Sharp decline in rate of injured employees returning to work, review finds
One in four injured employees are not returning to their jobs despite this being the key aim of a state government overhaul of the workers compensation scheme.
An independent review of the scheme undertaken this year has revealed the return-to-work rate has plummeted from 96 per cent in 2016 to 73 per cent in 2019.
The NSW government reformed the scheme in 2012 to address a $4 billion deficit. When it introduced the changes, the O’Farrell government said a key aim was to improve the return-to-work rate. The changes included removal of claims relating to travelling to and from work, and cuts to benefits for injured workers. Weekly benefits were capped at five years.
The State Insurance Regulatory Authority commissioned external consultant Janet Dore, who was supported by Ernst and Young actuaries to conduct an independent review of the scheme.
The review, released last week, has also found that the main state government workers compensation insurer EML had an “alarming” rate of staff turnover. It is losing 22.7 per cent of its employees every month. The review was also critical of “deteriorating performance trends” at EML, including poor file management and a poor understanding of, and skills required for, achieving better outcomes.
NSW Greens MP David Shoebridge said injured workers were constantly being handed from one case manager to another “and no one has any understanding of their individual needs or history”.
“When the main workers compensation insurer is losing almost a quarter of its staff every month it is little wonder the system is in a mess,” he said. “The Liberal government savaged the workers compensation system in 2012 and they said at the time a key reason for the reforms was to improve return-to-work rates.
“We are now seeing return to work rates at an almost historic low, with injured workers spending longer getting back on their feet or back to work.”
Labor MP Daniel Mookhey said the review had also found that decisions on workers compensation claims were not being made within the 12-week legal time frame. Only 54 per cent of cases were being decided within that limit, he said.
And while state government agency icare had projected a loss of $481 million in the last financial year, it had “actually lost an astonishing $874.3 million”.
“icare for months comprehensively failed to make workers compensation decisions within the legal timeframe,” Mookhey said. “It’s outrageous that this government stood by and did nothing while return to work rates effectively collapsed.”
The State Insurance Regulatory Authority regulates icare, a NSW government insurer that provides workers compensation and care for employers and injured workers, primarily through contracted insurer EML.
Customer Service Minister Victor Dominello said he welcomed the Dore report and the commitment of icare and the regulatory authority to act on the findings “in a comprehensive and transparent manner”.
“This level of rigorous, independent analysis simply would never have happened without the reforms undertaken by this government in 2015,” he said. “We’d be stuck with the old Workcover model which consistently produced deficits, premium increases and poor return-to-work rates.”
The 2012 reforms also established the WorkCover Independent Review Office as a statutory office charged with reviewing insurers’ work capacity decisions.
Victorian public servant Simon Cohen will replace Kim Garling, the inaugural chief of the independent watchdog, in February. Mr Garling has been described as an “honest broker”.
A NSW government statement said Mr Cohen has more than 20 years’ experience in complaints handling and dispute resolution as the national Telecommunications Industry Ombudsman from 2010 to 2015 and director of Consumer Affairs Victoria from 2015 to 2019. He is currently working in the Victorian public service as Deputy Secretary Regulation, Department of Justice and Community Safety.
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