Workers’ mental health claims help put WorkCover back in the red

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Victoria’s workers compensation scheme is set to lose billions of dollars again this year amid soaring rates of mental health claims, more than a third of them from the government’s own workforce.

The state government stepped in with a $550 million bailout for WorkCover this month after the scheme, which is supposed to be self-funding, reported a loss on its insurance operation of nearly $1.2 billion in the second half of 2020.

Workplace Safety Minister Ingrid Stitt. Credit:Simon Schluter

Opposition spokesman Nick Wakeling said the taxpayers’ funds were pumped in to “keep the scheme afloat”, but Workplace Safety Minister Ingrid Stitt, who concedes the compensation authority is under financial pressure, said she had acted decisively so that injured employees continued to be cared for and that employers did not face increased premiums.

WorkCover, which lost $3.5 billion the previous financial year, cited a “bigger than predicted rise in mental injury claims”, which now account for 16 per cent of all the state’s workers compensation payouts, as a factor in the loss. Such claims are expected to soar to more than 30 per cent of payouts within nine years.

The scheme has separately disclosed that 36 per cent of mental injury claims – 1405 out of 3986 – came from the state’s police, nurses, paramedics, firefighters, carers, teachers, public servants and other government employees, despite such people making up just 9 per cent of the workforce.

Mental health claims are complicated and expensive to manage. More than 55 per cent of employees who go on leave because of a psycho-social injury in Victoria are still away from their jobs after six months, compared with just 23 per cent with physical injuries.

WorkSafe Victoria, the government agency that runs the workers compensation scheme, said growing community awareness of mental health meant workers were more likely to seek treatment, and take time off work, than in the past.

Many mental injury claims come from the state’s own workforce, including police.

Many mental injury claims come from the state’s own workforce, including police. Credit:Paul Rovere

The agency noted that emergency and other frontline workers faced significant workplace psychological stress and were more likely than others to suffer debilitating mental illness.



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