A former Fire and Rescue NSW retained firefighter has sought advice on a workers compensation matter.  I can’t provide specific advice, nor do I want to mention the specific details of the case, so I’ve rephrased the question to draw out the key issues rather than the specific ones.  My correspondent says:

I was a Retained firefighter for 20 plus years. In 2014 was placed on Workers Compensation and the brigade admitted liability for my Post Traumatic Stress Disorder however, all I am being compensated was for 10 hours per week which was calculated when I was on sick leave and my attendances were way down.  I have never been compensated for the loss of my business or financially compensated for the exact loss of both Primary and Secondary income.  I am held accountable for everything I do week in week out.

My questions are this:

  • Why aren’t I compensated for the full loss of Income?
  • Why am I held accountable 24/7 when I’m only compensated for 10 hours a week?

The answer is that Workers Compensation is a statutory scheme.  The obligations imposed on insurers, and the entitlement to compensation are all set out in legislation; in New South Wales there are two relevant Acts – the Workers Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (and for volunteer emergency service workers there is a third – the Workers Compensation (Bush Fire, Emergency And Rescue Services) Act 1987 (NSW)).

Tort law, in particular the law of negligence, would allow a person who has suffered losses due to someone else’s negligence to recover all their losses.   That too is no longer the case given many amendments to the law brought in by the Civil Liability Act 2002 (NSW).  This Act came in after the HIH Insurance collapse and at the time a ‘moral panic’ about the amount of compensation being paid and who was being compensated.    Even if a person can sue in negligence, today there are thresholds that must be met before any compensation is award and caps on the amount of compensation.  For example, compensation for loss of earnings is capped at three times average weekly earnings (AWE) so a person who earns more than three times AWE does not get fully compensated for their losses (s 12).

Workers Compensation has even more significant limits but it has benefits.  In particular workers compensation is ‘no fault’ so every employee who is injured at work receives compensation without regard to how the accident was caused even if the injured person caused their own injuries.  Further workers compensation is ongoing – whereas tort compensation is a ‘one off’ payment and when it’s spent it’s spent, regardless of ongoing need.  On the other hand, as my correspondent has noted, because workers’ compensation is ongoing the insurer has an ongoing interest in assessing and reassessing the claimant to ensure that they are still entitled to the ongoing compensation.

In terms of payments, for lost income workers compensation provides a maximum amount. In 2007 the maximum was $1838.70 per week but that has been indexed with inflation so the maximum today will be higher than that.   The entitlement to compensation ‘steps down’ so a worker receives 95% of their weekly earnings for the first 13 weeks then 80% for the next period until 130 weeks or 2.5 years.  A special case needs to be made for continuing compensation after 130 weeks.

It should be noted that these limits were introduced with amendments in 2012.  Fire fighters and paramedics were exempt from those amendments so the description of the limits, above, apply to workers other than fire fighters, paramedics and police BUT that doesn’t change the fact that there are limits.  For firefighters, paramedics and police compensation for the first 26 weeks is based on the employees average weekly earnings (but again subject to a statutory limit) and then it steps down to 90% of AWE.

As for being ‘accountable’ 24/7 that also reflects the attitude of the community to ensure that people don’t get benefits they are not eligible for.  Tightening up the rules to capture the undeserving necessarily exposes everyone to the procedures and requirements including the need to cooperate with the insurer and attend medicals and worse, be subject to scrutiny.

So, the answer to the questions

  • Why aren’t I compensated for the full loss of Income?
  • Why am I held accountable 24/7 when I’m only compensated for 10 hours a week?

Is because the scheme is not intended to compensate everyone for the entire loss of income – particularly if a person is a high income earner and it is designed to impose scrutiny because the Daily Telegraph and the radio shock jocks get outraged over perceived ‘bludgers’ and governments respond to such ‘moral panics’.

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