State Insurance Regulatory Authority (SIRA) chief executive Adam Dent has weighed in on the rising number of psychological injury claims in workers’ compensation over the decade.

Dent, who appeared before the Standing Committee on Law and Justice 2022 Review of the Workers’ Compensation scheme hearing, revealed that around 11% of active NSW workers’ compensation claims relate to a psychological injury – a dramatic jump from 6% a decade ago. He also revealed that people with a psychological injury claim lose six weeks of work on average.

“For psychological claims, the average lost time is 20 weeks. Alarmingly, people who access psychological services after a physical injury are off work for an average of 31 weeks,” he said. “The reality is that poor mental health is more prevalent among the workers’ compensation cohort than the broader working population.”

SIRA’s customer experience research showed that one in five people with a workers’ compensation claim had a possible mental illness based on the Kessler 6 scale. Meanwhile, a recent Australian Council of Social Services report found that one in 10 wage earners in Australia report “high” or “very high” levels of psychological distress.

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Dent warned that lodging a claim in any compensation scheme may lead to worse health outcomes – with high case manager turnover, low workforce capability, investigations, delays in decision-making, and accessing treatment contributing to psychological distress. Therefore, he has called for a response to the changing nature of workplace injuries to address the elements of the system that may cause or exacerbate mental health conditions.

“In the meantime, people who have mental ill health must be better supported by the current workers’ compensation system. There is a wealth of evidence that tells us how to do that. In simple terms, high-quality case management delivers better outcomes for all injured workers and is particularly important where mental health is a factor,” he said.

For insurers, Dent suggested screening for the risk of delayed return to work and psychological distress and developing tailored pathways and hyper-care arrangements where those risks exist.

“Insurers can also minimise exposure to friction points by focusing on the right things early in the claim. Insurers can also make attracting, training, and retaining capable case managers a top priority,” Dent said.