Victoria introduced the Workers’ Compensation Act 1914 with benefits payable to workers arising ‘out of and in the course of’ employment. The Workers’ Compensation Act 1946 changed to arising ‘out of or in the course’ of employment. Major amendments were made in 1984 and the Accident Compensation Act 1985 was introduced. The Accident Compensation Act 1985 made sweeping changes to the system including public underwriting, vocational rehabilitation, work health and safety reforms and a new dispute resolution system.

The Act has been constantly updated with major reforms as follows:


  • restricting weekly benefits for workers with a partial work capacity
  • introducing a non-adversarial dispute resolution system via conciliation
  • establishing expert Medical Panels to determine medical questions
  • limiting access to common law to seriously injured workers, and
  • reinstating the right to sue for economic loss.


  • introducing the premium system.


  • removing access to common law
  • significantly changing the structure of weekly benefits
  • introducing impairment benefits to replace the Table of Maims, and
  • restructuring death benefits.


  • reinstating access to common law damages for seriously injured workers with a new threshold for economic loss.


  • improving the efficiency of the claims process, and
  • facilitating early and sustainable return to work.


  • making provision for previously injured workers whose employers exit the Victorian scheme to become licensed corporations under the Comcare scheme.


  • enhancing existing benefits including death benefits and the extension of the weekly benefits entitlement period from 104 to 130 weeks with increased payments for workers with a partial work capacity.


  • clarifying the financial guarantee requirements on employers who exit the Victorian WorkCover scheme (or Victorian self-insurer arrangements) to self insure under the federal Comcare scheme
  • mandating the return of the management of tail claim liabilities to the Victorian WorkCover Authority (WorkSafe Victoria) for Victorian self-insurers who cease their self-insurance arrangements under the Victorian scheme
  • restoring the original approach to the assessment of permanent impairment for injured workers who suffer spinal injuries prior to the decision of the Full Court of the Supreme Court in Mountain Pine Furniture Pty Ltd v Taylor
  • confirming that compulsory employer superannuation payments are not taken into account in the calculation of weekly benefit compensation
  • improving counselling benefits for the families of deceased or seriously injured workers, and
  • contributions towards the purchase price of a car where the current car is unsuitable for modification, home relocation costs and portable semi-detachable units in addition to car and home modifications.


  • preservation of the higher impairment rating regime for workers with musculoskeletal injuries assessed under Chapter 3 of the American Medical Association Guides (4th edition) in place since 2003
  • retrospective amendments to the Act to maintain the status quo regarding recovery rights against negligent third parties that contribute to the compensation costs payable for a worker’s injury, and
  • workers with asbestos-related conditions can claim provisional damages and access expedited processes to bring on court proceedings quickly where the worker is at imminent risk of death.


  • on 17 June 2009 the Victorian Government responded to 151 recommendations made in a commissioned report following a review undertaken in 2008 by Mr Peter Hanks QC of the Accident Compensation Act 1985 and associated legislation, and
  • improvements to benefit both workers and employers and aimed at enhancing the scheme as a whole were introduced into Parliament in December 2009.


The Accident Compensation Amendment Act 2010 was passed with the majority of the reforms commencing from 5 April 2010, except for new return to work rights and obligations commencing from 1 July 2010. The Act introduced the following changes:

  • almost a doubling of lump sum death benefits, and improved access to pensions for dependants of deceased workers

For injured workers who suffer a permanent impairment, the reforms provided:

  • a 10 per cent increase in no-fault lump sum benefits for workers with spinal impairments
  • a 25 per cent increase in the maximum impairment benefit, increasing no-fault lump sum benefits for the most profoundly injured workers, and
  • a five-fold increase in benefits awarded to workers who suffer a serious psychiatric impairment.

For injured workers who receive weekly payments:

  • an increase in the rate of compensation from 75 per cent to 80 per cent of income after workers have received compensation for 13 weeks
  • a superannuation contribution for long term injured workers
  • the extension of the inclusion of overtime and shift allowances from 26 weeks to 52 weeks when calculating a worker’s weekly payments
  • increasing the statutory maximum for weekly payments to twice the state average weekly earnings, and
  • payment of limited further weekly payments for workers who have returned to work, but who require surgery for their work-related injury.

Other changes include:

  • the replacement of prescriptive return to work requirements with a performance based regulatory framework from 1 July 2010 and the appointment of a Return to Work (RTW) Inspectorate with the power to enter workplaces and issue return to work improvement notices for any contravention by an employer of the return to work part of the Act
  • greater accountability and transparency of decisions made by Victorian WorkCover Authority and its agents, including the right of employers to request written reasons for agents’ claims decisions and to appeal premium determinations, and
  • less red tape for employers and improved understanding and usability of the legislation by the removal or reform of anomalous, obsolete, inoperative or unclear provisions.

Further reforms were introduced in the latter half of 2010 with amendments to:

  • streamline the provision that sets out the calculation of pre-injury average weekly earnings (PIAWE) and correct an anomaly in relation to the incorporation of commissions into PIAWE
  • codify current policies that relate to the impact on remuneration of salary packaging and injury prior to taking up a promotion, on the calculation of PIAWE
  • restructure and streamline the provisions that govern the coverage of contractors
  • align the value of impairment benefits for injured workers assessed at 71 per cent WPI or above with the equivalent value of common law damages payable for pain and suffering on an ongoing basis
  • introduce greater clarity and equity for dependants of deceased workers in relation to medical and like benefits, how earnings are calculated and how partial dependant partners of deceased workers are compensated
  • improve the usability of provisions relating to medical expenses, and
  • extend an existing provision in the Act to allow the making of a Governor in Council Order that would permit the introduction of a fixed costs model (FCM), with built-in increases linked to inflation, for plaintiff’s legal costs in the litigated phase of serious injury applications.


On 1 July 2011, the new ANZSIC 2006 based WorkCover Industry Classification (WIC) system commenced.


The Workplace Injury Rehabilitation and Compensation Act 2013 commenced on 1 July 2014. The Act recasts the Accident Compensation Act 1985 and the Accident Compensation (WorkCover Insurance) Act 1993 into a single Act.