COMPENSATION costs for stressed and injured federal public servants have doubled in a year to nearly $1 billion.
Comcare, the Federal Government's workplace compensation insurer, has recorded its first loss, a $564 million for 2011-12.
It blames the blow-out on a surge in claims and public servants "not recovering as quickly as they should".
The effect of lower interest rates on earnings and higher forecasts for inflation also contributed.
Comcare has been dealing with a rash of controversial compo claims, many for bullying and "adjustment disorder", a type of psychological injury due to work-related stress.
It will announce today its High Court appeal against a Federal Court order that it pay compensation to a public servant injured during sex in her motel room while on a business trip.
The case will set a national legal precedent, drawing the line between injuries sustained at work and in private.
Comcare's latest annual report reveals the cost of ongoing workers' compensation claims soared from $459 million in 2011 to $994 million last year.
The government-owned agency will increase premiums by 25 per cent this year to try to claw back the $564 million loss.
Comcare's acting chief executive, Cathy Skippington, said yesterday the record $994 million expense included the "estimated future costs of claims or liabilities".
"These increased due to economic factors and because some injured workers are taking longer to get back to work," she said.
"As a result, we've had to increase our scheme premium rates substantially to return the scheme, over time, to a fully funded position."
A Comcare spokesman said the operating loss would have "no fiscal or cash impact on the Government's Budget".
But government departments and agencies will have to find the money to pay higher premiums for their workers' compensation coverage, which has jumped to 1.77 per cent of payroll costs this financial year.
Ms Skippington said Comcare had dealt with a "moderate increase" in mental health claims during 2012.
"People are much more aware of bullying now and the fact they don't have to put up with it," she said.
Mental health claims made up 8 per cent of Comcare claims during 2011-12, with bullying accounting for nearly half the mental stress cases.
Three in every four claims related to "body stressing", with 15 per cent caused by slips, trips and falls.
Workplace Relations Minister Bill Shorten has ordered a review of the government's snowballing Comcare scheme.
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