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In June the South Australian State Government moved to update return to work legislation with the introduction of the controversial Return to Work (Permanent Impairment Assessment) Amendment Bill 2022.

The proposed changes came in light of the Supreme Court decision in Return to Work Corporation of South Australia v Summerfield [2021] SASCFC 17 (Summerfield). In this case the Supreme Court held that workers could combine their injuries when calculating their impairment rating for compensation claims (read more about the Summerfield decision here). See more about the proposed changes and what they mean via this article.

The decision in Summerfield resulted in a doubling of Return to Work SA’s (RTWSA) liability deficit which is estimated to now be $1.1bn. To tackle the increasing deficit, RTWSA proposed to increase the payroll levy on employers from 1.7 per cent to 2.2 per cent unless urgent changes to the legislation were made. The State Government rushed to pass amending legislation to ensure the payroll levy was kept below 2 per cent.

The Return to Work (Permanent Impairment Assessment) Amendment Bill was opposed by the unions and concerns were raised by The Law Society for lack of consultation with stakeholders. In response, the Government revoked the original Bill and introduced the Return to Work (Scheme Sustainability) Bill 2022 (Bill) to address the issues raised. Earlier this month the Bill was amended to reflect additional concerns and eventually passed on 6 July 2022.

The legislation ensures the payroll levy on employers is kept below 2 per cent, with premiums expected to increase to 1.9 per cent.

Other key changes to the Return to Work Act 2014 (SA) include:

  • Threshold to be considered seriously injured increasing from 30 per cent whole person impairment to 35 per cent whole person impairment.
  • Injured workers assessed to have between 30 to 35 per cent impairment are eligible to receive lump sum payments.
  • Seriously injured workers can choose between weekly income maintenance payments or a lump sum payment.
  • The decision in Summerfield is now entrenched in legislation. Injured workers can continue combining the impairment percentages of multiple injuries.
  • Any consequential injuries can be joined to the original injury.

These changes make it easier for an injured worker to reach the 35 per cent impairment threshold needed to be considered seriously injured and receive ongoing medical support and weekly income maintenance payments until retirement age.

If you would like more information on how changes to return to work legislation will affect your business please contact our experienced Employment and Workplace Relations team for assistance.

This article was contributed to by Solicitor, Maida Mujkic.