Accident Compensation Amendment Bill 2009

Introduction Print

EXPLANATORY MEMORANDUM

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BILL LA INTRODUCTION 9/12/2009

General

The Bill will amend the Accident Compensation Act 1985(the Act) and the Accident Compensation (WorkCover Insurance) Act 1993.

The Bill updates the current legislation relating to accident compensation by—

  • removing obsolete provisions;
  • updating provisions;
  • inserting new provisions to introduce reforms to the accident compensation scheme;
  • providing for improved and accessible benefits and better rehabilitation and return to work outcomes;
  • improving the operation of the legislation

Main Changes

The following is a summary of the main changes to the current Acts—

  • WORKERS' ENTITLEMENT TO COMPENSATION. The provisions in the Act that determine how pre-injury earnings are calculated are amended by clause 4 to double the period for which a worker or a deceased worker's dependants may receive weekly payments of compensation that take account of preinjury overtime and shift allowances. Theapplication of the scheme is extended to municipal councillors, while its application to outworkers in the textile industry and jockeys while competing in, or training for, mixed sports gatherings, is clarified. The operation of current section 82(2A)—known as the "stress exclusion"—is also clarified and the types of management actions that may activate the exclusion is more clearly defined. Penalties in the form of a reduction in compensation payments will be introduced where the relevant injury was caused by the worker driving in the workplace while intoxicated by alcohol or other drugs.
  • ENSURING TIMELY ACCESS TO BENEFITS. Clauses19, 20 and 21 provide for earlier decision making and provide a more proactive role for WorkSafe and self-insurers in managing claims. Clause 19 reduces the formalities for making a claim, by providing that a claim will now remain valid unless WorkSafe or the employer is unable to clarify any information omitted or to remedy a defect that relates to a material defect or omission. The clause also amends the process for lodging a claim for compensation, to provide that a claim for compensation in the form of weekly payments can be made by way of either serving a claim that states a ceased work date, or a claim that is accompanied or followed by a section 105 medical certificate. Clause 19 also provides for a more efficient claims process, by requiring WorkSafe and self-insurers to determine liability for claims for both weekly payments and medical and like services within 28 days of receipt of a claim, even in the absence of a section 105 medical certificate. Clause 20 introduces a 10 day time period in which employers will be required to forward the initial medical certificate to WorkSafe. However, payments of weekly benefits will not commence until the worker has provided a section 105 medical certificate. Clause 20 also amends the penalty that applies to employers who fail, without reasonable cause, to forward a claim for weekly payments within the required time frame of 10 days.
  • ANTI-DISCRIMINATION. Clause 23 protects injured workers and applicants for employment from discrimination by employers and prospective employers for pursuing claims for compensation or notifying of a workplace injury. The new discrimination provisions will generally align with the provisions prohibiting discrimination under the Occupational Health and Safety Act, with appropriate modifications to allow for the different compensation context within which such remedies are offered. Clause 23 broadens the range of conduct that is considered to be discriminatory in relation to the criminal offence for discrimination, provides a broader range of remedies for discriminatory conduct and provides workers and applicants for employment with a right to request that WorkSafe bring a prosecution in relation to a breach of the anti-discrimination offence. Clause 23 also introduces a new civil action allowing workers (and applicants for employment) to bring a civil proceeding in the Industrial Division of the Magistrates' Court for an order against an employer or prospective employer who has engaged in discriminatory conduct. The anti-discrimination provisions are not intended to affect any return to work obligations under the Act or subordinate instruments made under the Act in relation to workers or employers.
  • BETTER INCOME REPLACEMENT. Clause 31 increases the proportion of pre-injury earnings that workers may receive in compensation. Clause 37 provides for workers who have received 52 weeks of compensation payments to also receive compensation in the form of superannuation contributions for as long as they continue to receive weekly payments. Thecontributions will be a percentage of their weekly payments. Clause 31 also provides for workers who have returned to work after being injured and no longer receive compensation to receive up to 13weeks of weekly payments while recovering from any necessary subsequent surgery for that injury. Clauses 34 and 35 improve the administration and availability of compensation for workers who have returned to work for at least 15 hours per week and, because of their work-related injury, are unlikely to be capable of increasing their earnings.

Clause 43 introduces a statutory right for an employer, who is not a self-insurer, to seek written reasons for the Authority's decisions to accept or reject liability for certain compensation claims.

  • TREATMENT EXPENSES. The Bill introduces a power for the Authority to issue guidelines identifying services for which prior approval should be sought before the service is provided. Failure to obtain prior approval of the service identified in the guidelines will not necessarily disentitle a service provider from payment for services rendered if the service provider can still demonstrate that the costs of the services were reasonable and compensable under the Act. The Bill also introduces a discretionary power for the Authority or self-insurer to require prior approval of costs which relate to purchase or modifications to a car or home and relocation costs. Failure to obtain prior approval of these costs will, unless otherwise determined by the Authority or self-insurer, mean that the Authority or self-insurer is not liable to pay for those costs. The Bill also introduces a process to be followed for ceasing entitlement to compensation under sections 99(11) and (12) of this Act where the worker must be given at least 28 days written notice, including the reasons for giving the termination notice and the date the entitlement will cease. The Bill also repeals co-ordinated care programs from the date of commencement of Part 5, however co-ordinated care programs existing prior to commencement date will continue to run until expiry. The Bill also introduces a provision to enable the Governor-in-Council, by Order to fix limits on contributions to be made by workers towards the cost of supported accommodation, together with the definition of "supported accommodation".
  • LUMP SUM BENEFITS. Clause 54 aligns the maximum amount of lump sum benefits payable with the maximum amount available at common law for pain and suffering damages for workers with a serious injury. The new maximum amount will be $503000 (indexed annually). The increase in lump sum benefits will apply to workers with a whole person impairment of greater than 80%, and will apply proportionately for workers assessed between 71% and 80% whole person impairment. Clause 54 also increases (by 10%), the amount payable to workers with accepted spinal impairments, and increases the lump sum benefit awarded for psychiatric impairments of 30% to 70%, to the same level of impairment benefit for a physical impairment (there is already parity for psychiatric and physical impairments greater than 70%). Further, clause 54 deems a date for gradual process injuries (injuries that arise through employment or because of the nature of employment incrementally over time) to apply in relation to the calculation of claims for lump sum benefits.
  • ACCESS TO JUSTICE FOR SERIOUSLY INJURED WORKERS. Clause 57 requires an authority to access medical information relevant to an application to accompany a serious injury application made by a worker under section 134AB or135A. This authority will replace the current voluntary Form D authority. A worker's medical authority will effectively be revoked if the worker withdraws their serious injury application, or the matter otherwise resolves. Clause 57 also amends the existing sections regarding the determination of whether party/party legal costs are payable, to provide that weekly payments received by a worker after the making of a statutory counter offer (which is part of the mandatory negotiation process for common law matters following the granting of a serious injury certificate to a worker) are to be disregarded for the purpose of determining payment of party/party legal costs. Clause 57 also clarifies that no finding made on an application for leave to bring proceedings for serious injury shall give rise to an issue estoppel. This means that if a worker is granted or awarded serious injury status for an injury, at any later common law damages trial relating to that injury all issues are be open to a defendant to contest, other than the worker's right to bring a damages claim.
  • Clauses 58 and 62 enable a worker's serious injury application under section 134AB, 135A or135BA to continue (inparticular circumstances) following the worker's death from a cause unrelated to the injury from which their claim arises. The legal representative of the deceased worker's estate will be able to continue the application on behalf of the worker's estate. However, the application can continue only where the worker had one or more dependants or had left a person or persons who at the time of the worker's death would have been wholly or partly dependant on the earnings of the worker, but for the incapacity of the worker due to the work-related injury or disease of the worker or the injury or disease which caused or materially contributed to the death of the worker.
  • PAYMENTS FOR FAMILY MEMBERS FOLLOWING WORK-RELATED DEATHS. The regime of benefits payable to the family of a worker who dies from a work-related injury will be expanded by several amendments. Themaximum amount of lump sum compensation payable to the dependants of a deceased worker under section 92A is increased from $273970 to $503000. The Magistrates Court is empowered to order WorkSafe or a self insurer to pay the non dependant family members of a deceased worker , up to $30000, where the worker has died leaving no dependants, andthose persons have suffered financial hardship from the incursion of reasonable expenses as a result of the worker's death. The eligibility age for the dependent child weekly pension is increased from 21 to 25 years, where the recipient is a full-time student. The same eligibility rule is to apply to fulltime apprentices. Any child of a deceased worker who was unborn at the time of the worker's death is to be eligible for the same benefits as other dependent children of deceased workers. Weekly pensions payable to both dependent children and partners are to be indexed on an annual basis.

Several other amendments will improve the efficiency of the claims process and ensure that family members of a deceased worker are in a position to receive benefits as soon as possible after the death. Clause 71 will introduce a new provisional payment regime, wherein WorkSafe or a self insurer may pay for the worker's medical and funeral costs or the family's counselling costs before it has determined liability for a proper claim for compensation. They may also pay the partner of a deceased worker a weekly pension for up to 12 weeks from the worker's death on the same provisional basis. The mandatory requirement that the court determine lump sum compensation claims under sections 92 and 92A will be removed, except where the claimant is a minor or a person with a disability or is unrepresented. Clause 68 amends current section 92A to deem a partner who resided with the deceased worker at the time of his or her death to have been dependent on the earnings of the deceased worker. This will remove the need for such partners to satisfy the current two-step eligibility test for benefits.

  • TRANSPARENCY IN DECISION-MAKING AND EFFICIENT RESOLUTION OF DISPUTES. Section 43 of the Act will be amended to remove the current limits on the Magistrates' Court jurisdiction to deal with disputes over statutory benefits. Division 1A will be amended to strengthen the governance structures of the Accident Compensation Conciliation Service, ensure that the Service operates in a transparent and accountable manner and expand the functions and powers of the Senior Conciliation Officer Section. Anumber of amendments to Divisions 2 and 3 will improve the efficiency and fairness of both the conciliation and medical panel processes.

Clause 91 introduces a new Division 3AA in Part IV of the Act. The new Division 3AA provides for a legislated review process which provides an employer the right to seek internal review by the Authority of its agent's decision to accept a claim for compensation on two grounds. The two grounds for review are—

  • theworker was not a worker as defined under this Act; or
  • the employer was not the correct employer of the worker at the time of the worker's injury or death.

The two grounds for review do not apply to questions of whether the worker was injured in the course of employment.

The outcome of the internal review process will be limited to premium impacts and will not affect any entitlements already granted to a worker as a result of the agent's acceptance of the claim for compensation.

During the review and appeal process, the employer's liabilities will continue and the worker will continue to receive the entitlements. If a decision is made by the Authority to overturn its agent's acceptance of the claim, or the Supreme Court decides against the Authority's confirmation of its agent's decision, the worker will be given a period of notice prior to the cessation of the entitlements.

If the employer appeals the Authority's decision to confirm its agent's acceptance of the claim and the worker is joined as a party in the legal proceedings, the Authority will be liable for the worker's reasonable legal costs.

  • EMPLOYER PREMIUMS. Amendments to the calculation of premium and the treatment of related businesses under the Accident Compensation (WorkCover Insurance) Act 1993 further harmonise the legislation with the Payroll Tax Act 2007 and workers compensation legislation in New South Wales. Penalties for promoting, participating in or benefitting from premium avoidance schemes are increased and WorkSafe's ability to collect unpaid premium is strengthened.

Amendments to the Accident Compensation (WorkCover Insurance) Act 1993 will establish a formal scheme for the review of decisions about the premium payable by an employer.

  • RECOVERIES. Clause 121 effectively prohibits the use of "hold harmless" clauses between employers and third parties by rendering void a term of any contract between a third party and an employer that requires the employer or has the effect of requiring the employer to indemnify the third party in respect of any liability that the third party has or may have in relation to the recovery provisions under section 138 of the Act.
  • SELF INSURANCE. Clause 126 amends various elements of the procedures and requirements relating to self-insurers, in particular regarding the process for employers who become self-insured and for self-insurers who cease to be self-insured. The main changes in clause 126 are as follows—
  • WorkSafe will have flexibility in rewarding higher performing self-insurers, to allow subsequent approvals to be for a period of six years.
  • Introduction of a fee for the pre-application eligibility process for employers who want to apply to become a self-insurer, and modification of the formula for the application fee to enable an estimate of remuneration to be used in circumstances where the employer has no remuneration for the previous year.
  • WorkSafe will have a discretion to extend the term of approval for self-insurers who undergo corporate restructures, such as the take-over or divesting of subsidiary companies.
  • Self-insurers to be able to acquire the liability for and management of the "tail claims" (those claims relating to injuries incurred prior to an employer becoming self-insured or taken over by a self-insurer) of an acquired company that becomes a subsidiary of the self-insurer.
  • New self-insurers may elect to assume responsibility for the management and liabilities of their worker's tail claims (claims relating to injuries or deaths incurred before the date the employer's approval as a self-insurer commenced). New self-insurers that elect to assume tail claims liabilities will be required to hold a bank guarantee equivalent to 150% of the amount of the assessed tail claims (adopting the approach endorsed by the national Heads of Workers Compensation Authorities).
  • General alignment of the conditions for all self-insurers that cease to be self-insured, bringing the requirements for those self-insurers that return to scheme-insurance into alignment with those that exit self-insurance to become self-insured under Comcare.

Clause 126 has a delayed commencement date of 1 July 2010. This is because a number of the amendments in clause 126 can only take practical effect at the commencement of a new financial year. It is operationally expedient for self-insurers and the Authority that all amendments that relate only to self-insurers commence on the same date.