The Victorian government and opposition have brokered a deal to push through contentious changes to the state’s broken worker insurance scheme.

Premiums for businesses under the WorkCover scheme will be frozen for the 2024/25 financial year under an agreement to secure opposition support for the bill.

Other amendments include an independent review into the impact of the reforms, expanding WorkSafe’s board from five members to six and setting up an advisory committee on the creation of Return to Work Victoria.

The deal means the legislation, which restricts eligibility and testing requirements to curtail skyrocketing costs, will pass the upper house as early as Tuesday.

“This premium freeze for employers will help many of them at a time when land taxes and payroll taxes and other fees and charges … continue to skyrocket,” Opposition Leader John Pesutto told reporters.

Under the incoming scheme changes, workers suffering stress and burnout will no longer be able to access weekly WorkCover benefits.

They will instead be eligible for 13 weeks of provisional payments to cover medical treatment, along with access to enhanced psychosocial support services.

Workers receiving payments beyond two-and-a-half years will also have to undergo another impairment and capacity test to determine if they are still eligible.

The union movement has staunchly opposed the reforms since they were announced a year ago.

Victorian Trades Hall Council secretary Luke Hilakari wrote to all 70 Labor MPs last month encouraging them to lobby WorkSafe Minister Danny Pearson to ditch the bill.

But Mr Pearson declared the changes were a victory for “all Victorian workers” while confirming the deal on Tuesday.

“We’re making sure that Victorian workers have the dignity of a viable, sustainable workers compensation scheme,” he said.

“It will ensure that we can give people the support they need when and where they need it.”

Some 98,000 Victorians received support through WorkCover in 2022/23 and in the last three years taxpayers have topped up the scheme with an extra $1.2 billion to offset rising costs.

The average premium for businesses was lifted from 1.27 per cent to 1.8 per cent in July after the government declared the scheme was broken and in need of an overhaul.

WorkCover claims liability has tripled in Victoria since 2010, mainly because of people staying on the scheme longer and soaring mental health claims.

Over the 2022/23 financial year, 16 per cent of claims were for mental injuries and that was expected to rise five per cent every year until 2030.

Callum Godde
(Australian Associated Press)