Workers' Compensation and Social Security Expenditure in Australia: Anti-Social Aspects of the 'Social' Wage

Abstract

This paper focuses on undercompensation among the work injured and the substitution of public welfare pensions for workers' compensation payments. It is argued that the costs of work-injury are transferred to the individual and the state as personal and social costs. Utilising Australian Bureau of Statistics, Department of Social Security and other data the importance of the Invalid Pension, especially among male migrants, is demonstrated. It is also evident that women, in particular migrant women, receive less workers' compensation and for shorter periods of time but are less likely to be on the Invalid Pension. These groups are consequently more likely to experience personal costs. It is argued that the substitution of pensions and benefits acts as a market subsidy and ultimately legitimates unsafe work practices. This contradictory outcome of social welfare expenditures challenges the assumption that pensioners and beneficiaries derive sole, or even greatest, benefit from social welfare expenditures. As a case study this paper illustrates the need to consider industrial relations and labour market aspects when assessing income maintenance policies. More generally, it is suggested that the analysis of public expenditures or the 'social wage' must incorporate the impact of policy on the labour market and the interaction of the public and private sectors.