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Businesses to pay higher premiums, mental health claims restricted in Victorian WorkCover overhaul

Mental health claims will be restricted under changes to WorkCover. (ABC News: Danielle Bonica)

Businesses will be slugged with higher premiums and criteria around mental health claims will be tightened as the state government grapples with a "broken" WorkCover system.

Employees suffering from burnout or stress will no longer be paid weekly WorkCover benefits under the changes, which also include a hike in premiums paid by businesses from 1.27 per cent to 1.8 per cent. The new measures will not affect people already on the scheme.

However, unions and businesses formed a rare united front in criticising the proposed changes — albeit for different reasons. 

The government will also introduce a body called Return to Work Victoria, which will facilitate the reintroduction of people who have been off work with an injury to the workforce.

"Safety is critically important, but getting people back to work, that's the key. Being at work, earning, being connected, being safe and well, is infinitely better then being on benefits, at home, disconnected, unwell and getting worse for years and years," Premier Daniel Andrews said.

Earlier this year, the government declared WorkCover was fundamentally broken because the value of payments outstripped the premiums collected by $1 billion.

Labor warned without reform the system would completely collapse.

"We will not stand by and watch this scheme fall over. That means making difficult decisions, but they're the right decisions to make," Mr Andrews said.

The government said workers suffering from burnout and stress would instead be eligible for provisional payments for 13 weeks to cover medical treatment.

Victorian Premier Daniel Andrews described WorkCover as "broken" and in need of an urgent overhaul. (AAP: Julian Smith)

Minister for WorkSafe Danny Pearson said that when WorkCover was introduced in 1986, mental health claims made up 2 per cent of claims. He said that figure was now 16 per cent, and those claims accounted for 50 per cent of WorkCover's cost.

Mr Pearson said the proportion of mental health claims would continue to grow, along with the number of "long-tail" claimants who have been on benefits for more than 130 weeks, threatening the existence of the WorkCover scheme if nothing was done.

"It's just awful to hear about what it's like to be in the long tail. Relationships break down, you get isolated from your work and your colleagues. It's a very, very challenging place where injured workers find themselves, and I think injured workers deserve better," Mr Pearson said.

"I don't think anyone wants to see the situation where we don't have a solvent, sustainable workers compensation scheme in the state of Victoria."

Victorian WorkSafe Minister Danny Pearson said the number of mental health claims under WorkCover had skyrocketed.  (AAP: Joel Carrett)

Standing alongside the premier and minister, occupational physician Mary Wyatt welcomed the changes to the scheme, saying that she and other professionals in the field saw the impact on injured workers of a scheme that was not functioning as it should.

Dr Wyatt said the best outcomes occurred when there was a focus on claimants' welfare in the first few weeks or months after they entered the WorkCover scheme.

"We see the negative impacts on people day in and day out where they're subject to schemes that are not set up or working in their best interests," she said.

"WorkCover has developed a bit of a negative stigma ... there are occasional naughty people but the big bulk of it are people who need help and it's great that we're starting to think about what can be done to support them."

The changes to scheme also mean that workers receiving WorkCover payments for longer than two-and-a-half years will need to meet a "whole person impairment" test of 20 per cent if they are to continue receiving benefits.

A legislative review will be carried out in three years to determine whether the overhauled scheme is working.

Business groups, unions make rare united stand

Chief executive of the Victorian Chamber of Commerce and Industry Paul Guerra and secretary of Trades Hall Council Luke Hilakari held a joint press conference to criticise the proposed changes.

Mr Guerra agreed that the system was in urgent need of reform but said businesses should not have to shoulder the burden of fixing it.

"The WorkCover system in Victoria is no longer fit for modern Victoria. But slugging businesses a 42 per cent premium increase to keep it viable is not fair. What we need to see is real reform, reform that ensures that assistance is given to the worker as soon as it can be," Mr Guerra said.

Mr Hilakari took aim at the restrictions on mental health claims, particularly, he said, at a time when efforts were being made to destigmatise mental health problems.

"We know there are real problems with the scheme. We want to see injured workers get back to work as soon as possible. But we think denying workers access to the scheme is the wrong way to go," he said. 

"We have real concerns about what is being said about excluding workers who experience stress, anxiety and overwork. We have real concerns about a whole person impairment test being put forward at 20 per cent."

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