Work injuries, the duty of disclosure, and fraud – Don’t risk it

The incidence and cost of fraud by employees, employers and service providers in workcover schemes across Australia is generally accepted to be low or minimal, however can be costly.

For example in the 2021/2022 financial year, the Workers Compensation Regulator received 93 referrals for investigation, commenced 29 prosecutions, and successfully prosecuted 12 matters; a small number when considering the large number of workers’ compensation claims lodged across the year.

The 12 prosecutions pursued last financial year recovered $545,000 in restitution on behalf of insurers and resulted in fines totally $122,000 being issued.

Offences of Workers Compensation fraud can include fraud or attempted fraud, and providing false or misleading statements or documents, and impersonating an authorised person.

It is important to note that this fraud provision in the legislation refers to attempts to defraud as well as a committed act of fraud against WorkCover.

Defrauding or attempting to defraud WorkCover carries a maximum penalty of five years imprisonment or 500 penalty units (which currently equals $68,925).

It can also result in having to pay restitution for the amount of compensation paid by the insurer as a result of the fraud, and a jail sentence.

Case example: a recent conviction

A worker injured their back on 22 January 2020 in the course of employment as a child care worker. The claim was accepted and the worker received compensation including weekly payments.

Prior to and from the outset of their claim, the worker was engaged in running their own business. The worker had opened a bank account under the business name, operated a business website, and opened an online sales shopfront through Shopify. The worker also registered an ABN for the business and extensively marketed the business on social media.

The worker’s business offered consumers the option to create, order and purchase custom made personalised gifts. The worker did not have any employees and completed all duties required for running the business.

Throughout their workers’ compensation claim, the worker was certified either totally or partially incapacitated for work, was in receipt of weekly payments due to their incapacity, and did not inform the insurer of their other income, and made a false statement to a medical expert about their work duties.

On 19 January 2022, the worker was convicted of fraud and received a sentence of 12 months imprisonment (suspended for 2 years), ordered to pay $25,210.39 in restitution to the insurer, and $3,648.20 in legal costs.

It is important to remember to fully disclose all income and work-related activities to the insurer as well as treating doctors and medical experts at the beginning and throughout the period of your claim, including gig-based or self-employed activities not connected with the employment in which you suffered injury.

If you have suffered a work injury and require advice regarding a workers’ compensation claim, including advice as to your obligations and duties under the workers’ compensation scheme, please reach out to one of our lawyers for an obligation free consultation.