Claims blowout hits Tasmanian workers' compensation scheme

The amount the Tasmanian government has paid for workers' compensation claims has more than tripled over the past decade.

According to the Tasmanian Risk Management Fund's annual reports, the amount the government paid in workers' compensation rose from $32.7 million to $143.4 million between the 2015 and 2024 financial years.

Meanwhile, the government has flagged 1,700 job cuts across the state service.

Tasmania's workers' compensation scheme covers people who have suffered a physical or psychosocial injury, or a disease in the course of their employment, or when their work has substantially contributed to such harm. 

Independent body WorkCover Board Tasmania is currently reviewing the scheme to ensure it is fair and financially sustainable.

"The review comes at a time of increasing complexity across workers' compensation systems nationally, including growth in psychological injury claims, increasing claim duration and complexity, and evolving workforce structures," its media release said.

Consultation on the changes closes in September.

Better prevention, support needed

The review has raised concerns for some. 

In state parliament on Wednesday, Labor leader Josh Willie asked the treasurer what changes were being considered.

"Will you guarantee that no injured Tasmanian worker will recover a lower payment, lose coverage, or face a higher barrier to make a claim as a result of your review?" he asked.

Treasurer Eric Abetz sought to ease concern, pointing to other states that were reviewing rules around workers' compensation.

"Why would you look to lock in a position before you get a full report, and you've got the information before you to make a genuine considered decision?" Mr Abetz asked.

"What we want to do is get the best possible protection of our workers while the system is sustainable."

Unions Tasmania secretary Jessica Munday said any change that reduced compensation could be detrimental. 

She said prioritising preventative measures was more important.

"Resourcing workers, supporting workers, preventing bullying and harassment ... If we invest in those things, we will go a long way towards lowering the cost of workers' compensation,"

she said.

Reduced cover not ruled out

Mr Abetz said psychosocial injury claims had doubled over the past decade, and amounted to eight times the cost of a physical injury claim. 

In 2019, workers' compensation laws were amended in Tasmania so that the cause of the post-traumatic stress disorder (PTSD) would be automatically presumed to be work-related for the purposes of a compensation claim.

Health Minister Bridget Archer would not rule out the government reducing, narrowing or removing the presumptive cover offered to first responders.

A report by KPMG stated that in the 2024–2025 financial year, 28 per cent of Tasmania's state service claims were mental-health related, and 15 per cent of those were PTSD claims.

It found that frontline workers — including police, firefighters and paramedics — accounted for up to 23 per cent of mental health claims, and that over the past five years the figure appeared to be growing.

The parliament also heard that a specialist wellbeing unit for Department of Justice staff was to be abolished, with the opposition claiming 200 workers would be affected.

Justice Minister Guy Barnett said the change would occur later this year, following a review of wellbeing services.

Ms Munday criticised this approach. 

"That to me sounds like a government that wants to tick off numbers on a budget paper and say 'we have got less staff here', but your costs are going to come out somewhere else," she said. 

"What we worry about is that the cost is going to come out in more injuries, not less."

'Bracing' for 'significant increases'

Hobart-based barrister Luke Taylor, who has represented employees and employers in the workers' compensation process, said the Tasmanian government self-insured its workers' compensation risk through its Tasmanian Risk Management Fund (TRMF).

"Each year, the money that each agency [department] is paid out of that fund to meet its workers' compensation exposure is then calculated to produce a premium that department will then pay into the TRMF for the following year," Mr Taylor said.

The Department of Police, Fire and Emergency Management (DPFEM) was an example of a costly department for workers' compensation claims.

Earlier this year, the ABC reported that more than 100 police officers at the time were off work on mental health claims.

During Senate estimates, it was revealed that insurance premiums to the TRMF from the DPFEM had risen from $2 million in 2018 to $63 million this year.

"We have done some work around where we think the premium is going to head and we are bracing ourselves for significant increases in [future] years," Police Commissioner Donna Adams said at the time.

Mr Taylor said several significant changes to benefits for DPFEM workers had been made in recent years, which included the presumption of PTSD.

"The statutory step-downs in their weekly payment rates have been done away with for police who suffered their injury in the course of frontline policing,"