A crackdown on dishonest claims and fraud in the former WorkCover scheme has led to an unprecedented number of workers facing legal action, convictions and fines.
Figures provided to Business Insight by ReturnToWorkSA – the renamed WorkCoverSA – reveal a substantial increase in compliance and enforcement activity over the past two years with referrals of suspicious activity rising from 342 in 2013-14 to 493 in the nine months of the current financial year.
Investigations have increased from 89 in 2013-14 to 105 in the financial year to date.
Both measures indicate a more than doubling in the rate of compliance activity since 2012-13.
As a result, there have been seven prosecutions this financial year with a further seven matters currently before the courts and another 11 awaiting advice from the Crown Solicitor.
ReturnToWork general manager, scheme improvement and regulation, Michael Francis, told Business Insight that the increased activity has helped “to achieve liability savings of approximately $1.5 million through information being used to inform discontinuance, recoveries and prosecutions”.
“Most of the individuals we prosecute end up with convictions against their names with suspended jail sentences and good behaviour bonds,” Francis said.
“Even if you don’t go to jail a conviction can impact you in a variety of ways, and for a number of years, such as in future employment opportunities.
“The system is there to support people who are injured at work and genuinely need it to recover and return to work and their life.”
Individuals found guilty of fraud face up to a $50,000 fine or 12 months jail for each offence.
A successful prosecution last month saw a worker having to repay WorkCover $30,000 in dishonestly obtained payments and receive a 10 months suspended prison sentence plus a two year good behaviour bond.
The seven prosecutions in the past nine months and a comparable number currently before the courts, compares with five prosecutions in 2013-14, one in the previous year and none in 2011-12.
Francis said “the increase in our compliance and enforcement activity over the past two years is part of our active management of the work injury insurance scheme which has delivered the record-breaking financial results we announced in March this year”.
The reformed ReturnToWorkSA was legislated last year and achieved a dramatic reversal from an unfunded liability of $1.13 billion at 30 June last year to record $20 million in net assets in the six months to 31 December 2014.
As a result, the scheme which provides income support for injured employees became fully funded and, at same time, facilitated a fall in 2015-16 premiums for business to 1.95 per cent of a firm’s remuneration costs – the lowest since the inception of the insurance scheme in 1987.
