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Alex Collie receives funding from WorkSafe Victoria, the Transport Accident Commission, and the Motor Accidents Authority of NSW. State and territory governments are currently considering the impact of the National Injury Insurance Scheme (NIIS) proposed by the Productivity Commission. The draft scheme goes a long way toward improving access to compensation for Australian’s with severe and disabling injury.
Every year more than 150,000 Australians file a personal injury compensation claim for medical conditions resulting from workplace or transport accidents. These conditions range from relatively minor injuries resulting in a few visits to a health practitioner or a day off work, to very severe injuries that result in profound and lifelong disability.
These claims cost our state and federal governments over $8 billion in medical, rehabilitation and other expenses.
This patchwork of injury compensation agencies means Australians' level of compensation and access to benefits and services is dictated by where they live.
For example, in Victoria and Tasmania the motor accident compensation system is primarily no fault.
Similarly, some states allow compensation claims for work-related stress while others do not. The list of differences between the state, territory and federal systems is almost endless. Some large national employers can choose to participate in a state-based workers’ compensation scheme or a national scheme, further complicating the system and creating another potential level of inequality based on who your employer is. Australians who are injured in settings other than work or motor accidents (while playing sport or at home, in medical accidents, for example) cannot access public compensation systems and must rely on private insurance and the public health, disability and aged care systems. This inequality was a focus of the Productivity Commission enquiry and is a consistent theme in the draft report. The NIIS proposes to level the playing field for those people affected by “catastrophic injury” such as severe brain injury, paraplegia and quadriplegia, severe burns and multiple amputations. The Productivity Commission estimates that 800 of these injuries occur each year and that over time approximately 20,000 Australians would be covered by the scheme. Under the proposed scheme, compensation would be provided for people with these very severe injuries, regardless of how the injury was acquired, with lifetime care and support services provided to those insured.
In Victoria and New South Wales, this system already operates for those whose injuries result from motor accidents.


But unlike the New Zealand Accident Compensation Corporation (ACC), the NIIS would not provide nationally consistent coverage for other injuries. In fact, the vast majority of injuries, including many severe injuries, would remain either uninsured or subject to the current patchwork of state-based injury compensation schemes.
Surprisingly, it appears that people who receive compensation following injury have worse health and well being than people with equivalent injuries who do not receive compensation.
Compensable patients' injuries can have long term impacts on family members, co-workers, healthcare providers, employers and a host of other individuals and groups. For example, a US study showed that people with work-related injury were 25% more likely to divorce than non-injured workers. This so-called “compensation effect” appears to operate across state and national borders and is not specific to any individual compensation system.
The “secondary gain” theory proposes that being involved in compensation process creates an unconscious incentive for the injured person to remain unwell.
In contrast, the “secondary victimisation” theory proposes that being involved in the compensation process is complex and stressful, and that it gives rise to renewed victimisation for the injured person.
A close inspection of most Australian compensation systems reveals many examples of these theories in operation.
Thus most Australian compensation systems either provide an incentive to remain unwell, a disincentive to getting better, or both. Importantly these are system level problems that can be addressed by changing the design and operation of compensation schemes.
For example, research suggests that removing access to certain financial incentives in compensation systems can improve health and wellbeing.
Other evidence demonstrates that changing the compensation process to remove adversarial or stressful elements can improve health and wellbeing. There is, or should be, a strong motivation for our compensation regulators to address these issues to improve financial viability of insurance schemes and reduce the costs to the taxpayer. The Commission’s proposal outlines the structural elements of a national injury scheme, with relatively little detail regarding process or operation. The Commission’s approach to these issues may become clearer through the second round of consultations currently under way, or in the final report due in July.
It is clear that, if enacted, the NIIS would provide lifetime support to many thousands of the most severely injured Australians.


It is also clear that the vast majority of injured Australians will be left to navigate their way through our current maze of injury compensation organisations, rules and processes. It would be foolish to progress with the detailed design without considering what we already know about the impacts of such systems on health and well being. To do so would put at risk the health of many tens of thousands of Australians, and the financial viability of the system itself. Some people believe stretching reduces the risk of injury, reduces soreness experienced after exercise, or enhances sporting performance. The scene of a crash after a car crossed a median strip onto the wrong side of the Princes Highway between Moe and Morwell and hit another car head-on on January 21, 2012. This service may include material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and the BBC World Service which is copyright and cannot be reproduced. According to the Australian Transport Safety Bureau there were 1601 people killed in 1,456 road accidents in the year 2006.
We use a Creative Commons Attribution NoDerivatives licence, so you can republish our articles for free, online or in print. The broader economic and other costs to the community and society are likely to be much greater. There are 19 different state and commonwealth organisations responsible for providing workplace and motor accident compensation. This means that compensation is provided regardless of the injured person’s role in causing the accident. For an individual with a severe traumatic brain or spinal cord injury this can mean the difference between having access to the latest equipment and rehabilitation and just scraping by. Some states limit access to benefits for conditions such as work-related hearing loss while others do not.
There is a long list of possible causes for this effect, and these generally fit in one of two broad theories. The number of crashes on Australian roads has been consistent for the past 3 years and is higher than European roads.



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