Home - Fraudulent workers’ compensation claims? What to do

UpdatesMay 08, 2014

Fraudulent workers’ compensation claims? What to do

It can be very difficult and frustrating for an employer to try to convince the insurer or safety regulator that the worker compensation claim is fraudulent, and how would you even go about doing that?

By Michael Selinger

Have you ever had a worker claim for workers’ compensation but you suspect that the claim may not be legitimate?

Worker’s compensation fraud is when a person dishonestly obtains a payment or other benefit under workers’ compensation legislation in that jurisdiction.

If this happens, more often than not, the claim will be rejected by the insurer because it will determine that either:

In some cases though, the worker’s claim will be approved and the worker will receive payments even though either of the above scenarios may apply.

It can be very difficult and frustrating for an employer to try to convince the insurer or safety regulator that the worker compensation claim is fraudulent, and how would you even go about doing that?

Can you prove a workers’ compensation claim is fraudulent? 

Every now and then, an employee lodges a workers’ compensation claim that an employer suspects may be fraudulent. What would you do if this happened to you?

You can invest time and resources into undertaking an internal investigation into the matter with the aim of disproving the claim.

While an internal investigation is costly and time consuming, the benefits of taking this approach can make a big difference to your business, including:

Case study 

A recent prosecution in Victoria highlights the monetary extent of some fraudulent claims.

A worker lodged a claim for compensation for a genuine back injury sustained in May 2008 while working as a scaffolder.

An investigation by the safety regulator in 2011 established that he had failed to disclose that he was working as an electrical trade assistant while receiving weekly payments of compensation for a period of 2 years. The worker was convicted and sentenced to imprisonment of 9 months (which was wholly suspended for 18 months) and was ordered to pay restitution of over $50,000 and legal costs.

Your business should always be aware of the potential for fraudulent claims and offer assistance to insurers in detecting this conduct.

If an insurer is refusing to take any further steps to investigate the matter and you have a reasonable suspicion that a claim is fraudulent, your business should undertake its own investigation.

For example, the following methods may be used to investigate the matter:

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