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Work disability: a mess worth untangling

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The workers’ compensation and compulsory third party insurance scheme maze is part of a larger health-related income support system jumble that could operate more effectively.

Systems have been designed in isolation, they vary across state and Commonwealth bodies and they include a mishmash of private and public providers.

A Monash University report, commissioned by a new private-public partnership set up to tackle the issue, notes people suffering ill health or injury often have to move between social security, statutory schemes, life policy cover and other areas of support.

But such programs tend to operate without reference to each other, leading to gaps in coverage, duplications and inefficiencies, and a lack of support when people move from one area to another. These complexities add costs and often take a toll on those they are meant to be helping.

The Monash Cross Sector Project estimates 786,000 people who could not work due to ill health, injury or disability received income support from a government or private source in 2015/16, for total expenditure of  $18.4 billion.

A further 6.5 million people accessed employer-provided sick leave and entitlements, taking total spending to $37.2 billion.

The possible rewards of improving the system are high, but the challenges are great given the way the system has evolved and the continuing pace of change due to political policies and various reviews.

“In Australia we have disaggregated across all these different areas and it is a constantly shifting landscape, so it is hard to pin it down,” Monash’s Insurance Work and Health Group Director Alex Collie told insuranceNEWS.com.au. 

The Collaborative Partnership to Improve Work Participation, established in March, has taken up the challenge of making the system operate more effectively.

It commissioned the Monash study to gain a clearer picture of the situation.

Partnership members include Comcare, the Insurance Council of Australia, the Department of Jobs and Small Business, insurer EML, the Department of Social Services, the Royal Australian College of Physicians, the Australian Faculty of Occupational and Environmental Medicine, and the Australian Council of Trade Unions.

A further breakdown of the 2015/16 estimates in the Monash report shows 469,000 people received social security expenditure of $8.6 billion, and 156,000 were recipients of workers’ compensation, for a total $2.5 billion.

Total and permanent disability and income protection payments through life insurance policies were received by 95,000 people, with total expenditure of $4.4 billion.

Motor vehicle accident compensation statutory benefits went to an estimated 6000 people, for support payments of $96 million, and 9000 recipients gained lump sums totalling $267 million.

The Monash report, which maps 10 major systems of income and benefit support, says areas where improvements could be made include data sharing and a harmonised approach to rules and forms.

Sharing of data and information is key to better service provision across the system, but the current situation is highly fragmented and siloed.

“One example of such information sharing might occur when a system is planning a change to policy, product design or eligibility that may have flow-on effects to other systems,” the report says.

Service models could be better aligned, such as through greater consistency in medical certificates required from GPs and agreed criteria for impairment levels.

Earlier interventions would be more effective with collaboration, while the sector overall is reducing its clout by dealing separately with employers that are sometimes reluctant to accept a greater role in prevention and recovery.

“There appears to be consensus that while there are some examples of outstanding employers, these are very few and that progress is slow,” the report says.

“There is potential for a joint approach to employer engagement, a ‘unified voice’ to develop a clearer business case that will encourage greater action and accelerate the pace of change.”

The report suggests the design of benefits and products could be considered in the context of surrounding systems to reduce support gaps, while there are opportunities for tailored assistance when people move from one area to another.

Interviewees for the report highlight policy reform potential, citing countries with more streamlined approaches, while recognising that may be a longer-term proposition for Australia.

In New Zealand the Accident Compensation Corporation manages and underwrites all injury claims including the equivalent of workers’ compensation and motor vehicle accident compensation claims, but also extending to injuries occurring in other settings.

Professor Collie says improving collaboration in Australia’s system and helping more people recover from illness and injury to return to work has a range of far-reaching health and economic benefits.

“I don’t think it is going to be easy, it will be very difficult, but there is so much opportunity,” he said.