SA WorkCover’s $4 million blow-out

17th Oct 2012

A significant deterioration in South Australian WorkCover’s performance has resulted in unfunded liabilities increasing from $1.billion to $1.4 billion the Auditor-General’s report tabled in parliament, yesterday, reveals.

The Report also showed the scheme’s funding ratio has fallen from 64.8% to 59.2%.

Australian Lawyers Alliance SA President, Patrick Boylen, says the report is illuminating and shows just how vulnerable to poor management no-fault schemes are and how these can compound over time.

“The Report also reveals that income maintenance payments grew to $197million – mainly because less workers are being paid redemptions to exit the system, 11% more workers are on weekly payments for longer than a year, and 53% of work capacity reviews are being challenged with 56% having income maintenance reinstated.

“Work capacity reviews were a key plank to the legislative changes introduced in 2008 and it is clear that the Auditor-General was concerned about the effectiveness of the changes,” Mr Boylen said.

He said the Report also highlighted concerning deficiencies in the scheme’s management by the WorkCover Corporation and its claims agent, EML.

This included: failure by the WorkCover to implement earlier recommendations and to compare data with other agencies for levy collection purposes; poor EML internal audits and control of average weekly earnings calculations; and late application of step-downs causing workers to be overpaid.

“The Auditor-General’s report highlights that the further deterioration of the WorkCover scheme is due to poor management, ineffective legislative changes and the absence of redemptions to allow injured workers to exit the system with dignity,” Mr Boylen said.

He called on the Minister to direct the WorkCover Corporation to implement the recommendations of the Auditor-General and to cease the “no redemptions policy” immediately.

“The Australian Lawyers Alliance also notes that the Auditor-General’s Report on the Motor Accident Commission, also tabled yesterday, reveals the investment to outstanding claims ratio was 1.22 with a five year average of 1.22,” Mr Boylen said.

Tags: South Australia WorkCover