Significant changes to the “fundamentally broken” WorkCover scheme

On 19 May 2023, Victorian Former Premier Daniel Andrews announced a number of significant changes to the “fundamentally broken” WorkCover scheme, with the main objective being to promote and achieve better outcomes for both workers and businesses.

These significant changes include:

1. The establishment of ‘Return to Work Victoria’ – a new body that will assist injured Victorians (including workers experiencing work related stress) with returning to work.
2. The introduction of a ‘Whole Person Impairment Test’ for claims that receive weekly benefits beyond two-and-a-half years. If an injured worker is assessed as having whole person impairment of 20%, they will continue to receive payments beyond two and-a half years.
3. Workers experiencing stress and burnout will now be eligible for provisional payments for 13 weeks to cover medical treatments (as opposed to accessing weekly benefits from WorkCover). However, psychosocial supports will be provided to facilitate their return to work.
4. Premiums paid by organisations will move to an average of 1.8% of remuneration to restore and promote the financial viability of the WorkCover scheme.

Former Premier Daniel Andrews has stated that planned eligibility changes will take effect in 2024, and will apply prospectively. Therefore, Victorian workers who are currently receiving payments from WorkCover will continue to do so and will not be impacted by the reform.

Moreover, the announcement made by Former Premier Daniel Andrews highlighted the increase in mental injury claims since WorkCover’s inception over thirty years ago. These mental injury claims currently represent up to 16% of new claims, and, as acknowledged by Former Premier Daniel Andrews, has been a driving force in formulating the above changes to build a “modern WorkCover scheme.”

It has been foreshadowed that a legislated review will occur no earlier than three years after the changes have come into effect to assess whether the reforms are working as intended by the Andrews Labour Government.

Since the announcement was made, the Victorian Government has introduced the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023 (the Bill) to Parliament.

It is expected that the Bill will be enacted in early 2024.

It is important that Victorians are aware of these changes, and in particular, injured Victorians should seek advice from a legal practitioner to ensure that their needs are being safeguarded and they are taking proactive steps to mitigate the negative impacts of long-term unemployment.

For more information, please contact our Workers Compensation Lawyers Bree Knoester and Anastasia Nagorny on 03 9070 9816.