Since 2010, WorkCover’s claims liability has tripled, driven by the increased cost of weekly income support, many workers staying on the scheme long-term and the rise of mental injury claims.

The State Government has announced changes to the system, including an increase in premiums paid by employers to an average of 1.8 per cent of remuneration, up from 1.27 per cent.

Other changes include:

• A new pilot program, Return to Work Victoria, will provide support for injured Victorians and those experiencing work related mental stress to return to work or training pathways
• WorkSafe will update the test for workers receiving WorkCover weekly payments beyond two-and-a-half years by introducing a Whole Person Impairment test of greater than 20 per cent
• Workers with stress and burnout will no longer access weekly benefits from WorkCover but will be eligible for provisional payments for 13 weeks to cover medical treatment.

The Victorian Government will move to introduce legislation later in 2023. Planned eligibility changes will come into effect in 2024 and will only apply prospectively.

Victorians already receiving WorkCover past the two-and-a-half-year mark will continue under the current scheme while also being eligible to use the services of Return to Work Victoria.

Any financial improvements to WorkCover will not be repatriated to the State Budget, instead returning to the scheme for operational improvements or lower premiums.

A legislated review will take place three years after the changes come into effect to review the impact of the reform.

Victorian Chamber response

Both Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra and Victorian Trades Hall Council Secretary Luke Halikari expressed opposition to aspects of the announced changes.

While the Victorian Chamber acknowledges that the WorkSafe scheme is unsustainable and premiums have remained stagnant for several years, it is disappointing that business is once again asked to foot the bill.

The Chamber has been actively advocating for holistic reform of the system. It’s clear that the mental health injury is a factor in the scheme’s challenges and we would have liked to see more preventative and proactive measures as part of this announcement to ensure that workers can be assessed sooner and get help sooner.

Mr Guerra said: “Today’s 42 per cent increase has contributed to Victoria having the highest WorkCover rates in the country and will impact our reputation as the best place to do business.

“The WorkSafe system is in trouble and it’s clear it’s been in trouble for a while but slugging employers with premium increases, without any other reform measures, is not the answer. We need clear commitment to reform, and they must be legislated. We cannot be back here again next year with another premium increase.

“Employers and employees deserve holistic reform of the system with business and unions having a seat at the table to collaborate on practical, meaningful solutions. The Chamber must be involved in shaping a program to address the mental health crisis among our workforces and we are well placed to do this.

“The only way to prevent further increases of this nature is to deliver real reform of the system which would result in healthier and happier workplaces.

“Ultimately, every business wants to ensure a viable WorkCover System, but no business wants to wear increases of 40-plus percent on premiums. Reform is required. The business community is willing to engage to guide that reform.”

Business assistance

For employers that require assistance on any aspect of their employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222 or visit our website at Services | Victorian Chamber of Commerce and Industry.

If your business is concerned about the physical and psychological safety of employees in the workplace, please contact our Health, Safety and Wellbeing team on 03 8662 5196 or at HSW@victorianchamber.com.au.