2018 amendments to the Workers Compensation Acts

On Wednesday, 17 October 2018 the Workers Compensation Legislation Amendment Bill 2018 was passed by the NSW Parliament without amendment. The Bill was debated in the Legislative Assembly on 17 October and, notwithstanding a number of amendments proposed by the opposition, it was ultimately passed without amendment. The Bill was assented to on Friday, 26 October 2018 however a number of amendments have not yet come into effect and await proclamation.

In summary

• Schedules 1 through to 3 of the Bill (which relate to the calculation of PIAWE’s and the jurisdiction of the Workers Compensation Commission with respect to work capacity decisions and permanent impairment disputes), as well as clauses 7.2 and 7.3 of Schedule 7 (which relate to various miscellaneous provisions) commence upon proclamation;
• Schedule 5 (which relates to indexation) commences on 1 December 2018; and
• The remaining schedules (schedules 4, 6 and 8, as well as clause 7.1 of Schedule 7) which relate to information sharing; the motor accidents scheme; miscellaneous provisions; and savings and transitional provisions) commenced on the date of assent (ie 26 October 2018).

Perhaps the most significant of the amendments concern the restoration of the Workers Compensation Commission’s jurisdiction to determine weekly payment disputes (including work capacity decisions) and providing the Commission with the power, subject to regulation, to determine permanent impairment disputes without referring the worker to an Approved Medical Specialist (AMS).

The stated objective of the Bill is to simplify the workers compensation dispute resolution process; to establish the Commission as the central dispute resolution body in the scheme; to improve and clarify key legislative provisions to reduce and prevent disputes; to modernise the operation of the relevant legislation; and to enable SIRA to more effectively undertake its regulatory and oversight functions.

The Bill seeks to achieve these objectives by:

Abolishing the existing system of review of work capacity decisions (ie mandatory internal review, merit review and procedural review) and restoring the jurisdiction of the Workers Compensation Commission to determine all disputes concerning weekly payments of compensation (including work capacity decisions).

The Bill does this by:

• Removing the merit review functions of SIRA and procedural review functions of WIRO; and
• Removing section 43(3) of the Workers Compensation Act 1987 (WCA) and the note to section 105(1) of the Workplace Injury Management and Workers Compensation Act 1998 (WIM), which specifically exclude the jurisdiction of the Commission to hear work capacity disputes.

Workers retain the option of applying to an insurer for an internal review of the insurer’s decision (with this review to be completed in 14 days) however an internal review will no longer be mandatory. Where a worker is not satisfied with an insurer’s work capacity decision he/she may commence proceedings in the Workers Compensation Commission to have the dispute determined.

The Bill provides that a work capacity decision is stayed while the Workers Compensation Commission undertakes a review of that decision provided the worker lodges a dispute in the Commission within a specified time-frame.

Any review of a Work capacity Decision in progress prior to the commencement of the amendments will remain subject to the current legislative provisions, with the savings and transitional provisions providing for a 6 month transitional period for such reviews to be completed (subject to amendment by the regulations).

This part of the Bill (schedule 1) commences on a date to be appointed by proclamation.

Enabling insurers to combine notices involving a liability dispute (formerly section 74 notices) with notices advising of a reduction or discontinuance of weekly payments of compensation (formerly section 54 notices) into one dispute notice [section 78(2), WCA].

Section 54 of the WCA and section 74 of the WIM act as they currently stand are omitted and replaced by sections 78 and 79, which are to be inserted into the WIM.

The three month notice requirement for the reduction or discontinuance of weekly payments under a work capacity decision is retained as are the other notice requirements currently contained in section 54 of the WCA.

This part of the Bill (schedule 1) commences on a date to be appointed by proclamation.

Schedule 2 of the Bill provides the Workers Compensation Commission with jurisdiction to award permanent impairment compensation without referral to an Approved Medical Specialist.

This amendment will enable Arbitrators to make determinations with regard to permanent impairment by removing section 65(3) of the WCA (noting section 65(3) provides that all permanent impairment disputes are to be referred to an Approved Medical Specialist (AMS) prior to the Commission awarding permanent impairment compensation).

Decisions made by Arbitrators with regard to permanent impairment are deemed to be a binding assessment for the purposes of section 322A of the WIM (noting section 322A provides only one assessment may be made of the degree of permanent impairment of an injured worker).

The Bill provides that the jurisdiction of the Commission to determine permanent impairment disputes may be qualified by regulation and that regulations may prescribe circumstances where a dispute is not to be referred to an AMS or, conversely, there is a mandatory referral to an AMS.

Schedule 2 of the Bill commences on a date to be appointed by proclamation.

Schedule 3 of the Bill provides amendments relating to pre-injury average weekly earnings. The stated intention of these amendments is to simplify the current pre-injury average weekly earnings regime. Significantly, the Bill provides that shift and overtime allowances are no longer excluded from PIAWE after 52 weeks of payments.

While the Bill removes section 35 of the WCA (which defines earnings to mean the greater of the amount the worker is able to earn in suitable employment or the worker’s current weekly earnings), it provides an amended definition of current weekly earnings such that the current weekly earnings of a worker in a given week is to be the greater of the worker’s actual earnings or his/her capacity to earn in suitable employment [clause 8 of Schedule 3. Refer also clause 9 of Schedule 3].

The Bill also provides that the worker and insurer may reach an agreement with respect to pre-injury average weekly earnings, with such agreements to be the subject of regulation.

Schedule 3 of the Bill commences on a date to be appointed by proclamation.

Schedule 4 of the Bill provides amendments relating to information sharing. The amendments are aimed at enabling SIRA to improve its data information, collection and monitoring capacity. The Bill provides that SIRA, WIRO and insurers are authorised to exchange data concerning policies of insurance, claims, complaints and other related matters. The Bill also provides for the imposition of mandatory reporting obligations on insurers both in terms of the provision of information and with regards to notification of breach.

Schedule 4 of the Bill commenced on 26 October 2018 (the date of assent).

Schedule 5 of the Bill applies to indexation and enables SIRA to prescribe the latest index numbers applicable to weekly payments, death benefits and permanent impairment compensation by an order published on the NSW legislation website.

Schedule 5 of the Bill commences on 1 December 2018.

Schedule 6 of the Bill seeks to address unintended consequences arising from the implementation of the Motor Accident Injuries Act 2017 (which applies to persons injured in motor vehicle accidents on or after 1 December 2017) and the WCA.

The Bill aims to limit the extent to which workers compensation payments may be deducted from damages received from a CTP insurer as a result of a motor vehicle accident (CTP damages).

The amendments provide that a claimant who receives workers compensation benefits as well as CTP damages for the same injury, will only need to repay to the workers compensation insurer the amount of weekly payments received. The claimant will not need to repay from his/her CTP damages the amounts paid by the workers compensation insurer for medical and treatment expenses (including rehabilitation and care expenses).

In a similar vein, a claimant who recovers CTP damages as well as permanent impairment compensation under section 66 of the WCA will only need to repay the section 66 sum to the workers compensation insurer if that worker has also recovered damages for non-economic loss (ie pain and suffering and loss of amenities of life) under the Motor Accident Injuries Act 2017.

Finally, the Bill provides that workers injured in a motor vehicle accident who are entitled to receive workers compensation benefits maintain an entitlement to reasonable and necessary medical, treatment and care expenses from the CTP insurer should workers compensation entitlements cease.

Schedule 6 of the Bill commenced on 26 October 2018 (the date of assent).

Schedules 7 and 8 of the Bill contain savings and transitional provisions (schedule 8) and miscellaneous amendments (schedule 7).

The amendments in schedule 7.2 and 7.3 provide that:

• Mandatory information employers must provide to their employees regarding workers compensation may be delivered electronically (rather than in the form of a poster as currently required) – clause 7.3 of Schedule 7;
• Injured workers who suffer an injury that meets the definition of a ‘catastrophic injury’ as specified in the Workers Compensation Guidelines are not able to commute their entitlement to medical and treatment benefits under section 87AE of the WCA. This amendment is intended to ensure that the small cohort of workers who suffer a ‘catastrophic injury’ remain entitled to receive medical and treatment expenses under the workers compensation scheme even if they commute their weekly benefit entitlements under section 87AE – clause 7.2 of Schedule 7; and
• The Minister may appoint up to 5 members to the SIRA board [section 18(2)(c) of the State Insurance and Care Governance Act 2015] – clause 7.1 of Schedule 7.

Clauses 7.2 and 7.3 of Schedule 7 commence on the date of proclamation. Clause 7.1 of schedule 7 commences on the date of assent.

Schedule 8 contains saving and transitional provisions that govern the application of the 2018 amendments to current and existing claims. Generally speaking and with some exceptions, these provisions provide that:

• The amendments to schedules 1-3 do not apply to certain cohorts of workers – namely, coal miners; persons suffering from a dust disease for which the Workers Compensation (Dust Diseases) Act 1942 applies; and volunteer fire-fighters and emergency rescue service personnel;
• The amendments to schedule 2 (which grant the Workers Compensation Commission jurisdiction to determine permanent impairment disputes, subject to regulations) do apply to ‘exempt’ workers [ie police officers, paramedics and fire-fighters], however schedules 1 and 3 do not;
• Otherwise, the 2018 amendments extend to: an injury received before the commencement of the amendments; a claim for compensation made before the amendments; and proceedings pending in the Workers Compensation Commission or Court immediately before the commencement of the amendments;
• The amendments do not apply to compensation paid or payable in respect of any period before the commencement of the amendments; and
• In relation to work capacity decisions the amendments do not apply during the ‘transitional review period’, being a period of 6 months commencing on the day on which schedule 1.1 [3] commences or the period specified in the regulations.

Schedule 8 of the Bill commenced on 26 October 2018 (the date of assent).

With many of the amendments subject to regulations, practitioners and other stakeholders alike await the publication of the regulations by SIRA with interest.

This article was written by Jenne Tzavaras, Partner and Chris Lehmann, Special Counsel.