The Federal Government’s workers’ compensation scheme requires substantial changes in almost every area, according to a new report.

Comcare and the legislation underpinning it were earmarked for a government review last year in a bid to cut red tape and ensure best practice.

Now 137 recommendations have been made to address performance, governance, funding and legislative anomalies.

The report includes proposals for better rehabilitation outcomes for injured employees; fair, expedient and cost-effective dispute resolution; and the removal of age barriers to equitable compensation provisions.

Suggested changes to the legislation include provisional liability to help keep injured employees at work and improved permanent impairment assessment to ensure staff receive compensation based on severity of injury.

Improved provision of incapacity payments is recommended to achieve fairer remuneration for injured employees and “assist in reducing age barriers to work”. The receipt of compensation payments should not affect an employee’s savings for retirement, the report says.

Disputes should be resolved as quickly, economically and fairly as possible, with a focus on issues and outcomes rather than the process, according to the review.

Employment Minister Bill Shorten is to consult with scheme stakeholders on the recommendations. Emailed feedback is accepted until May 3.