Proposed changes to modernise Victoria’s WorkCover laws

The Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023 (the Bill) has entered Parliament. It aims to modernise the existing Act to better respond to mental injury claims and reinforce the financial health of the workers’ compensation scheme by:

  • introducing strict eligibility requirements for mental injuries, by generally excluding stress and burnout type claims;
  • for payments beyond 130 weeks, introducing a permanent Whole Person Impairment (WPI) threshold of more than 20% in addition to the existing work capacity test; and
  • removing the role of arbitration for initial eligibility decisions.

When will it come into effect?

The proposed changes to initial liability and arbitration will only apply to claims lodged after the amendments are enacted. Changes to ongoing entitlements after 130 weeks will only impact claims that reach 130 weeks after the changes are enacted.

Proposed key change 1: Eligibility

Only mental injuries diagnosed by a medical practitioner in accordance with the most recent version of the Diagnostic and Statistical Manual of Mental Disorders, and which cause significant behavioural, cognitive or psychological dysfunction, will be compensable. The injury must also be predominantly caused by work. Mental injuries predominantly caused by work-related stress or burnout, unless caused by traumatic events in employment that is usually traumatic, will not be compensable beyond the existing provisional payments scheme.

Proposed key change 2: Entitlements post 130 weeks

To receive weekly payments after 130 weeks, an additional test is added to the current work capacity test. A worker must also have a permanent WPI of more than 20% for injuries arising from the same event or circumstance.

Proposed key change 3: Arbitration

Initial eligibility disputes about whether a worker is entitled to compensation under the Act can no longer be referred to arbitration.

How will the new permanent impairment test operate?

WorkSafe and self insurers are to arrange an assessment prior to 130 weeks, by a qualified independent impairment assessor in accordance with the existing process for assessing impairment. That same assessment must also be used by a worker if they later pursue a lump sum claim for permanent impairment.

However, the Authority or self-insurer is not bound by the assessment in determining the degree of impairment.

Is an actual assessment by a doctor always required?

No. Decision-makers may make an administrative decision when it not necessary or practicable to obtain an assessment. Administrative decisions should only be made if there is no reasonable prospect of the injury reaching the threshold (such as a simple strain, when terminating payments) or when there are no reasonable prospects the injury will not meet the threshold (such as quadriplegia, when continuing payments).

What if a worker’s condition changes, or is not stable?

If surgery takes place after a 130 week termination, the worker may be reassessed.

If injuries are yet to stabilise, an interim decision can be made to cease or continue weekly payments without an assessment. An interim decision to cease weekly payments can only be made where the decision-maker is satisfied that the injury is not likely to be permanent, that the WPI is likely to be 20% or less, and the worker has a current work capacity. Interim decisions remain in force until an ongoing eligibility determination is made.

What about top-up payments after 130-weeks?

Workers who previously met the eligibility test in section 165 of the Act will still be eligible for top up payments as long as they also meet the new requirement of a permanent WPI of more than 20%.

How are disputes about 130 week terminations resolved?

Where a worker disputes the percentage of assessed impairment, the matter must be referred to the Medical Panel for a binding assessment. Where a worker disputes any other aspect of the ongoing eligibility determination, the matter must be referred to the Workplace Injury Commission for conciliation.


Andrew Stamp

Andrew practices in personal injury litigation on behalf of self insurers, employers, and WorkSafe Victoria and its agents.

Ilona Strong

Ilona focuses on both statutory and common law claims across both Victorian and Tasmanian workcover legislation.

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