colleague, remain entitled to compensation.

Journey Claims

While journey claims are still available, workers are now excluded from claiming compensation for injury which occurred on a journey after 19 June 2012, unless there is a real and substantial connection between the worker's employment and the injury sustained. It has been established that the 'connection' referenced in this section is broader than the general concept of causation. Thus, in the case of Field v Department of Education and Communities [2014] NSWWCCPD 16, the worker was successful in bringing a journey claim for injuries sustained when he tripped and fell on a crack in the pavement hurrying to his job as a relief teacher. In this case, the worker was able to prove that he had been given less than an hour's notice between being called up for work and being required to be at the school, causing him to rush and not notice the crack in the pavement. This was held to be enough of a 'connection' to entitle him to compensation.

Whole Person Impairment

Workers who did not make a claim specifically seeking compensation in accordance with ss66 and 67 prior to 19 June 2012 (regardless of the date of injury) are subject to the following restrictions:

  • Section 67 compensation for pain and suffering is no longer available.
  • Section 66 compensation is payable only for physical impairments greater than 10 per cent WPI; that is, 11 per cent WPI or more. The threshold for primary psychiatric injury/ impairment remains at 15 per cent WPI.
  • At the time of writing, only one claim for s66 compensation may be made, regardless of whether deterioration later occurs, and regardless of whether the initial claim was made prior to the 2012 amendments (see Cram Fluid Powder Pty Ltd v Green [2015] NSWCA 250). However Parliament has recently issued a media release indicating that a new Regulation will commence in November 2015. This Regulation will overturn the Cram Fluid decision, and workers who brought a lump sum claim prior to 19 June 2012 will again be entitled to bring one further deterioration claim. In any case, workers should consider very carefully when to submit their claim.

Section 66 claims for hearing loss provide a slight exception to the 'one claim' rule. Workers who have suffered a WPI due to hearing loss may bring more than one claim for impairment, with each claim being considered a new claim, rather than a deterioration. Each claim on its own must therefore reach the greater than 10 per cent WPI threshold (see Sukkar v Adonis Electrics Pty Ltd [2014] NSWCA 459).

Workers who have a WPI claim due to hearing loss with a date of injury before 1 January 2002 are not subject to the 2012 or 2015 amendments, and remain entitled to bring deterioration claims, using the old table of maims system, potentially indefinitely.

It should be noted that the amount claimable for s66 compensation has increased dramatically for workers injured on or after 16 October 2015.

Footnotes

1 Special Supplement to WorkCover Guidelines for Claiming Compensation Benefits, 28th September 2012.

2 Ibid.

3 For example, if the worker is returned to pre-injury duties, assessing them to determine their work capacity would be redundant. A 'work capacity assessment' is an assessment of an injured worker's current work capacity, conducted in accordance with the Workers Compensation Guidelines (see s44A of the WCA).

4 The review is conducted at first instance by the insurer; at second instance by the WorkCover Authority; and at the third instance by the Independent Review Office – as set out in s44.

5 WIRO will not fund any dispute over a work capacity decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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