Rising Mental Health Compensation Claims

While workplace injuries and deaths are decreasing, more compensation claims for mental health issues are being made.

The economic cost of work-related injury and disease has been estimated by Safe Work Australia as $61.8 billion per annum for the 2012-13 financial year. Plainly, the economic burden of workplace injury is enormous and is one shared by workers, employers and the broader community. What may be surprising is how unequally the cost is shared.

Overwhelmingly, it’s estimated that it’s not employers but workers who bear the brunt of the cost at an estimated 77 per cent. This is in contrast to employers, who bear five per cent, and the community, which bears 18 per cent.

The ultimate cost of workplace injury or disease is loss of life. In 2016, there were 182 fatalities nationally, which equates to 1.5 deaths per 100,000 workers. Perhaps somewhat surprising is the age demographic with the highest number of fatalities is those aged between 55 and 64. Very deep and long-lasting trauma sits behind these statistics, impacting families, workmates and the community.

There’s positive progress in that the fatality rate has decreased by just under half over the past decade. While the highest fatality rates occur not surprisingly in industries such as agriculture, manufacturing and construction, labourers and trades workers, workplace-related deaths occur right across occupation groups including “white collar” professional groups.

Injured workers face many challenges on top of the injury itself and must contend with financial insecurity and hardship, emotional upset, and, often, stigma in the workplace. Notably, in the 2016-17 financial year, the highest proportion or 35 per cent of referrals to Slater and Gordon’s national social work practice related to workers compensation claims. This is proof of the far-reaching emotional and social consequences of personal injury and particularly workplace injury.

Some good news to mark National Safe Work Month is that Safe Work Australia data shows rates of workers compensation claims nationally have been declining steadily over the past ten years. WorkSafe Victoria also reports a pleasing reduction in workplace injuries in the order of 22 per cent per million hours worked over the preceding five years.

However, there is a growing challenge for employers and communities. While claims are declining overall, the landscape in Victoria, at least, is changing and becoming more complex due to the increasing numbers of mental health claims. Such claims arise out of a range of circumstances such as emergency services workers witnessing traumatic events in the course of work, or workplace bullying and stress caused by excessive or unreasonable demands and pressures. Victorian data shows that claims for compensation for psychological injuries are rising both in terms of treatment expenses and income benefits.

Mental health injuries tend to be more protracted and complex for employers to manage. They are also harder to treat and employees take off more time from work than for non-mental health related injuries. The stigma is also often greater. For employers, prevention of workplace injuries in terms of policies to build resilient and positive workforces is vital and is more complex than traditional occupational safety measures such as guard on machines and appropriate equipment.

National Safe Work month is a timely reminder that workplace injury has the potential to impact workers in all aspects of work and all stages of their working lives. Prevention of workplace injury must be a key focus for employers, regulators and all of us as workmates and colleagues and will have key wide-reaching social and economic benefits.

Author EAP Assist

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