New South Wales: Amendments to Workers Compensation Legislation June 2012

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1 There are two primary pieces of legislation governing Workers Compensation in New South Wales: Workplace Injury Management and Workers Compensation Act 1998 The Workers Compensation Legislation Amendment Act 2012 NO 53, was passed in June This Act makes amendments to both of the above Acts. An additional Act, the Safety, Return to Work and Support Bill 2012, creates a new Board to oversee the operation of three authorities: WorkCover Authority, Motor Accidents Authority and Lifetime Care and Support Authority. Ai Group has developed a series of Fact Sheets to help employers to understand the changes, with a particular focus on the practical implication for workplaces managing workers compensation claims. Further information can be obtained by contacting the Ai Group BIZassist Infoline on This Fact Sheet contains information on most of the changes, with more detailed fact sheets provided where necessary and appropriate. Schedule 1 Weekly Payments of Compensation See separate detailed Fact Sheets. Staged implementation Schedule 1 Workplace Injury Management and Workers Compensation Act 1998 Rehabilitation and Return to Work Section 48 has been amended to provide greater clarity around the workers obligations to participate in return to work; this includes a new sub-section (2) which outlines what is meant by making reasonable efforts to return to work. A new section 48B has been inserted which prescribes when and how an insurer can: suspend or terminate weekly payments; or cease and determine the entitlement to weekly benefits. Requirements include processes to warn the worker and provide them with an opportunity to comply. The Act establishes that an inspector may issue an improvement notice to an employer they believe is in breach of the Act. A maximum penalty of 100 penalty units may be applied to employers who fail to comply with an improvement notice. Schedule 2 Lump sum compensation Note: Section 2.3 of the Act also amends s.261(2) of the Civil Liability Act Amendments have been made to Division 4 Compensation for non-economic loss. Amongst other things, amendment to 66(1) introduces a requirement that a person must have at least a 10% degree of permanent impairment in order to access lump sum compensation under this division. Related amendments have also been made to s.263, 280B, 314, and 322A of the Workplace injury Management and Workers Compensation Act August 2012 New South Wales Fact Sheet Page 1

2 Schedule 3 Damages for nervous shock A new section 151AD prevents a claim for damages for nervous shock to be made by relatives of an injured or deceased worker, on the basis that the relatives nervous shock is not a work injury. Schedule 4 Medical and related expenses A new section 59A in the limits payment for treatment, service of assistance. Generally, whilst there are some variations, this will be limited to either 12 months from the date of injury, or 12 months after weekly compensation has been ceased. A new section 60(2) determines that, in most cases, the employer will not be liable to pay treatment expenses unless there has been prior approval. This requirement for approval has a range of exclusions, including treatment provided within 48 hours of the injury. Sections 61 and 63A, which specify how rates are to be determined, have been amended. Schedule 5 Journey Claims Schedule 6 Heart attack and stroke injuries Schedule 7 Disease injuries Schedule 8 Commutation of compensation Schedule 9 Insurer licensing and transfer of claims New subsections (1A), (1B) and (6) have been inserted into section 87EA Preconditions to commutation. New subsections (2A) and (2B) have been inserted into 87F Commutation by agreement. Subsection 87H(2), relating to commutation agreements, has been amended. These provisions go to the operation of the insurance licensing scheme and are unlikely to be of any interest to most employers. August 2012 New South Wales Fact Sheet Page 2

3 Schedule 10 WorkCover Independent Review Officer To commence from 1 October 2012 Workplace Injury Management and Workers Compensation Act 1998 A new Part 3 will be inserted into Chapter 2, establishing a WorkCover Independent Review Officer. The Officer will have the following functions: Investigating complaints about insurers, made by workers; Reviewing work capacity decisions ; To inquire into such matters associated with the operation of the Workers Compensation Acts as the Review Officer considers appropriate, or may be referred to the Review Officer; To encourage establishment by insurers and employers of complaint resolution processes; and Other functions conferred by the under the Workers Compensation Acts or other Acts. Schedule 11 Miscellaneous amendments Workplace Injury Management and Workers Compensation Act 1998 Insurers disputing claims An amended section 74 makes amendments to the provisions associated with the insurer advising the claimant of the reasons for disputing a claim. Miscellaneous changes to provisions around powers of entry Changing authorised officer to inspector in a number of sections. Division 3 Special provisions for costs in compensation and damages assessment matters Replacing sections 341, 342, 343 and 345 with the following: 341 Costs (1) Each party is to bear the party s own costs in or in relation to a claim for compensation (2) The commission has no power to order the payment of costs to which this Division applies or to determine by whom, to whom or to what extent costs to which this Division applies are to be paid. August 2012 New South Wales Fact Sheet Page 3

4 Schedule 12 Savings and transitional arrangements Various transitional arrangements have been established in this schedule. Of most interest to employers is section 3 which outlines: (1) Except as provided by this Part or the regulations, an amendment made by the 2012 amending act extends to: (a) An injury received before the commencement of the amendment; and (b) A claim for compensation made before the commencement of the amendment; and (c) Proceedings pending in the Commission or a court immediately before commencement of the amendment (2) An amendment made by the 2012 amending Act does not apply to compensation paid or payable in respect of any period before the commencement of the Safety, Return to Work and Support Board Bill 2012 This Bill establishes the Safety, Return to Work and Support Board which will consist of 7 members; the Chief Executive Officer and 6 members appointed by the Governor on the recommendation of the Minister. The Board has been appointed in relation to relevant authorities, defined in the Bill as: WorkCover Authority; Motor Accidents Authority; and Lifetime Care and Support Authority. The board will have the following functions: To determine the general policies and strategic direction of each relevant authority To oversee the performance of each relevant authority To advice the minister and the CEO on any matter relating to the relevant authorities or arising under their legislation Such other functions as are conferred or imposed on it by any legislation In exercising its functions, the Board is: to ensure, as far as is practicable, that the activities of the relevant authority are carried out properly and efficiently; and to have regard to the objects (if any) of compensation and other related legislation The Board also has the function of determining investment policies for the investment of a range of relevant funds. The Bill also allows for the Board to establish Board Committees and for the Minister to establish Advisory Committees. Various other administrative matters, including amendments to relevant legislation are dealt with in this Bill. The Board has been appointed; it will be chaired by Michael Carapiet. A selection process is currently underway to select a new CEO for WorkCover to guide the transition and reform process. August 2012 New South Wales Fact Sheet Page 4

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