Expensive and cruel: report exposes decade of NSW workers comp failure

Unions NSW

A damning new report reveals the cost of administering the NSW workers compensation system has steadily increased, suicidal ideation has surged among people the scheme is supposed to support, and return to work rates have declined. It’s Broken was compiled by the McKell Institute and was launched this week at NSW Parliament by Unions NSW and the Injured Workers Support Network. Since major cuts to entitlements were ushered in by the O’Farrell Government in 2012, return to work rates have declined declined five per cent. Since 2015/16 there has been a 12 per cent decline in the number of people with illness or injury returning to work after four weeks. More broadly, the return to work rate is now the lowest it has been at any point since 2008-09. A qualitative study of 106 workers compensation recipients also reveals participants routinely experiencing financial hardship, stress, and even suicidal ideation. According to the survey:

  • 73 per cent had experienced suicidal ideation as a result of their workers’ compensation claim.
  • 72 per cent had lost employment during the period of their claim.
  • 76 per cent strongly disagreed that the workers’ compensation system had helped them recover from injury, and
  • 87 per cent found it difficult to meet the cost of living while receiving workers’ compensation payments.

The study finds that the cost of administering the system is more expensive. In the four years since iCare was established, expenses increased 61 per cent (from $576 million to $926 million). Board and Committee fees, for example, more than quadrupled between 2013 and 2021. Unions NSW Acting Secretary, Thomas Costa, said the report was a damning illustration of an organisation that had lost its way. “Rehabilitation of sick and injured workers should be the north star of workers compensation. Instead the system has been descended into greed, cruelty and mismanagement. “Rather than attending to the needs of sick and injured workers, iCare has specialised in menacing them, badly aggravating their existing injuries. “This is an organisation that has strayed far from its purpose. The entire system needs complete overhaul.” McKell Institute CEO, Michael Buckland, said the report’s findings were stark. “It is now a decade since workers compensation was reformed and it simply has not met the objectives set out. Outcomes for participants have deteriorated, the number of claims has flatlined, and administration costs are up. Even the slight decrease in premiums can not be attributed to the reforms. “If we were designing workers compensation from a blank sheet of paper today, it would look very different to the system we have.”

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