Government considers rejig of compo laws

VICTORIA is considering whether to scrap its workplace compensation laws and implement a scheme that could cost nearly $150 million more.

VICTORIA is considering whether to scrap its workplace compensation laws and implement a scheme that could cost nearly $150 million more.

A leaked draft of a Government review of the laws governing WorkCover makes 133 recommendations that would comprehensively reshape Victoria's scheme.

The author of the report, Peter Hanks, QC, says the current system is "overly complex" and that the Accident Compensation Act and the Accident Compensation (WorkCover Insurance) Act should be "recast" into one comprehensive act. Mr Hanks recommends the new scheme be named "WorkSafe Victoria".

The report is the result of a review commissioned in December by WorkCover Minister Tim Holding.

It is believed to be now before a Stakeholder Reference Group made up of representatives of unions, employer groups, legal associations and the Australian Medical Association. A final version of the report is expected to be made public later this year.

Mr Hanks says in the report that some of the provisions in the current laws are "spent or obsolete" and cites "anomalies and inconsistencies" that he says frustrate the laws' application.

"It is fair to say that the legislation itself is a complex piece of legislation that has been amended numerous times over the years," said Craig Sidebottom, a senior associate at plaintiff law firm Slater & Gordon.

"We would hope that the review would lead to some simplification and streamlining of the act."

Workcover's profits reached nearly $1.2 billion last year. Much of that money came from returns on WorkCover investments that may be used to subsidise the reforms.

But Opposition Leader Ted Baillieu said most of the cost increases would probably fall to employers, who would be hit with higher premiums.

Among other things, the recommendations include:

Higher maximum payments for those who have suffered injuries at work and amendments to ensure workers with long-term disabilities are paid superannuation.

An increase to the maximum payment for a work-related death from $257,210 to $468,720.

An increase to the minimum benefit for psychological impairment due to injury, but no change to the threshold that triggers the payment, which will remain at a 30% loss of function.

An expanded bureaucracy including a WorkSafe Review Panel to be a final arbiter of disputes.

Some recommendations, such as the operation of the review panel, are uncosted, but a preliminary cost estimate of selected recommendations is between $85 million and $146 million. About $3 million of savings are identified.

The Victorian Government under Premier John Brumby and his predecessor, Steve Bracks, has cut WorkCover premiums for five consecutive years.

In the most recent state budget, handed down in May, the Government offered a 5% reduction in premiums, which it estimated would save businesses $88 million this year.

A Government spokesman, Matt Nurse, said Victorian employers would have saved more than $2 billion by the end of this year thanks to the cuts to WorkCover premiums.

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