Discounted Workers Comp for Employers
In several states across Australia, authorised incentives, discounts and other adjustments are offered to employers in order to help businesses lower the cost of their Workers Compensation Insurance premiums and create safer, healthier workplaces for all.
Workers Compensation is a compulsory statutory insurance for all employers in every state and territory in Australia. The premiums paid by employers fund the financial and medical support given to injured employees, cover the costs of dispute management and the administration of the schemes.
While the cost of policies varies by location, Workers Compensation is typically the largest insurance cost for a business and unlike other lines of insurance, if not actively managed, can experience premiums that increase quickly.
Therefore, some states have available to employers specific incentive structures and schemes, predominately based on a business' claims history. These ultimately encourage the enforcement of more effective health and safety management plans in the workplace, lowering the incidence of injury and therefore facilitating lower premium costs. These are discussed in more detail below.
New South Wales
Apprentice Incentive Scheme
If you employ an apprentice, you are entitled to a reduced premium based on the wages paid to your apprentice. The incentive amount is based on what details you provide in your Wage Declaration Form.
To be eligible, you must:
- Have a valid Workers Compensation policy
- Have entered into a Training Services NSW approved contract with the apprentice, who must be identified in the training contract.
Avoid Claim Excess
Should one of your employees sustain an injury at work, you may avoid paying an excess in your claims by reporting the incident to your insurer or insurance agent early - within 48 hours of you becoming aware of the injury. The excess amount is equal to the first week of weekly compensation.
Premium Discounts if paid in full
Employers are entitled to a discount on their premium if payment of your annual premium is made in full (on or before the due date). For small employers, the current discount is 5%. For experience-rated employers, the current discount is 3%. These discount rates are subject to change.
Employer Safety Incentive
All employers (small and experience-rated) with a standard workers compensation policy will get a 7.5% Employer Safety Incentive premium discount at the start of each policy period in the hope it will encourage employers to invest the savings in making their workplace safer.
Return to Work (RTW) Incentive
A RTW incentive discount (5,10 or 15 per cent) will be applied, for experienced rated employers, to the cost of each claim that is made against your workers compensation policy, with a sustainable RTW outcome within 52 weeks of the date the injury was sustained. Higher discounts apply to shorter RTW outcomes.
Performance Discount
Experience-rated employers with claims performance better than the Scheme are eligible to receive a performance discount at the end of the policy year. All small employers with policies commencing on or after 30 June 2019 are eligible to receive a discount.
Note: The performance discount depends on the NSW workers compensation Scheme's financial performance and is subject to change.
Employer Safety Reward (ESR)
An ESR discount of 5% will be applied at the end of the insurance period for experience-rated employers who have no incurred any claims that affect their premium, in the last four consecutive policy periods.
For more information on these incentives and discounts offered in NSW, click here.
Queensland
WorkCover QLD
WorkCover QLD has initiated the Injury Prevention and Management (IPaM) program which works with employers across Queensland to prevent and manage the outcomes of workplace injuries. Each employer is allocated a dedicated IPaM advisor who for 12 months will help to establish an improved workplace health and safety management plan.
Those employers who have already opted to try the incentive program have seen improvements in worker participation, injury and insurance claims rates and average claim costs, productivity and insurance premium rates.
For more information on the IPaM program, click here.
Victoria
WorkSafe VIC
To set premium rates, industry averages of past claim costs are considered. However, businesses in Victoria with a claim's history are also given a rating which will affect their premium if they have wages totalling more than $200,000 per year. Should a business have a good rating (or low claims) their premium will be reduced. Employers are therefore encouraged to implement proactive measures to reduce the incidence of workplace injury and intervene early in the event of an incident occurring.
Employers can also help to lower premium costs by helping their employees return to work. This is important when estimating your claim. If an employee can return to work, compensation will cease, so the estimation of future costs and therefore premiums will reduce. Establishing an effective return to work plan is the most effective way to get employees back to work following an injury.
WorkSafe Incentive Scheme for Employers (WISE)
WISE provides a 6-month financial incentive of up to $26,000 payable to a new employer who offers ongoing employment of at least 15 hours a week to an injured worker with an accepted claim who is unable to return to their place of employment before the injury. This is not currently applicable for traineeships and apprenticeships.
Employers are also offered WorkSafe Victoria Injury Insurance protection if the worker ceases work because of new injury.
For more information on this incentive, click here.
South Australia
ReturnToWork SA
In South Australia, employers can directly influence the amount of insurance premium they pay by helping to prevent the incidence of workplace injuries and ensuring recovery and return to work should one occur. In doing so, this helps to minimise income support costs associated with the injury claim and therefore the amount of premium companies pay.
ReturnToWorkSA is responsible for providing work injury insurance and regulating the Return to Work Scheme in South Australia.
For more information on this scheme, click here.
In Western Australia, Northern Territory, Tasmania and the ACT, premiums vary between insurers and are calculated differently in each state. While there are no specific schemes or initiatives in these states, employers can generally achieve lower premiums by maintaining good workplace OHS and adopting effective risk management procedures for reducing the incidence of injury in the workplace.
How Coverforce can help
In NSW, QLD, VIC and SA our experienced Coverforce Workplace Services (CWS) team can assist your business with embedding safe working processes and the efficient management of your workers compensation premium. Contact them directly on (02) 9098 5500 to find out more.
For all other states, please contact your local Coverforce Insurance Broker who can provide your business with sound risk advice and quality insurance cover to help prevent financial loss arising from workplace injury/illness. For personalised advice, find your local broker here or by calling 1 3000 COVER.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
REFERENCES
- https://www.icare.nsw.gov.au/employers/premiums/ways-to-lower-your-premiums/#gref
- https://www.rtwsa.com/about-us/return-to-work-scheme
- https://www.worksafe.qld.gov.au/injury-prevention-safety/injury-prevention-and-management/about-the-program
- https://www.worksafe.vic.gov.au/program-worksafe-incentive-scheme-employers-wise
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