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WIRC January Newsletter
WIRC Newsletter
Good morning,
The first thing that those of you who are getting a printed copy of this newsletter is that the letter-head has changed a bit.
Work Injured Resource Connection has always been open to working with like minded bodies; TransHelp Foundation is such a body.
To date work has been done on one inter-state claim, and one local claim.
The most exciting thing though is that next month I will be attending a meeting in Victoria to speak with leaders from Lifeline and Beyond Blue.
For the first time the impact of WorkCover on injured workers will be explained to the very people who can put in place real help for those who call for help.
I expect that the network that is being built will generate a great deal of work, as well as a better understanding for all of us.
It really is a huge step forward for all of us to be able to sit at the same table as these industry leaders, and help them to start to formulate what is needed to put understanding in place for injured workers every where.
As a team, we have all worked very hard to put injured workers in the forefront of industry leader’s minds. Whilst this is extra work for me, it is also a huge credit to all for the persistence that we have had now for a long time.
This coming meeting is just a small step forward towards a better future.
The last Public Forum on the 25th Nov ’06 was very interesting, for the first time we had 7 employers in attendance – 1 of them told me that he had actually shut his business for the morning to attend the Forum with his injured worker. Also in attendance was 1 Occupational Therapist, 1 Rehab provider and 1 psychologist. I spoke to each of these people, and was saddened to hear that none of them were impressed by what they heard. The psychologist said he had watched over the last few years the WorkCover system continue to decline and did not hold out much hope for change. Given that this man has provided his services to injured workers since the inception of WorkCover, it really was not what I had hoped to hear.
I have also been asked when the next Forum will be, to be honest; I just don’t know when it will be.
There are many reasons for that.
It takes many hours of hard work to put a Forum together; it also takes a great deal of funding.
Whilst Mediation & Employment Relations Services and EML did cover the costs of the venue and catering, they did not cover the costs of the phone or mail out.
Granted there was a donation box passed around at the Forum, when it was counted it contained just under $40.00 which again did not go any where near covering the costs incurred.
All I can say for now is that there is a great deal of interest in the Forums continuing. Thus I will speak with the other members of the Injured Workers Alliance to see what their thoughts are, and then advice you from there.
Over the last few days I have had a series of phone calls in regard to income payments issues –it seems that EML are saying that injured workers have been paid in advance, and are now reverting the payments to the “correct status”. It also appears that no letters are sent to advise any one of the payment changes. It is not until the monies do not appear in the bank account, that any one is aware of the change.
If this has happened to you, could you please send me the details.
I need to be able to go to both EML & WorkCover with this issue.
Next issue in regard to concerns of payment comes to the non-payment of accounts and non-payment of submitted receipts.
Since well before Christmas the number of injured workers who have contacted me in regard to the non-payment of travel claims, chemist receipts, accepted medical accounts not paid, and the list is growing.
Again I ask you to send copies of the outstanding amounts to me.
I am tired of being told that receipts have been lost, or the chemist account is being investigated, or any of the many other “reasons (excuses)” that are given.
If need be, I will place all the outstanding amounts of money in the hands of a debt collector under my name on your behalf.
It is time for the table to be turned on the system that puts injured workers through un-necessary hardships when the legislation in place requires injured workers to be treated with care and concern.
I do know that a number of you will be fearful of this approach, likewise I know a number of you will welcome it.
I also know that there will be people within the system who will be watching to see what happens.
International Day of Mourning -28th April- is again approaching, again this year Work Injured Resource Connection will be planting trees in memory of the SA workers who did not get to go home. At present I am waiting for the accepted number of fatals for the calendar year 2006. For our new members the Memorial Forest is in Bonython Park, entry is off of Park Tce at Bowden via gate 27. We have planted 103 trees in the 3 years that the Memorial Forest has been started. Each tree representing a life lost. Again this year the planting will start at 12.30pm. No speeches, no political points to be scored, it is just a mark of respect to our fellow workers here in South Australia.
It is also quite possible that we will have inter-state guests this year. I will remind you closer to the day, but for now please put the 28th April on your calendar.
* April 28th is a Saturday, so it is most likely that we will hold the ceremony on the 27th April. I will advise you closer to the date*
This newsletter has a guest article from Robin Shaw of South Australia Self Insured. If you have any comments in regard to what is written, please direct them to Robin. I have known Robin a number of years, and whilst I do not agree with all that he has written, it does give you the reader the opportunity to read what you would not normally have access to.
Some of you already know that an injured worker has started a blog site, many of you don’t know about it.
It can be accessed at http://www.blognow.com.au/workcover
I leave it to you if you access the site or not, I also leave it to you if you enter your own comments there.
Lastly in the mail this last week I received a copy of the nomination certificate for the Australian of the Year Award.
It was very humbling to know that Bev had nominated me, and that some of you supported her nomination. It was also most humbling to learn that Candice & Justin from NSW and Alison, Peter, Jordan & Mathew from Vic, also nominated me. I thank each of them for their belief in me; I also thank each of them for their support of me. It really was a most unexpected honor.
I hope that you are like me and that you are looking forward to a better 2007.
Rosemary.
Foot note:
I will be away from the 15th -26th Feb.
The trip is part work but mostly holiday.
I will check the e-mails daily, however phone calls and mail will need to wait until I return.
I thank you for understanding that I actually need a break.
ng with a sustainable and equitable workers compensation scheme. The SISA perspective on WorkCover’s unfunded liability and the need for legislative change
Robin Shaw, Manager, Self Insurers of South Australia Inc
I appreciate the opportunity to present my views to the members of WIRC. I think it is essential that organisations like WIRC and SISA maintain good communication, exchange information and ideas and contribute to a balanced and sustainable workers compensation scheme.
A lot has been said by many people about the unfunded liability and the alleged failure of WorkCover to return people to work. At the outset we need to keep that in perspective - only a small percentage of claims remain open past 2 years. Why those claims remain open for that long is an issue that attracts strong opinions on case management, legislation and so on.
What is the ‘unfunded liability?
“WorkCover’s unfunded liability is the balance between the assets of WorkCover and the liabilities of WorkCover, including the independent actuary’s estimate of the claims liability of the Workers Rehabilitation and Compensation Scheme over 40 years.
“The Actuary estimates the value in current dollars of all the costs associated with current claims. This is an amount the actuary expects will be paid over the life of those claims, but is not payable at any one point in time.”
WorkCover SA Annual Report 2005-2006
This helps to resolve one misapprehension we occasionally hear. The unfunded liability is not a current debt, nor is it ‘lost money’. In reality, far from ‘losing money’, as we sometimes hear, WorkCover currently collects enough in levies to cover the cost of existing claims plus a margin to add to its asset base to cover future claims.
Drivers of the unfunded liability – the SISA view
Simply put, the actuary studies the frequency, cost and duration of current and past claims to come up with a set of assumptions about what will happen to current claims as they progress on the system, and the frequency and cost of new claims that will be received in the coming years.
If past and current claims consistently show increased costs, the actuary will assume that future claims will also incur increased costs, and therefore assumes a higher projected liability.
It is my view that this is why paying more on redemption of current claims to ‘get them off the system’ is not a viable option for WorkCover. I believe that increased redemption amounts now will compel the actuary to further increase the future liability of the scheme by an amount that is potentially greater than the value of the income maintenance that is saved, which defeats the purpose of the exercise.
In the case of longer term claims, the people have obviously been dealing with the system for a long time, and often have limited options in terms of either remaining on compensation or leaving the scheme.
Rumours persist about the likelihood of legislative change that might see some alteration of the structure of the scheme. What the realities of that might be I cannot say. It is the role of the WorkCover Board to judge whether the scheme in its current form is sustainable after all of the changes of administrative arrangements in recent years,(eg the move to a single claims agent). If, in its best judgment, the Board concludes that the scheme is unsustainable, its task is to give objective advice to the Government on what needs to be done to correct that situation and recover the unfunded element of the claims liability. It remains the responsibility of the Government to make legislative change. One must assume that if change is in fact in the wind, that process will have already commenced.
Any changes that are made to the compensation benefit structure (such as more frequent income maintenance step-downs, injury thresholds or claim duration limits) are unlikely, in my opinion, to apply retrospectively. Therefore, if inroads are to be made into the unfunded liability in the short to medium term, something else must be done for longer term claimants.
The challenge for the Parliament is to find a way to deal fairly with longer term claimants so as to allow them better opportunities to leave the scheme without adversely affecting the scheme’s claims liability. In the Sunday Mail late last year I suggested that some form of temporary access to a limited common law settlement regime might be a solution. While some stakeholders might disagree, I still think it is an option worth exploring. The SA scheme has not had common law since 1992, and the structure of common law damages under the Civil Liability Act has evolved since then.
Self insurers don’t have the unfunded liability issues being experienced by the insured side of the scheme. We estimate that while self insurance covers about 36% of the State’s remuneration, we carry less than that proportion of the State’s total workers compensation liabilities.
The qualitative advantage is workplace-based injury management and rehabilitation that shows the injured person a human face rather than an administrative process. Relatively low numbers of claims per case manager, and the presence of the claims and rehabilitation staff within the workplace allow self insurers to do this. I note that Employers Mutual’s description of its approach to case management is consistent with this approach.
Self insurers do not claim to be perfect by any means. We are at times criticised for our conduct, but the reality is that for the most part, employees of self insurers are supportive of the process and mutually-beneficial outcomes are usually (though not universally) achieved.
All parties affected by the potential legislative change need to understand the mechanics of the unfunded liability in order to be able to judge developments objectively. SISA will constructively add to the effort to achieve a balanced result. We do not encourage legislative over-reaction or the adoption of entrenched positions. That will not serve the purpose of emerging with a sustainable and equitable workers compensation scheme.
Robin Shaw
Manager - Self Insurers of South Australia Inc
136 South Road
Torrensville
Phone 8234 9522
e-mail robin@sisa.net.au
Injured workers are not problem people, they are people with a problem!
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Posted by Workedover at 9:13 AM, 31/1/2007 |
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Interesting Newsletter
Thanks for posting this interesting newsletter.
I really have trouble grasping some of the ideas that Workcover and others associated with Workcover have in relation to " unfunded liability", rehabiltiation, return to work etc.
Perhaps someone can explain how it works for the benefit of all..
These are things that I have found with my claim.
1) Workcover had an opportunity to redeem my claim around the two year mark.
They did not want to enter into reasonable negotiations instead stopping payments, withholding weekly wages etc.
and trying to reduce the amount they were going to pay me.The offer was around $50,000.
I stayed on the system..My claim is now around the $700,000 mark.
I would have been happy at any time to receive more than $50k. Of the 700 k most of it has been dribbled on my weekly payments, rehab and lawyers bills.
If Workcover offered me more than 50k . I might have been at least able to do something with my life and perhaps obtain some sort of self-employment as a courier or something..instead I have been tormented and left on the system to rot..
To redeem my claim is still going to cost the same now as it would have 10 years ago.
Please explain how this is not gross mismanagement of my claim by Workcover and how there is any cost saving here.
2) Workcover has openly interfered with the relationship that patients have with their doctors, there are cases where Workcover has seized patients medical records in their investigations.
How can anyone have a proper confidential relationship with their doctor if Workcover are going to get hold of the records of their case notes. I am sure if patients had to have Workcover staff present at every doctors meeting there would be a public outcry...I see no difference in whether the workcover employees are present or whether they get the doctors records of the meeting at a later date..point is the privacy and doctor patient relationship is still breached and eroded. ( point to workers..do not trust that anything you say to your doctors is confidential. Workcovers access to medical records has also been known to exceed the notes relating to Workcover related appointments. ie all your medical records can be accessed by Workcover..even if you see the doctor about that nasty little rash..
2) Workcover use injured workers attempts to rehabilitate themselves and retrun to work programs as evidence in performing section 38 reviews and the like.
How can an injured worker trust an insurance agent or workcover who is fighting against them for wages when they say they want to rehabilitate you or try and get you involved in some sort of return to work when the only purpose seems to use your work trial as further evidence to reduce your livelihood?
Surely the management of Workcover are not that shallow minded. Workers are not that stupid to think Workcover are really helping them if they review and reduce your income maintenance yearly, deny your rights to weekly payments and travel reimbursements. They trap workers in the lengthy legal dispute processes so they can review your eligibility to income payments and all the while try and hoodwink them into thinking that they are trying to rehabilitate them.
Wake up Workcover...
Its about time you looked at the real situation and stopped trying to pull the wool over everyones eyes...
Redeem all injured workers at the two year mark and stop the rot..
The only positive outcome could be that there is no more unfunded liability..as there is no liability to make payments after two years.
Many injured workers would be able to receive real amounts of compensation if paid a lump sum after two years instead of staying on the system getting paid their weekly payments year in year out for decades.
Lets face it Injured workers do not care about Jobs for the boys...
How many less staff will be needed to manage the claims if every injured worker is redeemd fairly after two years.
Its about time workcover stopped blaming the legislation and concentrated on managing Workcover properly with what legislation has been put in place..
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Posted by reader at 2:15 PM, 31/1/2007 |
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Feb Newsletter update.
Good morning,
I did not expect to be writing to you again so soon, however I have been asked by Phil M to pass on to the entire mailing list his response to the article from Robin Shaw, hence the reason for this mail out.
I have also taken the opportunity to add a few other items to this mail out. I am hopeful that each of you will if you feel it required, contact the writer of each of the articles.
I have again included the article from Robin Shaw, so as you can read it as well as the response to it.
Again I have taken the tact of printing and posting to those on the mailing list first, and then sending out to the e-mail list the next day. In this way I am hopeful that you will all receive the information at the same time.
Lastly I remind you that I will be away from the 15th -26th Feb.
Rosemary
5th Feb ‘07
Robin Shaw, Manager, Self Insurers of South Australia Inc
I appreciate the opportunity to present my views to the members of WIRC. I think it is essential that organisations like WIRC and SISA maintain good communication, exchange information and ideas and contribute to a balanced and sustainable workers compensation scheme.
A lot has been said by many people about the unfunded liability and the alleged failure of WorkCover to return people to work. At the outset we need to keep that in perspective - only a small percentage of claims remain open past 2 years. Why those claims remain open for that long is an issue that attracts strong opinions on case management, legislation and so on.
What is the ‘unfunded liability?
“WorkCover’s unfunded liability is the balance between the assets of WorkCover and the liabilities of WorkCover, including the independent actuary’s estimate of the claims liability of the Workers Rehabilitation and Compensation Scheme over 40 years.
“The Actuary estimates the value in current dollars of all the costs associated with current claims. This is an amount the actuary expects will be paid over the life of those claims, but is not payable at any one point in time.”
WorkCover SA Annual Report 2005-2006
This helps to resolve one misapprehension we occasionally hear. The unfunded liability is not a current debt, nor is it ‘lost money’. In reality, far from ‘losing money’, as we sometimes hear, WorkCover currently collects enough in levies to cover the cost of existing claims plus a margin to add to its asset base to cover future claims.
Drivers of the unfunded liability – the SISA view
Simply put, the actuary studies the frequency, cost and duration of current and past claims to come up with a set of assumptions about what will happen to current claims as they progress on the system, and the frequency and cost of new claims that will be received in the coming years.
If past and current claims consistently show increased costs, the actuary will assume that future claims will also incur increased costs, and therefore assumes a higher projected liability.
It is my view that this is why paying more on redemption of current claims to ‘get them off the system’ is not a viable option for WorkCover. I believe that increased redemption amounts now will compel the actuary to further increase the future liability of the scheme by an amount that is potentially greater than the value of the income maintenance that is saved, which defeats the purpose of the exercise.
In the case of longer term claims, the people have obviously been dealing with the system for a long time, and often have limited options in terms of either remaining on compensation or leaving the scheme.
Rumours persist about the likelihood of legislative change that might see some alteration of the structure of the scheme. What the realities of that might be I cannot say. It is the role of the WorkCover Board to judge whether the scheme in its current form is sustainable after all of the changes of administrative arrangements in recent years,(eg the move to a single claims agent). If, in its best judgment, the Board concludes that the scheme is unsustainable, its task is to give objective advice to the Government on what needs to be done to correct that situation and recover the unfunded element of the claims liability. It remains the responsibility of the Government to make legislative change. One must assume that if change is in fact in the wind, that process will have already commenced.
Any changes that are made to the compensation benefit structure (such as more frequent income maintenance step-downs, injury thresholds or claim duration limits) are unlikely, in my opinion, to apply retrospectively. Therefore, if inroads are to be made into the unfunded liability in the short to medium term, something else must be done for longer term claimants.
The challenge for the Parliament is to find a way to deal fairly with longer term claimants so as to allow them better opportunities to leave the scheme without adversely affecting the scheme’s claims liability. In the Sunday Mail late last year I suggested that some form of temporary access to a limited common law settlement regime might be a solution. While some stakeholders might disagree, I still think it is an option worth exploring. The SA scheme has not had common law since 1992, and the structure of common law damages under the Civil Liability Act has evolved since then.
Self insurers don’t have the unfunded liability issues being experienced by the insured side of the scheme. We estimate that while self insurance covers about 36% of the State’s remuneration, we carry less than that proportion of the State’s total workers compensation liabilities.
The qualitative advantage is workplace-based injury management and rehabilitation that shows the injured person a human face rather than an administrative process. Relatively low numbers of claims per case manager, and the presence of the claims and rehabilitation staff within the workplace allow self insurers to do this. I note that Employers Mutual’s description of its approach to case management is consistent with this approach.
Self insurers do not claim to be perfect by any means. We are at times criticised for our conduct, but the reality is that for the most part, employees of self insurers are supportive of the process and mutually-beneficial outcomes are usually (though not universally) achieved.
All parties affected by the potential legislative change need to understand the mechanics of the unfunded liability in order to be able to judge developments objectively. SISA will constructively add to the effort to achieve a balanced result. We do not encourage legislative over-reaction or the adoption of entrenched positions. That will not serve the purpose of emerging with a sustainable and equitable workers compensation scheme.
Robin Shaw
Manager - Self Insurers of South Australia Inc
136 South Road
Torrensville
Phone 8234 9522
e-mail robin@sisa.net.au
Robin,
I thank you for submitting the attached article to the WIRC newsletter. I find it refreshing to find someone in a position of authority who is willing to commit to writing the ignorance that has led to the blowing out of the unfunded liability of the WorkCover Corporation of South Australia.
From the outset, I feel it would be appropriate readers of your contribution are made aware that you were formerly employed by WorkCover and were a key contributor to the establishment of the now defunct multi agency outsourcing that proved to be an enormous failure, both from the perspective of Injured Worker’s and WorkCover. http://www.aic.gov.au/conferences/regulation/shaw.html I would also like to attest to the fact that I am an injured Worker.
In your article, you stated that
“the actuary studies the frequency, cost and duration of current and past claims to come up with a set of assumptions about what will happen to current claims as they progress on the system, and the frequency and cost of new claims that will be received in the coming years.”
If past and current claims consistently show increased costs, the actuary will assume that future claims will also incur increased costs, and therefore assumes a higher projected liability.
As a former WorkCover executive and now General Manager of SISA, you would be well aware that this is totally incorrect. It is this type of misinformation that WorkCover use in their attempt to lay blame for the financial mismanagement of the scheme at the feet of Injured Workers. The actuarial assessment is actually based on the amount WorkCover would have to pay out if they had to pay out their entire exposure as at a given point in time and the only reference the Actuary would make to future exposure is based on the current rates of inflation and the effect that is anticipated to have on the ongoing claims. The Chairperson Bruce Carter on page 4 of the 2005/06 annual report states;
The actuary estimates the value in current dollars of all the costs associated with current claims.
This is an amount the actuary expects will be paid over the life of those claims, but is not payable
at any one point in time.
Also at page 77 of the 2005/06 Annual Report the role of the Actuary, Finity Consulting is explained in more detail.
(d) Key assumptions
The key assumptions used by Finity Consulting Pty Limited in developing the valuation of the claims liability are the economic assumptions relating to inflation and discount rates and the assumptions relating to the duration and severity of claims. The key assumptions have been developed through the actuarial analysis of historic trends in conjunction with analysis of current and likely future economic factors. The following key assumptions were used in the measurement of the outstanding claims liability.
Economic assumptions
Inflation rate – income maintenance 3.75% 3.00%
Inflation – medical, legal and other costs 4.00% 3.75%
Superimposed inflation rate – medical costs 0.00% 4.00%
Discount rate 6.00% 5.25%
Duration and severity of claims Refer below
The actuary has made a range of assumptions relating to the projected duration that claimants will remain in receipt of payments and the quantum of those payments having had regard to the particular characteristics of groups of claims including:
• The length of time that a group of claims has been in receipt of payments
• The analysis of past claims experience including the cost of claims
As you are well aware, in no way do these assumptions suggest the Actuary would have a crack at guessing the number or cost of future claims and I believe it is irresponsible that any spokesperson for WorkCover make such claims. Furthermore, if you suggest their guess is that the number of claims will increase, I would suggest you have scant regard for the WorkSafe initiative and the decrease of the incidence of workplace injury by 21.1 percent as reported by Professor Jack McLean last week.
You then turn your attention to Redemptions and the fallacy perpetuated by WorkCover that paying redemptions will only increase the future liabilities. You state;
“It is my view that this is why paying more on redemption of current claims to ‘get them off the system’ is not a viable option for WorkCover. I believe that increased redemption amounts now will compel the actuary to further increase the future liability of the scheme by an amount that is potentially greater than the value of the income maintenance that is saved, which defeats the purpose of the exercise.”
Again, this statement is anachronistic to the facts provided in the Actuarial review. It is common sense to assume that if a person suffers an injury that is substantial enough to keep them away from work and receiving at best 80% of their pre injury income for in excess of 2 years, they could well be assumed to be “permanently incapacitated” and sections 42, 42a and 43 of the Legislation were written with a view to deal with this “capital loss” This is also a statistical and well documented fact that is oft cited by WorkCover, indeed the Chairperson states at page 5 of his annual report;
“In particular the actuary has assumed that injured workers in the long-term category will remain on the Scheme for longer.”
Whilst the erroneous views espoused by yourself and other individuals currently associated with WorkCover are being sold as fact, the policy of retaining permanently incapacitated workers on the scheme will continue. In turn, the actual liability of the scheme will continue to rise at a financial rate equivalent to the long term cost of 400 injured workers every 3 years and although WorkCover can report a loss of 42 million for the financial year ending 2006, the reality is that the loss was offset by an operating surplus of $180 million which represents 30 percent of the amount employers pay in levies.
An informed view would suggest the contra application of the redemption policy would in fact have a positive affect on the outstanding liability and it is for that reason the provision was included in the Legislation. If for example the current long term liability amounts to 50% of the total liability carried by WorkCover of approximately $2 Billion and WorkCover were to redeem their liabilities in the order of 15% on a case by case basis and in line with the legislation, I would suggest that for an investment of $150 million dollars, or one years operating surplus, the net position of WorkCover would immediately turn around in the order of $800 million dollars. The ongoing operational costs of managing the “long term” claims including medical costs would also fall significantly and WorkCover would then be in a position of positive funding as was intended when the Corporation was established. WorkCover would then be in a position to pass on the savings to employers by reducing levies by 30 percent, still enjoy an operating surplus in the order of 30-50 million dollars a component of which they would invest in redeeming their long term liability to the 130 or so workers annually.
The other argument used to counter this commercial and moral approach to managing the scheme is that it may create a “lump sum mentality” or “compensation neurosis”. Having been trapped in this inhumane system for 3 and a half years, I can assure you I would willingly redeem my entitlements for just 15 percent so I no longer have to feel like a leper who is bludging on society and my life controlled by uneducated megalomaniac insurance clerks. I would also suggest that those that are seeking a “free ride” and are willing to put up with the system, will not redeem and will happily continue receiving 100 percent of their entitlements and there is little that can be done about it. All insurers in the world factor this element of fraud into their costings.
Having said that, with a slimmer scheme, EML would be better positioned to work with injured workers to do what they do best and that is provide rehabilitation services and work with rather than against injured workers thus achieving higher return to work rates. WorkCover would also be more able to pursue the greatest area of fraud, namely understatement of wages paid by employers and more importantly, focus on issues pertaining to workplace safety.
You also dare to suggest;
“Rumours persist about the likelihood of legislative change that might see some alteration of the structure of the scheme. What the realities of that might be I cannot say. It is the role of the WorkCover Board to judge whether the scheme in its current form is sustainable...”
The very fact that you are publishing this statement is in my opinion your effort to forewarn of the changes coming and only serves to further the rumours. You also bravely confirm it is the role of the Board to use its judgement, the very judgement that drove the scheme from an unfunded liability of $64 million to $700 million in just six years.
In that regard, I am offended that you choose to use a voluntary organisation that was established to support Injured Workers and not to further the mythology according to WorkCover. I do ask that Rosemary forward this to the entire WIRC mailing list.
Regards
Phil Moir
696935/3
0401440440
PAYOUT CUTS Inflated WorkCover awards to end:[2 Metro Edition]
PAUL STARICK, CHIEF REPORTER. The Advertiser. Adelaide, S. Aust.:Jan 30, 2007. p. 1
WORKCOVER payments to injured workers are likely to be cut in an attempt to reduce the $700 million liability of a scheme that its own management admits is the nation's worst-performing.
An Advertiser investigation has revealed WorkCover's liabilities - potential future payouts it cannot fund - are being inflated by a more generous compensation scheme than other comparable states.
A key reason for the increased cost is long-term payouts to injured workers rising in number, duration and cost.
The State Government is discussing law reform with the WorkCover board, which has already flagged the need to slash long-term payouts.
Any move to cut benefits is likely to inflame Unions SA, which argues reducing workplace injury rates is "the real key to improving WorkCover's performance".
South Australian employers already are paying the nation's highest WorkCover levies - 3 per cent of payroll - to fund benefits which are higher and continue for longer than comparable states.
SA has the lowest rate of returning injured workers to employment and the highest rate of injured workers receiving compensation payments, according to a 2005-06 national comparison for workers' compensation authority chiefs.
WorkCover Corporation chief executive officer Julia Davison conceded the scheme was the nation's worst-performing, despite an overhaul of management and procedures.
"Our levy rate is one of the highest in the country at 3 per cent and our return-to-work rates are one of the lowest," she told The Advertiser.
Continued Page 6
SA WorkCover reforms: Cuts for payouts
From Page 1
"SA's levy rate hasn't always been the highest but our return-to- work rate has tended to be one of the worst for years."
Ms Davison said interstate schemes had experienced problems but had turned them around while also cutting levy rates. But she said it would be "premature to specify" what legislative changes WorkCover was seeking.
In the corporation's latest annual report, WorkCover chairman Bruce Carter flagged the need for "legislative change" to get more people on benefits back to work. "Long-term claims (claims from injured workers who have been receiving income maintenance payments for longer than three years) make up about 45 per cent of WorkCover's claims liability," Mr Carter said.
"The growth in the number and duration of these claims has been a major driver of the increase in costs and the estimate of claims liability in recent years.
"Returning people to safe work sooner remains critical for the scheme's long-term sustainability," he said.
Industry groups, including the influential Motor Trade Association, have publicly and privately urged cuts in benefits to curb WorkCover's ballooning compensation liability.
WorkCover's unfunded liability - the balance between the scheme's assets and liabilities - climbed in the last financial year to $694 million.
The scheme is 65 per cent funded, compared with 63.4 per cent at the end of the 2004-05 financial year. In the past financial year, registered employers made 23,401 claims to WorkCover and total claims payments to registered employers were $472 million, up from $399 million in the previous year.
Key aspects of WorkCover's operations which are likely to be brought into line with other states, particularly New South Wales and Victoria, include:
CUTTING the benefit rate from the present 100 per cent of average weekly earnings for the first year and 80 per cent thereafter.
LIMITING long-term payouts to those workers who are seriously and permanently injured.
CHANGING the payment thresholds to ensure seriously injured workers receive more adequate benefits, while cutting payments to those less injured.
TIGHTENING of the extensive legal process for medical disputes relating to injured workers' capacity to return to employment.
A spokesman for Industrial Relations Minister Michael Wright said the Government was still discussing further reforms with the WorkCover board.
Opposition Leader Iain Evans said the main thing wrong with WorkCover was that Mr Wright was "simply not interested in it".
Putting WorkCover back in the black -this is the impossible dream
Putting WorkCover back in the black
THE State Government has no option but to examine ways of reducing benefits to injured workers in a bid to cut WorkCover's $700 million unfunded liabilities.
It is, of course, imperative that South Australian workers have adequate protection against work-related illness or injury.
But the continued blowout of WorkCover's long-term liabilities is untenable, unacceptable and unsustainable.
Ultimately, if the debt is allowed to spiral above $1 billion, there is a danger SA's AAA international credit rating must come under scrutiny.
Equally, the current levies paid by employers are among the highest in Australia, creating a business disincentive for investment in the state.
While unions will oppose any erosion of WorkCover benefits, it is not unreasonable to bring SA's employer levies and employee benefits into line with comparable schemes interstate.
Perhaps the most important reform would be to reduce the number of long-term claims and encourage injured workers to rejoin the workforce as quickly as possible.
Workcover chief executive officer Julia Davison told The Advertiser: "Our levy rate is one of the highest in the country at 3 per cent and our return to work rates are one of the lowest."
In the WorkCover annual report, chairman Bruce Carter says the growth in the number and duration of long-term claims has been a major driver in increasing costs and rising liabilities.
These are warnings the Government cannot afford to ignore.
* Responsibility for all editorial comment is taken by The Editor, Melvin Mansell, 31 Waymouth St, Adelaide, SA 5000
From the letter to the editor.
The Advertiser Thursday, February 1 2007
Regarding Workcover reforms, it is disappointing that the Government is looking to reduce benefits to injured workers as a solution to the unfunded liability issue (The Advertiser 30/01/07). It is also disappointing to note that benefits have been described as “inflated Workcover awards”.
To describe the Workcover scheme as one of the most “generous” compensation schemes in Australia fails to properly compare provisions of the different systems.
Australian Lawyers Alliance is an organisation which looks to protect the rights of injured but is also fully aware of the fact that any compensation system needs to be sustainable. There are solutions to the issue of unfunded liability other than to cut the beinifits to injured workers.
It is hoped that the Government considers reforms other than reducing the benefits for the injured and that it will also consult widely with all “relevant stake holders” before making any decision.
-AJ Kerin
SA president, Australian Lawyers Alliance, Adelaide.
Hello friends, I put this letter to the Advertiser late morning...talked to Bill about it. He will try to put it in as soon as space... Keep up the wonderful work you are doing. cheers Gary
Dear Sir
The Government and some business response to WorkCover liabilities, (The Advertiser 31/01), to minimise payments to injured workers begs belief for those caught up in a system that seeks to avoid taking responsibility by all sorts of legal manoeuvres. This system of management forgets the fundamental cause of why there are so many injured workers; worksite risk.
There are businesses out there that don’t give a damn about the levels of noise, dust, and fumes they create in a neighbourhood. Many of the same businesses have significant numbers of staff on the injury list.
Had more effort been given to listening to the safety reps instead of sacking them, there would be less injuries. Now there are even ways of dismissing injured staff.
Those staff who dare speak up about risks, and neighbours who complain about intrusion, are isolated and subjected to the worst possible intimidation from both business and Government. Go for it boys, and forget all of the costs that staff and the community already bear for the sake of unsustainable commercial success.
Workplace services has done little to reduce site risks for reason they don’t have legal capacity to identify and reduce those risks. If the Government were serious about reducing the liability it is subjecting taxpayers to, it would have stepped up the standards of work sites years ago. It would have reduced deaths and injuries. It should have been able to do this along with the handouts that have been given to business. Instead we still have businesses imposing risk on everyone, and telling us what they will and wont do to contain it.
AK Kerin of the Australian Lawyers alliance, (The Advertiser 1st Feb) points out that compensating workers less is not the answer. I put it to you that having fewer injuries would be more to the point
Gary Goland
Chair, People’s Environment Protection Alliance
Injured workers are not problem people, they are people with a problem! |
Posted by Reader at 11:25 PM, 7/2/2007 |
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Thank you Blog Master
Sir,
I do not know who you are, but I thank you for putting the Work Injured Resource Connection newsletter up here as well.
It is very important that as many people as possible get to read what it is that we are forced to live with.
This newsletter comes from a lady who I greatly admire for her strength of will and for the depth of compassion.
It always amazes me that the whole workcover system has not found a way to fund the work she does.
Again thank you Blog Master, I do appreciate your efforts as well.
Charles. |
Posted by Charles at 12:24 PM, 10/2/2007 |
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Doctor
It is a pleasure to introduce to you the members of your new Medical Board in this issue of the Newsletter. Many of you are no doubt aware that the new Medical Practice Act 2004 came into effect in August 2005. The Act brought with it a new composition of the Board and the then Minister chose not to reappoint any members of the previous Board. Neither did any previous Board members stand for the three positions elected by the profession.
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Posted by Anonymous at 2:27 PM, 23/12/2007 |
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