ICA workers comp report looks after insurers, hurts injured workers

15th Jun 2015

State and Territory Governments should reject outright a self-interested report that seeks to hand operational control of workers’ compensation schemes to private insurers and cut the right to compensation of injured workers in every jurisdiction, the Australian Lawyers Alliance (ALA) said today.

ALA Queensland Director Rod Hodgson said the Insurance Council of Australia’s (ICA) attempt last week to present a model for best practice on workers’ compensation was an attempt to promote profitable opportunities for insurers at the expense of injured workers, for no good reason.

“This report suggests that State-based workers’ compensation schemes are unsustainable, and that the only way to achieve best practice and efficiency is to privatise these schemes,” Mr Hodgson said.

“The ALA represents lawyers who assist injured workers within these workers’ compensation schemes every day. These are nonsense claims from the ICA that show a limited understanding of how State schemes operate.”

“No State Government would put the desire of private insurers for more profitable opportunities ahead of injured workers,” Mr Hodgson said.

“The evidence shows that State schemes, with the exception of the no-fault South Australian Scheme, are sustainable and well-run. In fact, examples of the two of the best run schemes - Queensland and Victoria - have a long history of delivering low premiums for employers, high solvency and providing fair benefits for injured workers.”

“Queensland has had the lowest premiums for employers averaged across the last ten years. And Victoria, since 1999, has achieved concurrent increases in benefits for injured workers and reduced premiums. Both are run by government and both schemes have meaningful access to common law,” Mr Hodgson said.

“Those schemes also work because State Governments rightly channel revenue and profits into a carefully balanced mix of benefits for injured workers, for everything from return to work initiatives to enhancing OHS enforcement on worksites.”

“There is no evidence that workers’ compensation schemes function best when run by private insurers, as asserted by the ICA,” Mr Hodgson said.

“Crucially, current State schemes provide injured workers with access to common law. The benefits of this are invaluable: injured workers have finality, dignity and a say on how they manage their recovery, and common law also helps to act as a deterrent for unsafe workplace practices,” Mr Hodgson said.

Mr Hodgson said the ICA however had conveniently glossed over the strengths of State schemes to instead push for retrograde and unfair measures that couldn’t be further from ‘best practice’ when it comes to workers compensation.

“The ICA are proposing cut-offs in weekly compensation payments, on a work capacity test controlled by insurers that is not subject to any sort of court or legal review,” Mr Hodgson said.

“That will see thousands of people stripped of their legal safety net, with few options for review.”

“This proposal alone should ring alarm bells for the Federal Government as well as the States - if the ICA’s proposals are adopted, many people would not be able to return to work, driving people on to entities like Centrelink and Medicare and leaving taxpayers to pick-up the tab,” Mr Hodgson said.

“Alarmingly, the ICA has also called for the right to medical treatment to cease for claimants after 12 months. Again, that is an uninformed and illogical step that runs counter to best medical practice.”

“Under the ICA plan, catastrophically injured workers who need assistance for life would be palmed off to a yet to be created National Injury Insurance scheme,” Mr Hodgson said.

“The ICA says that a new scheme culture should prevail and that staff at the regulator should be committed to sustainability ahead of compliance. This is plain wrong - all workers compensation schemes must work towards both sustainability and compliance and you cannot have one without the other.”

“The message for State Governments is clear - do not to hand over the keys to workers’ compensation schemes to the private insurers,” Mr Hodgson said.

“All it will achieve is a reduction of benefits to injured workers, does not allow the law to do its job of holding unsafe employers to account and lets private insurers go after outcomes that are counter to good social and economic policy,” Mr Hodgson said.

Tags: Compensation Workers' rights WorkCover Workers compensation