Australia: Workers Compensation & Self Insurance

Last Updated: 19 August 2008
Article by John Walsh


The Rann Government has recently introduced an amending Bill which seeks to amend the WorkCover scheme in response to an independent review of the system carried out by Alan Clayton and supported by actuary, John Walsh.

The Clayton/Walsh review had three objectives:-

1. That the scheme provide fair support to injured workers, delivered efficiently and enabling the earliest possible return to work;

2. The average employer levy rate be reduced to a range of 2.25 – 2.75 by 1 July 2009; and

3. That the scheme should be fully funded at the earliest possible date.

Employer groups have embraced the outcome of the review and enthusiastically endorsed the legislative reform package set out in the amending Bill.

Business SA has been robust in stating that the reform package should be implemented as soon as possible.


The key proposals to the reform package are:-

1. Discontinuance of income maintenance at 130 weeks post injury for partially incapacitated workers who are not working to their maximum capacity in suitable employment;

2. A reduction in the amount of income maintenance being paid to 80% of Average Weekly Earnings at the end of the first 13 weeks of incapacity for work.

The above proposals form the basis upon which sections of the business community have given its unqualified support to the amending Bill. In doing so, the business community has supported not only the key proposals but other related amendments.

The "other" reform proposals require careful consideration.

Among the changes that all employers should be aware of are:-

  • The requirement for an employer employing more than 30 permanent full time employees to appoint a rehabilitation and return to work coordinator.
  • That weekly payments and medical expenses be paid to workers upon lodgement of a claim. (Recovery of compensation paid will only be available where the Compensating Authority can demonstrate dishonesty.)
  • Limited application for redemption of entitlements.
  • Section 58B amendment that will require an employer to pay an appropriate wage or salary for workers on return to work plans performing alternative or modified duties that would normally fall outside of the workers contract of service.
  • Wide ranging amendments to the lump sum compensation scheme.
  • Changes to the dispute resolution system that effectively represents a reintroduction of the old "Review Panel" system.
  • The introduction of medical panels to determine questions that would normally be determined by the Workers Compensation Tribunal.

The reform package includes a myriad of changes to the current scheme that have the potential for unintended consequences. Not only is there potential for injured workers to be worse off as a result of the cutting of benefits, employers too may be significantly prejudiced by the proposed changes. These potential problems for employers may not be offset by the expected moderation in average levy payments.

For a more detailed exposition of the amending Bill and the proposed legislative changes, please click on the link below to read in full John Walsh's article "Be Careful What You Wish For"

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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