Western Australia's Modernised Workers Compensation and Injury Management Act - What You Need to Know | IRP

Peter Spark • June 26, 2024

How the WA Workers Compensation and Injury Management Act Will Impact Your Business

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On 1 July 2024, the Western Australia Workers Compensation and Injury Management Act 2023 came into effect.


The Act has been re-written and contains several key changes. Employers will need to be aware of new laws, along with the impact on workers compensation and claims management. Some of these changes include new penalties for non-compliance and additional claim and insurance costs, which could be significant without further review and investment in claims management (see WorkCover WA cost estimate from Modernising WA’s Workers Compensation Laws). 


Final wording and specific details for associated regulations are not available. However, regulations have been drafted identifying and referencing relevant sections of the new Act. 


Deferred Decisions

Where a decision is made to defer a decision (or pend liability), workers will be entitled to provisional payments while those investigations are being conducted. 


Under the new legislation, if an insurer defers their liability decision and no decision to accept or decline is made within 28 days, provisional payments must be commenced. Provisional medical and health expenses are payable from the date of injury, with provisional compensation from the day of incapacity. 


Back payment of the provisional income compensation is to be from the date of injury, meaning delayed lodgement claims will need a very strong focus on the investigations to ensure a decision can be made prior to the 28th day. 


Claim Process 

If the insurer does not provide a response to the worker within 14 days, the insurer or self-insurer, will be deemed to have accepted that the employer is liable to compensate the worker and payments of compensation must be made. This includes income compensation for any incapacity.  


Responding to a Claim for Compensation 

Employers will have seven (7) calendar days to provide the claim form and medical certificate to the insurer from the date it’s provided to them by the worker. This is a change from five (5) business days and failure to comply may result in a $5000 fine, which is an increase from the $1000 previous penalty. The insurer has new notice periods including: 


  • Liability notice must be issued within 14 days 
  • ‘Deferred decision notice’ to be issued within 14 days 
  • Within 28 days of receiving a claim and a deferred decision notice issue, provisional payments are to be paid (unless a liability notice has been issued in the interim) 
  • Deemed liability acceptance day = 120 days from receipt of claim 

 

Previously, workers had to give notice of an injury. Under the new Act, notice is no longer required. However, a claim still needs to be submitted within 12 months, although it’s likely that some leniency will be given to workers on this, depending on the circumstances. 

 

Common law - a worker must have a WPI of 15% to settle under section 92(f). Claims will no longer be able to settle under 92(f) to extinguish common law if WPI is less than 15% (assessment must be registered and writ must have been filed). 


Psychological Claims 

There is some tightening of exclusions for psychological claims. Exclusion of psychological and stress related injury now relates to any psychological or psychiatric condition arising from reasonable formal administrative actions, including performance appraisals. However, the exclusion doesn’t apply if the action is deemed harsh or unreasonable, or is arising out of other conduct of the employer (i.e. bullying). 


There are key changes here from the word formal, which should be interpreted as thoroughly documented, robust HR administration. And in a practical sense, the definition of what is unreasonable is yet to be tested or understood.  


Injury Management & RTW 

Employers, insurers or agents of the insurers (i.e. rehabilitation consultants) are now prohibited from attending clinical examinations with workers. However, they are permitted to attend return-to-work case conferences.  The new Act now provides for workers with an incapacity to attend and cooperate in a case conference with the employer, insurer or rehabilitation consultant with the workers treating medical practitioner. Regulations around notice, frequency and other details are yet to be outlined.   


Discontinuing income compensation payments to a worker has increased from 13 weeks to 26 weeks. 


Employers will be allowed to immediately discontinue income payments when a worker returns to work. Previously, employers needed to wait 21 days. 


Higher caps on medical and health expenses compensation have been prescribed in the new Act from 30% to 60% of the general maximum amount. This would equate to an increase from $75,817 to $151,634. 


WorkCover WA estimates a nearly 1% lift in the average premium rate will result from increasing the point income compensation payments drop from 13 to 26 weeks. The anticipated increase in the capped amount for medical and health expenses compensation, from 30% to 60% of the general maximum amount, is projected to result in a 0.91% rise in the average premium rate. 


Pre-employment Screening 

There are now prohibitions on pre-employment medical screening disclosures relating to previous workers compensation claims. Fines of up to $10,000 exist for any violation. 

 

How Should Employers Prepare? 

Adjusting claims management practises, supporting your workers, and engaging them within your workplace with meaningful, suitable duties as soon as possible will make a huge difference. Working with your Injury Management specialist can help to work through and prevent claims running out of control, as well as help to maintain engagement, progressive rehabilitation and support the workers recovery and ultimate closure of the claim. 


The new legislation is going to result in claims costing more and therefore premiums, which are estimated to rise by about 2% of your payroll. For most employers, that’s a very substantial budget to invest in prevention. Strategically increasing spend on health and safety in the right areas should really be paramount. 


Reviewing your policies and procedures should be part of the investment too. So too, training of line managers in areas that will have the biggest impact on prevention, particularly psychological and stress related issues where a formal documented approach is a mandatory prerequisite to managing claims of this nature. And with the claims process itself, ensuring the overall investigation is conducted quickly and contains detailed facts with documented and photographic or video/CCTV information. 


Employers should review their policies and procedures to ensure that they include things like offering an employee a support person when conducting any administrative action. 


Delayed lodgement of claims will need a speedy and comprehensive investigation to ensure a decision based on strong facts and supporting evidence can be made prior to the 28th day. 

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Free Workers Comp Practical Recommendations Guide

Not only is it important to be aware of the new laws, it's also essential to implement the right changes.


This summary of key changes to the WA Workers Compensation goes through each new legislation with a range of practical recommendations to help you get started.


Download Free Guide

How We Help 

Workers Compensation is already complicated and time consuming with a whole range of financial and non-monetary costs for everyone involved. Despite the Government’s best intentions, the new Act makes the system more costly, more complex and time consuming to manage. 


At IRP we have the expertise, experience and empathy to help employers. Our focus is always on prevention and being strategically proactive. Unfortunately, there are injuries and claims made and we employ the same philosophy, strategically preventing claims from running out of control (and its genesis is usually very early on in the claim). 


We offer a workplace/shop floor-based assessment and support including: 


  • Audit of current safety systems with practical recommendations 
  • Review of incident and injury procedures 
  • Claims management processes 
  • Specialist workers compensation claims advice and guidance 
  • Hands-on management of claims, including direct contact with your insurer, broker, or rehab provider 


For an initial discussion or for more information on changes to Workers Compensation, please contact Alex Young at 0407 187 327 or email alex@irp.net.au.


More information can be obtained from the WorkCover WA website https://www.workcover.wa.gov.au/ 


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