You’d be hard pressed to find anyone to gush over the current performance of WorkCover SA. As Anna Kelsey-Sugg reported in article 674 – “Not good enough: SA’s WorkCover losses unacceptable,” – in the first half of this financial year WorkCover SA posted a net claims’ management loss of $313m. Unfunded liabilities recently topped $1 Billion. Despite a suite of reform legislation passed by the Rann government last year, the scheme continues to underperform. 

According to SA Unions Secretary Janet Giles, the state government’s “heartless campaign” to save WorkCover by slashing entitlements to injured workers has failed, leaving “vulnerable workers to suffer for nought.”

Nor is the business community singing WorkCover’s – or the government’s – praises. David Frith, speaking on behalf of Business SA, said that they supported the legislative reform because “taking the Bill as a whole we believed that overall it was better than what we had.” Mr Frith conceded, however, that the new legislation was far from perfect, stating that “there are things that are an imposition on the business community”.

Hardly a ringing endorsement.

Leaving aside the fact that WorkCover SA is currently glaringly in the red, the scheme’s overall performance stats read like a litany of woe. In last year’s RTW Monitor, SA infamously laid claim to Australia’s:

• Lowest durable return to work rate;
• Highest rate of injured workers receiving compensation (more than double the national average);
• Lowest level of employee perception that ‘management help return to work’ and have ‘clear return to work policies and procedures’; and
• Lowest perception that supervisors and employers assist return to work. In fact, one in five SA employees said that their main supervisor and their employer actually made returning to work more difficult.

What these stats make painfully clear is that WorkCover SA’s shortcomings go way beyond the financial. This is something that the Rann government pointed to when they introduced their WorkCover amendments. According to the Minister for Finance, Government Enterprises and Industrial Relations, a culture shift was necessary: away from a “culture of compensation” and towards a “culture of injury management”.

In order to encourage this shift, the government legislated for:

• A step down in wage replacements at 13 weeks (to 80% of pre-injury wage);
• Significantly restricted access to redemptions (previously used as a way to close cases);
• Provisional liability, to enable intervention and treatment for two weeks following the placing of a claim;
• Medical panels, to deal with disputes about medical issues (allowing for no appeal except on procedural grounds, and no representation for the worker);
• Employer incentives for early reporting; and
• Mandatory return to work coordinators for all workplaces with 30 or more employees.

As David Frith points out, it’s too soon to reach a verdict on the success of these measures, as some were only implemented in April 2009. Business SA is hopeful that, with the full implementation of the legislative reform, SA’s workers’ comp scheme will not only become fully funded, but will also become successful at returning employees to work, family and community following illness or injury.

However, according to an SA Unions research project, conducted by researchers at the University of South Australia, workers’ advocates believe that some of the legislative changes have resulted in “severe emotional distress” for claiming workers, up to and including attempted suicide. The report does not assess how much of this distress stems from the legislation itself, and how much stems from the stress and uncertainty of transition, but either way it makes for disturbing reading.

So what can be done?

According to David Frith from Business SA, everything hinges on improvements to the RTW rate:

“Until that rate has improved then the unfunded liability can’t come down, levy rates can’t come down, and benefits to workers can’t be increased.”

We’ll be keeping a close eye on SA.