4.5.6 Claims and injury management performance

Table 13: Period of incapacity for time lost claims (accepted claims) 1998–99to 2002–03

	1998-99		1999-00		2000-01		2001-02		2002-03
3 months or less	156	73.9%	115	73.2%	127	70.6%	103	70.1%	101	69.6%
3-6 months	28	13.3%	20	12.7%	23	12.8%	19	12.9%	24	16.5%
6-12 months	12	5.7%	6	3.8%	18	10%	14	9.5%	6	4.1%
Greater than 12 months	13	6.2%	14	8.9%	11	6.1%	4	2.7%	1	0.7%
Continuing incapacity	2	0.9%	2	1.3%	1	0.6%	12	8.2%	13	9.0%
Total	211	100%	157	100%	180	100%	147	100%	145	100%

Source: AMICA

Table 13 indicates that there is a continuing modest decline in the proportion of seafarers whose incapacity lasts for less than three months, falling from 73.9% in 1998–99 to 69.6% in 2002–03, suggesting that the period of incapacity is on the increase. Given that the date of extraction for 2002–03 data is 14 July 2003, it is not possible to reliably use 2002–03 data in relation to incapacity beyond three months. Care should be taken when comparing past years' data with the current year because it is not clear what may emerge in relation to claims lodged in the last three to six months of the current year. Noting the data reliability issue, and examining the years prior to 2002–03, Table 13 shows that the proportion of claimants who are incapacitated from three to six months is high at around 13%, a figure which appears relatively constant over time. Again, excluding 2002–03 data, the 2000–01 and 2001–02 data shows a higher number of claims (around 10%) are lasting from six to 12 months. The low number of continuing claims in a scheme which is designed to provide continuing benefits suggests that claims are being settled as a means of minimising long tail claims.

One conclusion which can be drawn from the preceding data is that while the total number of seafarer compensation claims is decreasing, the period of incapacity appears to be increasing, over the reporting period. This may add significant costs to the Seacare workers' compensation scheme.

There are 30 claimants who lodged a claim over the past five years who were in receipt of incapacity payments at 30 June 2003.

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Table 14: Seafarer days lost 1998–99 to 2002–03

	1998-99	1999-00	2000-01	2001-02	2002-03
1998-99	11 069	16 657	18 117	19 134	19 643
		(5 588)	(1 460)	(1 017)	(509)
1999-00		8 996	14 861	17 571	18 642
			(5 865)	(2 710)	(1 071)
2000-01			11 324	16 018	17 036
				(4 694)	(1 018)
2001-02				11 877	16 623
					(4 746)
2002-03					7 995
Total	11 069	14 584	18 649	20 298	15 339
Seafarers	3 530	2 800	2 895	3 152	3 355
Days lost per seafarer in each year	3.14	3.21	3.91	3.77	2.38
Days lost per seafarer (cumulative)	3.14	5.21	6.44	6.44	4.57

Source: AMICA

Note: The figures across the table are cumulative. The actual days lost in the following year from previous year claims are the figures shown in brackets.

Table 14 indicates that while the total number of days lost from all injured seafarers has remained relatively constant over most of the previous four years, there has been a marked decline in 2002–03, to 7 995 days lost from injuries in 2002–03. The result is that the days lost per seafarer has fallen from 3.77 in 2001-02 to 2.38 in 2002-03,a decline of 36.9%. Also, for the first time over the reporting period the cumulative number of days lost from injuries in each of the reporting years has declined, relative to previous years. This points to the potential for a significant decline in the cost of claims.

One interpretation of the relative constancy in days lost over time, at least until 2002–03 (fluctuating from a low of 3.14 to a high of 3.91 over the previous four years) is that claims of six to twelve months duration and long tail claims (claims of one year's duration or more) are continuing to contribute to the relatively high number of days lost per seafarer. The relative constancy has occurred notwithstanding the general decline in injury rates over that period. Long tail claims are most likely the major contributing factor to days lost.

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Figure 15: Days lost per seafarer 1998–99 to 2002–03

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Source: AMICA and Seacare Authority

Figure 15 indicates that there is a downward trend in lost days per seafarer over the period 1999–00 to 2002–03.

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Given the hazardous working environment, the reduction in days lost per seafarer indicates the commitment of the industry to improving occupational health and safety

 

 

 

 

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Table 15: Active or continuing claims, 1998–99 to 2002–03

Year claim commenced	Active or continuing claims at 30 June 2002 from the year specified	Percentage change over previous year	Accepted claims	Percentage claims active or continuing as a proportion of accepted claims
1998-99	2		211	0.9%
1999-00	2	0%	157	1.3%
2000-01	1	-100%	180	0.5%
2001-02	12	1 100%	152	7.9%
2002-03	13	8.3%	145	9.0%
Total (over five years)	30		845	3.6%

Source: AMICA

Table 15 indicates that there are 30 active or continuing claims at 30 June 2003 from the last five years, which represents 3.6% of all accepted claims reported to AMICA over that period. This underscores the importance of actively supporting claimants and seeking rehabilitation/return to work options for claimants with a continuing incapacity to work.

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Table 16: Cost of claims 1998–99 to 2002–03

	1998-99	1999-00	2000-01	2001-02	2002-03	Total $
1998-99	2 909 500	215 541	259 136	169 550	92 055	3 645 782
1999-00		1 615 375	775 022	658 487	242 664	3 291 548
2000-01			1 960 041	1 517 477	471 617	3 949 135
2001-02				2 184 085	1 115 724	3 299 809
2002-03					2 007 549	2 007 549
Total $	2 909 500	1 830 916	2 994 199	4 529 599	3 929 609	16 193 823

Source: AMICA

Note: Costs include:

(i) payments to employees and/or dependants such as weekly payments;

(ii) payments for goods and services such as medical and hospital treatment, rehabilitation expenses, traveling expenses and property loss; and

(iii) non compensation payments such as investigation expenses, some legal costs, medico-legal reports. 

Costs not included are: some legal costs associated with disputed claims, AAT costs which are met from
Commonwealth appropriations, and some settlements.

Table 16 indicates that claims over the past five years have cost the industry $16.19 million (down from $18.78 million for the five years to June 2002). There has been a decrease from $2.18 million to $2.01 million in claim costs from 2001–02 to 2002–03, though claim costs for both the last two years are higher than 2000–01, by $1.96 million. The total cost during 2002–03 of all claims over the past five years is $3.93 million, down from $4.44 million for the five year period to 30 June 2002.

If the insurance premium pool data identified by Taylor Fry for the Authority for 1999–00, 2000–01 and 2001–02 of $6.95 million, $8.64 million and $9.73 million respectively is indicative of the five year reporting period it suggests that approximately $42.20 million in premiums has been paid over the last five years to help offset claim costs for which the insurer has responsibility (because such claims exceed the policy excess). While the full cost of insurer claims costs are not available at the time of reporting, insurers reported that the cost of long tail claims (claims of one or more years duration) to insurers over the five year period to 30 June 2002 was $7.44 million (excluding legal costs and settlement costs). Premiums are assessed on the basis of present and future liabilities, so care needs to be taken when comparing premium income with insurer payments, at any particular time, as future claim costs (future liabilities) can escalate.

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4.5.7   Dispute resolution in the Seacare scheme

Reviewable decisions by the AAT

The AAT is the second tier review for seafarer disputed claims (the first tier is reconsiderations by the employer). The AAT review process usually operates as follows. Firstly, an AAT conference is held to enable applicants to discuss with their employer and an AAT member or conference registrar (an AAT official), why they think the employer determination is wrong. The conference gives the parties an opportunity to agree to what the decision should be. If at the end of the conference process a matter has not been settled, then a compulsory conciliation conference will be listed. If the matter fails to settle at a conciliation conference, the matter will proceed to a hearing unless both parties and the AAT agree that a mediation should be held. In 2002–03, 66 conferences were held involving seafarer matters, 21 conciliation conferences were conducted and 11 matters were heard by the AAT.

Table 17: Outcome of AAT review of decisions 1998–99 to 2002–03

	1998-99	1999-00	2000-01	2001-02	2002-03
Undetermined matters brought forward from previous years	60	72	66	70	50
New matters recorded by AAT for review of reviewable decisions	69	64	66	46	37
Matters resolved by consent or withdrawn	30	19	23	22	23
Matters heard and employer's decision affirmed	1	3	0	0	3
Matters heard and employer's decision set aside	3	2	2	2	7
Matters heard and varied	1	0	0	0	0
Matters heard and remitted to employer	0	0	0	0	1
Decision set aside by consent	18	14	9	7	5
Decision varied by consent	7	13	6	5	3
Decision dismissed as non-reviewable	1	1	0	0	0
Matters where there is no jurisdiction	0	1	1	4	1
Other	2	17	21	27	8
• Dismissed at request of applicant		15	17	21	8
• Dismissed by consent or withdrawn		1	3	5	0
• Dismissed for non appearance		1	1	1	0
Matters undetermined at 30 June	72	66	70	48	44
Number of conferences	NA	NA	NA	NA	66
Number of conciliation conferences	NA	NA	NA	NA	21
Average time taken from lodgement to decision (days)	NA	NA	NA	NA	476

Source: AAT

Table 17 shows that in 2002–03, 43 applications were resolved in some way by the AAT. Of those, the employer's original decision was upheld in 18or 42% of cases; 12 or 28% of matters were set aside; nine or 21% were dismissed at the request of the applicant or by consent, three or 7% of cases were varied by consent; and in one or 2% of cases, there was no jurisdiction.

The total number of claims reported to AMICA in 2002–03 was 163.In 2002–03, 37 new applications were made to the AAT for review of a decision. The number of applications relative to claims made is a useful indicator of the propensity to use the AAT. Using this analysis, 23% of claims made by seafarers resulted in an application to the AAT for a review of a decision, compared to 28% in 2001-02. Table 17 indicates the consistently high proportion of claims referred to the AAT for consideration over the past five years. Table 18 below compares the Seacare and Comcare dispute rate, noting that both schemes have a similar legislative and reviewable decisions structure.

In 2002–03, the time taken from lodgement of a claim with the AAT to a decision took on average 476 days. By comparison, under the Comcare scheme, which operates in the same tribunal, the average time taken from lodgement to decision in 2002–03 was 322 days.

This report does not contain an Appendix reporting on significant tribunal and court decision relevant to Seacare scheme legislation, as has appeared in previous years. While a number of cases were concluded during the financial year, none were considered to raise significant issues in relation to scheme legislation. A list of references to tribunal and court decisions involving Seacare scheme legislation is nevertheless available from the Seacare Authority website at www.seacare.gov.au .

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Table 18: Comparison of Seacare scheme and Comcare dispute rate (number of applications to AAT as a proportion of claims)

	1998-99	1999-00	2000-01	2001-02	2002-03
Seacare scheme	31.3%	35.1%	32.5%	28.0%	23.0%
Comcare	6.1%	7.1%	9.3%	12.7%	12.1%

Source: Seacare Authority and Comcare

Note: Comcare data includes both AAT applications and reconsiderations (Seacare uses only AAT applications ("disputes"). Comcare also uses accepted claims, not all claims, as does Seacare). This explains at least part of the difference in the dispute rates. The dispute rate for Comcare for 2001-02, as reported in the 5th CPM report, is 27%, compared to Seacare at 28%.

The use of the AAT by seafarers suggests that claimant prospects for a favorable decision are perceived to be high, or alternatively, the employer processes in considering claims are not working satisfactorily, resulting in applications to the AAT as a substitute for strong claims management at the enterprise level. It is not uncommon for an employer to exercise their statutory right to not make a determination within the statutory timeframe, which in effect is a denial of liability for the claim. In such circumstances an employee is entitled to seek an AAT review of what is in effect a decision to reject the claim.

In 12 or 28% of cases in 2002–03 applicants had a decision set aside or varied. This relatively low rate of variation suggests that although a high number of seafarers are applying to the AAT to have decisions reviewed, the data does not suggest a particularly high rate of success.

Figure 16: Claims reviewed as a proportion of all claims lodged 1998–99 to 2002–03

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Source: Seacare Authority and Comcare

Reconsiderations by employers

 Under subsection 78(4) of the Seafarers Act an employer must, upon receipt of a request by an employee for a reconsideration of a determination (of a claim), arrange for an industry panel, or for a Comcare officer, to assist in reconsidering a determination made about a claim for compensation. This review is tier one of a two tier review process under the Seafarers Act. As there are no industry panels established pursuant to section 78 of the Seafarers Act, Comcare conducts all such reviews for employers. In 2002–03 Comcare reviewed 19 such cases, involving eight maritime employers. In 100% of cases, the Comcare recommendation was to affirm the employer determination.

Figure 16 indicates that Comcare reviews as a percentage of claims lodged have declined over the period 1998–99 to 2002–03, while AAT reviews seem to be showing the same trend 12 months later. Given that on average it takes 476 days from the time of lodgement of a claim with the AAT to a decision to be made the delay in AAT trends is expected.

While it would be expected that there would be a lower number of tier two reviews (in that some disputes would be resolved at the tier one stage) the data (as represented in Figure 16) shows the contrary. The key explanations for this are first, that AAT matters can arise from claims made in earlier financial years so the application year will not necessarily match reconsiderations arising from claims lodged in a particular financial year; and second, AAT matters can arise from decisions other than an employee requested reconsideration eg an employer initiated reconsideration which does not require a Comcare assisted review, or can arise from an employer decision to refuse a request for additional time to complete the request for a reconsideration i.e. the AAT matter arises from a procedural issue associated with the operation of section 78 of the Seafarers Act. AAT matters can also arise from the application of section 91 of the Seafarers Act (cost of proceedings before AAT).

4.5.8   Rehabilitation/Return to Work performance— using claims data

Table 19: Rehabilitation and return to work 1998–99 to 2002–03

	1998-99	1999-00	2000-01	2001-02	2002-03
Accepted Claims	211	157	180	152	145
Claims of 28 days or more	127	91	112	96	85
Number of claimants assessed for a rehabilitation program	27	60	49	14	24
Number of claimants commencing a rehabilitation program	24	35	41	13	17
Number of claimants commencing a rehabilitation program and whore turned to work	7	21	33	6	12

Source: AMICA

 Table 19 indicates that in 2002–03 there were 85 (58.6%) of claimants who were eligible for assessment of their capability of undertaking a rehabilitation program, that is, the data shows 85 claimants had an injury which lasted 28 days or more. However, of those 85 eligible claimants, only 24 or 28.2% were assessed by employers for their capability of undertaking a rehabilitation program in 2002–03 — suggesting there was non compliance with section 49 of the Seafarers Act in 71.8% of cases. Of the 24 who were assessed as capable of undertaking a rehabilitation program, only 17 or 20% of eligible claimants commenced a rehabilitation program.

Table 19 also indicates that of those assessed, some 70.8% have commenced a rehabilitation program, and 50% of those commencing rehabilitation, returned to work.

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Table 20: Period of the rehabilitation program, where rehabilitation is finalised 1998–99 to 2002–03

	1998-99	1999-00	2000-01	2001-02	2002-03
3 months or less	13	17	2	4	8
3-6 months	3	4	5	2	5
6-12 months	3	1	2	2	4
Greater than 12 months	5	13	11	5	0
Total	24	35	41	13	17
Continuing rehabilitation	2	7	6	5	4

Source: AMICA

Table 20 shows that while the most prevalent length of rehabilitation programs in 2002–03 are those of up to three months duration, a number are continuing for quite lengthy periods, perhaps involving retraining. However, a considerable number of programs appear to have durations of between six months up to more than 12 months, though it cannot be ascertained from the data as to whether the longer programs are resulting in successful and durable return to work.

Table 21: Nature of duties on return to work 1998–99 to 2002–03

	1998-99	1999-00	2000-01	2001-02	2002-03
Full duties	NA	78	133	82	94
Light duties	NA	13	9	10	6
Same position	NA	83	136	84	93
Other position	NA	6	6	7	7
Full time	NA	88	138	82	98
Part time	NA	1	3	2	2
Ship	NA	85	137	84	94
Land	NA	4	5	8	6

Source: AMICA

Table 21 indicates that the majority of seafarers return to the same position on full duties when they return to work after injury. The data nevertheless indicates that some graduated return to work opportunities (presumably in a supernumerary position or on a laid up ship) are being found for returning seafarers as part of the rehabilitation process and that some land based employment options are also being used to assist recovery and return to work.

4.5.9   Rehabilitation and return to work — using ARTW Monitor data

The ARTW Monitor 2002–03 reports on a survey of 2 966 injured workers in Australian and New Zealand workers' compensation schemes. It aims to establish a national/international benchmark for measuring RTW and durability of RTW across Australian and New Zealand workers' compensation schemes. Seacare scheme data was included in the ARTW Monitor for the first time in 2001–02.

Injured seafarers are interviewed by phone in four survey waves each year in August, November, February and May. Those seafarers who lodged a claim in the seven to nine months prior to the survey month, who had more than 10 days compensation paid and who had not participated in a previous survey are identified by AMICA for confidential interview. In 2001–02, 30 such seafarers were interviewed, a response rate of 35.7% of the cohort (84).

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The highly specialised nature of shipping operations requires innovative solutions to maximise return to work options for injured seafarers

 

 

 

 

 

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A range of survey questions was asked of seafarers to ascertain their perceptions about the way their compensation claim was managed, and their rehabilitation and return to work experience. Some of the key findings which compare Seacare scheme performance with national outcomes are reported below:

• the return to work rate in the Seacare scheme of 77% (87% in 2001–02) is below the national average of 83% (unchanged from 2001–02), and is the lowest of any scheme in Australia;
   
• the durable return to work rate (i.e. the seafarer has remained back at work following a return to work) in the Seacare scheme is 67% (73% in 2001–02), below the national average of 73% (unchanged from 2001–02), and is the lowest of any scheme in Australia;
   
• only 17% of Seacare scheme employees were still receiving workers' compensation payments at the time of the interview (18% in 2001–02), below the national average of 24% (25% in 2001–02). As a low percentage is desirable, it suggests that injury duration is generally less than six months and that return to work is durable in the Seacare scheme;
   
•  Seacare scheme injured employees are very likely to return to the same employer following a return to work. 96% (88% in 2001–02) reported returning to the same employer compared to the national average of 83% (85% in 2001–02). This is the highest rate of any Australian scheme;
   
• 87% of Seacare scheme workers (90% in 2001–02) returned to the same duties following an injury compared to the national average of 75% (74% in 2001–02). This is the highest of any scheme in Australia and probably reflects the fitness for duty requirements of the industry, the peculiarities of seagoing work and the specificity of seagoing occupations;
   
• Seacare scheme employees reported the highest identification with the importance of the workplace, and felt well valued by their employer;
   
• Seacare scheme employees indicated a high level of ease of access to information in making a compensation claim at 83% (87% in 2001–02), compared to the national average of 81% (77% in 2001–02), possibly due to the self contained nature of the workplace;
   
• Seacare scheme employees reported the highest rate of having lodged a previous claim, at 58% (13% in 2001–02), compared to the national average of 38% (32% in 2001–02). Given the large variation in outcome over two years, it is difficult to determine a trend;
   
• of Seacare scheme employees not working at the time of the survey interview, 91% reported that they were still injured (68% in 2001–02) and 21% had left their employment(26% in 2001–02) and none had been retrenched (6% in 2001–02). These results are broadly consistent with the pattern across all schemes;
   
• Seacare scheme employees reported the lowest involvement in development of a rehabilitation program of any scheme in Australia, at 17% (16% in 2001–02), compared to the national average of 49% (47% in 2001–02);
   
• of those who did have a rehabilitation program, 77% indicated employee involvement in development of the program (87% in 2001–02), compared to the national average of 79% (81% in 2001–02), and 59% indicated the rehabilitation program was helpful (52% in 2001–02), compared to the national average of 72% (74% in 2001–02);
   
• 81% of Seacare scheme employees reported feeling ready to return to work when they returned (88% in 2001–02), compared to the national average of 73% (unchanged), though only 68% indicated they were given suitable duties on return to work (77% in 2001–02), compared to the national average of 77%(78% in 2001–02);
   
• of the assistance provided to seafarers in returning to work, the most help came from the seafarers own initiative (the highest of any scheme, suggesting that seafarers need to be resourceful given their isolation from professional assistance), their doctor, physiotherapists and other allied health professionals, rehabilitation providers, with work related assistance ranking the lowest help;
   
• Seacare scheme employees reported by far the lowest partial or graduated return to work of any scheme, at 4% (5% in 2001–02) compared to the national average of 23% (25% on 2001–02) — the next lowest being NSW at 20%. This undoubtedly reflects the lack of access to graduated return to work opportunities for seafarers;
   
• the mean age of injured seafarers who were part of the survey cohort was 46 (45 in 2001–02), the oldest of all schemes with the Australian mean being 42 years of age(41 in 2001–02);
   
• the average (mean) cost per claim by seafarers interviewed was $14,717, compared to the Australian average of $10,102;
   
• the average (mean) cost of rehabilitation of seafarers was $809 compared to the Australian average of $1,718.

Selected tables developed from data reported in the ARTW Monitor 2002–03 of August 2003 are reproduced below.

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Figure 17: Seacare comparative return to work performance

Source: Seacare and ARTW Monitor

Figure 17 shows that the Seacare scheme return to work rate has fallen relative to 2001–02, is below the Seacare Authority's benchmark established in 2000–01and is below the national average for 2002–03.

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Figure 18: Seacare comparative durable return to work performance

Source: Seacare and ARTW Monitor

 Figure 18 shows that durable RTW in the Seacare scheme has fallen relative to the Seacare Authority's 2000–01 benchmark and relative to 2001–02. Durable RTW in the Seacare scheme is also lower than the national average and suggests that durable return to work in the Seacare scheme is volatile.

The isolated nature of shipping activity poses large challenges to employers in seeking graduated return to work opportunities for injured seafarers

 

 

 

 

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Figure 19: Seacare comparative graduated RTW

Source: Seacare and Australasian Return to Work Monitor, Campbell Research & Consulting

 Figure 19 shows a slight deterioration in graduated or partial RTW in the Seacare scheme compared to 2001–02, though the rate remains above the 2000–01 benchmark established by the Seacare Authority. However, the graduated RTW rate remains well below the national average of 23%.

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Figure 20: Development of a rehabilitation program

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Source: Seacare and ARTW Monitor

 Figure 20 shows that rehabilitation programs do not appear to be a significant feature of seafarer return to work arrangements. While there has been a very slight improvement over 2001–02, the Seacare scheme is well behind the national average on this measure.

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