What’s Breaking Injured Workers in Victoria? It’s Agent Behaviour — and What’s Finally Changing

Nov 2

3 min read

A person stands before a mountain of papers with "DENIED" stamped, spilling from file cabinets in an office, creating a chaotic scene.

For more than a decade, every serious investigation into Victoria’s WorkCover system has found the same thing: it’s not just the law or the process that’s broken it’s the behaviour of the agents paid to run it.

A System Built on Perverse Incentives

Under Victoria’s outsourced model, private insurers, currently Allianz, DXC, EML, and Gallagher Bassett administer claims on behalf of WorkSafe Victoria. In theory, this was meant to deliver efficiency. In practice, it has created perverse incentives that reward denial and delay rather than recovery and dignity.

The Victorian Ombudsman’s 2016 and 2019 investigations found that agents were cherry-picking evidence, ignoring medical advice that supported workers, and prematurely terminating payments. WorkSafe, the regulator, often accepted these decisions even when they were clearly wrong.

By 2020, the Victorian Government could no longer ignore the damage. It commissioned Peter Rozen KC to conduct an independent review into the management of complex workers’ compensation claims. His verdict was damning:

“The agent model is ill-suited to the management of complex and psychological injury claims. Workers report being treated like criminals, not citizens.”

What Changed by 2025

Reform Momentum Finally Took Hold

The WorkCover Scheme Modernisation Act 2023, which took effect in March 2024, introduced stricter rules for psychological injury claims and tighter impairment tests after 130 weeks. Supporters said the changes would stabilise the scheme. Critics warned they would push the most vulnerable over the edge.

In March 2025, an independent review of the reforms confirmed structural fixes were needed but stressed that outcomes for injured workers must be at the centre of any “sustainability” discussion.

New Laws to Rein in Agent Behaviour

In early 2025, the Government introduced the Workplace Injury Rehabilitation and Compensation Amendment Bill 2025, which directly implements Rozen’s key recommendations: stronger oversight of agents, fairer dispute pathways, and improved case-management standards.

Direct Case-Management for the Hardest Cases

For the first time, WorkSafe is directly managing long-term and complex claims, around 1,500 workers whose cases extend beyond 130 weeks to test a more trauma-informed model that prioritises recovery over cost.

A Stabilised Funding Base

Employer premiums were frozen for both 2024-25 and 2025-26. That gave WorkSafe room to rebuild the system without hiking costs while reforms take hold.

A Leadership Reset

In late 2025, Cathy Henderson became CEO of WorkSafe Victoria with a clear mandate: fix the culture, enforce accountability, and restore trust. Leadership stability is now critical to carrying reforms from paper to practice.

The Heart of the Matter: Agent Behaviour and Data Accountability

While Victoria’s agents use digital systems to manage claims, it remains unclear whether they operate under a single unified database or separate proprietary platforms. What’s clear is this: poor data management and fragmented oversight have allowed damaging behaviours to persist.

Common failures identified across reviews include:

Incentive frameworks that reward claim terminations or “cost efficiency” over recovery outcomes.
Lack of trauma-informed training for case-managers dealing with psychological injuries.
Weak WorkSafe oversight — with too few reversals of unfair decisions.
Inconsistent data reporting across agents, leaving serious risks (including suicide) under-detected.

These failures are not technical. They’re human, cultural, and moral.

What Still Needs to Happen

Publish Agent Performance Data. Workers and employers deserve transparency on complaint rates, claim reversals, and long-term outcomes by agent.
Reform Financial Incentives. Replace termination bonuses with metrics tied to sustainable recovery and worker wellbeing.
Expand Direct-Management for Complex Claims. Early results show better continuity of care when WorkSafe handles complex cases directly.
Improve Data Oversight and Integration. Regardless of which systems agents use, WorkSafe must ensure consistent, transparent data flows and early risk flags.
Monitor Post-Reform Harm. The new impairment thresholds and 130-week cut-offs must be audited for unintended human costs — including mental distress and suicide risk.
Embed Culture Change. Respect, empathy, and dignity must become the daily practice of every case-manager, not just a slogan in an implementation plan.

Bottom Line

By 2025, Victoria has begun to confront what injured workers have known for years: the harm is not accidental, it’s systemic. The Government has passed the laws, created the reviews, and changed the leadership. The question now is whether it will enforce real accountability inside the agent network or allow another generation of workers to be broken by bureaucracy.