In late September the NSW Government introduced amendments to the Workers Compensation Act 1987 (1987 Act) and Workers Compensation and Workplace Injury Management Act 1998 (1998 Act)
The proposed changes include:
1. DISPUTE RESOLUTION
Currently, once an insurer makes a work capacity decision in respect to a worker’s capacity for work, which also includes a decision about the calculation of their Pre-Injury Average Weekly Earnings (PIAWE) a worker may request:
- the insurer to conduct an initial internal review of the decision, and then
- a merit review by the Merit Review Officer (MRO) within SIRA and then
- a procedural review by the Workers Compensation Independent Review Officer (WIRO).
The proposed amendments abolish the system of review and restore the jurisdiction of the Workers Compensation Commission (WCC) to determine disputes about work capacity decisions and once again allow these types of disputes to be referred to the WCC for determination under the 1998 Act.
1.1 Work Capacity Dispute to be determined by WCC
The referral of a dispute for determination by the WCC in relation to a work capacity decision to discontinue, or reduce the amount of weekly payments of compensation operates to stay the decision and prevents the taking of action by an insurer based on the decision while the decision is stayed.
It is proposed changes will be made to schedule 6 of the Workers Compensation Regulation 2016 (the Regulation) regarding the payment of legal costs for work capacity decision reviews at the WCC. Legal advice will be made available to injured workers through the Independent Legal Assistance and Review Service. Insurers will be able to obtain legal advice for work capacity decisions in line with other disputes currently determined by the WCC.
The proposed amendments will also enable the WCC to fast-track disputes that involve work capacity decisions so insurers need to be prepared for the referral and hearing of such disputes within two to three weeks of commencement of proceedings in the WCC..
Whilst there is no time limit on when a worker can refer a work capacity decision for determination, a work capacity decision is stayed only if the dispute is referred for determination by the WCC before the expiry of the required period of notice under proposed section 80. A stay operates from the time the Registrar accepts the dispute for referral until the proceedings are determined, dismissed or discontinued.
The WCC may, if it considers that a party to the dispute is unreasonably delaying the proceedings on the dispute, order that the stay ceases to have effect.
1.2 Existing work capacity reviews
In respect to current work capacity decisions and disputes, the proposed amendments make provision for any work capacity decision made prior to commencement to be concluded under the existing provisions. That is internal review, a merit review by SIRA and a procedural review by WIRO. This will allow work capacity reviews that are currently in progress to conclude without being impacted by these proposed changes. The amendments provide a six-month transitional period for these reviews to be completed. This period can be amended by regulation if required
2. DISPUTE NOTICES AND AND NOTICE REQUIREMENTS
2.1 Notices
It is proposed an insurer giving notice:
- to dispute liability in respect of a claim or any aspect of a claim, or
- to discontinue payment to a worker of weekly payments of compensation, or reduce the amount of the compensation
may now issue a single notice dealing with a liability dispute and a discontinuation or reduction of weekly compensation (subject to any provision of the Workers Compensation Guidelines requiring separate notices to be given).
2.2 Notice Period
The requirement to give notice of a decision to discontinue payment to a worker of weekly payments of compensation does not affect any limitation on weekly payments of compensation under Division 2 of Part 3 of the 1987 Act.
An insurer must not discontinue payment to a worker of weekly payments of compensation, or reduce the amount of the compensation, unless the required period of notice (commencing when the notice of discontinuation or reduction is given) has expired.
This applies to a worker only if the worker has received weekly payments for a continuous period of at least 12 weeks.
The required period of notice for a decision made on the basis of any reassessment by the insurer of the entitlement to weekly payments of compensation resulting from a work capacity decision of the insurer is three months.
In any other case, the required period of notice (proposed under s 80 in place of s 54) is:
- for a worker who has been receiving weekly payments of compensation for a continuous period of less than one year—two weeks, or
- for a worker who has been receiving weekly payments of compensation for a continuous period of one year or more—six weeks.
The required period of notice of the discontinuation or reduction is required to be given whether or not the notice also includes notice of a liability dispute.
The notice period does not apply to a decision of an insurer to discontinue or reduce the amount of weekly payments of compensation as a result only of the application of different rates of compensation after the expiration of earlier periods of incapacity for which higher rates were payable. However, notice of the decision must be given before the expiration of the period of incapacity that results in the discontinuation or reduction.
2.3 Reviews by Insurers
It is proposed a worker may request an insurer to review:
- a work capacity decision of the insurer that is disputed by the worker, or
- a claim, or any aspect of a claim, that is disputed by the insurer.
A request may be made at any time before the dispute is referred for determination by the WCC.
The insurer must conduct the review, and notify the worker of the decision on the review, within 14 days after the request is made.
2.4 Stays
It is proposed a stay of a decision to discontinue, or reduce an amount of, compensation that is the subject of a dispute referred to the WCC for determination does not operate to extend the required period of notice with respect to the discontinuation or reduction.
2.5 Penalties
It is proposed failure to comply with any of the notice, notice period and review requirements can result in a penalty of $5,500.
3. DETERMINATION OF PERMANENT IMPAIRMENT AND MEDICAL ASSESSMENTS
The proposed amendments remove a limitation that prevents Arbitrators awarding permanent impairment compensation unless the degree of permanent impairment resulting from the injury has been assessed under the 1998 Act by an Approved Medical Specialist (AMS).
These proposed changes are aimed at situations where there are minor differences between assessments, which would have prevented an insurer from making an offer, or a worker accepting an offer, or the claim being compromised to resolve it.
The proposed amendments will allow for regulations to specify circumstances in which a medical dispute concerning permanent impairment of an injured worker is authorised, required or not permitted to be referred for medical assessment by an AMS.
4. CALCULATION OF WEEKLY PAYMENTS AND DETERMINATION OF PIAWE
The proposed amendments substitute the method for calculating PIAWE for the purposes of weekly compensation payable to an injured worker.
The proposed amendments define “earnings” to include the actual amount of weekly income of the worker earned in any employment, rather than by reference to ordinary earnings (which
currently exclude overtime and shift allowances.
In respect to the period following 52 weeks of compensation, it is proposed the PIAWE will now include overtime and other allowances.