Presented by Robert Clark MP		www.robertclark.net

INJURED WORKER RIPOFF TO FUND WORKCOVER'S BLACK HOLE

News Release - Thursday, 22nd November 2001

The financially troubled WorkCover scheme will receive thousands of dollars of windfall profit from seriously injured workers desperate for cash, under a scheme being proposed by the Bracks Government.

Under the scheme, seriously injured workers will be entitled to cash in their future rights to receive weekly benefit payments in exchange for a lump sum payout. However, the maximum lump sum payout being offered totals less than one-and-a-half years of weekly payments.

The scheme is contained in a Bill currently before Parliament and will apply to workers injured in the past or who may be injured in future. However, the Government is proposing separate payout options for workers injured in the periods 1985 to 1992 and 1997 to 1999.

To receive this payment, the worker is required to surrender all rights to receive future weekly payments for the injury, which could otherwise continue until the injured worker reaches age 65.

This will mean that the Victorian WorkCover Authority will make a profit of thousands of dollars from almost every worker who cashes in their benefits. This profit will go towards reducing the VWA's accumulated losses, which now stand at $683 million after the Authority lost $260 million last financial year and $127.5 million in 1999-2000.

The Shadow Minister for WorkCover, Robert Clark, described the scheme as a callous ripoff of injured workers desperate to raise cash.

"Only in the most limited circumstances is there the remotest possibility of this scheme being a fair deal for an injured worker," Mr Clark said.

"For most injured workers, this scheme is so outrageous that they will realise it is a sham and treat it and the Government with the contempt they deserve.

"However, there will be a minority of seriously injured workers in such desperate financial need that they will be prepared to accept the offer even though it is disgracefully unfair.

"The Government has been vigorous in condemning private sector payday lenders but this scheme is equivalent to a payday lending scam that charges workers who will never be able to work again interest of between 69 per cent and 250 per cent per annum in order to receive an advance payment of their weekly entitlements."

An injured worker will be entitled to seek a payout under the scheme after obtaining financial and legal advice if they have an impairment classified as 30 per cent or more, or are aged over 55 and are unlikely to ever be able to work again.

Injured workers aged up to 39 will be entitled to receive a lump sum equal to the after tax equivalent of 75 weeks worth of weekly payments. At 39 and over, the entitlement diminishes with each year of age, down to 19 weeks for a worker aged up to 64, and zero thereafter.

The Accident Compensation Act already contains provisions for lump sum payouts, but until late last year these provisions were used to provide more generous payments than those in the Government's new scheme. They were also confined almost exclusively to workers aged over 55 who wanted to use the lump sum payment to start their own business.