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Sharon Rutherford, Head of Risk Consulting, shares key takeaways from Q4 as well as industry trends to monitor over the coming quarter.
The rise in claims has seen the performance of all workers’ compensation schemes across Australian states and territories deteriorate. As a result, most regulators have started applying premium rate increases, or will do so shortly. This is directly impacting employers who now have to share the cost of their respective deteriorating schemes.
For workers’ compensation schemes to be sustainable, regulators will need to consider substantial reforms to address these increasing costs. In VIC, SA, and WA, legislative changes are being considered as part of this reform, with rollouts expected over the next 12-18 months.
WorkSafe Victoria has confirmed the premium window for 2022/23 will be 3 years from 1 January 2019 - 31 December 2021. However, the last 12 months of that experience period (claims received between 1 January 2021 - 31 December 2021), will NOT have statistical claims estimates (SCE) applied, or any medical and like expenses included. Furthermore, only actual weekly compensation payments will be used. This will impact premiums payable for 2022/23 with reductions likely to occur, however the full impact of SCE costs won’t be realised until 2023/24.
VIC Key Renewal & Payment Dates:
VIC Premium notices for 2022/23 are expected to be available from 5 July 2022, and revised notices generated by Worksafe each weekend thereafter.
Some employers may still see a rate increase or decrease, irrespective of the average rate, which will be driven by their claims performance relative to industry benchmarks.
Any wage updates received before 30 June 2022 will be reflected in the 2022/23 premium calculation. Otherwise, WorkSafe will calculate premiums based on remuneration estimates for 2021/22. It is therefore essential for businesses to ensure their remuneration details are current.
To avoid potential financial penalty, businesses will need to provide revised remuneration estimates within 28 days, if, at any time, they become aware that:
Businesses wishing to update their remuneration figures or any other policy details should visit WorkSafe’s Online Employer Services portal or seek advice from their Honan Workplace Risk Consultant.
The average premium rate for the 2022/23 year will increase from 1.44% of wages to 1.48%, in line with increases in the past year and remaining below the national average.
For employers currently eligible to move between providers, the freeze will begin on 15 July 2022 and end on 1 January 2023 when the claims management services begin operations. By making this change, the freeze will minimise potential disruption during the transition to the new claims model.
Any eligible employers who renew their policies prior to 15 July 2022 can still choose alternative claim service providers at the time of their policy renewal. These eligible employers will also have the freedom to choose between any new claim service providers from 1 January 2023 when the new claims model comes into effect.
NSW Key Renewal & Payment Dates:
For the financial year 2022-2023, the average net premium rate will move from $1.20 to $1.23 per $100 of wages (after discounts). While this is the first premium increase since 2012/13, it remains one of the lowest premium rates in Australia.
QLD Key Renewal & Payment Dates:
ReturnToWorkSA has increased the Average Premium Rate from 1.7% to 1.8%, which means the South Australian Industry Classifications (SAIC) rates previously used to calculate base premium have also changed. However, this increase would have been much larger (likely over 2%) had the Government not committed to legislative change.
The State Government has introduced a Bill to Parliament in order to amend the Return to Work Act and restore the original intent of the Scheme, which will also support its financial sustainability.
SA Key Renewal & Payment Dates:
The average recommended premium rate for 2022/23 will be 1.82% of total wages (up 6.9% from 1.704% of total wages for 2021/22.). The recommended premium rates came into effect on 30 June 2022. Rising claim numbers and claim costs are key drivers of the 2022/23 increase, offset by wage increases.
The overall premium rate is unchanged at 2.22% of wages. This includes a 1% loading for workplace COVID-19 infections that is applied to all classes. Excluding this loading, the overall reasonable premium rate would have been 2.19%, a 1.3% proportionate reduction from the previous review.
The Tasmanian Government has announced that from 1 July 2022, the Asbestos Levy will apply to all workers. Money raised through the levy is paid into the Asbestos Compensation Fund, which ensures that the Asbestos Compensation Scheme is self-funded. The aim of the Scheme is to provide Tasmanian workers and their families living with asbestos-related diseases access to compensation to assist them during a most difficult period in their lives.
It is important to familiarise yourself with key submission dates for wage declarations, in addition to the 5% premium discounts available (VIC, NSW, QLD) for upfront payment prior to the premium due date. Premium funding is available to assist clients to achieve these upfront payment discounts.
Honan’s Workplace Risk webinar in June examined the legislative updates relating to Psychosocial Hazards in Victorian Workplaces. This legislation impacts all Victorian employers, so be sure to review the webinar to understand how to update your current OHS Policies & Procedures to reflect these changes.
