On 2 January 2017 Anna Patty of The Sydney Morning Herald reported about the New South Wales Workers Compensation Scheme. The article was an overview of the significant surpluses that the Scheme is producing amongst the background where many injured workers are likely to be cut off from their workers compensation benefits, in the near future.
This is because at 31 December 2017, the “fourth entitlement period” of more than five years after an injury comes into effect from the sweeping changes that took effect on 31 December, 2012 under the O’Farrell Government; and this has serious ramifications for injured workers.
To continue to receive workers compensation benefits beyond five years an injured worker needs to have a whole person impairment of over 20%. Unless injured workers are almost catastrophically injured this is an almost impossible threshold to reach.
The result is the overwhelming majority of injured workers unable to work but currently under 20% whole person impaired will be transitioned from receiving their weekly payments to having to receive a Centrelink benefit.
This could sceptically be seen as the New South Wales Government trying to shift the welfare onus onto the Federal Government, and it may be hard to disagree with this point. Through no fault of their own, injured workers will become victims of a scheme designed to supposedly protect them. The article quite rightly states many injured workers will be placed onto the scrap heap in circumstances where a scheme set up to protect them is posting record profits and they are forgotten about because they do not meet artificially and highly inflated thresholds of whole person impairment.
To understand why the Workers Compensation Scheme is arguably not doing enough to assist injured workers it must be first necessary to understand what benefits an injured worker is potentially entitled to.
An injured worker is potentially entitled to the following workers compensation benefits:
- Payment of medical expenses relating to their workplace injury, providing they are reasonably necessary;
- Payment of wages during times of incapacity;
- Lump sum compensation should their injuries be severe enough, measured by an assessment of whole person impairment.
Unfortunately the ongoing entitlement to weekly payments and medical expenses is not measured by when the injured worker’s treating doctor says the injured worker is able to return to work or can stop treatment but ultimately what their percentage of whole person impairment is.
Furthermore, lump sum compensation is only given where injures are assessed as giving rise to an 11% whole person impairment or more. The article in The Sydney Morning Herald gives one of thousands of sad examples where people have a serious injury but does not rate highly in terms of percentage of whole person impairment.
For example, low skilled workers earning minimum wage or slightly above are up there with the most vulnerable people in society, living week to week and only a loss of a weeks work or two away from financial ruin.
A lot of the duties performed by low skilled workers is labour intensive and repetitive work. Repetitive work can have a debilitating effect on elbows and wrists through tennis elbow injuries or carpal tunnel injuries, sometimes both. If an injured worker sustains severe carpal tunnel injuries to both hands rendering them totally unfit for work, the injured worker’s whole person impairment may be around 6%-8% whole person impairment and therefore an injured worker with these debilitating injuries would be entitled to payment of medical expenses only up to two years after their weekly payments stop and weekly payments of wages may stop at a maximum of five years. They could have associated elbow shoulder and neck problems but still fall well short of the 20% threshold, be completely unfit for work, and reliant upon heavy painkilling medications.
It must be also be recognised that injured workers do not receive 100% of their pre-injury average weekly earnings (PIAWE). If they are not working they earn 80%, and if it is after the first 12 months this 80% only includes base salary, no overtime or shift allowances which are vital to many workers’ take home pay.
If, for example, an injured worker is earning $700 per week and they are totally unfit for work and their injury has been accepted by the workers compensation insurer, they will receive 80% of this $700 (which is $560), and less tax, they could be earning around $500 per week.
After they are cut off from the Workers Compensation Scheme, this $500 per week may be reduced to something like $350 per week on a disability support pension or $250 per week on a New Start Allowance if they do not qualify for the disability support pension. The difference in this weekly take home pay can be the difference between paying rent or becoming homeless.
In circumstances where workers compensation premiums have been reduced due to the profitability of the Scheme, more needs to be done to assist injured workers on the other side of the ledger.