Opinion: Victoria’s WorkCover scheme “modernisation” is a backward step in managing mental health

Last year, the Victorian government released the outcome of a two-year review of the Victorian WorkCover scheme, which found that benefits paid to injured workers exceeded premiums paid by businesses to fund the scheme by about $1.1 billion per year. At the time, the scheme was described as being ‘fundamentally broken’ and ‘unfit for purpose’. Of particular note and highlighted by the government then was the ‘blowout’ in costs attributed to a significant increase in psychological injury claims, along with longer durations and higher overall costs associated with such claims. 

Several potential solutions were floated, including restricting the types of psychological conditions accepted and other changes to the criteria on which psychological injury claims are assessed. There was a fear that the government would simply play a numbers game of reducing costs by restricting the number of claims accepted. We now know that this fear has been realised.

On March 31, 2024, changes* came into effect to ‘modernise’ Victoria’s WorkCover scheme. Many of these changes are focused on psychological injury claims and the criteria around assessing and managing such claims. These changes will be made under the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Act 2023 (Scheme Modernisation Act) and target two main areas: The eligibility requirements for mental injury claims; and the requirements for ongoing entitlements after 130 weeks on claim. 

The problem is that changes being made to the eligibility requirements for mental injury claims are not in line with national standards, or best practice for occupational health and safety, nor are they aligned with current mental health assessment and treatment standards. 

Under Victoria’s WorkCover, a psychological diagnosis needs to be provided by a medical practitioner (GP or other medical doctor). The new requirement is for the doctor to provide this diagnosis within 28 days of the claim being lodged. This places a higher burden on GPs as the initial treating doctor to assess and accurately diagnose their patient in a short period of time, while also coordinating more appropriate and focussed treatment; or to refer on to a psychiatrist with availability (a rare find in the current climate). 

There are intricacies to psychological diagnosis and getting it right is pertinent to ensure appropriate treatments are being recommended and implemented. Psychologists are experts in mental health and can assess and diagnose psychological conditions. Restricting the provision of diagnosis to a medical doctor, within 28 days, reduces the chances of getting the diagnosis (and therefore treatment planning) right. It negates the expertise of other mental health professionals and adds pressure to already overloaded medical professionals. A solution would be a collaborative, multidisciplinary approach that allows the primary treating party to engage those they believe to be best placed to assess, diagnose and support the individual. 

In addition to changes to diagnosis, stress and burnout will no longer be accepted causes of mental injury. Specifically, workers will not be eligible for compensation where a primary mental injury has been caused by work-related stress or burnout caused by events that are considered usual or typical; and are reasonably expected to occur in the course of their duties. The exception here is where traumatic events are considered usual or typical, such as for first responders. Victoria WorkCover mentions that the exclusion of stress and burnout from the scheme is an acknowledgement that most jobs involve a degree of work-related stress that is reasonably expected to occur and that workers respond to stress in different ways. 

Unfortunately and frustratingly, this completely misses the mark on the definition of work-related stress and burnout. They are not the typical day-to-day stresses most people feel in response to tight deadlines or a temporarily increased workload. They are, in fact, a response to persistent, frequent, and ongoing levels of physical, emotional, or mental demands. They are a response to unreasonable work demands, environment, and work overload. Removing them from the eligibility for compensation is in direct contradiction to national (and other state) guidelines and codes of practice regarding psychological hazards and psychological health and safety in the workplace. This is a step back in time for the management of psychological health in the workplace. 

Not recognising psychological injury as a result of work-related stress and burnout, means individuals who are suffering under these circumstances can only access support through other mental health systems. Some will be reluctant to do so, due to cost difficulties, ineligibility for other subsidies (such as Medicare), or long waitlists. 

The ‘modernisation’ of the scheme is anything but modern. It negates the importance of psychological wellbeing in the workplace and removes employer responsibility for work overload, stress and burnout. It places undue pressure on an already strained mental health system with unrealistic timeframes and undervalues the primary treatment providers for mental health (psychologists). It also has missed the point entirely that prevention is the only way to reduce compensation claims. 

Psychological injuries increased because people became more aware of mental health, they wanted work to be good for them, and they recognised their rights at work and their employer’s responsibilities to provide a safe space for them. 

Restricting claims by denying genuine psychological injury is simply victim blaming and playing the numbers. Prevention and holding employers to account is the solution to this problem and this is the work that is being done nationally and in other states. Victoria is yet again lagging behind. 

*These changes do not affect those already on claims and come into effect on 1 April 2024. 

Dr Katrina Norris is the director of the Australian Association of Psychologists.