Workers’ compensation for mental health injuries could be restricted to post-traumatic stress disorder and exclude bullying and harassment under plans being floated to rein in the growing cost of Victoria’s WorkCover scheme.
Last week the government declared the scheme “fundamentally broken” – with benefits paid to injured workers exceeding the premiums paid by business to fund the scheme by about $1.1bn a year. The government also flagged the possibility of higher premiums for businesses to help cover the cost of paying claims.
On Thursday, a government spokesperson confirmed narrowing the criteria for mental health claims is an option being canvassed at meetings with unions and businesses.
This could include limiting mental injury payouts only to workers suffering post-traumatic stress disorder, or making bullying and harassment-related claims ineligible.
Workers may also have to prove the mental health injury is almost entirely work-related and not due to external factors. Currently, an injured worker only needs to show a causal relationship between their injury and their employment.
The government spokesperson said the WorkCover scheme is “no longer fit for purpose and does not meet the modern needs of those it was originally designed to assist more than 30 years ago”.
“The Victorian government is working with business, union and advocate groups to look at all options and take urgent action to continue the ongoing sustainability of the WorkCover scheme,” the spokesperson said.
“Our priority is helping people get back to work after an injury – and ensuring the sustainability of the scheme so every Victorian has the opportunity to return to the workforce after an injury.
“The government is looking at all options and welcoming proposals from business and workers to modernise the scheme. We know that multiple levers are required and that raising premiums alone won’t fix the long-term sustainability issues.”
When WorkCover – originally known as WorkCare – was first set up by the Cain Labor government in the mid-1980s, it was largely designed to cater for physical injuries.
However, changes in workplaces and societal attitudes have seen a significant increase in mental injury claims. They currently make up 16% all WorkCover claims and are rising by about 3.5% each year.
More workers are also staying on the scheme longer, with the proportion of all claims reaching 130 weeks reaching 18% in 2022. There are currently 3,930 claims which have been running past 130 weeks and 1,116 of these are for mental injuries.
Several options being floated by the government to address the “long tail” of people who receive payments over a long period of time, including capping value of benefits for these people, the length of time they can be received and reducing the amount they receive each week.
Premiums are also lower than most other states at just 1.27% of payroll and have remain unchanged since 2015. A rise to more than 2% has not been ruled out.