Time will tell if icare reforms are effective, says NSW Auditor-General's Report

Workers' compensation schemes in NSW provide workplace injury insurance for around 4.7 million workers. 

Workers' compensation schemes in NSW provide workplace injury insurance for around 4.7 million workers. There were around 110,000 injured workers' compensation claims in 2022–23.  

The recent Workers' compensation claims management report by the NSW Auditor-General, which discusses icare's management of workers' compensation claims, has shed light on several key aspects of their operations, highlighting both strengths and areas needing improvement. Some key takeaways from the report that speaks to the long-term sustainability of the workers' compensation scheme in NSW are discussed below. 

Improving return to work and financial sustainability  

icare's efforts to enhance return-to-work rates and financial sustainability are underscored by its Nominal Insurer (NI) improvement program. The program prioritises getting injured workers back to work sooner, a critical objective for supporting employees and businesses. Central to this initiative is the implementation of a new claims management model, alongside other changes aimed at streamlining day-to-day processes. 

Furthermore, icare has proactively clarified roles and responsibilities within the claims management process, including consultation with service providers and establishing a Professional Standards Framework. This framework outlines minimum standards and capabilities expected of case managers, setting a benchmark for excellence within the industry.  

Unclear accountability  

Despite these practical steps, icare's overall accountability for the worker's compensation scheme outcomes remains ambiguous. The decision to adopt a 'platform' model, emphasising self-direction and choice, raises questions about icare's commitment to transparent accountability. The rejection of a 'scheme administrator' model, which would've been underpinned by clear performance metrics and accountability, further muddies the waters regarding icare's oversight and responsibility.  

Lack of transparent reporting  

The report also identified shortcomings in icare's public reporting practices. Prior to recent years, icare failed to provide transparent reporting on key areas such as return-to-work rates and financial sustainability. While some improvement has been seen with the inclusion of performance measures in annual reports, these metrics often prioritise internal processes over scheme performance.   

Downplaying challenges  

The tone of icare's public statements and reports has raised concerns about the organisation's acknowledgment of the challenges facing workers' compensation schemes. While core responsibilities such as financial sustainability and return-to-work performance are mentioned, these are often overshadowed by discussions of internal projects and corporate improvements.  

The report's findings provide valuable insights into icare's management of workers' compensation claims, highlighting areas of progress and areas in need of attention. Clear accountability, transparent reporting, and a stronger focus on core responsibilities are essential for ensuring effective and sustainable support for injured workers in NSW, and only time will tell if the recent reforms prove to be effective.  

For full recommendations regarding how icare should address these challenges, read the report here.