For everyone The Law & You: New limits to WorkCover claims

Workers’ compensation for mental health injuries such as stress and burnout will be limited in Victoria following legislative changes. 

Several legislative amendments to the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) have significant implications for current and future WorkCover claimants.

Mental injury claims

Changes to eligibility for mental injury claims apply to claims made in respect of injuries that occur on or after 31 March 2024. 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 medical practitioner in accordance with latest Diagnostic Statistical Manual of Mental Disorders.

A ‘medical practitioner’ able to provide a diagnosis must be a general practitioner or psychiatrist, not a psychologist.

To be entitled to compensation for a mental injury, workers must 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 predominantly caused by traumatic events experienced by the worker that may be considered usual or typical and reasonably expected to occur in the course of the worker’s duties.

This last amendment is intended to cover roles where workers are exposed to traumatic events in their course of their usual duties. A ‘predominant’ cause refers to employment being the strongest or largest contributing factor. Provisional payments for reasonable medical services are still payable for mental injury claims, irrespective of whether the worker meets the new eligibility tests.

A worker will not be entitled to WorkCover if their mental injury is predominantly caused by events typical or reasonably expected as part of their duties.

New exclusion for stress/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.

Payments beyond 130 weeks

After 130 weeks, in order to be eligible to receive weekly payments, a worker must establish they have no current work capacity that 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 are working at least 15 hours per week and, because of the injury, likely to remain incapable of working beyond this level.

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

To meet the greater than 20% WPI threshold, physical and mental injuries arising from the same event or circumstance cannot be combined.

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.

If a worker has previously attended an impairment assessment for their lump sum impairment benefit claim, that assessment will be regarded as a final assessment for the purposes of the greater than 20% WPI requirement. Similarly, if a worker undergoes a medical assessment to determine the level of their impairment, that assessment is final and may only be reassessed if the worker has surgery.

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