NSW public insurer to pay out $38 million

·3-min read

At least 53,000 injured workers will share in a $38 million payout from the beleaguered NSW public insurer icare, with its chief executive offering a "sincere apology" for miscalculating payment amounts.

It's a significant development in the underpayments scandal that has been brewing since icare identified the potential issue in 2019.

A review of 16,000 workers' files found 3.5 per cent had been underpaid due to an error in the way the company was calculating their earnings before their injuries.

The insurer - an employer-funded workers' insurer, owned by the state but independent from government - will move to proactively pay the workers most likely to be affected by the miscalculation issue.

"I would like to offer my sincere apology to any injured worker who has been affected by this calculation error," icare CEO Richard Harding said in a statement.

The company was working closely with the NSW government, the State Insurance Regulatory Authority and employers to make sure it didn't happen again, he said.

The decision to make proactive payments was designed to get workers paid as quickly as possible, and was endorsed by a Deloitte review.

Deloitte found there was a risk some people would be overcompensated, but that was outweighed by other considerations.

Shadow treasurer Daniel Mookhey told reporters on Thursday the decision was "a big step forward for justice" for injured workers who had been the victims of "the biggest act of wage theft committed by any Australian government".

He said the government should guarantee the repayments would cover the state's public service.

"As icare's finances are dire, the insurer must now guarantee that they won't seek to recover this money from sick and injured workers through benefit cuts, or employers through higher premiums," he said.

The insurer says it's written to 280,000 injured workers since 2020 and conducted a statewide awareness campaign for potentially affected workers.

The calculation error was made between 2012 and 2019, and also resulted in some people being overpaid.

The 53,000 workers will have the weekly benefits adjusted for the weeks they've already been paid.

The amount they receive will be based on characteristics of their claims, like weeks off work and the nature of their injury.

Injured workers can also request further review.

But Unions NSW is complaining anyone who wants it has to jump through bureaucratic hoops.

"Icare must ... err on the side of accepting further claims from people who have been underpaid," Unions NSW secretary Mark Morey said.

"There may be many thousands more sick and injured workers whose underpayments have not been captured by this review ... icare needs to give them the benefit of the doubt."

Mr Morey said the icare saga should prompt a "fundamental rethink" of how the state treats sicka nd injured workers.

"We will continue to campaign on this issue. The system remains broken and needs to be fixed so that sick and injured workers are not forced to again carry the cost of government incompetence," he said.

Impacted workers can expect to hear from icare shortly.

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