Queensland's Workers Compensation Scheme Is Under Review
The Queensland’s workers compensation scheme is currently under review. What that means for business owners is uncertain, but clients and referrers of Clifford Gouldson Lawyers are encouraged to participate in that review.
The Worker’s Compensation and Rehabilitation Act 2003 (the Act) establishes Queensland’s system of workers’ compensation. During 2010 a number of reforms to the scheme were implemented by making a number of amendments to the Act. On 7 June 2012 the Queensland Parliament initiated an enquiry into, and a report on, the operation of Queensland’s scheme. That enquiry is underway at the moment, and every business in Queensland that holds a policy of insurance with WorkCover (Queensland’s statutory insurer) should consider participating in that review.
As one of only two states left in Australia with a workers’ compensation scheme that continues to grant relatively unrestricted rights to common law claims to workers throughout Queensland, the enquiry is designed to consider:
- whether or not the reforms implemented in 2010 have addressed the growth in common law claims and claims cost that was evidenced in the scheme during 2007 – 2009;
- WorkCover’s current and future financial position;
- the scheme’s impact on the Queensland Economy;
- Queensland’s competitiveness and employment growth.
Naturally the enquiry will also consider how Queensland’s workers compensation scheme compares to schemes in other Australian jurisdictions and how the scheme could better meet its objectives in terms of providing benefits for workers who sustain injury in their employment, for dependants if a worker’s injury results in death and generally encourages improved health and safety performance by employers.
Importantly, all of these goals need to be achieved whilst ensuring the scheme does not impose too heavy a burden on business owners and the community.
Business owners who might be directly affected by any policy change that results in increases in WorkCover premiums have been invited to participate in the enquiry. The current time table for the enquiry is:
|Friday 3 August 2012:||Closing date for submissions|
|To be advised:||Public hearing|
|28 February 2013:||Anticipated reporting dates|
Clifford Gouldson Lawyers is available to assist any clients who wish to prepare and lodge a written submission or participate in the public hearing.
SOME KEY FACTS
The following represent some key facts in relation to Queensland’s scheme:
- WorkCover is Queensland’s primary insurer, with 25 current licensed self insurers also in existence.
- WorkCover insures over 150 000 employers, covering 90% of workers.
- the self insurers cover 258 employers and approximately 10% of Queensland workers.
- WorkCover has projected equity of $502 million at 30 June 2012 and an estimated funding ratio of 117%.
- the net tangible asset position and profit history of all self insurers is sound.
- over the last 10 years WorkCover has consistently delivered either the lowest or second lowest average premium rate for employers compared with all other state schemes.
- the total cost for statutory claims in 2010/2011 was $578.2 million.
- the total cost for statutory claims in 2010/2011 was $677.8 million.
- the statutory benefit claim rate declined from 49.7 claims per 1000 workers for the 2007/2008 year to 46.5 claims per 1000 workers in the 2010/2011 year.
- in 2010/2011 of the approximately 92,000 statutory claims finalised, 56% were for lost time and 44 percent were for medical expenses only.
- of all lost time claims, 98% were finalised within 1 year and only 0.6% lost time claims totalling 310 in number were still active after 2 years.
- the scheme return to work rate has improved from 95.3% in 2010/2011 to 98.5% in 2011/2012.
- during 2009/2010 there were 4,991 common law claims with an average damages settlement of $134,389.00.
- in 2011/2012 there was forecast to be 4,400 common law claims with an average damages settlement of $117,933.00.
- Queensland’s scheme is unique in that it has a “short tail” scheme where weekly benefits stop when: incapacity ends; an injury is considered to be stable and stationary; after 5 years; or at the point a maximum amount of weekly benefits is received ($287,605.00 as at 1 July 2012).
- most Australian jurisdictions operate a “long tail” scheme that pay benefits for the duration of a worker’s incapacity but with heavily restricted or no access to common law damages
Under the Act, all Queensland employers who engage workers must have a workers’ compensation insurance policy with WorkCover unless they are licensed self insurers. This insurance policy covers any costs that may be incurred from the employer’s workers' injuries and it includes the cost of any common law claim that might be made against the employer. Employers insured with WorkCover pay a premium to meet the cost of this insurance.
WorkCover’s average premium rate has been increasing since 2009/2010 from $1.15 per $100 of wages to an average premium rate of $1.45 per $100 of wages forecast for the 2012/2013 year.
The actual premium paid by an employer varies according to the size, claims experience and industry of the employer. The premium is calculated using the experienced based rating (EBR) system which multiplies an employer’s wages by their premium rate. The scheme is designed to reward employers with good injury prevention and management.
Where employers operate across a number of industries, it is the industry with a higher level of claims experience which will usually dictate the rate for the premium calculation.
FALSE OR FRAUDULENT CLAIMS
The current fine or penalty for a person found to have defrauded or attempted to defraud WorkCover is $40,000.00 or 18 months imprisonment. In 2010/2011, 95 cases of potential fraud were investigated and 20 cases were successfully prosecuted.
Employers are encouraged to make submissions about the extent to which WorkCover investigates and prosecutes false or fraudulent claims