Are premiums impacted by workers compensation changes?
Top The 2012 reforms to workers compensation do not impact how employer premiums are calculated.
Work capacity decisions were introduced to give insurers greater ability to drive more timely and positive return to work outcomes, which should reduce claims estimates and premiums over time.
How do I find a trainer or assessor?
Top See the training and assessment area of our website for information on finding a trainer or assessor.
How do I find the workers compensation premium rates for 2012-2013?
Top
Insurance Premiums Order 2012-2013 at a glance
Each year the New South Wales Government approves the rates that the WorkCover Scheme will charge employers for workers compensation cover.
The Government has recently approved the rates for the 2012-2013 policy year and they have been published in the Insurance Premiums Order 2012-2013.
The Insurance Premiums Order includes important information on the WorkCover Industry Classification System, premium rates, dust diseases rates and the manner in which an employer’s workers compensation premium should be calculated by Scheme Agents for the relevant policy period.
The Insurance Premiums Order 2012-2013 applies to policies that commence or renew on or after 4pm on 30 June 2012.
Insurance Premiums Order 2012-2013 Amendment Order (Prescribed Excess Amount) Order 2012
An amendment has been made to clause 5 Recovery of excess from employer: section 160 of Act of the current Insurance Premiums Order 2012-2013. The purpose of the amendment is to align claims excess with the injured worker’s first week of weekly compensation payment under new section 36 of the Workers Compensation Act 1987.
The Insurance Premiums Order 2012-2013 Amendment (Prescribed Excess Amount) Order 2012 commences at 4pm 31 December 2012 and applies to claims made against policies issued or renewed to commence on or after 4pm 31 December 2012. No other changes have been made to the Insurance Premiums Order 2012-2013.
Insurance Premiums Order (Retro-Paid Loss Premium Method) 2012-2013
Certain large employers are approved by WorkCover to have their premiums calculated using the Retro-Paid Loss Premium Method. Those employers’ premium calculations are subject to the Insurance Premiums Order (Retro-Paid Loss Premium Method), which operates in conjunction with the Insurance Premiums Order.
The Insurance Premiums Order (Retro-Paid Loss Premium Method) 2012-2013 applies to policies that commence or renew on or after 4pm on 30 June 2012.
A change has been made to the formula for the required deposit to amend the amount of the required security. The amendment sets the required financial security to be the equivalent of the participant’s basic tariff premium for the policy period and makes amendments to the timeframe for holding security.
No change has been made to the adjustment rates used in the Retro-Paid Loss Premium Calculation Method.
Following is a summary of key components of the Insurance Premiums Order 2012-2013:
WorkCover Industry Classification Rates (WIC rates) and Industry Claims Cost Rates (ICCRs) for the 2012-2013 policy year are unchanged from those gazetted in 2011-2012.
If you are a small employer, that is your basic tariff premium (payroll x WIC rate) is less than or equal to $10,000 or your annual wages are less than or equal to $300,000, your premium will remain unchanged except where your wages increase or decrease – or you move to a new industry classification.
As a small employer, you are not experience-rated, which means the cost of claims made against your policy are not included in your premium.
Approximately 88% of Scheme employers are small employers.
If you are a medium or large employer, that is your basic tariff premium (payroll x WIC rate) is greater than $10,000 and your annual wages are greater than $300,000, your premium will be affected by your wages and claim costs.
Medium and large employers are experience-rated, which means the cost of claims made against your policy will be included in your premium calculation. The higher your basic tariff premium, the greater the impact your claim costs will have on your premium.
Approximately 12% of Scheme employers are experience-rated.
Table B of the Insurance Premiums Order 2012-2013 includes two new WorkCover Industry Classifications (WICs):
- 785410 Corporate Head Office Administration -This class is specifically for employers who provide corporate head office-type services to its own interstate and overseas operations or to related interstate and overseas businesses.
- 931950 Professional Combat Sports has been included to allow for current employment trends in mixed martial arts and cage fighting.
The late payment prescribed rate is used for calculation of late payment fees applied to employers for late payment of premium. The rate is based on the interest rate calculation under section 22 (4) of the Taxation Administration Act 1996 for the period 1 April to 30 June each year using the February 90-day bank accepted bill rate published by the Reserve Bank plus the premium component.
The late payment prescribed rate for policy renewal year 2012-2013 is 0.977% per month, compounded monthly.
The Insurance Premiums Order prescribes the maximum excess amount recoverable from an employer who does not report injuries in a timely way. This amount is aligned to the maximum weekly compensation payment under section 34 of the Workers Compensation Act 1987.
Where an employer notifies WorkCover or the Scheme Agent within five days of becoming aware of the injury this excess is waived.
Where the excess is charged the cost of claims used in the premium calculation is reduced by the same amount, so that the employer is not effectively paying twice for the first week of the injured workers weekly compensation.
Where the excess is waived, the first week of the injured workers weekly compensation payments is deducted from the cost of claims, providing an incentive for timely reporting.
For policy renewal year 2012-2013 the maximum excess amount recoverable from an employer is $1,838.70 and the maximum cost of claim deduction amount is $1,838.70.
The extent to which motor vehicle allowances and accommodation allowances are excluded from wages is aligned to the Income Tax Assessment Act 1997 (for motor vehicle allowance) and the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2006 (for accommodation).
The 2012-2013 rate for motor vehicle allowance is $0.75 per kilometre. The accommodation allowance is $238.10 for 2012-2013.
Dust diseases contribution rates
The rates at which the Dust Diseases Contributions are collected are determined each year by the independent Dust Diseases Board actuary, and are approved by the directors of the Dust Diseases Board.
Employers are required to pay a dust diseases levy to fund this scheme and the levy is collected by WorkCover scheme agents or insurers on behalf of the Dust Diseases Board. The dust diseases levy is calculated separately and added to the workers compensation premium.
Employers are levied according to the risk of dust diseases claims in their particular WorkCover Industry Classification (WIC). To determine the levy payable, an employer’s dust diseases rate is multiplied by the amount of annual wages paid by the employer.
From 30 June 2012 the Dust Diseases Contribution payable by an employer will be the relevant dust diseases levy rate determined by the Dust Diseases Board, plus Goods & Services Tax (GST). This is because the total premium payable (including Dust Diseases Contribution) is regarded as a supply under GST legislation. GST has previously been included in the calculation of all premium components, except for the Dust Diseases Contribution. This change remedies an anomaly in the collection of the Dust Diseases component of premium from employers since introduction of the GST.
A summary of the Dust Diseases Contribution rates (including GST) payable by employers for 2012-2013 is in Table A of the Insurance Premiums Order 2012-2013.
Mine Safety Fund premium adjustment rate
The NSW WorkCover Scheme is required to provide a contribution to the Mine Safety Fund established under the Mine Safety (Cost Recovery) Act 2005 to the Department of Trade and Investment for its mine safety activities.
The WorkCover Scheme recovers the contribution from mining industry employers covered by the Scheme through an adjustment to their workers compensation premium. Employers classified in Division B (Mining) of the WorkCover Industry Classification System have the Mine Safety Fund premium adjustment applied to their premium calculation.
The Mine Safety Fund premium adjustment rate for policy renewal year 2012-2013 is 0.608% of wages covered under mining industry WICs.
Call 13 10 50 for more information about the Insurance Premiums Order 2012-2013.
How do I get advice for small business?
Top See the Assistance and support area of our website to find services available to small businesses.
How do I identify suitable employment?
Top If you need help in identifying and providing suitable employment for an injured worker, contact your insurer for assistance. They may refer you to a workplace rehabilitation provider.
How do I know if personal protective equipment (PPE) is adequate?
Top Designers, manufacturers or suppliers of PPE can give advice on the specifications and appropriate use of their products.
This is important because, for example, no one type of glove provides adequate protection against all chemicals. A respirator designed to be effective against medium air levels of a chemical may not be effective against high levels of the same chemical (or low levels of another chemical).
It may also be helpful to consult relevant Australian Standards.
How do I know if the owner can be a principal contractor?
Top The Work Health and Safety Regulation 2011 does not stop the owner from appointing themself as the principal contactor. See clause 293 the meaning of a principal contractor.
How do I know the specific requirements for construction work?
Top Chapter 8 of the OHS Regulation 2001 deals with many specific construction requirements including:
- OHS induction training for construction work
- excavation work
- demolition work
- asbestos
- diving
- form work
- site security
- compressed air
- laser work
- control of risks during construction work.
However, there are other chapters in the Regulation that relate to all workplaces (including construction sites).
Many requirements relating to construction are relevant to other workplaces as well and are included in other chapters of the Occupational Health and Safety Regulation 2001.
For example, part 4.3 Division 6 of the Regulation covers:
- working at heights
- scaffolding
- access
- confined spaces.
Chapter 2 of the Regulation covers:
- risk management
- emergencies
- amenities
- first aid.
Chapter 3 of the Regulation covers consultation
Chapter 4 covers work premises and working environment
Chapter 5 covers plant requirments
Chapters 6-7 of the regulation deal with hazardous substances and processes
Chapters 9 and 10 of the Regulation covers:
- certificates of competency
- licensing.
How do I know what is the current work health and safety legislation?
Top New work health and safety (WHS) laws replaced the occupational health and safety (OHS) laws in NSW on 1 January 2012.
The Work Health and Safety Act 2011 and the Work Health and Safety Regulation 2011 are now in place.
Transitional arrangements have been put into place in NSW to support businesses, industry and workers to move to the new system of work health and safety (WHS) laws. These arrangements started on 1 January 2012.
How do I know what must be in the WHS management plan?
Top A written WHS management plan must be prepared by the principal contractor and be site specific.
Clause 309 of the Work Health and Safety Regulation 2011 states what must be included in the WHS management plan.
How do I know which insurers issue NSW workers compensation insurance policies?
Top Scheme Agents or insurers issue and administer policies on behalf of WorkCover. There are seven Scheme Agents or insurers who calculate the premium by a formula determined by WorkCover. The particular industry classification attracts the same rate regardless of the Scheme Agent or insurers.
The Scheme Agents or insurers are:
Allianz Australia Workers' Compensation (NSW) Ltd
www.allianz.com.au
1300 130 664
Xchanging Integrated Services Australia Pty Ltd (trading as 'Xchanging')
www.xchanging.com.au
1800 803 905
1800 220 352 (fax)
02 8667 9700
CGU Workers Compensation (NSW) Ltd
www.cgu.com.au
02 9088 9000
1300 666 506
02 9088 9000
Employers' Mutual Indemnity (Workers Compensation) Ltd
www.emia.com.au
1800 469 931
02 9229 7900
Gallagher Bassett Services Workers Compensation (NSW) Pty Ltd
www.gallagherbassett.com.au
1800 007 033
02 8255 8500
GIO Workers Compensation (NSW) Ltd
www.gio.com.au
13 10 10
QBE Workers Compensation (NSW) Ltd
www.qbe.com.au
1800 112 472
02 9375 4444
Top A contractor is more likely to:
- be engaged to carry out a particular task using his or her own skill and judgement;
- employ others, delegate or sub-let work to another;
- be paid on the basis of a quotation for the job;
- supply his or her own tools and materials;
- carry on an independent business in his or her own name or under a business or firm name;
- be affected by PAYG tax arrangements.
An employee is more likely to:
- be subject to direction from the employer as to the work to be performed and the time and manner in which it is performed;
- be required to actually carry out the work;
- be paid on a time basis;
- have tools and materials supplied by the employer;
- work exclusively for a single employer
For more information see our
Worker or contractor site.
What are my obligations for providing suitable employment?
Top As an employer you are legally obliged to provide, when requested and where reasonably practicable, suitable employment to an injured worker who has current work capacity.
What is the role of inspectors in return to work?
Top WorkCover inspectors provide advice on returning injured workers to work and are now authorised to issue legally binding improvement notices to employers not meeting their injury management and return to work obligations.
Failure to comply with the improvement notice can attract maximum penalties of up to $11,000.
