Taxpayers left with $100m Comcare compo bill

Posted on October 31, 2013. Filed under: Uncategorized |

The following article appeared in the Canberra times yesterday relating to Comcare’s future viability.  One has only to look at changes made to the work cover scheme in NSW to realise that such reviews rarely benefit employees who are injured at work and who legitimately claim compensation for their injuries.  The first casualty is inevitably the quality and frequency of treatment afforded to injured workers which significantly increases the rehabilitation period costing more money in the longer term (a false economy)

Unfortunately this article, like almost every other article published in the media on the same subject, focuses mostly on the subject of legitimacy of workplace injury claims and does not delve sufficiently into the deeper root causes of such cost blow outs.  There is the subtle suggestion that psychological workplace injuries are somehow less legitimate than physical injuries in the workplace, usually backed up by a reference to a single sensationalist claim such as a worker injured whilst having sex.

What such articles do not reveal are the other significant factors behind the cost blow out of such schemes, which include:

The extent of litigation engaged in by Insurance Scheme (a.k.a Comcare) in order to avoid paying legitimate claims for which they are inevitably found liable.  The costs of fighting such claims often run into millions of dollars, for claims that are often only in the realm of tens of thousands of dollars.  So now we have a claim that is upheld, plus significant legal costs as the Commonwealth typical hires barrister(s) to defend the claim, plus often a cost claim by the injured worker and more often than not, a significant increase in the injured workers injuries and by extension the cost of their rehabilitation.

How many journalists writing such articles ever bother to seek information on how much the insurer has spent on ultimately fruitless litigation or acknowledge the growing criticisms of both judiciary and tribunal over the numbers of matters heard which ultimately should have been concluded in favour of the genuinely injured employee.

Another significant, yet often under examined factor directly related to the increase in the cost of the workers compensation schemes (such as the Comcare scheme) is the manifestly inadequate rehabilitation support provided by licensees of the scheme, particularly in relation to psychological injuries.

There appears to be a growing trend in federal agencies placing psychologically injured workers in the “too hard basket”, preferring to keep them out of the workplace indefinitely where “out of sight is out of mind”, thus all but condemning the injured worker to a never-ending cycle of claims and eventually a life of welfare at 75% of their pre-injury earnings, if they are “lucky”.

Unfortunately many employers, the CSIRO in example, fail to understand the different between back at work and fully rehabilitated, suggesting that their responsibilities towards injured employees end as soon as the employee returns to work, irrespective of whether they are working at pre-injury capacities, in their pre injury roles,  or undertaking appropriate employment duties relevant to their skills.

A number of members have reported to Victims of CSIRO that Comcare have shown a decided lack of interest in ensuring that licensees provided adequate rehabilitation to injured workers, more often than not stating that it is the employers responsibility and nothing to do with Comcare.  Intelligence would suggest that anything that is likely to significantly increase the cost of the Comcare scheme would be of paramount interest.

One also has to look at the performance of Comcare in relation to allegations of unsafe workplace practices, particularly those that are likely to lead to serious psychological injuries.

Again we use the CSIRO as an example:

Comcare in 2012  issued an Improvement Notice to CSIRO in relation to the way it addresses psychological injuries, no doubt accompanied by overt breaches of the Work Health and Safety Act.  In early 2013, the CSIRO announced an investigation (sponsored by the CSIRO), into ongoing allegations of workplace bullying and misconduct which continue to plague the organisation.  In the second half of 2013, the investigator uncovered 134 separate allegations of workplace misconduct, despite many declining to participate in the investigation amid concerns surrounding the impartiality of the process.

Throughout and subsequent to these distinct and separate processes, Comcare have continued to receive compensation claims relating to psychological injuries sustained due to workplace bullying, in one case two from the same site in QLD within weeks of one another plus anecdotal evidence of a further 10-12 allegations at the same work site.

In 2012, other revelations were exposed in the Senate Estimates Committee including:

– The CSIRO failing to investigate in the order of 10-12 additional allegations of harassment of female employees relating to a single senior employee, on the basis that they had not made formal complaints despite the CSIRO having a clear obligation to address any allegations relating to unsafe work practices and allegations of criminal misconduct.

– In 2012, it was also disclosed that CSIRO over recent years had received advice relating to employees on workers compensation who had either successfully committed suicide, unsuccessfully attempted to commit suicide or threatened suicide, despite CSIRO having previously claimed no knowledge of any such instances.  Apparently such matters were not of particular concern to CSIRO as the did not occur whilst on site!

– In 2012, CSIRO CEO, Dr Megan Clark callously stated that she “regretted  a colleague had left CSIRO feeling mistreated” after the “colleague”, Martin Williams suffered a serious psychological injury as a result of the actions of other senior employees of the CSIRO.  It should be noted here that as a result of unreliable information from the CSIRO, Comcare instigated a challenge to Mr Williams legitimate compensation claim which no doubt cost it millions in legal fees to defend.  Despite CSIRO officers having been alleged to have made no less than 128 false statements before the Administrative Appeals Tribunal, no further action was taken by either Comcare or the CSIRO.

– Claims of workplace bullying and lack of rehabilitation support continue to be addressed on a regular basis to Dr Clark herself, yet Dr Clark has consistently failed to demonstrate any leadership in relation to such matters.

Despite Comcare being availed of greater powers to prosecute individuals for breaches of the new Work Health and Safety Act (Cth), there has yet to be a single prosecution in relation the woeful health and safety performance of the CSIRO, particularly in the way the organisation deals with Workplace bullying.

In conclusion, it is not the increase in spurious or false workplace injury claims that is driving up insurance premiums as the mainstream media would have us believe, but is due to the almost complete absence of compliance action undertaken workplace health and safety regulators such as Comcare in a) prosecuting unsafe workplace practices and b) ensuring that licensees such as the CSIRO provide effective rehabilitation programs that don’t simply consist of sitting injured employees at a desk twiddling their thumbs until they can be pushed out of employment under some spurious re-organisational pretence.

There is absolutely no point in changing the legislation when it is obvious that the real problem is enforcement of compliance with the existing legislation itself.

Injured employees deserve far better.
October 31, 2013 – 12:00PM

Reporter for The Canberra Times

Taxpayers have been left with a bill of nearly $100 million in the past year as the cost of public service workers’ compensation claims continues to climb.

Federal government workplace insurer Comcare will unveil a $98 million loss in its annual report, blaming more psychological claims in public service workplaces and “injured” bureaucrats staying off work longer.

The scheme’s long-term liability for payouts is now more than $2.6 billion, with more than 30 per cent of it unfunded, and last year’s horror losses of more than half a billion dollars have been revised upward to a book loss of $670 million after changes to accounting practices.


Federal departments and agencies had to find an extra $70 million for workers compensation premiums in 2012-2013 and are looking at another 18 per cent increase in 2013-2014 as Comcare tries to fund its long-term liabilities.

Despite Comcare’s win in the High Court on Wednesday against a public servant claiming compensation for injuries sustained while having sex, the results look set to intensify the momentum for reform to public sector workers’ compensation.

Despite accepting fewer claims in 2012-2013 than the previous year, the cost of payouts, including medical, legal and other overheads, grew by nearly $40 million to $360 million in 2012-2013.

Comcare chief executive Paul O’Connor, in his foreword to the report, said the stay-away rate and growing numbers of public sector psyche claims were to blame for the scheme’s continued financial woes.

“Psychological injury costs continue to rise and the length of time ill or injured people are away from their work has worsened at public sector workplaces,” Mr O’Connor wrote.

In March a review of the scheme ordered by previous Labor Government ordered a review urged sweeping reform to cut down on dubious claims for psychological injuries, payouts for dodgy therapies, doctor shopping and outright fraud.

The review made more than 147 recommendations to rewrite the legislation on federal public sector compensation claims with the aim of getting injured bureaucrats back to work and ending their “passive” reliance on compensation.

But legislation to implement changes has stalled with the change of government.

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