There are many myths being spread about Workers Compensation:

Myth 1: Cuts are needed because the workers compensation scheme has a $4 billion deficit

  1. Even in June 2012, when the NSW Government was claiming the workers compensation scheme had a $4 billion deficit, the workers compensation system had enough money to meet its current liabilities.
  2. That’s because the size of the deficit is based on anestimate of future potential claims, which is something no-one can predict.
  3. The size of the deficit was also in large part due to poor investment returns during the Global Financial Crisis.
  4. Since then, the actuaries have reported that the deficit in June 2012 was actually closer to $2 billion. And due to the economy improving and the massive cuts to injured workers rights, the scheme returned to surplus in 2013.
  5. The actuaries now say the scheme would have returned to surplus in about a decade, even without the cuts to workers compensation.
  6. In May 2014, the scheme was in surplus by $1.3 billion. That surplus is growing by $500 million every six months.
  7. This surplus has come directly out of the pockets of injured workers pockets mainly by:
    • Excluding journey claims;
    • Stopping most weekly payments after 2.5 years, with no consideration of whether the person has recovered or is in employment;
    • Stopping medical payments one year after weekly payments end, with no consideration of whether the person has on-going medical needs.
  8. This means injured workers and their families (and taxpayers through increased use of Medicare and social security) are bearing the cost of the cuts to the workers compensation system.

Myth 2: Injured workers are rorting the system

  1. Only about 30% of injured workers need five days or more off work.
  2. Only 1000 injured workers in the last 25 years qualify as “seriously injured” under the Government’s scheme giving them lifetime payments and medical.
  3. Tens of thousands of injured workers have been cut off weekly payments or medical costs since the workers compensation cuts, even if they are still injured and not working.

Myth 3: NSW Employers are paying too high workers compensation premiums

  1. Even before the cuts, NSW employers have enjoyed a 33% reduction in workers compensation premiums since 2005 delivering them huge savings of $1 billion.
  2. Since the workers compensation cuts, employers have had their premiums reduced by a further 12.5%.
  3. While premiums are lower in some other States and Territories, South Australia and the ACT are higher.
  4. There is no evidence lower premiums motivate employers to move States.
  5. Most other States and Territories also have significantly lower rates of serious claims than NSW.
  6. If NSW employers reduced the number of injuries at work, their premiums would drop.

Myth 4: If you cut injured workers rights, they will return to work sooner

  1. Making injured workers survive on lower or no weekly payments won’t stop them being injured but will make it harder for them to make ends meet.
  2. The Government has claimed return to work rates have improved since the workers comp cuts but they are counting people who have been cut off from the system and have no job whatsoever.
  3. Many injured workers can work but their employer can’t or won’t give them a suitable job. Cutting their weekly payments won’t change this fact.
  4. Many injured workers are working, but need follow-up operations or medication for many years. To cut them off from weekly benefits and medical costs is heartless and will put a huge financial strain on these families.
  5. If injured workers can’t work but are cut off from weekly payments, they are being forced to move onto Centrelink payments. This means taxpayers, not insurance companies, bear the cost.