Taxpayers spent more than $600,000 defending a workers' compensation claim from a "libidinous" public servant injured while she had sex in a motel room on a work trip.
Public Service Minister Eric Abetz revealed the cost of the claim on Wednesday as he moved to make changes to the federal workplace insurer aimed at cracking down on "rorting and malingering," by Commonwealth bureaucrats.
Legislation introduced to the Parliament on Wednesday can save federal government agencies up to $50 million in their insurance premiums each year by making sweeping reforms to the much-maligned public service compensation scheme.
The infamous "sex-in-a-motel claim" rumbled on for six years after the woman suffered lacerations to her nose and mouth as well as "psychological injuries" when a glass light fitting was pulled from the wall of the motel room as she had "vigorous" sex with a local man in Nowra in November 2007.
The bureaucrat, whose identity is protected by the courts, eventually lost her case in the High Court but left the Commonwealth with a legal bill topping $600,000, including the costs of the bureaucrat's own lawyers and barristers.
"The flaws in the system were highlighted in lurid terms by the infamous "hotel room sex case", where a Commonwealth public servant successfully sought workers compensation for an injury sustained on a work trip, after hours, while engaging in sexual activity," the minister wrote in The Canberra Times.
"Thankfully the decision was ultimately overturned by the High Court, but at significant cost to the scheme, which had to pay more than $600,000 in legal costs to defend the spurious claim, including for the legal costs of the libidinous claimant."
Senator Abetz said his reforms would help turn Comcare into an insurer that helped get injured public servants back to work, rather than paying them to stay at home.
"The amendments will help get more people back to work and back to health, while at the same time providing extra support for those who really need it," Senator Abetz said.
"Under the changes, there will continue to be compensation benefits until pension age, and lifetime medical where required.
"Rather than reduce the timeframe for support, the Government has chosen to target spending more carefully."