Federal public servants seeking workers compensation payouts face the biggest crackdown in decades.
A federal government review of the $1.2 billion Comcare insurance scheme has urged sweeping reform to cut down on dubious claims for psychological injuries, payouts for dodgy therapies, doctor shopping and outright fraud.
The review has made more than 147 recommendations to rewrite the legislation on federal public sector compensation claims with the aim of getting injured bureaucrats back to work and ending their ''passive'' reliance on compensation.
The taxpayer-funded insurer lost more than half a billion dollars in the 2011-12 financial year as the number of claims for psychological injuries in the public sector - many related to accusations of bullying and harassment - increased.
According to the review's two reports by Melbourne barrister Peter Hanks, QC, and former Defence Department head Allan Hawke, the ''long tail'' of the Comcare scheme means an individual claim can exceed $2 million.
The review, ordered last year by Workplace Relations Minister Bill Shorten, cited a case of taxpayers paying nearly $30,000 for massage therapy that had ''no curative effect'' and another of a Brisbane bureaucrat flown to a Buddhist meditation retreat in Alice Springs to treat his anxiety disorder.
The reports do not call for cuts to benefits for injured workers but urge a shift from a payout-oriented insurance scheme to one that emphasises rehabilitation and a return to work.
The report says claims for psychological injuries in the public service have increased by 30 per cent in the past three years and are four times higher in the federal public service than for other employers.
Mr Hanks says compensation for these claims should not be paid for more than three months without a diagnosis by a properly qualified
medical practitioner. The barrister also wants to see an end to payouts for mental stress caused by imaginary factors.
''It is an unfair burden on employers to make them liable to pay compensation for a psychological injury that is caused by an employee's fantasising rather than by any aspect of employment,'' he wrote.
Among the main recommendations is a no-fault, provisional liability that would cover injured workers for a three-month rehabilitation period and a shift in jurisdictions for workplace dispute resolution from the Administrative Appeals Tribunal to Fair Work Australia.
Mr Hanks wrote that Comcare's legislative framework, the Safety Rehabilitation and Compensation Act, was supposed to be beneficial to workers but the insurer had a duty to spend taxpayers' money wisely.
He also urged greater vigilance on doctors who signed off on compensation payouts and ''that health practitioners are held accountable for their conduct, and that they do not exploit what is, in effect, a publicly funded scheme by overcharging, over-servicing or providing services that do not meet basic professional standards.''
Mr Shorten said he would consult with ''stakeholders'' on the reports of Dr Hawke and Mr Hanks.
''It is vital that the Comcare scheme is focused on early and effective intervention to promote recovery of injured workers,'' Mr Shorten said.
''It is also critical that employers and Comcare are proactive in supporting injured workers from the point of injury, during rehabilitation and when they return to work.''
Comcare's greatest hits
- Commonwealth public servant compensated, after a court appeal, for injuries sustained during a ''vigorous'' sex session in a motel room on a work trip.
Underperforming Canberra public servant compensated after she claimed one-on-one counselling sessions constituted bullying.
Brisbane-based public servant flown to Alice Springs for a Buddhist meditation retreat to treat his anxiety disorder.
Canberra government worker paid $29,000 for massage treatment that had ''no curative effect''.