The dodgy side of workers' comp

The dodgy side of workers' comp

How many people are really rorting this system?

As a kid, I remember hearing an uncle of mine, now deceased, boasting about the workers' compensation payments he'd been receiving for years. It was some sort of neck injury, one that didn't actually exist but enabled him to proudly rort the system. I was appalled anyone could view this as a badge of honour, which is what he (and his family) smugly did.

Fast forward to last month and the revelation Australian public sector workers were faking serious medical conditions in order to apply for workers' comp payments. Complaints of fraud have apparently increased by 15 per cent in the past year, with many employees allegedly using the time off work to earn extra income via a second job.

Contrary to popular belief fraud isn't a perennial feature of the workers' compensation system.

Contrary to popular belief fraud isn't a perennial feature of the workers' compensation system.Credit:Erin Jonasson

And that's in the public service where the funds, resources and manpower exist to handle these abuses. It's a much harder exercise in small businesses that are often constrained by time and money. Indeed, depending on the state you're in and the size of your business, your premiums increase in concert with your claims history.

Here are a few recent examples of people who were caught cheating the system. All three (and more) are freely available on the prosecutions page of Victoria's WorkSafe website. What this means is that if you're so inclined to take the system for a ride and you're subsequently busted, your name will forever be plastered on the inerasable forum that is the world wide web.


One bloke claimed to have injured his back and was awarded generous weekly payments … until he was observed being the driver in a high-speed motor race. Really, you'd think you'd lay low, right? He had to pay back more than $97,000 and in November was given a suspended prison sentence of six months.

Another guy, while pulling a trolley at his workplace, strained his muscles, ligaments, neck and back, and was therefore declared unfit for work. But despite being in regular receipt of workers' comp payments, he was captured by covert surveillance working as a tyre fitter during which he was effortlessly bending and pulling, lifting and carrying, and handling heavy stuff. He was ordered to pay nearly $19,000 in restitution and to perform 400 hours of community service.

The third case is the most remarkable. A female employee had a workplace accident that resulted in the amputation of her leg, thereby rendering her wheelchair-bound. Her workers' comp payments were then justifiably inflated to account for the 24-hour care she needed. Except she wasn't actually wheelchair-bound. And she didn't have any carers looking after her. She was sentenced to 12 months in jail and had to pay back $112,000.

Despite the above, an analysis published in the American Journal of Industrial Medicine in 2012 suggests the prevalence of workers' comp fraud is actually a myth perpetrated by employers and insurance companies. The collective ambition of these bedfellows is seemingly to curtail the benefits provided to those who are injured at work even though the proportion of cases found to be fraudulent is quite tiny.

Similarly, workers' comp authorities in NSW, Victoria and Western Australia have confirmed for me this week the number of prosecuted frauds here is just as small – so negligible, in fact, it's an almost incalculable fraction of the overall number of claims. For example, in the most populous state, NSW, there have been just five prosecutions in the past two years.

So while the anti-workers' compensation rhetoric continues to be louder than the reality, the consequence ends up being employee stigmatisation. It's a stigma that compels those who are legitimately entitled to make a claim to refrain from doing so because they're fearful of the impact it'll have on their reputation and their career.

Which is another example of a few bad eggs spoiling it for everyone else.

Are you aware of suspicious workers' comp claims? Do you feel stigmatised?

Follow James Adonis on Twitter: @jamesadonis

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