The board of NSW state insurer icare has approved a plan to remediate injured workers who were underpaid benefits due to calculation errors, with up to $40 million to be paid from July. 

Deloitte estimates almost 7% of total claims, or 20,643, require remediation, costing up to $40 million, though icare expects that estimate will “reduce significantly as claims are reviewed and the correct application of indexation is confirmed”. 

The remediation program, which is to correct miscalculation errors between 2012 and 2019, will begin in July and take 4-6 months to complete. 

The payments come after reviews into historic pre-injury average weekly earnings calculations. icare CEO Richard Harding apologised to injured workers impacted by the errors.  

“We are taking responsibility to fix it. This issue started more than 10 years ago, and we discovered it thanks to our improved processes and systems,” he said. “When we find a problem, we are open about it and we work very hard to fix it.”  

icare identified the historical issue in relation to the application of indexation of weekly benefits for some injured workers last year. In NSW, an injured worker getting weekly benefits is entitled to an indexed adjustment to their benefit each April and October. 

Legislative reforms were introduced in 2012 which included new and complicated provisions relating to indexation, then overseen by WorkCover. 

From 2012 to 2019, there was an onus on the employer and worker to provide additional pay details to inform eligibility and enable the Claims Service Provider (CSP) to process indexation. The indexation anomalies relate to claims from this period, managed on legacy systems run by external CSPs before icare was set up. 

Indexation after 2019 is accurate, icare says, and it has introduced systems upgrades to ensure indexation continues to be applied correctly going forward.