By
Elizabeth Greenwood
Senior Policy Manager, Workers Compensation, WHS and Regulation
Why should employers beware?
Last month, the NSW Government released its report on the performance audit that concerned workers’ compensation claims management.
A key component in that report was the finding that the “State Insurance Regulatory Authority (SIRA)* has not allocated sufficient resources to investigate and prosecute on fraud”*. This conclusion was based, in part, on the “backlog of high-risk fraud referrals”*.
It recommended that by “December 2024, SIRA should…respond to gaps in its approach to investigating and responding to fraud”*.
Employers tend to assume that fraud on the workers’ compensation system (WC fraud) only happens when workers falsely claim that their injury occurred at work.
This is not true.
Employers can be charged with WC fraud too.
Also, because fraud is criminal behaviour, prosecutions for WC fraud are dealt with through the NSW criminal legal system and may attract a penalty of imprisonment.
What are some examples of employers committing WC fraud?
SIRA has provided some examples of where employers can be found to have committee WC fraud.
They include:
- failing to take out workers compensation insurance and then lying about it.
- conspiring with a worker to support a false claim,
- supplying false information to obtain or renew a policy,
- falsifying documents like a certificate of currency,
- deliberate underestimation of wages or worker numbers,
- failure to pass on workers compensation benefits, and
- working with others to supply false documents to support any aspect of a claim.
What should employers do to protect themselves against allegations of fraud?
Some tips include:
1. Check whether or not your business needs to take out workers’ compensation (WC cover).
2. If your business needs to take out WC cover, correctly calculate your ‘wages’ paid to ‘workers’ (NOTE: certain types of contractors engaged by your business will be ‘workers’ for workers compensation purposes. This means that payments made to these types of contractors are ‘wages’ for workers’ compensation purposes).
3. If one of your business’s workers receives a ‘workplace injury’, ensure all the information you provide to the insurer is prompt and accurate.
4. Keep on top of all the paperwork that relates to any WC claim that has been made by one of your business’s workers.
* State Insurance Regulatory Authority
* New South Wales Auditor-General’s Report: Performance Audit - Workers compensation claims management, 2 April 2024, at page 34
* At page 34
* At page 9
Elizabeth Greenwood
Senior Policy Manager, Workers Compensation, WHS and Regulation
With a background as a litigation lawyer, tutor, and insolvency accountant, as well as extensive experience in industry associations, Elizabeth provides a wealth of expertise in policy development and advocacy.
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