2012 Reforms to NSW Workers Compensation Scheme The Safety Conference Rhett Slocombe Sparke Helmore Lawyers October 2012 adelaide brisbane canberra melbourne newcastle perth sydney upper hunter
Overview of what we are covering today Liability Lump sums Medicals Weekly benefits 2
Heart Attack & Stroke Section 9B provides no compensation payable in respect of any heart attack or stroke unless the nature of a person s employment gave rise to a significantly greater risk of the injury than had the worker not been in that employment Applies to injuries received post 19 June 2012 Aims to be fairer and more reasonable test for employers than s9a second reading speech Extensive definition of what are heart attacks or strokes 3
Disease Section 4 amended to provide that for diseases to be compensable employment must be main contributing factor to: Contracting disease Aggravation, acceleration, exacerbation or deterioration of disease Applies to injuries received on or after 19 June 2012 Aim is to exclude injuries where employment has limited connection with the disease 4
Journey claims To be compensable the worker requires a real and substantial connection between employment and injury received Applies to injuries received on or after 19 June 2012 Similar to South Australia Cusack v State of South Australia [2005] real and substantial connection found when policeman fell asleep resulting in MVA as he travelled home following back to back shifts 5
Lump sums Only available to workers assessed at greater than 10% WPI No s67 Only one assessment of permanent impairment per injury (covers s66, WID and commutation thresholds) Certification from insurer that it is satisfied worker has obtained legal advice or has waived right to independent legal advice for agreement Applies to claims made post 19 June 2012 6
Section 60 medical expenses Medical expenses are payable for 12 months after date of injury or 12 months from the last payment of weekly benefits, whichever is latter. This does not apply to seriously injured workers» Seriously injured workers degree of permanent impairment greater than 30% OR AMS says impairment not stable or ascertainable OR where insurer satisfied that the degree of impairment is likely to be more than 30% Can be payable for later period if weekly benefits become payable but only whilst weekly payments made ( e.g. - subsequent surgery) 7
Section 60 medical expenses Employer not liable for medical treatment unless prior approval given by insurer (not including treatment within 48 hours of injury or treatment exempt by WorkCover Guidelines) Guidelines will be important in relation to whether treatment appropriate and properly provided Employer is not liable for travel expenses for treatment at a place requiring more travel than reasonably necessary 8
Weekly Benefits adelaide brisbane canberra melbourne newcastle perth sydney upper hunter
New Regime: Application The weekly benefits amendments will apply to:» injuries on or after 1 October 2012» all current claims from 1 January 2013 10
New Regime: Definitions AWE = Pre-Injury Average Weekly Earnings Sum of: a. average ordinary earnings during the relevant period and b. for first 52 weeks of weekly benefits - permitted overtime & shift allowances After 52 weeks, AWE reduces to average ordinary earnings only Minimum AWE = set by regulations and may be different for different classes of worker, including part-time workers 11
New Regime: Definitions Ordinary Earnings 1. If in receipt of hourly rate - ordinary rate for ordinary hours plus piece rates, commissions & monetary value of non-pecuniary benefits OR 2. In any other case - actual earnings, plus piece rates and monetary value of non-pecuniary benefits 12
New Regime: Definitions Permitted Overtime and Shift Allowances Any overtime and shift allowance paid during the relevant period Relevant Period If employed by employer for 52 weeks = 52 weeks If employed by employer < 52 weeks = period of employment If worker voluntarily varies work (not due to injury) such that earnings are less, any period prior to variation is not included If worker is promoted, only the promoted rate will apply and not the earnings prior to promotion (provided promotion is not temporary) 13
New Regime: Definitions D = Deductible Amount The sum of the following four non-pecuniary benefits provided to a worker for the benefit of the worker or his/her family residential accommodation, use of a motor vehicle, health insurance and/or education fees Monetary value of a non-pecuniary benefits is determined by new s44f 14
New Regime: Definitions E = Earnings Post injury earnings, being the greater of (a) amount a worker can earn in suitable employment or (b) worker s actual current weekly earnings Base Rate of Pay Excludes incentives, bonuses, loading, monetary allowances, piece rates or commissions, overtime or shift allowances and any separately identifiable amounts not referred to in section 44G(1). The reason being that these are already included in ordinary earnings for pre-injury AWE and current weekly earnings for post injury earnings 15
New Regime: Definitions Max = Maximum weekly compensation amount under s34(1). Currently $1,838.70 (will be indexed) 16
New Regime: 1 st & 2 nd Entitlement Periods First Entitlement Period (0 to 13 weeks) New Section 36 No work capacity: lesser of a. AWE x 95% - D b. MAX D Current work capacity: lesser of a. AWE x 95% - (E+D) b. MAX (E+D) Second Entitlement Period (14 to 130 weeks) New Section 37 No work capacity: lesser of a. AWE x 80% - D b. MAX D Working 15 hrs/wk: lesser of a. AWE x 95% - (E+D) b. MAX (E+D) Working < 15 hrs/wk or capacity for work but not working: lesser of a. AWE x 80% - (E+D) b. MAX (E+D) 17
New Regime: 3 rd Entitlement Period Third Entitlement Period (131 to 260 weeks) - New Section 38 No capacity for work If insurer assesses worker to have no work capacity and likely to continue to indefinitely have no work capacity, the lesser of a. AWE x 80% - D b. MAX D Current capacity for work If insurer assesses worker to have a current work capacity and worker is working 15 hrs/wk or more, earning at least $155pw and assessed as likely to continue to indefinitely be unable to work more to increase earnings, lesser of a. AWE x 80% - (E+D) b. MAX (E+D) A worker does not cease to be entitled to the new s38 benefits because he/ she occasionally (not more than four weeks in any 12 week period) works more or less hours or earns more or less than that at the time s38 was applied for. 18
New Regime: > 260 weeks and Surgery After 260 weeks New Section 39 Weekly benefits are only payable after 260 weeks for workers with permanent impairment of at least 20% - payments at new s38 rates Special Compensation for Surgery New Section 41 If a worker requires surgery at a stage that is at least 13 weeks after the end of the 2 nd entitlement period, and during the 2 nd entitlement period he / she received the highest rate, he / she can receive up to an additional 13 weeks of weekly benefits at that rate 19
Work Capacity Assessments & Decisions Work capacity assessment - an assessment of a worker s work capacity pursuant to WorkCover Guidelines Work capacity decision a decision by an insurer on matters relating to a worker s work capacity Insurer s work capacity decisions are final and binding and can only be appealed or reviewed by:» Internal review by insurer» Review by WorkCover» Review by WorkCover Independent Review Officer (WIRO) from 1 October 2012, and» Supreme Court Recommendations by WorkCover and WorkCover IRO are final and binding on parties If a WCA has been conducted, the WCC has no jurisdiction to determine disputes about a work capacity decision 20
Existing Weekly Benefits Recipients Amendments apply to workers receiving weekly benefits prior to 19 June 2012 The amendments apply to all current recipients of weekly compensation after 1 January 2013 A Work Capacity Assessment (WCA) must be conducted for all existing claims by 1 January 2014 to determine further weekly benefits entitlement once new regime takes effect» Exception seriously injured workers (i.e. at least 30% permanent impairment) Any payments prior to commencement of amendments do not count towards five year weekly benefits cap 21
Existing Weekly Benefits Recipients Current Status Transitional Payments & New Regime Start Time First 26 weeks Remaining weeks of CWWR then move to new regime Section 37 Current rate until three months after WCA conducted, then move to new regime. In new regime, no weeklies if no work capacity and permanent impairment less than 20% Section 38 Section 40 Remaining weeks of s38 then move to new regime Current s40 method then three months after WCA conducted move to new regime When new regime commences, pre-injury AWE of $906.25pw will apply to all existing claims (transitional amount) 22
Examples Example 1: DOI 10 April 2012 Receives remaining first 26 weeks entitlement, i.e. 16 weeks at CWWR After 16 weeks expired: If WCA done and three months expired, pay at 2 nd entitlement period rate If not, pay at pre-amendment s37 rate until WCA conducted and three months expired, then pay at 2 nd entitlement period rate 23
Examples Example 2: DOI 20 July 2010 Currently totally unfit and receiving s37 Receives pre-amendment s37 rate until three months after WCA done, then pay at 2 nd entitlement period rate 24
Examples Example 3: DOI 13 March 2009 FFSD and receiving s38 (15 weeks received) Receives remainder of s38 entitlement, i.e. 37 weeks at preamendment s38 rate After 37 weeks expired: If WCA done and three months expired, pay at 2 nd entitlement period rate. If not, pay at pre-amendment s40 entitlement until WCA conducted and three months expired, then pay at 2 nd entitlement period rate 25
Examples Example 4: DOI 4 September 2005 Receiving $250pw pursuant to s40 Receives pre-amendment s40 rate (i.e. $250pw) until WCA conducted and expiration of three months thereafter, then pay at 2 nd entitlement period rate 26
Examples Example 5: DOI 1 June 2012 currently totally unfit Calculation of Transitional Payments AWE = $800pw Pre-amendment s36 rate = $640pw (CWWR) Pre-amendment s36 rate paid to 1 Dec 2012 (end of first 26 weeks) If WCA conducted and three months expired prior to 1 Dec 2012, move straight to new regime at 2 nd entitlement period rate If WCA not conducted or three months not expired, move to preamendment s37 rate until three months post WCA, then move to 2 nd entitlement period rate Calculation of New Entitlement Transitional AWE = $906.25pw No deductible amount No capacity: ($906.25 x 80%) - $0 = $725 Works 10hrs/pw earning $200pw: ($906.25 x 80%) ($200+$0) = $525 Works 20hrs/pw earning $400pw: ($906.25 x 95%) ($400+$0) = $460.94 27
Examples Example 6: DOI 20 June 2012 AWE = $1,000 D = $100 1 st entitlement period No capacity: ($1,000 x 95%) $100 = $850 Works 10hrs/pw: ($1,000 x 95%) ($250+$100) = $600 Works 20hrs/pw: ($1,000 x 95%) ($500+$100) = $350 2 nd entitlement period No capacity: ($1,000 x 80%) $100 = $700 Works 10hrs/pw: ($1,000 x 80%) ($250+$100) = $450 Works 20hrs/pw: ($1,000 x 95%) ($500+$100) = $350 3 rd entitlement period No capacity: ($1,000 x 80%) $100 = $700 Works 20hrs/pw: ($1,000 x 80%) ($500+$100) = $325 28
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