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Overview - Workers Compensation Schemes

Contributed by Peter Sutherland and current to July 2018.

Workers Compensation - Principles and Features

Workers compensation is a scheme for payment of compensation to an injured worker under a legislative scheme which compels all insurers to be covered under the scheme and to pay premiums based on the wages of their workers, the level of risk of the type of work, and uplifts or rebates depending on the cost of claims incurred by the business.

The general principles and features of workers compensation schemes are:
  • Compensation is paid to injured workers or their dependants on a "no fault" basis, even if a worker's negligence contributed to their injury. Most schemes include some exclusions, including for self-inflicted injuries and injuries caused by serious and wilful misconduct.
  • Compensation benefits usually include incapacity payments (based on pre-injury earnings), permanent impairment payments assessed under a Permanent Impairment Guide, medical treatment costs, death benefits for dependants, and rehabilitation services.
  • Most modern workers compensation schemes place a high priority on managing workplace risk (OHS), rehabilitation, and early return to work.
  • Employer participation in the scheme is made compulsory by legislation and substantial penalties exist for failing to obtain coverage or under-declaration of total wages paid to workers.
  • Most schemes in Australia now prohibit or substantially restrict access to common law actions by worker in respect of negligence by the employer. The ACT private sector scheme is the only scheme to have unrestricted access to common law.
  • Workers compensation schemes are regulated by government authorities. Some schemes are entirely managed and underwritten by government, while other schemes may have varying levels of private sector management and underwriting. Large employers may apply to the workers compensation authority to become a "self-insurer".
  • Workers compensation schemes cover workers employed by an employer. Genuine contractors and self-employed business owners generally are not covered by workers compensation and must make their own income protection insurance arrangements. Most schemes have provisions to prevent sham contracting arrangements designed to avoid workers compensation premiums and other regulatory costs.
The various Schemes operating in Australia are discussed in this Chapter of the ACT Law Handbook.

ACT Private Sector Workers Compensation Scheme

Workers compensation for private sector employees in the ACT is governed by the Workers Compensation Act 1951 (ACT). The scheme covers employees who work in the ACT and extends coverage to injuries incurred outside the ACT if the worker's employment is connected with the ACT.

The ACT workers compensation regulator is WorkSafe ACT.

This Scheme is discussed in detail in ACT Private Workers Compensation Scheme.

Commonwealth and ACT Government Workers Compensation (the Comcare Scheme)

Workers compensation for employees of the ACT Government and of the Commonwealth Government and its various agencies is governed by the Safety, Rehabilitation and Compensation Act 1988 (Cth), and is often referred to as the "Comcare Scheme", named after one of the Scheme's regulators.

The SRCA scheme also covers a number of large national companies licensed to operate under the Comcare Scheme including Telstra Corporation, Optus, Commonwealth Bank, National Australia Bank, CSL, John Holland, TNT, Virgin Australia Airlines, Medibank Private, Prosegur, Linfox and a number of other transport companies.

This Scheme is discussed in detail in ACT Government and Commonwealth Workers Compensation (Comcare Scheme).

Military Compensation Schemes

Compensation for members and former members of the Australian Defence Force (ADF) involves a complex, interacting set of legislative arrangements under the:
* Military Rehabilitation and Compensation Act 2004 (Cth) (MRCA);
* Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (Cth) (DRCA); and
* Veterans' Entitlements Act 1986 (Cth) (VEA).

These Schemes cover all current and former members of the ADF (full-time members and Reservists), some veterans of allied forces now residing in Australia, and certain declared groups such as holders of honorary rank, entertainers and charitable support workers in overseas conflicts.

ADF members cannot seek coverage under other schemes where the injury was incurred during their ADF service, however a person may be in receipt of military compensation and other workers compensation where they were injured in both civilian and military employment.

These schemes are discussed in Veterans' Entitlements and Military Compensation.

State/Territory Workers Compensation Schemes

Workers compensation for workers in each State and Territory is governed by State/Territory legislation covering both private sector and government employees, including local government employees. The various State/Territory schemes are broadly similar, but vary considerably in relation to benefit levels, assessment of impairment, rehabilitation and medical treatment, review and appeals, and scheme governance. Common law actions have been abolished or substantially constricted in all State/Territory jurisdictions other than the ACT.

New South Wales - Workers Compensation Scheme

The NSW workers compensation scheme is governed by the Workers Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers Compensation Act 1998 (NSW).

The NSW workers compensation regulator is the State Insurance Regulatory Authority (formerly WorkCover NSW). SIRA covers motor accident CTP insurance and home building compensation as well as workers compensation.

Northern Territory - Workers Compensation Scheme

The NT workers compensation scheme is governed by the Return to Work Act (NT) and the Return to Work Regulations (NT).

The NT workers compensation regulator is NT WorkSafe.

Queensland - Workers Compensation Scheme

The Queensland workers compensation scheme is governed by the Workers Compensation and Rehabilitation Act 2003 (Qld) and the Workers Compensation and Rehabilitation Regulation 2014 (Qld).

The Queensland workers compensation regulator is the Workers' Compensation Regulator (formerly Q-COMP).

South Australia - Workers Compensation Scheme

The SA workers compensation scheme is governed by the Return to Work Act 2014 (SA).

The South Australian workers compensation regulator is ReturntoWork SA.

Tasmania - Workers Compensation Scheme

The Tasmania workers compensation scheme is governed by the Workers Rehabilitation and Compensation Act 1988 (Tas). Extensive amendments to the Act commenced on 1 January 2018.

The Tasmanian workers compensation regulator is WorkCover Tasmania.

Victoria - Workers Compensation Scheme

The Victorian workers compensation scheme is governed by the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic). Claims made before 1 July 2014 are still dealt with under the Accident Compensation Act 1985 (Vic).

The Victorian workers compensation regulator is Worksafe Victoria.

Western Australia - Workers Compensation Scheme

The WA workers compensation scheme is governed by the Workers Compensation and Injury Management Act 1981 (WA).

The Western Australian workers compensation regulator is WorkCover WA.

Other Australian Workers Compensation Schemes

Seafarers Rehabilitation and Compensation Act 1992

The Seacare Compensation Scheme was established by the Seafarers Rehabilitation and Compensation Act 1992 (Cth) which commenced, in substantive terms, on 24 June 1993. Seacare is a national scheme of occupational health and safety, rehabilitation and workers compensation arrangements that apply to seafaring workers.

The Seacare Scheme is closely modelled on the 1988 SRCA scheme, particularly with respect to liability for compensation and benefit levels. Differences exist in the transitional arrangements from the Seamen's Compensation Act 1911 and in the fact that the scheme involves private employers and private insurers. Cases on the Seafarers Act and the SRCA are often relevant to both Acts.

The Seacare Compensation Scheme covers employees on a "prescribed ship" that is engaged in trade or commerce:

(a) between Australia and places outside Australia; or

(aa) between 2 places outside Australia; or

(b) among the States; or

© within a Territory, between a State and a Territory or between 2 Territories: s 19(1).

The few persons who work on boats on lakes in the ACT will not be covered by the Seacare Scheme as they are not working on a "prescribed ship". However, there may be a small number of FIFO workers living in the Territory who are engaged on ships or oil rigs that are covered by the Seafarers Act.

The High Court considered the Seacare Compensation Scheme in Smith v ANL Limited (2000). See also ASP Ship Management Pty Ltd v Administrative Appeals Tribunal (2006) where the Full Federal Court discussed the meaning of "prescribed ship" which s 3 states is a ship to which Part II of the Navigation Act 1912 applies.

The Seacare Compensation Scheme is regulated by the Seafarers Safety, Rehabilitation and Compensation Authority with the assistance of Comcare. See the Seacare web site for further information

The Seafarers and Other Legislation Amendment Bill 2016, which was still before the Parliament in July 2018, proposes substantial amendments to the Seafarers Act and other legislation (including the SRCA), and repeal of the Seafarers Rehabilitation and Compensation Levy Collection Act 1992 and its substitution by a new levy scheme under the Seafarers Safety and Compensation Levies Bill 2016. In part, the amendments are intended to reverse the effect of the Full Federal Court decision in Samson Maritime Pty Ltd v Aucote (2014), which held that the Seafarers Act had wider coverage than envisaged by the key stakeholders in the scheme.

Parliamentary Injury Compensation Scheme

The Parliamentary Entitlements Amendment (Injury Compensation Scheme) Act 2016 (Cth) amended the Parliamentary Entitlements Act 1990 and Part VII of the SRC Act on 9 May 2016 to allow the Minister to establish a "Parliamentary injury compensation scheme" (PICS) by disallowable legislative instrument under new s 9A of the Parliamentary Entitlements Act. Part VII of the SRC Act was amended to authorise Comcare to manage claims under the Scheme, which is administered by the Minister for Finance. The PICS covers members, Parliamentary office-holders, Ministers and the spouse of the Prime Minister and is based on the benefits available under the SRCA. Many SRCA definitions are applied to the PICS by s 5 of the Parliamentary Injury Compensation Scheme Instrument 2016.

The Parliamentary Entitlements Act 1990 was repealed and substituted the Parliamentary Business Resources Act 2017 (Cth) on 1 January 2018. Section 41 in Part 5 of the new Act provided for the Parliamentary Injury Compensation Scheme in similar terms to the repealed 1990 Act. Item 4 in Schedule 3 to the Parliamentary Business Resources (Consequential and Transitional Provisions) Act 2017 provided for the continuation of the Parliamentary Injury Compensation Scheme Instrument 2016 and item 10 was an application provision concerning expenses, charges, obligations and liabilities of Comcare under the previous scheme.

Before the commencement of the PICS, members of Parliament were covered by superannuation and ex gratia arrangements and had the right to take common law action in respect of injuries.

Judges' Pensions Act 1968

The Judges' Pensions Scheme is established under the Judges' Pensions Act 1968 (Cth) and is administered by the Commonwealth Department of Finance. It is a superannuation scheme which provides full benefits after 10 years of Commonwealth judicial service, and a reduced pension for shorter judicial service. The Act covers judges of the High Court, the Federal Court, the Family Court and certain other persons with judicial status. Judges of the Federal Circuit Court are covered by the SRCA.

A Judge who retires on the grounds of permanent disability or infirmity (which is certified by the Finance Minister in consultation with the Attorney-General), is entitled to a pension of 60 per cent of the Judge's salary or the salary payable to an equivalent level Judge (whichever is applicable). Benefits are also payable to spouses and dependent children.

The operation of the Scheme is set out in the Judges Pension Scheme Handbook.

Internal and External Territories - Workers Compensation Schemes

Jervis Bay Territory

The laws of the ACT apply in the Jervis Bay Territory, providing they are not inconsistent with an Ordinance. For details of the relevant scheme, see ACT Workers Compensation Scheme.

Norfolk Island

The Norfolk Island Public Workers Compensation Scheme, which covers private sector workers, continues to operate in accordance with the Norfolk Island Employment Act 1988 until further notice.

Certain NSW industrial relations laws (including the Workers Compensation Act 1987 (NSW) and Workplace Injury Management and Workers Compensation Act 1998 (NSW)) commenced operation as applied laws on Norfolk Island from 22 March 2018 in relation to NSW government employees who are exercising powers or performing functions or duties under an arrangement entered into under section 18C of the Norfolk Island Act 1979. See s 6A of the Norfolk Island Applied Laws Ordinance 2016.

Christmas Island

The Christmas Island Act 1958 (Cth) applies Western Australian laws on Christmas Island: Legal framework and administration.

Cocos (Keeling) Islands

The Cocos (Keeling) Islands Act 1955 (Cth) applies Western Australian laws on Cocos (Keeling) Islands: Legal framework.

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