Workcover Claimant Convicted of Fraud Due to Side-hustle

Not every WorkCover Claimant is able to bring a successful common law claim. If a Claimant fails to disclose to WorkCover earnings or involvement in an activity which could result in a reward during the statutory phase, a referral can be made to the Workers’ Compensation Regulator (the Regulator) and a prosecution may result.

An example of this type of case includes a recent matter where the Claimant alleged she sustained a thoracic spine soft tissue injury during the course of her employment as a childcare worker. She alleged she was struck on the back with the end of a metal handled broom by a school-aged child who was having a tantrum.

The Claimant’s claim for compensation was accepted and she received weekly compensation benefits from WorkCover during the first half of 2020. Her statutory claim was eventually finalised, and she commenced a damages claim against her employer and WorkCover in October 2020. Mullins were appointed by WorkCover to defend the claim.

In her Notice of Claim for Damages served in October 2020, the Claimant declared that she operated a small business during the period she received weekly compensation payments.

Social media searches confirmed the Claimant was quite active in the business prior to and during the period she received statutory benefits. We requested further disclosure from the Claimant’s solicitors about the business which showed minimal income was being received, however, this increased significantly once her statutory claim was finalised.

The Workers’ Compensation and Rehabilitation Act 2003 (WCRA) contains various fraud provisions. Under the WCRA, it is an offence for a worker to:

  • Fail to notify the insurer of a return to work (section 136 WCRA);
  • Engage in a calling (i.e. participate in an activity for pay or reward) while receiving weekly compensation payments without notifying the insurer (section 535 WCRA); or
  • Provide false or misleading information to an insurer (section 534 WCRA).

The Claimant did not advise WorkCover about her income from the small business when lodging her statutory claim, or at any time while the statutory claim remained open, despite being advised to immediately notify WorkCover if she returned to any form of paid or unpaid work.

On the advice of Mullins, the Claimant was referred to the Regulator (the Regulator) in December 2020.

The Regulator pursued a prosecution of the Claimant, who in September 2021, was charged with one count of fraud, one count of failing to notify of an engagement in a calling and two counts of providing false or misleading information.

In January 2022, the Claimant was sentenced to 12 months’ imprisonment wholly suspended for two years for the fraud charge, 6 months’ imprisonment wholly suspended for the false and misleading charges and ordered to pay costs of over $25,000.00 to WorkCover and over $3,000.00 to the Regulator.

The Claimant’s entitlement to pursue her claim for damages for the incident was also extinguished.

This case serves as a reminder to employers to ensure that any information received about a worker returning to work or engaging in a “side hustle” while receiving compensation should be passed onto the insurer to investigate.

Injured workers are reminded that insurers will fully investigate and prosecute fraudulent and misleading conduct and failing to disclose a return to work can see them lose more than just their entitlement to pursue their claim.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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