Changes to WorkCover in Victoria

The Victorian Government has passed new laws which will bring in changes to the WorkCover system.

The changes relate to work related psychological injury claims, as well as workers entitlements to weekly payments beyond the first 130 weeks.

The changes will come into force on 31 March 2024. How and who this applies to will be detailed below.

Psychological injury claims

The old test

Currently the test required to claim workers compensation benefits in Victoria for a psychological injury is:

1. That you have a diagnosable psychological injury.
2. That the injury does not arise out of reasonable management action taken in a reasonable manner.
3. That work was a contributing factor to the injury.

The new test

The new test will apply to injuries occurring on or after 31 March 2024.

This means that if you sustained an injury in December 2023, for example, you could still lodge a claim in April 2024 for that injury and the old test would apply.

What will happen with psychological injury that is caused prior to the new test commencing and continuing after the new test comes into effect remains to be seen.

So what’s the new test?

1. That you have an injury that causes significant behavioural, cognitive or psychological dysfunction.

2. That the injury does not arise out of reasonable management action taken in a reasonable manner.

3. That work was the predominant cause of the injury.

4. That the injury was not caused predominantly 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.

Going through each change one at a time, we can see that there are significant differences in the new test.

It has been made much more difficult for people who have psychological injury to have a WorkCover claim accepted.

1 – Significant behavioural, cognitive or psychological dysfunction -v- diagnosable psychological injury.

Clearly, the test is now harder to satisfy as not only must you have a diagnosable injury, but it must also cause a “significant” change.

It is unknown at this stage who will decide what constitutes a “significant” dysfunction and it seems very likely that this will be something that is subject of review and judgement by the Courts, who will clarify what the test requires.

Initially, it seems likely that the WorkCover insurers will have the ability to determine that there is no “significant” dysfunction.

2 – reasonable management action.

There’s been no change here, but we assume that this test will become much less often relied upon by WorkCover insurers as in most cases, the new stress and burnout exclusion (discussed below) will supersede this test as the main reason relied upon to reject a claim.

3 – predominant cause v contributing factor

The new test is harder to satisfy. Previously, you could have had other causes of psychological injury or stress which may have been non work related, as well as the work related factors. Your claim could still be accepted in those circumstances.

Now, work must be the predominant cause. Again, this might be a definition that gets clarified in the Courts, and at some point we may have a ‘precedent’ set that sets out when an injury is predominantly caused by one factor or another.

Putting that aside for now, we can assume that if there are multiple factors contributing to your injury and work is not clearly the major cause, the claim will likely be initially rejected.

4 – work related stress or burnout

Any claim related to injury 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 is going to be rejected (with one exception noted below). This is the part of the test that has received the most publicity and scrutiny.

What’s not covered by the work related stress or burnout test?

Bullying, harassment and traumatic events. As a straightforward example, if you work at a bank, and there is an armed robbery of the bank which you witness, you will be able to claim compensation for stress.

There is also a direct exception to the new test, which is where the stress or burnout is caused by traumatic events experienced by the worker that may be considered usual or typical and reasonably expected to occur in the course of the worker’s duties.

This means for example that emergency service workers may be able to claim in relation to burnout because it is acknowledged that their work is by its nature very stressful, with exposure to traumatic events.

Finally, we note the language used that the stress or burnout caused by events that may be considered usual or typical and reasonably expected to occur.

Let’s say someone who was employed to work 38 hours a week ended up working 45 hours a week and was burnout because of that.

It seems very likely that a WorkCover claim made on this basis would be rejected as 7 additional hours per week would be considered, usual, typical and reasonably expected to occur.

What though if the worker was employed for 38 hours per week but was required to work 60 hours per week?

That might not be considered usual or typical and reasonably expected to occur.

It may well be that there are some additional circumstances where claims for burnout or stress can be accepted even when the bulling or harassment exception does not apply.

Post 130 weeks of weekly payments

The second lot of changes related to when a person is in receipt of weekly payments. Specifically, when an injured person is attempting to claim weekly payments post 130 weeks.

In order to stay in receipt of weekly payments post 130 weeks, the old test is that a person must have no work capacity, and that this incapacity is likely to continue indefinitely.

The new test adds an additional requirement to this – a requirement that you reach a minimum whole person impairment rating.

The changes outlined below will apply only to claims that reach 130 weeks honour, after 31 March 2024.

And if you have already reached 130 weeks of weekly payments, then these changes will not be applicable to you.

An assessment of your whole person impairment

When you are approaching the 130 week mark, the insurer will organise an assessment of your work capacity.

This is what happens currently, and will continue to happen under the new test.

Additionally, however, there now be an assessment of your whole person impairment of your injury or injuries.

And only those workers who have been assessed as having a 21% or more whole person impairment rating, and who satisfy the current test (i.e., that a person has no work capacity, and that’s likely to continue in definitely), that a person will be entitled to receive weekly payments post 130 weeks.

Conclusion

The changes to WorkCover have altered the test needed to be satisfied in order to have a claim for psychological injury accepted, and to stay on weekly payments post 130 weeks.

Over time, it will become clearer how the new tests will be applied.

What we can assume in the future though is that more claims are going to be rejected based on these changes to the act which will come into place on 31 March 2024.

As always, remember that this article is not legal advice, that some terms and descriptions are simplified for clarity, and that each sets of facts are different and can lead to different outcomes.