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Finbar O'Mallon

Calls to fix 'abusive' NSW workers' compo

Labor's Daniel Mookhey says the covenant NSW made with injured workers has been broken "by design". (AAP)

Injured NSW workers are facing longer waits for compensation, hard-to-live-off payments and are suffering mental trauma as they face an "abusive" system, a new report says.

The report from the left-leaning think tank, the McKell Institute, commissioned by Unions NSW, has laid out the failures of reforms to the state's compensation scheme made a decade ago.

It's another blow to the already controversial iCare scheme, which has been plagued by allegations of mismanagement and haemorrhaging money.

Advocate Frederik Smedes, 58, dubbed it an "abusive" and "muddied" system, which he struggled to navigate as he faced off with lawyers.

"No one really gave two hoots about injured workers," he said.

"People go to work to earn a living. To support themselves and their families."

Mr Smedes was injured at work and is medically retired. His knees, shoulders and neck are shot and his right lung is damaged.

His voice wavering at times, he said he fell into a "deep depression" as he tried to get his claim, struggling to connect to his children and grandchildren.

Workers are being thrown on the "scrap heap" and more is needed to be done to fix iCare, he said.

Unions NSW assistant secretary Thomas Costa was scathing about the state of the scheme, saying there was "a special place in hell for people who steal off workers".

"But that space is even smaller and deeper ... for those who have stolen from injured workers," he said.

Changes made in 2012 were meant to help improve outcomes for injured workers while cutting premiums for employers.

While premiums have dropped, workers are receiving less, are returning to work at record lows and operating costs are soaring.

Return-to-work rates have dropped from about 94 per cent in 2015 to 86 per cent in 2019.

Operating costs for the scheme have climbed from $200 million in 2011 to nearly $1 billion in 2021.

Nearly 90 per cent of surveyed workers on the scheme found it difficult to live off their compensation payments.

Three in four strongly disagreed that iCare had helped them return to work.

Nearly 80 per cent said their run-ins with the system had negatively affected their mental health.

About three in four contemplated suicide as a result of their claim.

McKell Institute chief executive Michael Buckland said needed changes to the system had to have "workers at their heart".

Workers faced an "additional trauma" from the administrative hurdles they faced to access compensation, he said.

Labor's Daniel Mookhey, who has helped lead parliamentary probes into iCare, said the covenant NSW had made with injured workers was broken.

"This isn't by accident, that is by design," he said.

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