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Published: 24 October 2014
Author: Ryan Carlisle Thomas

Stress compo claims maybe surging, but we’re not an “easy touch”

Figures released by WorkCover to The Age and reported in other media yesterday reveal that the cost of stress related claims is surging in Victoria, up from $189.3m in 2008-9 to $273.3m last financial year. That’s a rise of 44.3% in five years.

The WorkCover stats reveal that mental injury claims have jumped to third on their ladder of claim types, gaining ground on the more common musculoskeletal injuries and wounds and amputations.

It is also reported that the cost of so-called “payouts” has escalated from an average of $73,000 to $90,000.

The figures follow on the heels of the much-publicised case of public school teacher Peter Doulis, who successfully sued his employer for negligently causing severe psychological and psychiatric injuries and was awarded $1.3m damages.

Yet it would be misleading to conclude that Victoria is suddenly being overwhelmed by a tsunami of stress or that WorkCover is an “easy touch” for mental injury compo claims.

“Payouts” versus compensation

The use of the term “payout” is misleading, suggesting a large sum of money paid directly to the injured worker. 

Stress, anxiety, depression and bullying-related injuries can be complex and workers often require significant periods of time off work to recover. During that recuperative time, weekly payments of compensation and medical and like expenses may be payable. When the term 'payout' is referred to, it is most likely referring to the total of the weekly payments of compensation made to the injured worker during their time off work, and the cost of medical expenses, and even the WorkCover Agent's own administrative costs. 

So, the $90,000 referred to is likely to be the bundled total, not the net amount that filters through to the worker.

Injury thresholds

First, to obtain a lump sum no-fault “payout”, an injured worker must be assessed as having a 30% or more whole person psychiatric impairment. This is a much higher threshold than that of physical injuries, which require a 10% or more whole person impairment (5% for spinal and upper/lower limb injuries).

Second, to be awarded damages at common law, an injured worker must initially establish that he or she has sustained a “serious injury” and, additionally, that the injury was caused by the negligence of his or her employer and/or a third party.

Under-reporting

People who have become targets for bullying or who are working under intolerable workloads and other stresses are now more aware that they can and indeed should claim for compensation and medical support. 

But having said that, it’s our experience that many people tend to put up with stress and bullying for long periods before they feel compelled to complain about their treatment and then decide to lodge a claim for support.

It would be wrong therefore to conclude that workers have now suddenly clued onto the idea that WorkCover is an easy touch for compo.

Making a successful claim

Stress related claims are often more difficult to substantiate at the outset than physical claims. So although it has been reported 58 stress claims are approved each week by WorkCover, it is our experience that many are rejected.

How you make a WorkCover claim is important in getting the right outcome.

If you are considering making a claim, you should seek advice on how to do this and what you might then expect as a result of the process that WorkCover will then instigate.

Related Links:

The Age: Job stress compo claims surge to $273 million

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