On 31 March 2024, a number of legislative amendments were introduced into the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic). These changes will have a significant impact on current and future WorkCover claimants and in particular circumstances where compensation is payable for work related mental injuries and the introduction of an impairment threshold for weekly payments following the expiration of the second entitlement period (130 weeks).

Mental injury claims – a new definition and changes to eligibility

The changes to the eligibility for mental injury claims apply to claims made in respect of injuries that occur on or after 31 March 2024. To confirm, these changes do not apply to mental injuries occurring prior to this date.

A mental injury is now defined as:

• an injury that causes significant behaviour, cognitive or psychological dysfunction; and
• is diagnosed by a medical practitioner in accordance with latest Diagnostic Statistical Manual of Mental Disorders.

A medical practitioner who can provide a diagnosis is a general practitioner or a psychiatrist. A ‘medical practitioner’ will not include a psychologist.

To be entitled to compensation for a mental injury, workers must now establish that:

• the mental injury arose predominantly out of or in the course of their employment; or
• if the mental injury is a recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing mental injury, employment must be the predominant cause of such recurrence, aggravation, acceleration, exacerbation or deterioration; or
• the mental injury was caused predominantly by traumatic events experienced by the worker that are considered usual or typical and reasonably expected to occur in the course of the worker's duties.

The Explanatory Memorandum states that ‘predominant’ cause is to take its ordinary meaning and refers to employment being the “strongest or largest contributing factor.” Furthermore, mental injury caused by ‘traumatic events that are considered usual or typical and reasonably expected to occur’ is intended to cover workers such as emergency and front-line workers who are exposed to traumatic events in the course of their regular duties.

A new exclusion for stress and burnout

Significantly, under the new legislation, a worker will not be entitled to WorkCover compensation if their mental injury is predominantly caused by work related stress or burnout resulting from events that are considered typical or reasonably expected in the worker's duties.

Whilst stress and burnout are not defined and are intended to take their ordinary meaning, the Explanatory Memorandum provides examples including “typical job demands, workload pressures and interpersonal interactions.” Bullying, harassment and discrimination are not captured by this exclusion as these behaviours are not considered typical or reasonably expected to occur.

Stress or burnout injuries constitute a significant portion of current WorkCover mental injury claims. This exclusion will now disentitle workers to compensation for mental injury resulting from stress and burnout in the future.

Provisional payments for reasonable medical services are still payable for mental injury claims, irrespective of whether the worker meets the new eligibility tests. This means that workers who lodge a WorkCover claim for a mental injury may be able to receive up to 13 consecutive weeks of reasonable medical treatment for their claimed injury.

Eligibility requirements for weekly payments after the second entitlement period (after 130 weeks)

In order to be eligible to receive weekly payments after 130 weeks, a worker must establish they have no current work capacity, which is likely to continue indefinitely. Alternatively, if a worker has returned to suitable duties, they may be entitled to top-up weekly payments if they satisfy the following criteria:

1. they are working at least 15 hours per week
2. they are earning at least $228 per week (indexed annually); and
3. as a result of the injury, they are likely to remain physically or mentally incapable of working beyond this level.

In addition to the above existing requirements (the capacity tests), to qualify for weekly payments after 130 weeks, injured workers must now also have a whole person impairment (WPI) of greater than 20% resulting from one or more compensable injuries. 

For the purposes of meeting the greater than 20% WPI threshold, physical and mental injuries cannot be combined. Therefore, the degree of impairment of a worker will include one of the following scenarios:

• the degree of impairment resulting from one or more compensable physical injuries arising from the same event or circumstance must assess at greater than 20% WPI; or
• the degree of impairment resulting from one or more compensable psychiatric or psychological injuries arising from the same event or circumstance must assess at greater than 20% WPI.

If a worker does not meet both of these tests (that is the capacity and WPI test), they will not be eligible to continue to receive weekly payments after 130 weeks.

Importantly, workers who were receiving weekly payments before 31 March 2024, and had already reached the 130-week limit, are entitled to continue to receive payments and will not be required to meet the greater than 20% impairment threshold.

However, if a worker has not yet reached 130 weeks of weekly payments as at 31 March 2024, they will be affected by the new threshold requirement.

Independent medical examination

The WorkCover Insurer/self-insurer may request a worker to attend an independent medical examination for the purposes of an impairment determination. The WorkCover insurer/self-insurer must also provide the worker a written statement of each injury included in the examination. The worker must attend the examination. If the WorkCover insurer/self-insurer determines that it is not necessary or practicable to examine the worker, the WorkCover insurer/self-insurer may determine as follows:

• that there is no reasonable prospect of the worker having a WPI of more than 20%
• that there is no reasonable prospect of the worker having a WPI of less than 20%
• the worker resides overseas
• it is not reasonable or practicable for the worker to attend an examination.

The Medical Panel continues to be the available forum for the resolution of disputes regarding the degree of impairment (%).

Interim eligibility determinations

WorkCover insurers and self-insurers have the power to determine whether a worker is eligible or ineligible for weekly payments if an impairment determination cannot be made. This could be due to reasons such as the injury not being stable, the worker suffering from a progressive disease that is unlikely to stabilise, or if the worker is under the age of 18.

WorkCover insurers and self-insurers must consider the following before making the interim determination:

• the permanency of the impairment arising from the injury
• whether it will assess at greater than 20% or less than 20% WPI; and
• whether the worker has ‘no current work capacity which is likely to continue indefinitely’ or has a ‘current work capacity.’

Ongoing or final eligibility determination

The interim determination applies until there is a further interim determination or an ongoing eligibility determination.

If an interim determination is made that a worker is entitled to weekly payments after 130 weeks and subsequently an ongoing eligibility determination is made that the worker is no longer entitled to receive weekly payments, the insurer must give the worker 13 weeks of notice before terminating the worker’s weekly payments.

If an interim determination is made that a worker is not entitled to weekly payments after 130 weeks and subsequently an ongoing eligibility determination is made that the worker is entitled to receive weekly payments, the worker is entitled to weekly payments from the date the interim determination took effect (though interest is not payable). If a worker has previously attended an impairment assessment for their impairment benefit claim (lump sum claim), that assessment will be regarded as a final assessment for the purposes of the WPI requirement. Similarly, if a worker undergoes a medical examination to determine the level of their impairment, that assessment is final and may only be reassessed if the worker has surgery and believes the surgery will increase the WPI.

Arbitration

The new changes stipulate that the following disputes are excluded from Arbitration:

• whether the claimant is a worker
• whether the claimant has suffered an injury, including a mental injury
• whether an injury is an injury that arose of, or in the course of, or due to the nature of employment
• whether the claimant's employment was a significant contributing factor to an injury
• whether an injury caused to the claimant is a mental injury for which there is no entitlement to compensation
• whether an injury caused to a claimant is a disease for which there is no entitlement to compensation
• whether an injury caused to the claimant is a proclaimed disease.

What should I do?

Many workers who are captured by the new threshold requirement, must turn their minds to alternative financial supports after 130 weeks should their weekly payments cease. Injured workers may now find themselves considering a common law claim in order to claim economic loss damages or turning to alternative income streams such as Centrelink or income protection policies.

If you are concerned about the changes to the WorkCover scheme set out above and believe you may be affected, it is crucial you contact a personal injury lawyer immediately. Our team of experienced work injury lawyers are available to help you navigate the recent changes. Submit an online enquiry or contact our advice line on (03) 9321 9988 to speak directly to a member of our legal team.