In early 2024, the Victorian Government passed legislation introducing some of the most considerable changes to the Victorian Workcover System in decades, which our workers compensation lawyers believe to be a significant overreach.

The changes were made under the guise of “modernising” the WorkCover Scheme, however, in effect those changes have significantly eroded the rights of Victorian Workers when it comes to workplace injury and workers compensation.

The changes target workers suffering from mental health conditions and enshrine that the vast majority of injured workers will no longer be entitled to weekly compensation payments beyond 130 weeks.

While it is clear that the Workcover Scheme was in need of reform to remain economically viable, the changes were introduced without adequate consultation and in a manner that lacked transparency.

Such a severe tightening of the scheme’s purse strings at the expense of some of the state’s most vulnerable workers, is overreach, going far beyond the issues which have long been identified as Scheme challenges.

As some of Victoria’s most committed personal injury and workers compensation lawyers, we will now explain these changes and their practical implications in further detail.

Mental Injury

A definition of “Mental Injury”:

Previously the law did not define ‘mental injury’.

A new definition of ‘mental injury’ has now been introduced which provides that the injury must:

• cause significant behavioural, cognitive or psychological dysfunction; and
• be diagnosed by a ‘medical practitioner’ in accordance with the latest Diagnostic and Statistical Manual of Mental Disorders (DSM-V).

This will undoubtedly narrow the types of psychological conditions that will be accepted under WorkCover and mayalso delay acceptance of claims, as in the absence of a formal diagnosis a claim cannot be accepted.

For example, under the new legislation, if an injury is recorded by a doctor as being for

“stress”, it will no longer be compensable as this is not a formal DSM-5 diagnosis

The new definition will not apply to provisional payments, which means all workers who lodge claims for mentalinjuries will still be entitled to payment for their reasonable medical treatment costs for up to 13 weeks.

A new threshold for Mental Injuries:

Injured workers must now also establish that employment is the ‘predominant’ cause of their mental injury.

Previously, employment only needed to be ‘a cause’ of mental injury, or in the case of an aggravation a “significant contributing factor”.

This reflected that mental conditions could often result from multiple factors, but meant a person would not beprevented from claiming benefits merely because their mental health was impacted by other events or circumstances.

However, it will now be necessary for injured workers to prove that employment exceeds all other causes or is “the most significant” cause of their mental injury.

This requirement is likely to impact most those with pre-existing mental health conditions. Exclusions:

Workers with mental injuries will no longer be entitled to compensation if their injury is “predominantly caused by workrelated 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”.

This will likely exclude workers whose injury is caused by “over-work” or “interpersonal conflict”.

Fortunately, there is an exception to this exclusion where that mental injury is “predominantly caused by traumatic events experienced by the worker that may be considered usual or typical and reasonable expected to occur in the court of the workers duties”.

The means emergency service and other frontline workers exposed to traumatic events as part of their usual duties will likely satisfy the test.

It also the door open for workers who experience bullying, harassment and discrimination in the workplace.

It should be noted that the terms “usual”, “typical” and “reasonably expected to occur” have not been defined. How they will be applied in practice will therefore be a matter of interpretation by WorkSafe and insurers. As such, it will be very important to obtain legal advice in the event of a dispute, as we expect the courts will need to clarify this.

The new provisions regarding mental injury will impact any injury suffered on or after 31 March 2024.

Changes to Weekly Payment Entitlements after 130 weeks

The new law introduces an additional test for workers to continue receiving weekly payments after 130 weeks.

For workers who reach 130 weeks of payments after 31 March 2024 to receive ongoing payments, they must not only prove they are incapable of working in any capacity indefinitely, but must now also be found to have a whole personimpairment of over 20%.

This is a very high threshold, which in our experience will often not be reached.

When assessing the level of impairment, the medical practitioner must assess the worker’s physical and mental injuries separately. This means workers who suffer both physical and psychological injuries will only meet the test ifeither their physical or mental injury meet the threshold.

Where a person’s injuries are not stable, WorkCover and the Insurers may make an interim determination about a person’s eligibility to receive weekly payments after 130 weeks.

Importantly, except where subsequent surgery is undertaken, the impairment assessment will be final and no further assessments will be undertaken for those injuries, irrespective of changes over time.

An impairment assessment can only be appealed by a referral to an independent Medical Panel.

The Impairment assessment will also impact on other Workcover benefits, as a person’s entitlement to a lump sumimpairment benefit, will also be based on this final assessment.

Whilst the changes are not confined to workers with a mental injury, as these workers often remain on payments for longer periods, they will constitute a large proportion of those impacted.

Given the impact of these changes, it will be very important for injured workers to seek legal advice.

Conclusion

The recent amendments to the WorkCover Scheme create significant barriers for mentally ill workers to access WorkCover entitlements. The cost of managing mental injury for those with rejected claims, will now shift to an already stretched public health and welfare system.

The WorkCover scheme was designed with physical injuries in mind and undoubtedly required updating to adequatelydeal with the complexity of mental injury claims. However rather than truly “modernising” the scheme by making structural improvements to better manage these claims, the amendments merely attempt to exclude them.

Not surprisingly early statistics, suggest that the changes will lead to considerable reductions in scheme liability. But the cost of sustainability appears in this case to be equity. If the information in this article is of further interest to you, please review our personal injury page or contact one of our courageous workers compensation lawyers today who can help determine the appropriate course of action.