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The Age - 18th Jun 2009

LONG-term injured workers will receive superannuation payments as part of their compensation under sweeping changes to Victoria's WorkCover scheme.

Under the changes, weekly injury benefits will increase 5 per cent to 80 per cent of pre-injury earnings, at a cost of $20 million.

The changes are part of the State Government's $90 million response to a recent review of the state's workers' compensation system completed by Peter Hanks, QC.

Premier John Brumby said the changes would help the most disadvantaged - the families of deceased workers as well as workers with a permanent impairment or long-term injury - "without driving up premiums".

But the Opposition, unions and employers were quick to criticise the Government's response, branding it short-term and retrograde.

"The State Government ... is likely to make worse WorkCover's often poor record of getting injured workers back to work," Trades Hall secretary Brian Boyd said.

The yearly cost of providing benefits to injured workers is up to $1.3 billion, with the Government saying the changes will be funded through existing premiums. The May state budget was the first time in five years that WorkCover premiums have not been reduced.

The lump sum payment for the dependents of a worker who dies on the job will increase from $265,590 to $484,830.

The superannuation payments will apply for workers injured for longer than a year and are expected to cost $20 million.

While the Brumby Government accepted 117 of the 151 recommendations in the Hanks review, several controversial ideas were rejected including provisional liability, changes to resolving disputes and lowering the common-law test threshold.

But the Community and Public Sector Union, which represents government employees, branded the response a "retrograde step" for introducing further exemptions on workplace stress. "Fifty per cent of all stress claims across Victoria arise in government employment," union secretary Karen Batt said.

The Victorian Employers' Chamber of Commerce and Industry said it was disappointed the Government had not cut red tape to help create more jobs. Chief executive Wayne Kayler-Thomson said the act was an " overly complex shambles", requiring "an army of public servants, lawyers and agents to manage and interpret it".

The Opposition said the changes would significantly increase costs, which will be borne by employers.

The changes will be introduced into Parliament this year.