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 MARGARET KELLY Covering all bases in compo review

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Number of posts : 10
Registration date : 2007-06-04

PostSubject: MARGARET KELLY Covering all bases in compo review   Mon Jun 04, 2007 1:32 pm

The advertiser. Monday April 30th 2007

WORKCOVER is in the news again. The Minister for Industrial
Relations, Michael Wright, has announced a review of the WorkCover
Scheme, This review will consider proposals which, he says, will look
to achieve a scheme that is fully funded, that is fair to workers, and
enables the earliest possible return to work but also is affordable to

The most specific of the three objectives of the review is in
respect of the average employer levy rate. The aim is to reduce this
from 3 per cent to within a range of 2.25 per cent and 2.75 per cent by
July 1, 2009. Neither of the other objectives are as specific, which
tells me that that is the one that is most likely to occur. To reduce
the average employer levy rate and to fully fund the scheme as soon as
possible surely weakens the aim of fair financial support to injured

The media release stated that the structure of the scheme
administered by WorkCover had not been reassessed since its inception.
However, Mr Wright, as minister, established the Stanley Review after
the Labor Government came to power in 2002. The Stanley Review,
conducted by the former president of the corkers Compensation Tribunal
and the Industrial Court, Judge Brian Stanley, was delivered shortly
before Christmas 2002 with the minister proposing to introduce
legislative change in 2003.

Before that there were significant changes to the Workers
Rehabilitation and Compensation Act. Rights to common law claims were
removed in 1992 and there was a major overhaul of dispute resolution in

We are now having another review. It remains to be seen what
legislative changes will be made as a result. The proposals from the
WorkCover Corporation, set out on the website of the Department of
Premier and Cabinet, seem to have the primary aim of reducing the
unfunded liability and reducing costs to employers.

Key to this are two measures. Firstly, the proposal to reduce
initial income maintenance payments to injured workers by an immediate
step-down in weekly payments to 95 per cent of average weekly earnings
with a further step-down at 13 weeks to 75 per cent of average weekly
earnings, to bring us more in line with interstate schemes, in
particular, Victoria and Queensland. It is also proposed to cap the
maximum average weekly earnings payable to $1190, to be indexed.

The other significant proposed change to weekly payments is for
work capacity reviews to occur at the end of the second year after
injury, to reflect the Victorian scheme. The assumption is that after
two years there is no on-going entitlement to income maintenance unless
a qualification can be established. The aim is to ensure early return
to work, and report provides statistical evidence that the relative
performance of South Australia in area of return to work is poor.

It is not all gloom and doom for injured workers. There are some
increases proposed in the level of lump sum financial support to the
seriously injured. Presumably this will be balanced by the application
of a disability threshold similar to the Victorian scheme which must be
achieved before any lump sum is payable. There is no proposal to
reintroduce common law rights to claim negligence.

Changes are proposed to the dispute resolution system, including
medical review panels to make final and binding decisions about medical

I suspect that there will be legislative change as an outcome of
this review because the level of the unfunded liability and the desire
to reduce the employer levy rate makes the revision of the scheme an
imperative. It is perhaps not a coincidence that the review was
announced by the Industrial Relations Minister in company with the

Margaret Kelly Is president of the Law Society of South Australia.
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