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This article was co-authored by Estelle Sutherland (Paralegal, Melbourne) and originally published in AMA Victoria's Check-up Newsletter in August 2024.
In brief
Significant changes to Victoria’s WorkCover framework came into effect from 31 March 2024. These changes are set to impact medical practitioners and patients involved in the WorkCover scheme, particularly in relation to eligibility for mental injury compensation and the requirement for whole person impairment (WPI) assessments for weekly payments after 130 weeks.
The legislative changes
On 31 March 2024, new changes to Victoria’s WorkCover scheme were introduced by the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Act 2024. These changes have amended the Workplace Injury Rehabilitation and Compensation Act 2013 (the Act), the legislative framework governing workplace injury compensation in Victoria. Relevantly, the changes will modify certain eligibility requirements for WorkCover and will impact the form of assessment undertaken by medical practitioners.
Change 1: Mental injury definition
The first significant change introduced by the amendments is a modification to the definition of mental injury that will limit entitlements to compensation. The amendment will introduce a new definition of ‘mental injury’ under the Act. Mental injury will now be defined in section 3 of the Act for the purposes of an entitlement to compensation as an injury that:
(a) causes significant behavioural, cognitive or psychological dysfunction; and
(b) is diagnosed by a medical practitioner in accordance with the latest version of the Diagnostic and Statistical Manual of Mental Disorders.
Medical practitioners who are required to complete Certificates of Capacity should be mindful that compensation will only be available for those with a diagnosis listed in the Diagnostic and Statistical Manual of the American Psychiatric Association. These will include, for example, diagnoses such as generalised anxiety disorder, acute stress disorder or post-traumatic stress disorder. Diagnoses such as ‘stress’ or ‘fatigue’ will not meet the requirement contained in the new definition of ‘mental injury.’ Medical practitioners should note, however, that this new definition of ‘mental injury’ does not apply for the purposes of assessing the degree of psychiatric impairment.
For primary mental injury claims, employment must be the strongest or largest contributing cause of a worker's mental injury for it to be eligible for compensation.
Importantly, under the new section 40(1)(1A), workers will not be eligible to receive compensation where their mental injury has primarily been caused by stress or burnout emanating from usual or typical events which are reasonably expected to occur in the course of their duties. Moreover, under the new section 40(2A), a person is not entitled to compensation for a mental injury that is a recurrence, aggravation, acceleration, exacerbation or deterioration of a pre-existing mental injury unless their employment was the ‘predominant’ cause for this.
On the other hand, the new section 39(2A) provides that workers who suffer mental injuries due to exposure to traumatic events as part of their usual duties will be entitled to compensation. Traumatic events may include exposure to abuse and threats of, or actual, physical harm. This section may apply, for example, to certain front-line workers such as emergency services workers.
The above changes will apply to mental injuries which occur on or after 31 March 2024.
Change 2: Whole person impairment assessment
Another important change introduced by this amendment relates to the criteria for ongoing eligibility for compensation. This amendment introduces a further requirement for workers seeking to continue receiving weekly WorkCover compensation payments beyond 130 weeks (the second entitlement period). In addition to the pre-existing requirement for an assessment of a worker’s capacity to work, a worker will now also need to undergo a WPI assessment after 130 weeks. A worker must be found to have a WPI of at least 21 per cent and meet the capacity test to be eligible to continue to receive weekly compensation payments after 130 weeks have passed.
In limited circumstances, a worker may not need to undergo a WPI assessment at 130 weeks, for example if there is no reasonable prospect that the worker has a WPI of 20 per cent or less and this is likely to be the case permanently. An interim assessment may also be made in circumstances where an injury has not yet stabilised.
Workers receiving compensation will therefore be required to undergo a WPI assessment after their first entitlement period. If a worker fails to meet the above requirements, their compensation in the form of weekly payments may cease.
This amendment will apply to WorkCover compensation claims which reach 130 weeks on or after 31 March 2024.
Key takeaways
The changes introduced by the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Act 2024 will impact on compensation entitlements for mental injuries and for those receiving payments after their first entitlement period. Medical practitioners should be aware of these changes which may affect their own eligibility to workplace compensation or their completion of Certificates of Capacity for others.
Healthcare
Australia