Here's a question for SA WorkCover: when is a saving not a saving?

South Australian independent MP Ann Bressington released a media statement at the beginning of this month alleging that some injured SA workers who are struggling on compensation payments are, “living on nothing more than dry bread and packet soups and unable to afford their medications.”

Bressington blames the difficulty in making ends meet on changes to WorkCover SA’s policy, which occurred in 2008 under the Rann government and were rolled out in 2008 and 2009.

“People are in the situation of needing food because the system takes people down to 90 percent of their wage after 13 weeks on WorkCover, 80 percent after 26 weeks and after 130 weeks they can be cut off completely,” said Rosemary McKenzie-Ferguson, founder of the Work Injured Resource Connection, as reported by the Adelaide Sunday Mail last week.

McKenzie-Ferguson’s support group has been providing food hampers to families affected by the changes to worker’s comp for over two years. Injured worker Josie Lawn, who first went on WorkCover in 2006, was quoted in the Sunday Mail reflecting on the changes, “Now I only get $300 a week from WorkCover and my weekly rent is $235, so with bills and medication costs there’s not much left for food.”

According to the same report, Josie earned over $800 a week before her nerve-ending damage occurred, forcing her to leave her position as a sales assistant at which she sometimes worked for up to 60 hours per week.

Changes to the compensation system were a response to significant continuing financial losses posted by WorkCover SA, which reached a crescendo in the first half of the 2008 financial year. Deficits to a tune of $313M in net claims’ management losses and unfunded liabilities losses topping $1B prompted the SA Government to make the controversial changes.

In her media release, Bressington questions the intention of the changes, “It is a sad indictment of our government’s commitment to its constituents when sick, injured and vulnerable people are forced into this position….they have been thrown out in the cold and literally left to starve.”

One of the main intentions of the WorkCover changes was to restrict long-term access to WorkCover entitlements, thus tightening the WorkCover SA purse strings. While the prevention of long-term disability dependence is an idea that is supported by health and industry experts, the risk remains that WorkCover SA may move people off the system who are legitimately in need.

Long term disability can't be 'prevented' once it has already set in: and it is in the early stages of a claim that the groundwork is laid for slow recovery and poor RTW outcomes.

In his report on the issues faced by WorkCover SA, researcher Kevin Purse makes the point that although a robust compensation system must be financially sustainable, its ultimate purpose must be the priority of returning injured workers in a timely and supportive way. Blaming the injured worker for the State’s mismanagement is only passing the buck.

“South Australia’s lacklustre workers’ compensation performance is attributable to poor management by WorkCover and its former claims agents rather than the level of entitlements available to injured workers. The core problem has been the ongoing failure to manage the rehabilitation and return to work process,” says Purse.

The significant improvement in return to work rates since the changes, coupled with the announcement this week of a $148m improvement in WorkCover SA’s financial position, suggests that it is more than just the insurer's finances on the mend. However, while improvements to claims management may benefit new claimants, serious consideration must also be given to the social, financial, familial and personal consequences of simply cutting off long term claims and reducing benefits to those with engrained work disability.

Making gains in one area often involves losses in another. What counts for more in SA: the savings or the costs?