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Legislative Assembly for the ACT: 2001 Week 6 Hansard (15 June) . . Page.. 1807 ..

MR SMYTH (continuing):

The period from the date of injury within which a claim is to be commenced at common law for damages has been reduced to three years from six years. This brings the ACT into line with all other common law jurisdictions and, according to the Insurance Council of Australia, will provide greater certainty in actuarial analysis of future liabilities which in turn will ease pressure on premiums.

The accessibility of lump sum payments under the table of maims is restricted so that they are paid only after the injured worker has returned to work for at least three months or after the expiration of two years from the date of injury, whichever occurs sooner. For those workers who have suffered a traumatic injury where return to work is clearly unlikely, then the lump sum payment remains available immediately. This change will further encourage injured workers to seek an early return to work to access the lump sum payment, thereby reducing the costs that are sometimes currently incurred should the injured worker not have incentive to complete rehabilitation.

The draft legislation proposed that the insurer have a maximum period of three months within which to accept or reject a claim. However, should the insurer reject the claim at any point in this period, they could not recover the costs incurred to that point. The current period for decision-making is 21 days. Insurers indicated that this change would adversely affect premiums as the actuaries view the extended period as an opportunity for costs to accumulate substantially without the ability to recover them should liability be denied. As a consequence, the period for decision-making has been reduced to 28 days, in accordance with the ICA's expressed preference.

To ensure balance in this arrangement, if insurers seek to terminate a claim after the 28-day period but within the first 12 months they must provide the injured worker with their reasons for termination in the form of an affidavit. Any costs incurred by the insurer up to this point cannot be recovered from the injured worker. Beyond 12 months, the matter must come before a court prior to termination.

Insurers supported the draft legislation's approach to the early reporting of injuries. However, they noted that the penalties applying to employers for failing to advise the insurer of an injury within 48 hours of its occurrence were of no consequence. Experience in other jurisdictions shows that employers are very poor at timely reporting. In response, the legislation now provides that the employer is liable for the injured worker's salary cost for the period after the initial 48 hours until notification to the insurer is effected.

The requirement for employers to report salary and wage details quarterly was in response to the findings of the Assembly select committee. Insurers have advocated that the amount of data to be provided would serve only to increase their administrative costs for no real premium or coverage benefits. Business also strongly objected to this, especially as the Commonwealth government has moved to change the requirement for the quarterly business activity statements to be provided to the Tax Office, which would have been the basis for the workers compensation returns. Instead, the legislation now provides for reporting by business on a six-monthly basis.

Mr Speaker, the government is confident that this package, which has benefited from extensive consultation, now strikes the right balance for all involved. It treats injured workers fairly by requiring early action by employers and insurers to restore their

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