Workplace Compensation and Benefits (Vic)

Victoria, like other states and territories in Australia, has its own workers’ compensation law and workplace compensation scheme. Workplace compensation is a type of insurance payment paid to workers if they suffer injury, illness, or disease because of their work. Workers’ compensation laws provide a safety net to ensure that injured workers can access medical care, and either ongoing payments or lump sum settlements. These government-administered schemes operate either as an alternative or in addition to common law negligence laws. This article looks at workplace compensation and benefits in Victoria.

Seeking workplace compensation and benefits in Victoria

In Victoria, workers compensation is known as ‘WorkCover’. The scheme is regulated by WorkSafe Victoria and governed by state legislation. While Victoria first introduced workers compensation law in 1914, the scheme is currently regulated under the Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC Act). This Act covers insurance, workers’ compensation claims, rehabilitation, return to work provisions and dispute resolution.

Under this compensation scheme, employees have several benefits, including the right to:

• lodge a WorkCover claim if they sustain an injury, illness or disease because of their work;
• receive weekly payments until they can return to their previous hours of work;
• receive compensation for reasonable and approved medical and associated expenses;
• if the worker has a permanent impairment, receive a lump sum payment;
• have the worker’s dependents paid financial compensation if the worker dies as a result of their work-related injury or illness; and
• pursue a lawsuit against the employer for damages if the work-related injury or illness is serious and was caused due to negligence.

Not every claimant is entitled to all the compensation and benefits listed above. WorkSafe applies several criteria when determining a worker’s right to compensation in Victoria.

No-fault scheme

WorkCover is a ‘no fault’ compensation scheme, so the worker is entitled to the benefits outlined above regardless of who is at fault for the injury. The injury also does not need to be serious to make a WorkCover claim, although the severity of the injury will dictate the compensation entitlement. By contrast, a common law damages claim requires the worker to show that they suffered a ‘serious injury’ because of the employer’s negligence.

Coverage under WorkCover

Almost all employers must register for WorkCover insurance to ensure workers can claim workplace compensation if they sustain injury or illness while at work. Workplace compensation applies not only to injuries sustained in the workplace, but also in connection with employment. For instance, if a worker sustains injury in a company car while on company business, then the vehicle is considered a workplace.

An employer must register for WorkCover insurance if they employ workers in Victoria and pay more than $7,500 in remuneration in a financial year, or have trainees or apprentices (regardless of their remuneration). If a business does not meet these requirements, they do not have to register for WorkCover insurance. In that case, WorkSafe indemnifies the business for compensation and damages to any injured workers, but the business must register with WorkSafe as soon as a claim is lodged against them.

Self-insured employers and federal government agencies in Victoria must carry workers’ compensation insurance under the Comcare scheme instead of participating in the WorkSafe scheme.

Compensation

When an injured Victorian worker is unfit to return to the role they were performing before their injury, they do not receive their ‘pre-injury earnings’. Instead, they receive a weekly percentage of their income as follows:

• In the first 13 weeks, a worker is entitled to 95% of their pre-injury earnings (their PIAWE pre-injury average weekly earnings);
• In the subsequent weeks 14 to 130, a worker is entitled to a rate of 80% of their PIAWE; and
• Entitlement to weekly payments only continues after 130 weeks in limited circumstances. There is now an additional whole-person impairment requirement for workers who continue to receive weekly payments after the 130-week mark.

In the first 52 weeks of payments, the calculated payment rate includes regular overtime and shift allowance that the employee performed in the 52 weeks before their injury.

Mental injury claims

On 31 March 2024, changes were made to Victoria’s WorkCover scheme.  There are new eligibility requirements for mental health injury claims, as an injury must meet the following definition to be eligible for WorkCover compensation:

1. The mental health injury causes significant cognitive, behavioural or psychological dysfunction and
2. Is diagnosed by a medical practitioner using the Diagnostic Statistical Manual of Mental Disorders.

Under these legislative changes, employment must be the major contributing cause of the worker’s mental injury for them to be eligible for compensation. The new provisions acknowledge that most employment involves some level of work-related stress. The changes limit the availability of workers’ compensation for workers who experience mental health injuries if the injury is mainly caused by stress resulting from the normal expectations of a work role. For instance, there is a reasonable expectation that some roles have additional hours, workload pressures and interpersonal conflict with colleagues.  Employees can no longer claim compensation for mental injury caused by foreseeable stress, as long as the working conditions are not unlawful (such as sexual harassment or bullying).

These limitations do not apply to workers who are regularly exposed to traumatic events, such as ‘front-line’ or emergency workers. These workers remain eligible for compensation if their mental health injury is predominantly caused by burnout or stress resulting from routine traumatic events at work.

At Go To Court Lawyers, we understand that workplace compensation and benefits are complex and personal issues. For personalised advice, please contact our employment law team on 1300 636 846 to speak to a member of our team.