The Victorian Government has introduced to parliament the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023 proposing a range of changes to the Victorian WorkCover scheme.

In a media release on 31 October 2023, the Victorian Government announced the Bill is expected to pass this year with changes to take effect in the first quarter of 2024.

If passed, the Bill will enact significant changes to compensation entitlements including greater limitations on eligibility for mental injury claims and the ability of workers to claim weekly payments beyond the second entitlement period.

Mental injury

In one of the most significant proposed changes, a worker will not be entitled to compensation if they suffer a mental injury predominantly caused by "work-related stress or burnout" that has arisen from events that may be considered usual or typical and reasonably expected to occur in the course of the worker's duties.  

The Bill does not define terms such as stress, burnout or usual or typical duties, but the Explanatory Memorandum indicates usual or typical work activities may include typical job demands, workload pressures and interpersonal interactions.  However, injuries caused by bullying, harassment or discrimination are still intended to be covered.  

Importantly, the exclusion of mental injuries caused by stress from a worker's usual duties will not extend to workers whose usual duties are routinely traumatic.  The Explanatory Memorandum gives examples of occupations including emergency service personnel and other front-line workers.

The Bill does not change the existing "reasonable management action" exclusion, which will continue to apply.

The required causal connection between a worker's mental injury and employment will also be strengthened.  A worker's mental injury must "predominantly" arise out of or in the course of employment in order to be compensable.  Similarly, where a worker suffers a recurrence, aggravation or similar of a pre-existing mental injury, employment must be the "predominant" cause rather than a significant contributing factor.

While predominant is not defined in the Bill, the Explanatory Memorandum indicates this is intended to refer to the "strongest or largest" contributing factor relative to all other factors.  

In another proposed change, "mental injury" will now be defined to mean an injury that causes significant behavioural, cognitive or psychological dysfunction and is diagnosed by a medical practitioner in accordance with the latest version of the Diagnostic and Statistical Manual of Mental Disorders (DSM).  As a result, a worker who does not meet those criteria will not be entitled to compensation under the changes proposed by the Bill.

However, the new definition will not apply for the purpose of provisional payments for mental injury, meaning workers who do not meet the criteria may still be entitled to provisional payments of medical and like expenses for 13 weeks.

The proposed eligibility changes in the Bill will only apply to injuries occurring after the commencement of the amending Act.

Weekly payments

Under the proposed amendments, in order to be entitled to receive weekly payments of compensation beyond 130 weeks, a worker will now need a whole person impairment of more than 20 per cent in addition to the existing requirement of no current work capacity which is likely to continue indefinitely.

WorkSafe Victoria or a self-insurer can determine it is not necessary or practicable to assess a worker's impairment in some circumstances, including where there is no reasonable prospect of the worker having an impairment of more than 20 per cent.

In addition, WorkSafe Victoria or a self-insurer can make an interim determination a worker is or is not eligible to receive weekly payments beyond 130 weeks in some cases, including where the worker's injury has not stabilised or where the information required to make the impairment determination is not available for any reason.

The proposed eligibility changes in the Bill will not apply to workers already receiving weekly payments post-130 weeks before the amending Act commences.

Conclusion

If the Bill passes, the changes are likely to significantly impact the future claims liabilities of employers, self-insurers and WorkCover agents.

TG Legal + Technology will continue to monitor further developments and is ready to assist clients in navigating the proposed changes.

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