Amendments to the Workers Compensation Regulation 2016

Consultation period: 31/10/2022 10:00 am to 18/11/2022 5:00 pm

What has happened so far?

Existing workers compensation legislation provides that the family or estate of a worker who dies as a result of a workplace injury is entitled to a lump sum death benefit. This benefit is generally apportioned between the deceased worker’s dependants, including children, if any.

A minor child’s part of the lump sum death benefit can be ordered by the Personal Injury Commission to be paid into the NSW Trustee. The NSW Trustee manages the child’s benefit until they reach 18.

The Government passed amendments to the Workers Compensation Act 1987 on 16 June 2022, creating a new entitlement for the children of deceased workers who receive a lump sum death benefit. This new entitlement will provide for costs associated with the NSW Trustee and Guardian managing their benefit until they turn 18. The new section 25(1A) allows the Workers Compensation Regulation 2016 to prescribe the fees.

What are the changes?

The proposed Regulations provide a formula, modelled on the current NSW Trustee and Guardian’s fees, to calculate the additional compensation amount.

The formula includes components to cover establishment fees, account management and keeping fees, investment management fees and applies a discount rate. The calculated amount is determined by the initial fund size (the child’s lump sum amount plus any interest awarded) and the age of the child.

The proposed amendment makes no other changes to workers compensation death benefits.

Other minor proposed amendments to the regulation include:

Enabling SIRA to provide certain data to the Long Service Corporation
Correcting references to redundant references to the Workplace Injury Management and Workers Compensation Act 1998 that were repealed or replaced by the Personal Injury Commission Act 2020
Allowing SIRA to serve notices electronically, but only where consent has been provided.

Next steps

Feedback and submissions on the draft amendment regulation should be submitted online using the form below, or via email to PolicyDesignWHBCR-SIRA@sira.nsw.gov.au.
The closing date for submissions is 5pm, 18 November 2022.
Please send any enquiries about the consultation process to PolicyDesignWHBCR-SIRA@sira.nsw.gov.au.
SIRA may publish submissions on its website unless accompanied by a request for confidentiality.

SIRA received six submissions on the proposed amendments to the regulation, all of which have been made publicly available with information redacted where requested.

SIRA carefully considered all submissions received. The submissions did not result in substantive changes being made to the draft regulation. Some of the feedback received related to issues that were outside the scope of this regulatory amendment.

Summary of feedback

A summary of key issues raised in submissions is provided below:

All submissions supported the introduction of the new entitlement for children of deceased workers.
There was general agreement that the calculation method appeared workable, with one submission lending support to the formula approach.
Two submissions suggested that the entitlement should also allow for funds management costs for trusts managed by private trustees, with a different calculation method. The current legislation only allows for costs to be provided for where the trust is managed by the NSW Trustee.
One submission suggested that retrospectivity be allowed to permit recurrent annual fees to be paid out of the Workers Compensation Operational Fund. This is beyond the scope of the current legislation.
One submission argued for funds management costs to be provided for in arrears throughout the life of the trust. The current legislation requires the amount to be determined by regulation using a method that can be applied without discretion. SIRA acknowledges that it is impossible to precisely calculate the amount of funds management costs for the duration of a trust, particularly those of longer duration. However, the proposed approach represents a significant improvement for the children of deceased workers.
Several submissions suggested that SIRA monitor the operation of the calculation method to ensure children of deceased workers are not disadvantaged.
No comments were received on the other minor amendments proposed in the draft regulation including the electronic service of certain notices, the provision of additional information to the Long Service Corporation or minor changes to amend outdated or superseded references to legislation.

Further information

The Workers Compensation Amendment Regulation 2022 commenced on 16 December 2022.

SIRA is updating guidance material for insurers to support the implementation of the new compensation entitlement.

SIRA will continue to work with impacted stakeholders during implementation of the new funds management entitlement for children of deceased workers. SIRA also intends to monitor the new entitlement to ensure it achieves its intended objectives.

Submissions

View the submissions here

Have your say

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Days remaining for your submission: 0 (of 0)

Started:

31/10/2022 10:00 am

Submissions close:

18/11/2022 5:00 pm