South Australia’s New Workers Compensation Scheme
The state government's initial plan to overhaul WorkCover in SA is set to impact all injured workers.
The state government’s initial plan to overhaul WorkCover in SA is set to impact all injured workers.
Update: The Return to Work Act (2014) was enacted on 1 July 2015. For more information about the implications of the new laws click here.
South Australia’s current workers compensation system is, as Deputy-Premier John Rau said, “buggered”. It fails injured workers and employers, and is an enormous black hole for the state’s economy.
On 5 August 2014, we were given our first look at the state government’s planned overhaul of the scheme which is set to come into play from 1 July 2015. Before we highlight some of the proposed changes, it is important to note that we are yet to see the regulations and therefore a lot of the detail.
However it is already certain that every injured worker will be affected, and it is crucial to seek legal advice as soon as possible to find out how your current claim could be impacted by the new laws.
The key proposed changes to South Australia’s Workers Compensation Scheme:
The new scheme will be called the “Return to Work Scheme”. Currently it is known as “Rehabilitation and Compensation Scheme”.
Eligibility:
Employment must be a significant contributing cause of the physical injury or the significant contributing cause of the psychiatric injury.
Currently, the physical injury must arise out of or in the course of employment. For a secondary injury or disease, employment must be a contributing factor. For a psychiatric injury, employment must be a substantial cause.
Income Maintenance (weekly payments):
– 0 – 52 weeks: paid 100% of income (new scheme); 0 – 13 weeks: paid 100% (current scheme)
– 53 – 104 weeks (new): 80%; 14 – 26 weeks: 90% (current)
– Payments cease at 104 weeks unless seriously injured eg Whole Person Impairment (WPI) of 30% in which case payments remain at 80% until retirement (new); From 27 weeks: 80% then work capacity review at 130 weeks (current)
Permanent Impairment Lump Sum Payments:
The eligibility threshold is set to remain at WPI 5% and above, but the new system will only allow for one permanent impairment assessment per claim.
Unlike the current system, there is no dependency test when calculating lump sums for a death claim made by a surviving spouse.
The new scheme makes statutory economic loss payments available to workers with a whole person impairment loss of between 5% and 29% (eg maximum $350,000 at 25 years old and 29% WPI and $70,000 at 60 years old and 29% WPI).
Lump Sum Payment for Non-Economic Loss (eg pain and suffering) and Economic Loss (eg work):
| Whole Person Impairment | Adjusted Statutory WPI lump sum | Example of calculation to show adjustment for age | Example of calculation to show adjustment for age |
| Adjusted payment if worker is 25 years or younger at date of inj. | Adjusted payment if worker is 65 years at date of inj. | ||
| 0 to 4% | $0 | N/A | N/A |
| 5% | $11,800 | $5,000 | $1,000 |
| 10% | $20,768 | $41,342 | $8,268 |
| 15% | $31,624 | $86,453 | $17,291 |
| 20% | $45,920 | $153,296 | $30,659 |
| 29% | $107,449 | $350,000 | $70,000 |
| 30% to 100% | $0 | N/A | N/A |
(Note: If worker is working part-time, there is also an adjustment for part-time)
SA Deputy Premier and Minister for Industrial Relations John Rau at a recent TGB Lawyers event
Redemptions:
Current limitations are set to be removed, allowing redemption payments (a lump sum capital payment on the basis that the worker forgoes his or her ongoing entitlement to weekly payments and medical expenses) when both parties agree.
Common Law:
Currently, injured workers are unable to sue their employers. Under the new scheme workers will have this option, subject to:
– The injured worker having a WPI of 30% or more
– If there is a psychiatric injury, it must be primarily caused by the negligence of the employer
– A worker who is a working director cannot access common law for their injury
– A seriously injured worker must choose between suing their employer or agreeing to a redemption (or staying on the scheme).
Rehabilitation Services:
Rehab programs will be combined with return to work plans. These plans must be put in place at four weeks (instead of the current 13 weeks).
Return to Work Obligations:
WorkCover’s obligations to return workers to suitable employment or provide training will be bolstered under the new scheme.
Employers will have an obligation to support injured workers including participation in recovery/return to work plans.
Workers will be able to request WorkCover investigate an employer if the worker believes the employer has suitable employment available. The worker can also apply to take this to the Tribunal if necessary.
Workers will be obligated to return to suitable employment if they have the capacity to do so.
Seriously injured workers (30% WPI or more) will not have return to work obligations, unless they choose to.
Dispute Resolution:
Instead of the current Workers Compensation Tribunal, workers compensation matters will be managed by the new South Australian Employment Tribunal.
Weekly payments can continue during relevant disputes, while currently they reduce or cease at the expiry of the notice period.
WorkCover Ombudsman:
The role of the WorkCover Ombudsman will not exist under the new scheme.
Final thought:
These are just some of many proposed changes. Much more detail and the regulations will be revealed in the lead up to the enactment of this scheme. There will also be a lot of political debate and negotiation about what will actually become law.
As you have read the changes are significant and complex, and will have a big impact on all injured workers.
If you are on the current scheme, the new system will have implications for your entitlements. It is essential that you seek legal advice now to prepare for the changes and get the best possible result.
Tindall Gask Bentley is South Australia’s largest workers compensation law firm. Our lawyers are leaders in this area of law. To arrange a free initial interview, contact your nearest TGB office or register online here.