Fraud can and does occur in the world of workers' compensation insurance. Three recent prosecutions highlight just how seriously workers' compensation fraud is addressed in Queensland.
Fraud can and does occur in the world of workers' compensation insurance, just like it occurs in other aspects of life.
Three recent prosecutions highlight just how seriously workers' compensation fraud is addressed in Queensland.
Recent workers' compensation prosecutions
Case 1:
On 14 July 2021, a 23-year-old worker was found guilty on 29 charges of fraud relating to making false claims for reimbursement of travel costs to attend medical appointments.
The worker was sentenced to five months imprisonment (wholly suspended), ordered to repay $5,863.13 to WorkCover and to pay the prosecution's expenses of $23,908. A conviction was recorded on each charge.
Case 2:
On 22 July 2021, a 33-year-old worker was found guilty of fraud. The worker was charged with one charge of attempted fraud after lodging a common law notice of claim for damages where they stated they suffered ongoing symptoms as a result of a back injury.
Surveillance undertaken of the worker clearly demonstrated that the worker was exaggerating their symptoms and functional abilities in the notice of claim.
The worker was sentenced to six months imprisonment (wholly suspended) and lost their entitlement to continue with the common law claim they had made for $750,000 in damages. A conviction was recorded, and the worker was ordered to pay the prosecution's costs in the amount of $28,330.17.
Case 3:
On 12 August 2021, a 47-year-old worker entered a plea of guilty to one charge of fraud, one charge of failing to notify of an engagement in a calling and five charges of providing false or misleading information. The worker was charged with these offences after they returned to work while receiving compensation.
The worker was sentenced to two years imprisonment, which would be suspended after serving six months in actual custody. They were also ordered to pay $228,774.43 in restitution and a conviction was recorded.
What does the law say?
The Workers' Compensation and Rehabilitation Act 2003 (the Act) contains provisions around fraudulent offences. These relate to everyone who deals with WorkCover including workers/claimants, employers, service providers and others.
Defrauding or attempting to defraud WorkCover carries a maximum penalty of five years imprisonment or 500 penalty units (which currently equals $68,925).
The main fraud provision is contained in section 533(1) of the Act, which states "a person must not in any way defraud or attempt to defraud an insurer". It is important to note that this provision refers to attempts to defraud as well as a committed act of fraud against WorkCover.
Identifying fraud
Suspected fraudulent activity (including attempts) is brought to WorkCover's attention via various avenues including but not limited to:
- Reports of fraud submitted online via the WorkSafe website;
- Phone calls to WorkCover (from both anonymous and non-anonymous callers);
- Communication from a person or entity involved in or related to a claim, or
- An anomaly or irregularity identified by WorkCover while undertaking normal business activities.
Duty on WorkCover to report to the Worker's Compensation Regulatory Services
WorkCover is obligated under the Act to, without delay, inform the Workers' Compensation Regulatory Services (WCRS) of a reasonable belief it may hold in relation to a person or entity defrauding or attempting to defraud WorkCover
WorkCover has its own internal investigation process when suspected fraudulent activity is bought to our attention to ensure only genuine reports of fraud or attempted fraud are referred onto WCRS.
Actions taken by the Worker's Compensation Regulatory Services
If further investigations from WCRS find there is sufficient evidence of fraud or attempted fraud, it may support a recommendation to the Workers' Compensation Regulator for a prosecution.
In the 2019/20 financial year, the Workers' Compensation Regulator received 66 referrals for investigation, commenced 25 prosecutions and successfully prosecuted 12 matters.
It's important to note that even if fraud referrals are investigated but not prosecuted, action is still taken to address dishonest behaviour (such as a worker exaggerating their injury and having a greater capacity for work than they are cleared for).
This may result in WorkCover reviewing the worker's current entitlements to compensation and deciding to terminate, suspend, or decrease entitlements.
