Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation: Return to Work Act and Scheme

The Hon. J.E. HANSON (17:45): I move:

That the final report of the committee on an inquiry into the Return to Work Act and scheme be noted.

This is the final report into the referral for an inquiry into the Return to Work Act and scheme. It follows on from the committee's interim report, which was tabled in May this year.

The committee has made a total of 18 recommendations. For some areas of the scheme which are still rapidly evolving, the committee recommended the mandated review further explore matters into the future. For other areas, including those around the support and services available for workers, the committee made pragmatic recommendations to help further the scheme to be one where there is reasonable support offered to all.

Well-functioning workers compensation schemes are integral to modern society. Schemes must strike the balance of being both socially and financially sustainable. Arguably, for years South Australia's previous scheme, known as WorkCover, struggled to achieve either. The WorkCover scheme consistently produced return-to-work rates that were below the national average, required one of the country's highest employer premiums to operate and was extremely underfunded. Scheme reform was needed.

Just over two years ago, on 1 July 2015, the Return to Work Act came into full operation and the Return to Work Scheme commenced. The new scheme had a greater focus on early intervention, customer service and recognition of the health benefits of good work. This scheme has moved away from being adversarial and too often focused on medico-legal matters.

From a financial sustainability perspective, the Return to Work Scheme also strives to maintain affordable employer premiums to ensure that South Australia remains competitive in regard to other Australian jurisdictions. In fact, the scheme's average rate has dropped from over 3 per cent at its highest point to 1.8 per cent this financial year. This represents a significant saving for employers, of course; on top of this, the scheme is now funded with $501 million in net assets.

Of course, as with any reform it is important to stop and ensure that the changes are working. The Return to Work Act prescribes that the Minister for Industrial Relations cause a review of the act, its administration and operation. This review is due to commence next month and is required to be completed within six months after that. The committee expects its report to serve as a foundation for the minister's review.

The committee heard that many workers are better off under the Return to Work Scheme. Income support is now paid for the first 52 weeks at 100 per cent of pre-injury earnings, permanently injured workers can access both economic and non-economic lump sums, and services such as mobile case managers provide a greater level of face-to-face service than the scheme has seen before. Further, workers who are assessed as having a whole person impairment of 30 per cent or more are now considered seriously injured and are able to access income support until retirement and medical support for life.

However, while many workers are better off, the committee received a number of submissions about the negative impacts of the scheme and heard of circumstances where the act's hard and inflexible criteria created gaps in the safety net. Unless a worker meets the act's definition of 'seriously injured' they will receive income support for a maximum of only 104 consecutive weeks.

Further, injured workers' access to medical expenses ceases after 12 months when income support will stop. The cessation of income and medical support is automatic. This means irrespective of a worker's capacity for work, that worker's employment prospects and whether or not further treatment is required, all support will cease.

Some submissions cited that the scheme's new time limits for income and medical support would promote workers to be independent and return to work. However, the committee heard many stories of workers having to rely on limited social support benefits, turn to family members for help, or having to go without. The committee heard concern from some workers, including those with psychiatric injury, who may be unable to afford necessary medication, as it is not only too expensive but also not covered by the Pharmaceutical Benefits Scheme.

The committee found that the scheme may also discriminate against those with psychiatric injury. The act appears to have increased the threshold that must be met for psychiatric injury claims to be considered compensable. This threshold is arguably more difficult to reach for workers with psychiatric injury compared to those whose injuries are more visible. Further, economic and non-economic loss lump sums are not afforded to those with pure or consequential psychiatric injury. The committee also heard the test used to assess whole-person impairment for psychiatric injury, known colloquially as GEPIC, does not take into full account the impact on the worker or their ability to work or function in everyday life, a fairly critical scenario.

The committee also notes that, while the scheme's average premium rate has dropped, the scheme remains one of the least affordable for employers when compared to other jurisdictions across Australia.

Unfortunately, areas of the scheme were difficult to inquire into due to its evolving nature. While there has been a reduction in new disputes in the scheme, there is a backlog of appeals to be heard. As such, this has caused some confusion in parts of the scheme, with many waiting to find out the outcome of these cases and to assess the impact that those cases may have on future decisions.

The committee recognises that some of the recommendations it has made may result in increased costs to the scheme. Therefore an approach which balances the interests of workers and employers should be adopted.

This inquiry has been one of great interest. It received over 50 submissions as well as hearing from witnesses over 11 public hearings. The committee heard and received evidence from a wide section of the community, including injured workers and their unions, employers and their associations, the medical and legal professions, ReturnToWorkSA and others interested in the Return to Work Scheme. They have all greatly assisted the committee with undertaking this important inquiry.

I would like to thank members of the committee for their time and their efforts during this inquiry, in particular, of course, the Hon. John Darley; the Hon. John Dawkins; from the other place the committee's presiding member, the very hardworking member for Ashford; the member for Wright; the member for Fisher; and the member for Schubert. Finally, I would like to express my appreciation to the committee staff: firstly the committee's executive officer, Ms Sue Sedivy; Mr Peter Knapp, our research officer, who has been providing additional support during Ms Sedivy's leave; and Ms Peta Spyrou, who is a very hardworking research officer for the committee. I commend the report.

The Hon. J.S.L. DAWKINS (17:53): I rise to endorse the motion, which notes what I think is a significant body of work in a complex area that has undergone significant change in recent years, particularly in the last two years. It is not an area I profess to be an expert in, but I think it has been one where once again we have had, as the Hon. Mr Hanson said, a large number of witnesses, I think witnesses that have all been—while some have different views—very genuine in wanting to assist the process.

I think that is the value of good parliamentary committee processes. I think I have made this comment before. Sometimes we do not get earth-shattering responses to our recommendations in writing at the end, but some of the changes that happen behind the scenes on the way—and I will not mention names, but some ministers are nodding in the chamber—sometimes ministers find helpful. I think there are a number of things in this report that are very well worth taking up.

I am not going to delay the chamber a great deal, but it will not surprise anybody to know that, in all the evidence we have taken on this matter, I have had a particular interest in the way in which people with a psychological injury are treated. I have taken the opportunity to highlight with some of the agencies and other groups the need to better treat people who initially are coming up with a psychological injury.

In the previous report on the chemotherapy underdosing, in terms of the attitudes to people, the culture in some of these agencies has been pretty ordinary towards people with a psychological injury. I think those things are changing, but recently I have had evidence to say that one key agency and the peak body that works with it or the association of employees that works with it are lacking in this area, so we need to keep plugging away.

I think this report does make some important distinctions along the way in regard to the way in which psychological injuries are treated as compared to physical injuries, particularly physical injuries that are quite apparent to people. If people have a broken leg or a broken arm, people make an adjustment for them because they can see it. We do not do that very well with a psychological injury, but we are getting better.

There are many aspects in this body of work that I think go towards that and I put it to the Minister for Industrial Relations and all who have carriage of the Return to Work Act that more and more work needs to be done in that area. With those words, I support the motion.

Debate adjourned on motion of Hon. J.A. Darley.