Employment and Migration Blog

Fraudulent workers compensation claims

Posted by Stephen Booth, Lisa Qiu on 11 Feb 2016

Every employer in Australia is required to hold an insurance policy which covers their workers for injuries at work. Most workers compensation claims are genuine and legitimate, and this will generally be evident, especially if the worker has suffered a physical injury. 

Sometimes, employers will question whether the worker is genuinely suffering from an injury, or at least an injury as serious as is claimed, or if they’re just playing the system. Of course, neither employers nor lawyers can second guess medical assessments. However, that doesn’t mean that as an employer, you just need to accept each claim as it comes, without question. Your best course is to fully brief your insurer and to be actively involved in investigation and management of the case, if you believe there is no injury or that it is being exaggerated.  

It also doesn’t mean that employees who submit fraudulent workers compensation claims always get away with it.

Recently, in the case of R v Allred, the Supreme Court of the ACT imprisoned a worker for two years for submitting a fraudulent workers compensation claim to Government insurer Comcare, ordering the worker repay $64,418.62. 

Mr Allred, an employee of the ACT Ambulance Service, injured his back on the job in 1991. He received fortnightly payments from Comcare for 20 years. In order to continue receiving compensation, Mr Allred had to submit medical certificates to Comcare about once a year, demonstrating that he was still suffering from his injury and unable to work. 

However, a Comcare investigation including surveillance and a Federal Police search of his home showed that he had in fact been self-employed as a taxi driver from April 2007 to December 2010, earning approximately $120,000 a year, while still receiving benefits of about $72,000 each year. Had his income as a taxi driver been disclosed to Comcare, he would only have been entitled to about $7,000 each year. 

Mr Allred not only failed to disclose the fact that he could work, and that he was receiving income other than his workers compensation payments, he also lied to Comcare by stating that he wasn’t working, was unable to work, and wasn’t receiving any income outside of his Comcare payments. 

The custodial sentence in this case serves as a strong reminder that fraudulent workers compensation claims are not to be taken lightly.

If you need advice in relation to managing injured workers, get in touch with our Employment Law team: