Business slams SA workers comp scheme

Business SA is calling for major reform to South Australia's workers compensation scheme.

The business organisation released a policy statement yesterday "” Workers Compensation: A program for reform in South Australia "” which outlines suggested legislative changes to what it describes as an "under-performing workers compensation scheme".

Business SA president, Rob Chapman said reform was vital for the long-term economic feasibility of South Australia and the program recommended a system that was fair, viable, sustainable and affordable.

"South Australia's workers compensation scheme is the worst performing in the country," he said.

"Injured workers in this state are not returning to work soon enough, because our current legislation does not provide the incentives needed to get our injured workers rehabilitated and back to work as soon as possible."

Chapman said the scheme's level of unfunded liability has increased from $20 million to $700 million over the past five years and is estimated to reach one billion dollars by the end of this financial year.

A Business SA review found that 42% of South Australian injured workers were receiving weekly compensation payments "” a figure almost double that of any other state in Australia.

The review also highlighted that South Australia had the highest average cost per claim, the most number of days of paid compensation and the highest ratio of workers not returning to work in the first six months of their claim.

In addition, employers in the state also paid (on average) a 3% levy rate, which was well in excess of levy rates in other states.

Key recommendations of the program include:

• Introduction of incremental reductions or step-downs in weekly benefits to employees
• Cutting off benefit payments to employees at 104 weeks based on level of impairment
• Reduction of the maximum weekly benefit payment to each employee to 125% of state weekly earnings
• Restructure of employer levy rates to increase incentives for sustainable return to work
• Reduction in the employer's obligation to provide re-employment from 12 to six months.