RELEASE DATE 28/02/2008
The WorkCover Board today confirmed its support for the package of legislative reform put forward by the Government, stating that as a whole, the package would provide the tools necessary to improve the State’s return to work rates, which would in turn result in a more affordable, sustainable Scheme that was in line with other comparable State schemes.
The Government today tabled amending legislation adopting the package of reforms to the WorkCover Scheme, recommended by independent experts, Alan Clayton and John Walsh. The changes are designed to improve the State’s return to work rates, eliminate the unfunded liability and enable a reduction in the average levy rate paid by employers who fund the Scheme.
“The Board made its recommendations to the Government in November 2006, the review team has considered these issues over almost a year now and representatives of injured workers and employers have been extensively consulted. We’re pleased the Government has decided to act to fix the Scheme”, said WorkCover Chairman Bruce Carter.
“Failure to adopt this legislation would be a failure to address the Scheme’s inadequacies in returning injured workers to work, and would result in a further deterioration of the Scheme’s funding position.
“We think the package adequately balances the interests of both injured workers and the employers who fund the Scheme with its appropriate primary emphasis on return to work, while maintaining long-term support for the seriously injured.
“Importantly, it will bring the SA Scheme into line with other States, particularly those which have turned their schemes around and which are now enjoying better return to work rates and much improved funding positions.
“As noted by the independent expert review team, the package must be supported in its entirety to deliver better return to work outcomes, cost savings and Scheme liability reductions. The components of the package are interrelated and as such the whole is definitely greater than the sum of its parts. We hope the package attracts widespread support.
“We commend the independent review team, Alan Clayton and John Walsh, and the Government for developing a package that:
- retains the Scheme’s fairness and generosity for injured workers and their families
- will greatly enhance the Scheme’s ability to support injured workers to return to work
- will achieve full funding of the Scheme within five to six years, thus eliminating the $843m unfunded liability
- will enable reductions in the average levy rate, which is currently the highest in the nation.
“This legislative reform package, combined with the claims management improvements that will come from Employers Mutual, our sole claims agent, will ensure the Scheme delivers on its social and economic objectives and is sustainable long-term.”
Media contact: Danielle Martin, WorkCover SA – (08) 8233 2381 or 0418 295 324
BACKGROUND - The fairest and most generous Scheme
South Australia’s workers compensation Scheme is an essential safety net for injured workers and remains, as it was in 1987 when it was established, one of the State’s most significant initiatives to benefit the community.
Coinciding with 20 years of operation of the Scheme, an independent review has been undertaken, reassessing the fundamental structure of the Scheme for the first time since inception, despite South Australia’s changing social and economic environment.
The outcomes of the review, and the proposed legislation, will maintain the South Australian Scheme as the fairest worker’s compensation scheme in the nation.
Further, the proposed changes to the Scheme’s structure will position South Australia as a leader in implementing a ‘work health’ model of workers compensation and will strengthen accountability in a way that will position SA “among the international best,” according to the author of the review report, workers compensation expert, Alan Clayton.
Comparison of levy rates and funding positions (comparable schemes)
|
Scheme
|
Average levy rate (% wages)
|
Funding ratio
|
|
NSW
|
1.77%
|
103.5%
|
|
VIC
|
1.46%
|
134%
|
|
QLD
|
1.15%
|
178%
|
|
SA
|
3.00%
|
65%
|
Comparison of timing and level of step-downs
|
Period
|
SA
(proposed)
|
Vic
|
NSW
|
QLD
|
|
0 – 13 weeks
|
100%
($2,159 max)
|
95%
($1,210 max)
|
100%
($1,536 max)
|
85%
|
|
13 – 26 weeks
|
80%
|
75%
|
100%
($1,536 max)
|
85%
|
|
26 – 52 weeks
|
80%
|
75%
|
90% ($348 max)
|
75%
|
|
52+ weeks
|
80%
|
75%
|
90% ($348 max)
|
65%
|
Note: seriously injured workers who have no ongoing work capacity will be supported by the Scheme for the long-term.
Summary of payments for permanent injury or illness
|
|
SA (proposed)
|
SA (currently)
|
Vic
|
NSW
|
|
Non-economic loss for physical disability
|
Max $400,000
5% threshold
|
Max $136,000 ($213,060 inc supplementary benefit)
No threshold
|
Max $384,180
10% threshold
|
Max $231,000 + max $50,000 pain & suffering
10% threshold
|
|
Non-economic loss for psychiatric disability
|
Threshold 10%
|
No provision
|
Threshold 30%
|
Threshold 15%
|
|
Death benefits
|
Max $400,000
Ongoing payments to dependents
|
Max $230,983
Ongoing payments to dependents
|
Max $257,210
Some ongoing payments to dependents up to 3 years
|
Max $331,250
Ongoing payments to dependents
|