Karen McNamara (Dobell, Liberal Party) Share this | Hansard source

The scheme creates barriers and disincentives for injured workers to recover at work—for example, by emphasising the medical, rather than the vocational nature of rehabilitation services. Furthermore, the scheme allows injured workers to make claims for conditions that are unrelated to work, and to undertake treatments that are not evidence based. The truth be known, some injured workers are not getting back to work as quickly as they should be. There is strong community expectation that those who can work, even if only part-time, should do so to their capacity. These factors are contributing to the Comcare scheme being looked upon in a negative manner by the broader community.

The Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015 is part of a package of reforms that will rehabilitate injured workers and return them to work sooner. The government is also ensuring the long-term viability of the Comcare scheme. Importantly, the proposed measures will ensure that the Comcare scheme continues to provide eligible injured workers with income payments until pension age, and lifetime medical and rehabilitation expenses. The proposed changes will mean that injured workers will be better off in term of access to early rehabilitation, access to provisional medical expense payments, and that they are able to return to work and receive quality medical treatment and attentive care. In addition, claims and disputes will be processed more efficiently and quickly, and some claimants will be eligible to receive higher payments than currently received. The bill is an important step in modernising the Comcare scheme, which has not seen comprehensive reform since it was established in 1988. The bill implements in part recommendations of the review by Mr Peter Hanks QC, and Dr Allan Hawke AC, commissioned by the former government, in 2012. It also makes other changes to the act that will improve the efficiency, cost effectiveness, and viability of the Comcare scheme, and harmonise elements of the scheme with state schemes.

Currently, medical and rehabilitation costs represent 23.4 per cent of the total cost of claims under the scheme. This figure has been increasing at a consistent rate over the past three years. Forty-nine per cent of costs are the payments made directly to a claimant, and 28 per cent of costs are expended on legal, administrative, and regulatory costs. This bill seeks to ensure the long-term sustainability of the Comcare scheme by emphasising the vocational rather than the medical nature of rehabilitation services, and introducing measures designed to improve return to work outcomes under the scheme. It also seeks to promote fairness and equality in outcomes for injured workers by targeting support for those who need it the most, and by strengthening the integrity and viability of the scheme by clearly distinguishing between work and non-work related injuries—improving the quality of compensable medical treatment and support services by limiting legal and medical costs under the scheme.

The bill introduces a number of changes to assist employers to meet their rehabilitation obligations and to engage more effectively with injured workers upon return to work. The government is eager to see employees and employers work closer together. We believe that employers must accept more responsibility for managing injuries, for ensuring support when injuries occur, and for enabling people to get back to work as soon as possible. We will encourage this by providing employers with more responsibility, and with greater incentives to provide alternative work or reduced hours to injured workers. Injured workers will be encouraged to participate actively in their injury management and rehabilitation. It will be a requirement for injured workers to seek, engage and remain in suitable employment when able to do so.

In his second reading speech, the Hon. Luke Hartsuyker MP, Assistant Minister for Employment, said:

A large body of evidence based research has established that many health problems can benefit from work based rehabilitation and an earlier return to work.

Based on this approach, the compensation payment system will be restructured to provide targeted financial incentives for injured workers to return to some form of work as soon as practically possible. In doing so, the incentives that remain for workers compensation for extended periods will be removed. If an injured worker refuses employment whilst having a capacity to earn in a suitable environment, they will see their income payments and compensation gradually reduced. This is a fair system that does the right thing by employees, employers and the Australian government. In addition to providing greater incentives to encourage people back to work, the government will also be providing targeted support for injured workers.

It has been the case that many employees, when they are injured, utilise their savings and/or leave entitlements while waiting consideration of their claim. Delays in processing these claims can leave injured workers without leave entitlements and savings. Furthermore, medical treatment may be delayed, increasing the time before an injured worker is deemed fit to return to work. To address this, the scheme will now provide for provisional medical payments of up to $5,000 before a claim is determined. The employer will have immediate rehabilitation responsibilities.

The amendments also ensure that any money spent on medical treatment, post-injury care and support services is better targeted and that services are provided by trained professionals. Under these amendments, professional care will be provided to injured workers for the first three years of their injury, with uncapped long-term or lifelong care available to those who have suffered serious injuries. Workers who have been seriously injured will still have access to lump-sum payments to assist them achieve a better quality of life. Under the proposed changes, the maximum lump-sum payment will be increased from $242,000 to $350,000. Workers who suffer less serious injuries will receive payments that more accurately reflect the nature of their condition, thereby affording greater support to those with serious injuries.

The government will also ensure more timely access to compensation payments. This will be achieved with the introduction of time frames for determining claims and resolving disputed claims, as well as improved information-gathering powers. Employers will be required to lodge claims more quickly and within specified time frames following notification of a claim.

The bill also clarifies the rehabilitation responsibilities and duties of an employer to ensure: the rehabilitation of an injured employee, that the employee is assisted to find suitable employment, and that the employee remains in suitable employment. This ensures fairness for workers and more responsibility on an employer following a workplace injury. Greater assistance will be provided to employers under these new time frames, with the amendments enabling more accurate calculation of income replacement. This change will better reflect today's labour market conditions and the changing industrial profile of employers in the scheme. We want to ensure that there are no inequities in the payment of entitlements to workers nearing pension age. Therefore, eligibility for income replacement will be linked to the national age pension age and the five per cent reduction in compensation payments for employees accessing superannuation benefits will be removed.

It goes without saying that the success of the scheme is reliant on its sustainability. The initial intention of the SRC legislation recognised the need to ensure that employers were not paying for non-work related conditions and introduced changes that required employees to demonstrate a close connection between their condition and the employment in which they were engaged. Over time, judicial interpretation of the legislative provision has seen unreasonable constraints placed upon employers' ability to manage their workplaces. This is driving up the cost of premiums and placing increased burden on the scheme's sustainability. This legislation will better distinguish between work and non-work related injuries and limit the payment of compensation to workers who have sustained injuries due to work or their workplace. Existing provisions will be strengthened to require a clear connection with a workplace based injury before compensation is payable. Furthermore, the government will clarify the matters to be taken into consideration for psychological claims and introduce new thresholds for specified pre-existing conditions such as heart, brain and spinal injuries to ensure that the scheme is accepting liability for conditions which are work related. The intent of the Comcare scheme was never to prevent employers taking reasonable action to manage their employees. As a result, the proposed amendments will clarify the range of management actions that, when reasonably undertaken, should not give rise to compensation claims.

There is a strong need to address the increasing costs of the Comcare scheme. Inaction will severely undermine the long-term viability of the scheme. The government will allow Comcare to establish schedules that specify the amounts payable for medical treatment and medical reports as well as legal services obtained by claimants. Currently, there are no limits on the amounts that Comcare remunerates for these items. Scheme costs will also be reduced by excluding overtime and allowances in the calculation of compensation. These measures strengthen the integrity of the Comcare scheme. The scheme will be underpinned by a three-stage sanction regime in which employees who do not meet their medical treatment and rehabilitation obligations will have their compensation rights suspended or cancelled. The majority of people are eager to get back to work. They willingly participate in their injury management and rehabilitation process. We want to support people's lives getting back to normal. Those who take advantage of the system will not be permitted to do so. This is what is expected by the people of Australia and this is what is right for employers.

The Comcare scheme also applies to members of the Australian Defence Force. The government recognises the unique nature of military services. Australian Defence Force members with coverage under the act will be exempted from all but two of the proposals being introduced by this bill. These proposals relate to the calculation of permanent impairment compensation and will ensure that a member or former member of the Australian Defence Force will not receive less compensation than an employee covered by the Comcare scheme with the same level of impairment. It is the government's intention to create a new act to separate ADF members from the existing SRC Act.

The best thing we can do for workers under the Comcare scheme is to ensure that it is fair, equitable and sustainable. The Comcare scheme is one of the few remaining workers compensation schemes in Australia that provide income payments until pension age and lifetime medical and rehabilitation payments. This bill ensures a fair and sustainable scheme into the future. While this scheme remains one of the most generous in Australia, the focus will clearly shift towards getting people back to work rather than just providing compensation. This is consistent with this government's actions to assist more people into work. We do this because we believe it is the best outcome for the people of Australia. I commend this bill to the House.

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