Social Development Committee: Review of Operation of Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013

The Hon. D.G.E. HOOD (16:09): I move:

That the final report of the committee, for the review of the operation of the Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013, be noted.

Before beginning my commendation to the council, I would like to take the opportunity to acknowledge and thank all of those who have contributed to this review. On behalf of the Social Development Committee I thank the Lifetime Support Authority (LSA) and board for their assistance in providing the committee with very comprehensive evidence throughout the review.

I would like to thank the Compulsory Third Party Insurance Regulator, also known as the CTP Insurance Regulator, for providing detailed information on the CTP insurance scheme, and I thank the specialists from the Hampstead Rehabilitation Centre for their contribution to this review. Their expert evidence greatly aided the committee's understanding of the trauma and rehabilitation involved when a person experiences catastrophic injury.

Thank you also to the insurance industry and, indeed, representatives of the legal profession who provided technical and insightful evidence on the CTP insurance claims. The committee wishes to give thanks to Mr John Walsh and to the disability advocacy organisations who were central in the development of the Lifetime Support Scheme and its operation and importantly, of course, thank you to the Lifetime Support Scheme participants, their families and loved ones.

Although this committee of the Fifty-Fourth Parliament did not hear all of the evidence, having shared the stories with a previous committee, reading the evidence from the Hansard has given each of the members of the committee a depth of understanding of the individual experience of living with catastrophic injury and the manner in which the Lifetime Support Scheme, which I will be referring to from here on as the scheme, has assisted each of you, and their evidence has been invaluable.

As Presiding Member, I also extend my thanks to committee members for their commitment to this review. Without labouring the point, it has at times been challenging for the committee, having picked up the review someway through. It should be noted that the previous committee undertook the hearing of oral evidence from the witnesses and prior to this committee being appointed for the Fifty-Fourth Parliament.

The previous committee drafted a number of recommendations of which 19 have been agreed and adopted by the committee with some amendment: eight of these are made with a view to extending parts of the Lifetime Support Scheme and improving its processes and procedures; 11 recommendations have been made focusing largely on the fairness and accessibility of the compulsory third-party insurance scheme and making a claim under the Civil Liability Act 1936.

In brief, there is one recommendation addressed jointly to the Minister for Health and Wellbeing and the Minister for Police, Emergency Services and Correctional Services; two recommendations are addressed jointly to the Minister for Health and Wellbeing and the Premier of South Australia; two recommendations are addressed solely to the Premier; and the remaining 14 recommendations are addressed to the Minister for Health and Wellbeing.

I also make mention here that one member of the committee was not able to support the committee's report in full and consequently the minority report made by the Hon. Connie Bonaros MLC can be found at the end of the report.

As to the Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013, the introduction of a no-fault Lifetime Support Scheme that can provide people who have been seriously injured in a motor vehicle accident with all of their necessary and reasonable treatment, care and support is an historic shift in personal injury insurance policy in South Australia. This is a scheme that can provide the footprint for the future development of other categories of accidental injury as recommended by the Productivity Commission in 2011, and for which the heads of agreement continues to be progressed by the Council of Australian Governments.

The Lifetime Support Scheme is an insurance scheme which benefits South Australians in a way that no other accident injury insurance scheme has done previously and relies on the Motor Vehicle Registration Lifetime Support Scheme levy for its funding. The merit of drawing on funds from motor vehicle registrations, despite the criticisms of the past, has been adopted across the country as the most efficient and accountable way to provide this important safety net.

Approximately 1.79 million vehicles were registered in South Australia in the 2017-18 financial year, with the average scheme levy being $102.54 per vehicle. This amount had not changed from the preceding year and in 2015-16 the average levy was $102.49, meaning the yearly adjustment sits around less than 1 per cent of the levy cost.

In 2017-18, the LSA received approximately $151 million in revenue from registration levies and the scheme, although still young, has an exceptional probability of sufficiency at 78 per cent. This is above the target limit of 70 per cent for its age and is consistent with other older long-tail accident insurance schemes in Australia and New Zealand which typically targets 75 per cent to 80 per cent. These figures demonstrate a scheme that is highly effective and financially responsible.

Overall, the evidence shows that the act is providing a fair and effective scheme for people catastrophically injured in a motor vehicle accident on South Australian roads. Participants' stories and experiences tell of the everyday realities of living with catastrophic injury and the ways in which the scheme can ease the burden for the injured and their supporting individuals. The scheme has a robust governance framework with the rules also operating well. The LSA presents impressive key performance indicators meeting the objectives, functions and obligations under the act.

It was also clear to the committee that the scheme is highly regarded, having been received extremely well by stakeholders in general. A lot of that is down to the dedicated management of relationships with partnerships and service providers undertaken by the LSA's executive and staff. It was also evident, though, that the scheme is not highly well known, and some work to raise the scheme's profile is being undertaken by the LSA.

There were few criticisms or concerns raised in the evidence pertaining to the scheme, the LSA or the LSA staff, and the committee found the strengths of the scheme include, as already mentioned, that it has a reliable funding source through motor vehicle registration levies; that the authority prioritises and utilises best practice person-centred methodologies; that financial accountability is high, with greater than 80 per cent of the dollar spent on participant services; and also that there is dedicated funding support for medical, scientific and technological research to advance the treatments and supports for the scheme cohort and to contribute to the broader field of understanding catastrophic injury.

Of the few concerns raised in the evidence, the majority were in relation to third-party service providers. There were some issues raised regarding LSA's administrative procedures for the procurement of goods and services and in particular there were consistent accounts of difficulties in relation to the attendant care services industry. The issues concerning third-party providers and attendant care services which were raised in the evidence include that time frames for purchasing of specialised equipment can be too long and that some attendant care workers' training is too basic, with overall fairly low minimum standards for qualification. This is a particular concern for participants with complex needs. Worker to client ratios are also low, with a highly transient, largely unskilled workforce filling temporary and casualised vacancies whilst in between other occupations.

There are some obvious issues with the matters raised, and the committee has made several recommendations to address some aspects of these issues, such as the introduction of a minimum standard of certificate III in home care and community care training or equivalent and an on-the-job home care training package to be implemented by SA Health and the Hampstead Rehabilitation Centre to ensure attendant care workers are meeting the minimum safety and quality framework requirements.

Other concerns raised include some slow turnaround times in the procurement process and that some participants who are incarcerated have not had access to the scheme supports while in gaol nor other forensic disability support. One of the other concerns raised was the need for the scheme to provide greater support for participant spouses and/or their families. The committee has made recommendations to address each of these.

Chief among other concerns and pertinent at this time is the adequacy of the systems and supports for older South Australians who have sustained a serious injury through a motor vehicle accident but who are not eligible for the Lifetime Support Scheme. The committee found there were some gaps between services available to this particularly vulnerable group and so has made a recommendation for an assessment to be undertaken in relation to the issues of equity of access.

I will now look at the National Injury Insurance Scheme. In terms of extending the scheme, stakeholders made a strong case to include people seriously injured in a motor vehicle accident involving vehicles which do not presently meet the definition of a registrable vehicle under the Motor Vehicles Act 1959. These include accidents that occur on private property and the use of farming equipment or other motorised vehicles that are not currently able to be registered or can only be conditionally registered, such as some tractors, harvesting equipment and quad bikes.

The committee considered that a restricted miscellaneous vehicle conditional registration could be prescribed to such vehicles. This would provide the driver or rider with compulsory third-party insurance, and conditions of use would apply to protect the rider and the public. The cost to provide the scheme to those injured in the use of a quad bike alone, based on existing actuarial analysis, would be in the area of approximately $15.8 million or a further six or seven people entering the scheme per year.

The next category, accidents that cause moderate to severe brain injuries, could be covered for interim periods according to actuarial analysis. What makes this compelling is the evidence from brain injury advocate organisations and specialist brain injury professionals, who suggest early interventions through detecting and providing individually tailored treatment and rehabilitation which are critical for achieving better long-term outcomes for people with moderate to severe traumatic brain injury.

It is estimated that 30 to 40 children and 25 adults experience moderate to severe traumatic brain injury each year in South Australia. Based on the evidence the report shows that, where moderate to severe brain injury is present and not currently picked up by the scheme or the NDIS, over time this cohort will be likely to require increased support and resources from the public health system, social welfare system and justice system, with long-term outcomes being worse for children.

For the scheme to pick up this cohort and provide an interim program of reasonable and necessary treatment, support and rehabilitation based on the 2017 levy analysis, it would be in the area of approximately $1.5 million to $1.7 million in total extra per year. There is a real potential for the scheme to review the moderate to severe brain injury group as a category for inclusion in the scheme and the committee is aware some research has already commenced, looking to New South Wales Brain Injury and Rehabilitation Program for examples of the types of programs that might be offered.

Other evidence reviewed by the committee shows there is a need for a category for people who sustain multiple injuries but who do not meet the existing eligibility criteria. Actuarial analysis undertaken by Finity Consulting for the authority in conjunction with specialists at Hampstead Rehabilitation Centre identified there is a potential for a multiple injuries category which would include injuries such as muscular and tendon damage, vertebral and pelvic fractures, and internal abdominal and/or chest wounds, lumbosacral plexus injuries and severely damaged limbs that have significantly reduced functionality.

Costs associated with bringing this cohort into the scheme as interim participants focused on early intervention and based on costs determined from the 2017 levy analysis would be around $300,000 to $500,000 over three years per participant which would be a cost of approximately $4 million for 10 people per year to enter the scheme—a relatively modest amount, in my view. I make the note that the committee did not undertake its own actuarial analysis but has made recommendations for further investigation to be undertaken for consideration of broadening the eligibility criteria for access to the scheme for these categories.

In relation to the categories of accident injury insurance as identified by the Productivity Commission's 2011 inquiry, funding sources for these streams remain the principal obstacle to realising the full National Injury Insurance Scheme (NIIS). The committee understands that some work continues to be undertaken to determine funding options in order to progress the Productivity Commission's recommendations and establish the full NIIS.

The Standing Council on Federal Financial Relations and the Council of Australian Governments is yet to progress agreed minimum benchmarks to further the NIIS and funding options as agenda items in 2019. In particular, the committee heard that there is strong support from stakeholders for inclusion in the NIIS category of general accidents in the scheme with the key issue being an appropriate funding source. Various options are being considered and, importantly, the LSA has shown that stakeholder engagement will be critical to ensure the criteria on the conditions of eligibility are appropriate.

Evidence shows an alarming increase in brain injury through family violence. The statistics are overwhelming, and the committee understands that compensation through common law or the victims of crime levy may not be appropriate in all cases. Notwithstanding that, the committee acknowledges the scheme may not be best placed to deliver the necessary services to this cohort and welcomes research being undertaken by Brain Injury Australia into this important area.

In relation to sporting accidents, the committee found that in most cases these should be covered by sporting clubs and associations operating in South Australia in the form of public liability insurance. There was no evidence to suggest existing compensation arrangements need to be altered at this time. There would need to be further review of entitlements and benefits for sporting related accidents to be included in the general accidents stream of the scheme.

Whilst it is understood medical treatment accidents are more complex than other accidents to fund under the NIIS, the South Australian government committed to retaining its current arrangements in managing risk for the treatment of medical injury caused by fault in public and private hospitals. An agreement was also made between the state and commonwealth governments to undertake further partnering to review and implement the no-fault medical treatment scheme by July 2018. Whilst this has not occurred, the committee welcomes the further planning and research work being conducted on this. Further discussions need to be had by the COAG and the Standing Council on Federal Financial Relations to progress this accident stream.

The evidence in support of the Lifetime Support Scheme is overwhelming, signalling there is a strong public interest in it continuing and growing. For growth to occur, security of funding and sound actuarial oversight are the key. On the basis of the scheme's performance over the past four years, extension is conceivable as well as desirable, in the committee's view. While the committee acknowledges there may be some apprehension regarding increases to motorists' levies, the evidence suggests no significant increase in the scheme levy is likely to occur, given the prudent management of the LSS Fund.

The committee is not complacent to the fine balance between providing this vital service and keeping costs to the South Australian community low. The committee welcomes and appreciates the further research being undertaken to advance the extension of the scheme by the authority and scheme actuaries. As a result, the committee has recommended a follow-up review of the parts of the Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013 reviewed by this committee be undertaken in three years.

I turn now to the Civil Liability Act of 1936 and compulsory third-party insurance. In relation to amendments made to the Civil Liability Act in 1936 and, as a consequence, the compulsory third-party insurance (CTP) scheme, the committee recommends the state government consider moving to a full no-fault accident injury insurance scheme for motor vehicle accidents, with statutory benefits for a prescribed period of time and retention of some common law rights for more serious injuries. This would bring South Australia's scheme in line with similar schemes in Victoria and Tasmania and recently introduced schemes in New South Wales and the Australian Capital Territory.

While evidence provided by the CTP insurance regulator was generally positive regarding the changes to the Civil Liability Act as a consequence of a lifetime support scheme being introduced, other evidence suggests that making a claim or progressing a claim through the courts has become more difficult. The introduction of injury scale values (ISV) ranging from zero to 100, with seven being the threshold for economic damages and 10 for noneconomic damages to be awarded by the courts, has seen a significant decrease in claims for more minor injuries.

While this was intended, it was also the intention that those claims should be truly minor or indeed trivial. What the evidence suggests, however, is that somewhere between the very serious and the truly minor are injuries which are serious enough for people to require long periods off work and therefore loss of income, to become dependent on others for a period of time and therefore strain interpersonal relationships, to become socially isolated, to be at risk of developing comorbid mental illness and to suffer pain without recourse to compensation or, in some cases, even adequate treatment. The committee considers that these types of outcomes for many South Australians are not desirable.

To strike a balance between the CTP insurance scheme being viable and supporting people with injuries, which result in the previously mentioned outcomes, the committee has recommended lowering the ISV thresholds for economic loss, noneconomic loss and gratuitous services to five points. This will be fairer and more consistent. At the same time, the committee recommends that there be a review of the discounts in the Civil Liability Act which are applied by the courts to any compensation awarded. The committee considers, based on the evidence received, that a discount of 20 per cent imposed in relation to economic loss has been shown to be simply too high.

Recently, we have seen a rise in mental illness in our communities. While there are myriad causes for psychiatric impairment, evidence suggests that in some cases where motor vehicle accidents are concerned a minor to moderate brain injury can cause a person to also suffer a mental illness. As well as this, where a person has suffered other types of physical injuries with resulting incapacitation, sickness and disability, these can also negatively affect mental health. Evidence suggests that early interventions are crucial for both brain injury and in treating some mental illnesses. The committee recognises and acknowledges the complexities associated with the onset of mental ill health.

In light of the evidence provided during the review, the committee has recommended changes to make it easier for people with comorbid mental harm caused by a motor vehicle accident to access compensation that is available for physical injuries which might be of a lesser injury scale value. The committee also considers that mental harm should be treated as a separate injury, not merely as a feature of a physical injury, and recommends that the courts have the discretion to make this determination in assessing injury for damages.

There was also evidence that shows there are many people who find themselves unlucky enough to sustain several injuries which may not meet the minimum ISV thresholds individually, yet in aggregate cause ongoing pain and disability. The committee has recommended a review of the criteria relating to multiple injuries and the requirement for there to be a dominant injury over the ISV threshold upon which compensation rests.

To conclude the noting of this report to you, I want to highlight that, for the NIIS, of which the Lifetime Support Scheme was the initial phase, to be fully implemented, South Australia would need to take a lead role in COAG discussions. For the accident injury insurance scheme to be fair and equitable to all, there needs to be continual evidence-based improvements made. The committee has made recommendations that support a long-term vision for South Australia to have a full no-fault motor vehicle accident insurance scheme developed by the state government.

In introducing the lifetime support scheme, it was recognised that South Australia was joining several of the other states in providing such a scheme. There is now the opportunity once again to join the states of Victoria, New South Wales, Tasmania and the Australian Capital Territory in implementing a full no-fault scheme. The report provides recommendations to give our state's most critically injured, as well as those who suffer some types of moderate to serious accidental injury, whether at fault or not, the best opportunities to recover and to be able to contribute again within their families and their communities. As Chair of the committee, I commend the committee's report to the council.

Debate adjourned on motion of Hon. I.K. Hunter.