Workers compensation scheme key to protecting our ageing workforce

7th Apr 2015

The expectation that Australians will work past the age of 65 needs to be framed in a long-term vision that finds a sustainable balance between workers compensation, the National Disability Insurance Scheme and Centrelink, or risk breaking the system, the Australian Lawyers Alliance (ALA) said today.

According to the federal government’s 2015 Intergenerational Report, workers over the age of 65 will become an increasingly important source of workplace productivity and business prosperity, with forecasts predicting their workplace participation rate will rise from 12.9% today to 17.3% by 2055[1].

However, ALA National President Andrew Stone said that government plans to address the issues of a rapidly ageing workforce in future decades could be thwarted if state-based workers compensation schemes are not protected from governments slashing the rights and benefits these schemes currently offer injured workers.  

“As the average age of Australia’s working population increases, the government has highlighted the need to boost workforce productivity and participation,” Mr Stone said.

“However, if there is an expectation that people will have to work longer, there also will be a greater risk of workplace injury.”

“This is particularly the case in heavy industries, where it will be physically difficult for people to work longer, as well as in less physically demanding workplaces,” Mr Stone said.

“The increased risk posed by an ageing workforce means that we need a long-term vision to determine how to provide support for injured people. This includes ensuring that we do not weaken workers compensation schemes in the short term, as this will have significant long-term consequences.”

“Unfortunately, workers compensation schemes across Australia are currently under attack, with some state and territory governments looking to reduce costs by stripping benefits and removing rights to sue for damages under the common law,” Mr Stone said.

Mr Stone said that especially brutal cuts were made to workers’ rights in 2012 in NSW, that injured workers’ rights were reduced last year in South Australia and Queensland, and that cuts to people’s rights under the Commonwealth scheme Comcare were also proposed in 2014.

The ACT government has also recently announced that it will remove its public servants currently supported under the Comcare scheme, and create its own scheme. The shape of this new scheme is yet to be determined.

Mr Stone said the impending introduction of the no-fault National Injury Insurance Scheme (NIIS) meant that state governments are examining all options of how to fund changes to their respective workers compensation schemes.

“The question must be asked – if the government expects people to work longer, where does it expect that these people will receive support if they are injured?” Mr Stone said.

“An ageing worker is more likely to suffer a non-serious workplace injury and fall into a lower category of coverage, potentially receiving less support or even being denied workers compensation medical and income benefits,” Mr Stone said.

“As the average age of Australia’s working population increases, this risk will only increase.”

“With the rollout of the National Injury Insurance Scheme, state governments may feel forced by the Commonwealth to impose further cuts to the rights of thousands of people at the lower end of the spectrum in order to fund the high-cost claims at the other end of the spectrum. This is what we have seen in South Australia,” said Mr Stone.

“It is important that governments resist such pressures to raise thresholds, reduce caps and remove lump sum commutations as a short-term fix. In the long term, it is important to maintain access for people to workers’ compensation schemes, so that people may have appropriate support.”

“The impact of removing eligibility for workers’ compensation for less severe injuries will likely be increasingly felt in the decades to come, as an ageing workforce, combined with surging demand on the NDIS and NIIS, will create a sore need for another support mechanism,” Mr Stone said.

“Eligibility criteria for the NDIS and NIIS will likely mean that people injured at work, would be unable to access these schemes for support to a significant degree. If these people are also denied access to workers compensation, it will mean that their only means of support could be under the Disability Support Pension, Centrelink or Medicare. This has already been seen in NSW.”  

Mr Stone said that this increasing load on the public purse was highlighted by the Intergenerational Report, which showed the drop in the number of taxpayers who are able to contribute tax to the system in coming decades. The report estimated that by 2055 the number of people aged between 15-64 would be only 2.7 times the number of people over 65, (as compared to 4.5 times today and 7.3 times this figure in 1974-5)[2].



Tags: Workers' rights Workers compensation