2023/24 WorkCover Queensland Accident Insurance: Updates to Premium Rates and Policy Renewal Guide

Want to Renew Your Policy and Save Time?

Renewing and managing your policy with myWorkCover can simplify the process of renewing and declaring your wages. When you appoint myWorkCover to handle your policy, we ensure that your business classification is accurate and that you pay the appropriate premium. By renewing your policy with us, you gain various benefits. Firstly, you’ll have the opportunity to identify any discounts you’re eligible for. Additionally, you can compare your claims performance to the industry average, allowing you to assess how well your business is performing in terms of claims. Moreover, renewing your policy will help you understand the factors that influence the calculation of your premium, such as wages or industry rates.

It’s important to note that each legislative state publishes industry rates and claims cost rates annually, which play a significant role in calculating an employer’s premium based on their workplace classification. Additionally, the claims you’ve been involved in can affect your WorkCover insurance premiums. Payments associated with a claim, including estimates of future costs, are known as claim costs.

For more detailed information, you can visit the provided sources.

What Effects Do WorkCover Claims & Other Factors Have on Your Premium & Advice?

Changes & Premium updates for 2023-24 Renewal

During the 2023-24 fiscal year, WorkCover Queensland will experience a minor increase in its average net premium rate, rising to $1.29 per $100 of wages after applying discounts. This is a slight increase from the previous financial year’s rate of $1.23 (2022-23). It’s important to note that this marks only the second time in over a decade that the premium rate has increased. Despite this modest rise, WorkCover Queensland maintains one of the lowest average premium rates in Australia. In contrast, Victoria’s WorkCover scheme is undergoing significant changes, including a 42% increase in premiums and stricter criteria for mental health claims. The premium rate increase for WorkCover Queensland is considered reasonable and essential for ensuring the long-term stability of Queensland’s workers’ compensation safety net.

Time to renew your policy

If you have an accident insurance policy with WorkCover Queensland that covers your business for the cost of any work-related injuries to your employees, it is about to expire.

It’s crucial to renew your WorkCover Accident Insurance policy by declaring your wages and paying your premium between 1 July and 30 September each year. The specific deadlines for wage declarations and premium payments are typically mentioned in the policy renewal communication. Timely payment by the given deadline, along with proper wage declaration, can help ensure uninterrupted coverage and avoid any penalties or consequences associated with late payment.

Important Notice: Late premium payments can impact on your insurance coverage. In addition to incurring a late payment penalty, your policy will not provide coverage until all outstanding payments, including penalty fees, are settled. If your policy is inactive due to late payment and a worker sustains an injury, you will be held responsible for the associated costs.

The determination of the premium rate for each employer is influenced by various factors, including their wage expenses, claims history, and the performance of their industry. The official announcement of the WorkCover Industry Classifications for the 2023-2024 period is scheduled to take place later in June. Employers have the ability to significantly impact their individual premiums by cultivating a safer work environment and minimising workplace injuries. This proactive approach to safety and support for injured workers in returning to work safely has resulted in over 50% of policyholders experiencing a reduced premium rate this year.

The premium rate for each employer is determined by factors such as their wage expenses, their claims history, and the performance of their industry. The WorkCover Industry Classifications for 2023-2024 will be officially announced later in June. Employers can significantly impact their individual premiums by fostering a safer work environment and minimising workplace injuries. Over 50% of policyholders will experience a reduced premium rate this year, thanks to their proactive approach to safety and support for injured workers in returning to work safely.

For a quick overview of your accident insurance policy, watch the short video below. It explains Queensland workers’ compensation’s “how what, and why.”

What does the law say?

An employer has five days after hiring employees to obtain a policy, which must be maintained by making periodic returns and paying a premium at the time and in the manner specified by the policy. Employers who fail to maintain adequate insurance coverage are subject to penalties under the Workers’ Compensation and Rehabilitation Act of 2003 (the Act). These rules apply to any employer who hires workers. Failure to provide workers’ compensation insurance to all employees is a crime.

Individuals who fail to maintain workers’ compensation insurance face a maximum penalty of 275 penalty units (currently $37,908.75). If the employer is a corporation, the penalty is five times the prescribed maximum penalty for an individual, for a total of $189,543.75.

Premium Key Dates & Discount

• From 1 July – declare your wages early and take advantage of a payment plan if you need it
• 31 August – wage declarations due
• 16 September – If you pay in full by the specified date and your wages were declared on time, you will receive a 3% discount on your premium. The discount does not apply to the minimum premium coverage policy.
• 30 September – your full premium payment is due by this date if you don’t have a payment plan

Monthly Payment Due Date

You can nominate the day of the month for your deduction (any day between the 5th and 25th of each month) and the starting month of your payment plan (either July, August, September, or October).

You can change your nominated deduction date throughout the year if required.

Late Payment Fee

Late payment of your premium with WorkCover Queensland will result in an automatic late payment penalty being applied. It is important to pay all outstanding premiums, including penalties, in full to maintain coverage. Failure to do so may result in being deemed uninsured, which could make you liable for claims costs that may arise.

To avoid penalties and ensure compliance, you can pay your premium using WorkCover Connect or refer to your premium notice for additional payment options. WorkCover Queensland has authorised personnel who actively monitor and enforce insurance premium compliance. They employ data matching systems and various audit methods to identify underinsured or uninsured employers. If an employer is found to be uninsured or underinsured, WorkCover can recover unpaid premiums along with a penalty equal to 100% of the unpaid premium.

For accurate premium rates and policy renewal procedures, it is recommended to use myWorkCover to simplify the process of renewing and declaring your wages. By utilising myWorkCover, you can ensure accurate business classification and appropriate premium payment, potentially identify eligible discounts and compare your claims performance to the industry average.

Interim Certificate of Currency

The Interim Certificate of Insurance, akin to the Certificate of Currency, offers coverage under the Workers’ Compensation and Rehabilitation Act 2003 for policyholders’ legal liability concerning compensation and damages. This temporary certificate is valid during the standard policy renewal and payment process. Upon payment, policyholders receive the Certificate of Currency, valid for the entire financial year.

Employers must declare their business’s wages and pay the premium between July 1 and 30 September each year in Queensland, Australia. Specific key dates and options for declaring wages and paying premiums include online services, phone declarations, and payment plans.

WorkCover Queensland issues an Interim Certificate of Insurance in June, covering policyholders from 1 July to 30 September 2023. To maintain coverage until 30 June 2024, pay your premium or agree to a payment plan and obtain the full Certificate of Currency.

If you have not received the electronic communications from WorkCover Queensland, contact myWorkCover for assistance. Staying connected with WorkCover Queensland ensures you receive crucial updates and information about your insurance policy.

Policy Renewal and Declaring Wages

For the premium to be calculated, you must declare your wage information between 1 July and 31 August 2023. Declaring your company’s wages is an important part of renewing your accident insurance policy, as well as a key responsibility as an employer.

Generally, wages mean the total amount paid to a worker as wages, salary, or other earnings having monetary value. See National Remuneration Matrix Guide for full details. Learn more about what amounts paid to workers should be declared as wages in the Wages Definition Manual (PDF, 0.32 MB).

Who should I cover for?

Employers in Queensland have a legal obligation to ensure accident insurance coverage for their employees in order to safeguard them against work-related injuries or illnesses. To accurately determine the individuals who should be covered for workers’ compensation and appropriately report wages, it is essential to establish a clear definition of a worker. The legislative definition, along with steps to identify workers, is provided below. By understanding these criteria, businesses can ensure they cover the right people and comply with their obligations.

Who is a worker?

Workers are all PAYG employees and some contractors. However, the legal definition is complex, and there are some exceptions. Some people are not considered workers under the Act, and there are specific inclusions and exclusions.

As set out in the Workers’ Compensation and Rehabilitation Act 2003, a worker is:

• only an individual, not a corporation, partnership or trust (sole traders may be considered workers)
• a ‘person who works under a contract and, in relation to the work, is an employee for the purpose of assessment for PAYG withholding
• someone who works under a ‘contract of service’, as a sub-contractor. This worker may do the same work as an employee and could also be a worker under the Act.

Is my worker a “contract of service” or “contract for service”?

A contract of service is a contractual agreement between an employer and an employee that defines the relationship and terms of employment. It is the most common type of contract used by employers to hire their employees. The agreement can be in writing, verbal, expressed, or implied, but it is recommended to have it in writing to minimise disputes regarding the agreed-upon terms and conditions.

On the other hand, a contract for services is typically an agreement between an employer and a contractor. It establishes a client-contractor or client-independent service provider relationship, where the contractor provides specific services to the employer. This type of contract is often used for freelancers, self-employed individuals, or when engaging external service providers.

To determine if someone is considered a worker under the Workers’ Compensation and Rehabilitation Act of 2003, a worker determination test is available. By applying the four tests outlined in the guide, one can assess whether the person hired should be classified as a worker. For more information refer to Who is a Worker – Employer’s guide.

Who is a worker – Employer’s guide

In case of uncertainty after applying the tests, it is advisable to contact WorkCover Queensland or myWorkCover for further assistance.

Is my worker an employee or a contractor?

Whether a worker is an employee, or a contractor can be figured out by looking at the working arrangement. There are six main points for each – as set out by common law – that you should consider.

Importance notice: Contractor and working director are not covered under the Queensland Workers’ Compensation Scheme. Some contractors are still considered workers and need to be covered. Use the ATO’s employee/contractor decision tool to work out their status as a contractor or an employee.

You can also look at Mistakes to avoid relating to employees versus contractors on the ATO website.

See the full article on Contractor Provision.

Contractor Provisions

Employees:

1. The worker can’t pay someone else to do the work (subcontract).
2. The worker is paid by the hour for the time they work, per piece of work or for a commission.
3. The worker doesn’t provide their own tools or equipment for the job or, if they do, they are paid an allowance for this.
4. The worker isn’t legally liable for the cost of fixing any faults. The employer is responsible.
5. The employer has the right to tell the worker where and how to do their job.
6. The worker works within and is considered part of the employer’s business.

Contractors:

1. The contractor can pay someone else (subcontract) to do the work.
2. The contractor is paid for a job done based on a verbal or written quote they provided.
3. The contractor provides their own tools and equipment for the job and doesn’t get an allowance for this.
4. The contractor is legally responsible for their work and for the cost of fixing any faults in the work.
5. The contractor can do the work in the way they see fit, subject to the specific terms of any contract or agreement
6. The contractor operates their own business independently from the employer and is free to accept or refuse additional work.

ATO’s online decision tool

To determine whether your worker is an employee or a worker, use ATO’s online decision tool to work out specific contracting arrangements. If you have any further questions about employees or contractors, please contact myWorkCover.

What you need to declare

To ensure compliance with your workers’ compensation obligations, it is crucial to have a clear understanding of the employees you need to cover and the specific payments that should be declared as wages. A comprehensive resource to determine the necessary information for declaring wages in Queensland is the WorkCover Queensland Declaration of Wages Guide. This guide provides detailed information and instructions on fulfilling your workers’ compensation responsibilities. You can also consult the National Remuneration Matrix.

WorkCover Queensland – Declaration of Wages Guide 

Renewing your accident insurance policy and declaring wages are important aspects of fulfilling your responsibilities as an employer in Queensland. It is recommended to renew your WorkCover Accident Insurance policy by declaring your wages and paying the premium between 1st July and 30th September each year. The key dates to keep in mind are:

• From 1st July: Declare your wages early using online services or over the phone and consider utilising a payment plan if necessary.
• 31st August: Wage declarations are due.
• 16th September: Pay your premium in full by this date if your wages were declared.

Note: Some payment options will not be available if you do not declare your wages by 31 August 2023. Discounted premium price cannot go below $200.WorkCover Queensland

By following these guidelines, you can ensure that you fulfil your workers’ compensation responsibilities appropriately.

Who is covered?

Your policy covers any employees you hire as defined by the Workers’ Compensation and Rehabilitation Act of 2003. It only applies to employees who work for your company. Anyone you hire to perform a service for another company is covered by their own employer. You are not considered a worker if you are a sole trader, director, or partner in your own business or a trustee in a Trust.

Do I need to cover interstate and overseas workers?

You may or may not be required to provide workers’ compensation coverage in Queensland if you hire workers from other states or countries. You may be required to cover them in a different state, or you may not be required to cover them at all. You can use simple tests to determine your responsibilities and whether you should cover them.

Note: If your Queensland employees are travelling to interstate or overseas to work for a short period of time, the rule of thumb is no more than 6 months. Your Queensland policy may cover them while working outside of Queensland. This is known as cross-border coverage. You can find all this information here: Cover for interstate and overseas workers page and related reading WorkCover Cross-border Provisions

WorkCover Cross-border Provisions

Do I need to cover apprentices?

Apprentices are considered workers for the purposes of workers’ compensation. They are covered by your policy just like any other employee. Businesses that employ apprentices, on the other hand, can benefit from an ‘apprentice discount’ on their accident insurance policy premium. This works by removing the cost of apprentice wages from your wage declaration, resulting in a lower premium.

Apprentice discount

If your company employs an apprentice or several apprentices, you may be eligible for a premium reduction. The discount works by excluding (not counting) any wages paid to an apprentice when calculating your premium. This will result in a lower premium because the amount of wages you pay is a big part of calculating your premium. You must still declare any apprentice wages, but we will deduct them from your premium.

The following are the most important things to know:

• To qualify, you must hire and pay at least one apprentice.
• Apprentices must work under an official apprenticeship arrangement or training contract (trainees are not included).
• The discount applies to all wages for all apprentices you hire, as well as only work related to the apprenticeship.
• When you renew your policy, you must still declare your apprentice’s wages as part of your normal wage declaration. They will then be deducted by WorkCover.
• Your policy still covers your apprentices for injury, and any claims made if they are injured count towards your claims experience (claims costs).

Volunteers

Organisations are not required to ensure volunteers for any work-related injury that may occur while volunteering. If desired, certain organisations can obtain a limited policy to cover volunteers. Contact WorkCover to determine whether your company is eligible. Volunteers for a school’s Parents & Citizens (P&C) or Parents & Friends (P&F) organisation are not covered by the school’s Accident Insurance policy. Alternative insurance coverage will be required.

Students on work experience or vocational placement

Students on work experience or vocational placement may be covered by a Work Experience and Vocational Placement policy that only covers death or permanent disability. This policy applies only to private secondary schools and registered training organisations (RTOs), as the following schools are covered by policies held by Education Queensland, Catholic Education, and Independent Schools Queensland:

• State secondary schools
• Catholic private secondary schools
• independent schools providing secondary education that are members of Independent Schools Queensland.

Unpaid internship

Declaring unpaid interns (required as per Schedule 2 of the Workers’ Compensation and Rehabilitation Act 2003). Under workers’ compensation laws, unpaid interns are considered workers and are entitled to compensation for work-related injuries. If you hire an unpaid intern, your workers’ compensation policy or self-insurance arrangements must cover them. If you work without pay to gain practical experience or qualification, you are an intern; if you are paid, you are a worker.

You are not an intern if:

• you are paid
• you volunteer with a non-profit organisation or a religious, charitable or benevolent organisation
• you are a school or university student on work experience or have a vocational placement through a registered training organisation
• you are providing unpaid assistance as a favour.

Vocational placements through a registered training organisation are exempt because, under the National Vocational Education and Training Regulator Act 2011, WorkCover Queensland can enter into an insurance contract with a registered training organisation for specific vocational training (Cwlth).

Am I the employer of an unpaid intern?

If you engage or host an unpaid volunteer who is not part of a school, university, registered training organisation, or not-for-profit organisation-based work experience program, you are the employer of an unpaid intern for workers’ compensation purposes.

What is my obligation as an employer?

Unpaid interns must be covered by your WorkCover Queensland workers’ compensation policy or your self-insurance arrangements if you are a self-insurer. You must declare the number of unpaid interns when renewing your WorkCover Queensland accident insurance policy. Other types of accident insurance do not replace having a workers’ compensation policy that covers your unpaid interns.

General advice about internships can also be found at fairwork.gov.au.

What’s covered?

This policy protects you if one of your employees sustains a work-related injury or illness and needs to file a workers’ compensation claim. This includes both no-fault statutory claims and damages (at-fault) claims.

More information about these types of claim costs can be found in the sections below.

Types of injuries covered

Your accident insurance policy covers you and your worker for any work-related injury or illness a worker might experience.

There are many different types of injuries covered by your policy. They include:

• physical injuries, like lacerations, fractures, burns
• psychological/psychiatric injuries
• injuries that happen over time, like industrial deafness
• injuries that take a long time to show symptoms, like Coal Workers Pneumoconiosis or silicosis
• aggravation of a pre-existing condition
• death from an injury or disease.

Important Notice: Injuries that happen travelling to or from work, while on a break from work, or while working interstate or overseas, may also be covered. Employees might be covered while working from home, as long as their employment is a significant contributing factor to the injury.

Common Law costs covered

When your injured worker files a notice of claim, he or she sues you for damages under common law. This is the point at which they believe you are to blame for their injury. Your accident insurance policy will pay the full amount of any common law claim, which may include your worker’s compensation:

• past and future loss of income
• treatment and other medical, hospital and rehabilitation expenses
• legal costs
• pain and suffering.

Compensation is typically paid as a settlement to your employee to cover the aforementioned expenses. Your legal expenses are also covered by your policy.

Statutory claims costs covered

If a claim is accepted, your accident insurance policy covers your workers:

• lost wages
• medical costs, for example, doctor consultations, medication, x-rays
• hospital costs (public and private)
• rehabilitation costs like physiotherapy or returns to work programs
• travel expenses relating to treatment or the claim
• lump-sum payments
• death benefits and funeral expenses.

The only statutory claim cost you’ll have to pay is the excess as outlined above.

Will I have to pay an excess?

You’ll need to pay an excess if:

• your worker has taken time off from work due to their injury, and
• your worker‘s claim is accepted, and they receive weekly compensation

In the case of a WorkCover claim, you will pay your excess to your injured worker as their first weekly payment. We’ll tell you how much you owe. This will be calculated using the employee’s normal weekly earnings or award. The excess must be paid within 10 business days of being notified. If you do not do this, we will pay the worker on your behalf and recover the excess, as well as any penalties imposed by section 66(6) of the Workers’ Compensation and Rehabilitation Act 2003.

This excess will be whichever is less out of the:

• 100% of Queensland full-time adult’s ordinary time earnings (QOTE), or
• the worker’s weekly compensation (in most cases this is 100% of the award or 85% of normal weekly earnings, whichever is greater).

Your accident insurance policy covers you and your worker for any work-related injury or illness a worker might experience.

Employers failing to hold insurance in the Queensland Workers’ Compensation scheme

Employers who do not meet their workers’ compensation obligations for their workers should be aware that there can be very serious consequences. In the Queensland Workers’ Compensation scheme, it is essential for employers to hold adequate insurance for their workers. A recent prosecution in Queensland highlights the severity with which the failure to hold insurance is taken. On 15 July 2021, an employer, a Brisbane-based auto wreckers, was found guilty of failing to insure and fined $94,500, with a conviction recorded against them.

The Workers’ Compensation and Rehabilitation Act 2003 in Queensland contain provisions regarding employers failing to hold adequate insurance. These provisions apply to all employers, and it is mandatory for them to hold workers’ compensation insurance for all workers. Upon employing workers, employers have five days to obtain a policy and must maintain the insurance by making periodic returns and paying the premium on time.

The penalty for employers failing to hold insurance in the Queensland Workers’ Compensation scheme can involve substantial fines and the recording of a conviction against the employer. In the case mentioned above, the employer was fined $94,500. It is important to note that penalties may vary depending on the specific circumstances of each case. It is worth mentioning that there is an ongoing review of Queensland’s workers’ compensation scheme, conducted every five years, to ensure injured workers receive appropriate compensation and support.

Failing to hold workers’ compensation insurance can result in penalties and consequences for employers. In the specific case of Queensland, Australia, where the provided information pertains to, the penalty for individuals who fail to hold workers’ compensation insurance is a maximum of 275 penalty units, which currently equals $37,908.75. However, if the employer is a corporation, the penalty is five times higher, amounting to $189,543.75.

WorkCover Queensland, the authority responsible for workers’ compensation in Queensland, employs various methods to identify employers who fail to insure their workers. These methods include data-matching processes to check employer compliance, conducting state-wide site visits to verify insurance coverage, and identifying cases through the lodgment of claims without a corresponding policy.

When an employer is found to be uninsured, WorkCover Queensland may take action to recover the unpaid premium along with penalties. If WorkCover has already paid compensation or damages for an injury sustained by a worker when the employer did not hold insurance, they may seek to recover the compensation paid, along with a penalty equal to 50% of that amount.

It is important for employers to understand their obligations regarding workers’ compensation insurance. In Queensland, all employees engaged in manual work, regardless of salary level, need to be covered by work injury compensation insurance. Additionally, employees performing non-manual work and earning a salary of $2,600 or less per month (excluding certain types of payments) should also be covered.

Please note that the information provided above is specific to the context of workers’ compensation insurance in Queensland, Australia. Regulations and penalties may vary in different jurisdictions. It is advisable to consult the relevant local authorities or legal professionals for accurate and up-to-date information regarding workers’ compensation insurance requirements and penalties in a particular jurisdiction.

Understanding premium calculation: Ways to minimise your premium

Understanding premium calculation is crucial for businesses seeking to minimise their premium on workover in Queensland. The premium calculation for accident insurance policies in Queensland takes into account several factors, including the amount your business pays in wages, your claims experience, and your industry. To minimise your premium, you can consider the following strategies:

1. Maintain a safe work environment: Implementing robust workplace safety measures and practices can help reduce the frequency and severity of workplace injuries. This, in turn, can positively impact your claims experience and lower your premium.
2. Manage claims effectively: Promptly reporting and effectively managing any injury claims against your business can help mitigate the financial impact. Implementing return-to-work programs and providing appropriate rehabilitation support can aid in reducing the duration and cost of claims, potentially leading to lower premiums.
3. Review and update classifications: WorkCover Queensland assigns industry classifications (WIC) to determine premium rates. It’s essential to ensure that your business’s WIC accurately reflects your operations and industry. Regularly reviewing and updating your classification can help ensure you’re not paying higher premiums based on an inaccurate classification.
4. Explore risk management strategies: Implementing effective risk management practices tailored to your business can help reduce workplace incidents and associated costs. Conducting risk assessments, providing training and education programs, and implementing safety protocols specific to your industry can contribute to minimising premiums.
5. Seek professional advice: Working with insurance brokers, risk management consultants, or legal professionals like myWorkCover specialising in workers’ compensation can provide valuable insights and guidance. They can help you navigate the complexities of premium calculations, identify cost-saving opportunities, and ensure compliance with relevant regulations.

It’s important to note that premium calculations and specific strategies may vary based on the individual circumstances of your business. Consulting with myWorkCover consultant experts in the field will provide tailored advice based on your unique situation.

Premium calculation

The cost of your accident insurance policy will be determined by several factors, including the amount your company pays in wages, your claims experience (the cost of any injury claims made against your company), and your industry. You will pay your premium ‘provisionally,’ which means that you will pay it at the beginning of the fiscal year, and we will adjust it at the end if necessary.

Basic premium calculation formula: Premium = (Wages/100) X Premium Rate.

WorkCover Queensland will calculate your policy based on a number of factors, depending on whether you are purchasing a new policy or renewing an existing one.

Minimum Policy Coverage

The minimum premium for workers’ insurance in Queensland is $200, regardless of the apprentice incentive and other premium adjustments. This means that even if the total premium adjustments amount to less than $200, the minimum premium still applies. It is important to note that the total workers’ insurance premium payable by all employers cannot be less than $200 unless it is a new policy. The minimum premium may be subject to adjustment depending on the registration date.

New Policy Registration Minimum Premium

• $200.00 inclusive of GST and Stamp Duty for a policy that commenced before 1 October
• $150.00 inclusive of GST and Stamp Duty for policy commencing between 1 October and 31 December
• $100.00 inclusive of GST and Stamp Duty for policies commencing between 1 January and 31 March
• $50.00 inclusive of GST and duty for policies commencing between 1 April and 30 June

Renewing an existing policy

To work out how much you need to pay, WorkCover Queensland will simply ask you to declare your estimated wages for the current financial year. The information below is needed to provide WorkCover Queensland:

• your actual wages for the previous financial year (2022/23)
• your estimated wages for the current financial year (2023/24)

WorkCover Queensland requests that each current policyholder upon renewal of their Accident Insurance Policy declares actual wages for the prior financial period and an estimation for the current financial period. If there is a difference between the projection provided upon the last renewal of the policy and the actual wages declared, then this difference is just added to the next premium and there are no penalties.

Note: You cannot renew the policy without providing the previous year’s actual wages. If you fail to renew before 30 September, WorkCover Queensland will deem your previous year’s wages and renew your policy based on the previous year’s wage details.

What else is considered in the premium calculation?

Your industry rate and claims costs are significant factors to consider when calculating your premium for workers’ compensation insurance. The model used to determine your premium is based on the amount of wages you declare. In addition to wages, other factors such as the industry classification rate, medical expenses, and types of compensation also come into play.

The Work Injury Compensation Act allows employees to claim various types of compensation for work-related injuries or diseases without resorting to legal action. Under the Act, employees can claim medical leave wages, medical expenses, and lump sum compensation for permanent incapacity or death. Medical leave wages cover the days an employee is issued with medical leave or light duty due to a work injury or disease. Medical expenses include hospital bills, medication, and related charges resulting from a work injury. Lump sum compensation is provided for permanent incapacity, current incapacity, or death.

To calculate the cost of your workers’ compensation insurance premium, various factors are taken into account. One of the primary factors is your industry classification rate, which is based on the industry you work in. Additionally, the amount you pay in annual wages is considered, along with other risk factors specific to your business. You are classified as a small employer if your annual wages is below $1.5 million and claims costs do not affect your premium in the event of a worker’s injury. However, if your wages are above $1.5 million, you’re classified as a medium to large employer, and your premiums are experience-rated, meaning they are influenced by claims costs.

It’s worth noting that your workers’ compensation premium includes GST (Goods and Services Tax) and stamp duty in Queensland.

How can I reduce my premium?

You can reduce your premium costs in a variety of ways, including improving workplace safety and hiring apprentices.

The best approach to lowering your accident insurance policy premium is to enhance the safety culture and performance within your workplace. By creating a safer environment and prioritising the well-being of your employees, you can reduce workplace injuries and the number of WorkCover claims. When the cost of your claims decreases it improves your policy rating and ultimately lowers your premium. You can seek assistance from myWorkCover to achieve these goals and enjoy the following benefits:

1. Improve return-to-work strategies like suitable duties plans.
2. Access industry case studies showcasing effective ways to maintain a safe workplace for your workers.
3. Gain an understanding of how WorkCover Queensland evaluates your performance and its relationship to your industry as a whole.
4. We collaborate with Workplace Health and Safety Queensland to develop workplace health and safety initiatives.

Taking positive steps to become a safe and responsible employer offers numerous advantages. Not only does it protect your workers, but it also reduces your premium, industry rate, and the average premium rate for other businesses in Queensland.

Contact myWorkCover for a confidential health check on your policy. More information can be found here.

myWorkCover Claims Service

Calculating premiums with wages under $1.5 million dollars

WorkCover Queensland will use a simplified model to calculate your policy premium if your wage costs are less than $1.5 million. Your rating is determined by your claim’s costs from the previous fiscal year. The higher your rating and the lower your premium, the safer your workplace and the more creative your claims management approach is.

What are the benefits of the simplified model?

• 10% movement limit – your policy rating can only go up or down by one (1) rating each year. This means the percentage of industry rate you pay can only increase or decrease by 10%, making changes predictable and easier to manage.
• $500 claim cost protection – the first $500 of claims costs won’t count towards your total claims experience. So, if you have small or simple claims, they won’t affect your premium.
• The better your policy rating, the lower your premium. For example, if you have a policy rating of 1, you only pay 80% of your industry rate.
• No claim discount – if you have no claim costs for the year, your policy rating will automatically improve by 1 rating. This means your premium will go down unless you are already on rating 1 and benefiting from the best rate.

Small employer premium calculation

Your premium is calculated by multiplying your wages by your industry rate. Industry rates are worked out based on the claims costs of all employers in the same industry.

The premium calculation is based on their wages and a fixed industry rate. Small employers have simplified premium calculation methods based on their industry classification and an average industry rate set by WorkCover Queensland.

Premium calculation formula

Premium rate = Industry rate x Experience adjustment %

Example: Let’s say a small employer has declared estimated wages of $350,000 for the financial year. The industry rate assigned is 0.129% with a Rating of 1. Your policy rating influences what % of the industry rate you pay.

WorkCover Queensland Gazette

Maintaining a safer work environment can help you improve your policy rating and lower your premium. If your claims costs rise, your policy rating will suffer, and your premium may rise.

Calculating premiums with wages greater than $1.5 million dollars

If you pay more than $1.5 million in wages, your premium will be calculated using an experience-based rating (EBR). This means that your wages, industry rate, and performance are taken into account when calculating what you’ll pay and estimating your claims costs for next year. The only difference between this and the simplified model is the number of years of claims costs considered and the size of your business. When evaluating your performance, WorkCover Queensland considers your claim experience, i.e. the cost of claims made against your business. Total claims costs for four years are as follows: statutory claim costs for the previous three years and common law claim costs for the year preceding (before) those three years.

What are the benefits of the Experienced-Based Rate (EBR) model?

The Experienced-Based Rate (EBR) model offers several benefits in the context of workers’ compensation insurance. Here are some of the advantages:

1. Improved Performance and Reduced Premium: Implementing safe work practices to minimise injuries and assisting injured workers in returning to work can enhance your performance. As a result, your premium can be reduced, providing cost savings for your business.
2. Capped Premium Increases: Under the EBR model, annual premium increases are limited to a maximum of 30%. This cap helps you manage any significant performance-related decrease by preventing excessive premium hikes.
3. Comprehensive Assessment: WorkCover Queensland considers various factors when calculating your premium under the EBR model. These factors include your wages, industry rate, and performance. By taking into account the number of years of claims costs and the size of your business, the EBR model provides a more comprehensive evaluation compared to the simplified model.

Experience rating, which forms the basis of the EBR model, is a mathematical tool used by insurance providers to incorporate an organisation’s previous loss experience into the calculation of current premiums. It assumes that historical loss experience can predict future losses, making it a valuable approach in workers’ compensation insurance.

Claim costs not included in the EBR calculation

― individual claim costs greater than $185,000
― claim costs arising from journeys to and from work
― recess away from work claim costs.

For large employers, the premium calculation takes into account several factors, including the amount paid in wages, claims experience, and industry classification. The premium is calculated based on the following formula:

The formula for WorkCover QLD to calculate the premium rate for large employers is as follows:

Calculated premium rate = (E x Z) + [R x (1 – Z)]

1. E: This variable represents the employer’s base premium, which is determined based on factors such as the industry classification, wages paid by the business, and the employer’s claims experience.
2. Z: Z is the adjustment factor or discount applied to the employer’s premium. It takes into account the employer’s performance in terms of injury prevention, rehabilitation, and return-to-work efforts. If the employer has a positive track record in these areas, they may receive a discount, while poor performance may result in a higher premium.
3. R: R represents the risk premium, which is a component of the overall premium rate. It reflects the industry’s claim costs compared to the employer’s individual claim costs. If the industry’s claim costs are higher than the employer’s claim costs, the risk premium may increase the overall premium rate.

By combining these variables, the calculated premium rate is determined. It’s important to note that the specific values for E, Z, and R can vary depending on the employer’s circumstances and the industry they operate in. To obtain an accurate example and calculation, the specific values for these variables would be required.

Let’s look at an example calculation for wages above $1.5M for last year and the renewal period with claim costs. All other years are below $1.5M. The premium projection was calculated based on last year’s actual wages, above $1,5M.

The industry rate = 0.129%

Calculated premium rate = 0.421

The simulated premium rate is 90% of the industry rate. The premium rate is capped at 1.1 times the prior year’s premium rate adjusted for changes in the industry rate and therefore, the payable Premium Rate = 0.116% after capping.

The calculation of the claims-to-wages ratio for each employer relies on the Single Experience Factor. This factor is crucial in estimating the premium that employers must pay for their accident insurance policy, as it increases the current claims costs. The Single Experience Factor has been updated to 3.42 for the year 2023-2024, which represents a 10.33% increase compared to the previous factor of 3.1 in 2022-2023.

As a result, all employers with claims costs will face higher premiums during the 2023-2024 period, regardless of the industry rate. The purpose of adjusting the Single Experience Factor is to consider the claims experience of each employer and modify their premium accordingly.

Premium Capping

Here’s how premium capping works in WorkCover Queensland:

1. Premium Calculation: WorkCover Queensland calculates the premium for each employer based on several factors, including the amount paid in wages, claims experience, and industry classification.
2. Unique Premium Rate: After combining all the factors in the premium calculation, each employer ends up with a unique “premium rate.” This rate is multiplied by the rateable remuneration (wages) to determine the premium amount that the employer needs to pay.
3. Capping Limit: WorkCover Queensland applies a cap or limit to the increase in premium rates for employers. This cap ensures that any sudden increases in premium rates caused by claims costs or industry fluctuations are limited to a certain percentage.

Example: Let’s consider an example where an employer’s premium rate is calculated to be $2.50 per $100 of wages. If the capping limit is set at 3%, the premium rate increase will be capped at 3%. Therefore, even if the calculated premium rate would result in a higher percentage increase, it will be limited to 3%. In this example, the premium rate increase would be capped at $2.58 per $100 of wages (3% of $2.50).

Premium capping helps provide stability and predictability in premium rates for employers. It ensures that sudden increases in premium rates are limited, allowing employers to better plan and manage their workers’ compensation insurance costs.

WorkCover Queensland has premium capping in place to encourage our customers to improve claim outcomes.
The premium rate for the period of insurance will be the least of:
― Rate calculated as per EBR formula, or
― Prior premium rate (PPR) x 1.3, or
― Industry rate (IR) x 2.5, or
― Industry rate (IR), if the claims experience (E) calculated is less than the industry rate for that year, or
― $18 per $100 in wages

Injury Prevention and Management (IPaM) program

Customers who are capped at 2.5 times the Industrial Rate (IR) will be required to participate in the Injury Prevention and Management (IPaM) program when requested by WorkCover. If a customer decides not to participate, their rate will be increased by increments of 1 each year. For instance, if a customer is capped at 2.5 x IR for two years, their rate will be increased by 1 each year after the initial two years, as specified in the Gazette.

The IPaM program, delivered by WHSQ (Workplace Health and Safety Queensland) and WorkCover Queensland, is designed to assist businesses in developing and implementing sustainable health, safety, and injury management systems. It provides several benefits for employers, such as reviews of their health, safety, and injury management systems, identification of workplace hazards, assessment of workplace safety capability, and the creation of a tailored business improvement plan.

The Injury Prevention and Management (IPaM) program is a joint initiative delivered by Workplace Health and Safety Queensland (WHSQ) and WorkCover Queensland. It is designed to assist Queensland businesses in developing and implementing sustainable health, safety, and injury management systems. The program aims to help businesses improve worker participation and reduce workplace injuries through various services provided by IPaM advisors.

Here is an example case study that showcases the benefits of the IPaM program:

Lagardere is a French company operating travel retail services through ports, train stations, and airports. With a diverse workforce engaged in tasks such as customer service, warehousing, and replenishment teams, they encountered soft tissue injuries. Lagardere initially connected with IPaM due to the injuries they were experiencing. Although they had a reporting process in place, there was a lack of coordinated efforts to address the issue effectively. Through the IPaM program, Lagardere received assistance in conducting reviews of its health, safety, and injury management systems. The IPaM advisor identified workplace hazards, assessed safety capability, and helped develop a tailored business improvement plan. As a result, Lagardere witnessed improvements in worker participation and injury prevention.

The IPaM program has been instrumental in supporting Queensland businesses across various industries, helping them enhance their safety practices, reduce injuries, and create healthier work environments.

Who’s eligible?

The Injury Prevention and Management (IPaM) program in Queensland is available to any employer with a WorkCover Queensland policy, regardless of their size or business maturity. Additionally, sole traders who are not insured through WorkCover Queensland may also be eligible to participate in the program. The IPaM program is designed to assist businesses in developing and implementing sustainable health, safety, and injury management systems. It offers services such as reviewing health, safety, and injury management systems, identifying workplace hazards, assessing workplace safety capability, and creating tailored business improvement plans.

Large Employer Alternative Pricing (LEAP)

As a sizable employer in Queensland, you have the flexibility to select the premium calculation method that best suits your needs. You can opt for the conventional Experience Based Rating (EBR) calculation approach, or you can choose the Large Employer Alternative Pricing (LEAP) method.

Large Employer Alternative Pricing (LEAP) is a premium pricing model offered by WorkSafe Queensland, an Australian government agency responsible for workers’ compensation and workplace health and safety. LEAP provides an alternative to the Experience Based Rating (EBR) calculation method for large employers in Queensland.

LEAP is designed to recognise and reward employers who prioritise injury prevention, rehabilitation, and the return to work of their employees. It takes into account the claim costs of an organisation and compares them to the claim costs of the industry as a whole. If an organisation’s claim costs are higher than the industry average, LEAP may be a better option for calculating its premium.

To be eligible for LEAP, an organisation must meet certain criteria. They must be eligible for a self-insurance license in Queensland as a single or group employer, and they must employ at least 2,000 full-time workers (FTE) in Queensland (total number of ordinary time hours worked during a continuous 6-month period in the last 12 months divided by 910 = Total FTE, under section 73 of the Workers’ Compensation and Rehabilitation Act 2003).

Who’s eligible for LEAP?

If you have previously been a member of the WorkCover Queensland fund or are leaving the Queensland scheme, WorkCover Queensland will still review your application. During the review process, it will take into account your claims history, occupational health and safety performance, and compliance with the Work Health and Safety and Workers’ Compensation and Rehabilitation Act and Regulation. Your last five consecutive injury years will also be considered. Your organisation needs to show a genuine commitment to work health and safety, your ability to improve safety practices, manage incidents and assist workers to return to work after an injury. A senior executive from your organisation needs to commit to continued safety and injury management in writing.

How LEAP premium is calculated

The LEAP premium is calculated based on several factors and involves the following steps:

1. Period of Insurance: The period of insurance under LEAP is 3 consecutive years.
2. Upfront Normal EBR Premium: The calculation starts with determining your upfront normal EBR premium. The exact method for calculating the EBR premium is not provided in the information given. It may be based on your organisation’s claim costs and other factors.
3. Annual Premium Adjustments: Over the three-year period, three annual premium adjustments are made, which include GST (Goods and Services Tax) and stamp duty.
4. Annual Adjustment Calculation: Each year, an annual adjustment is calculated. The formula for the annual adjustment is as follows: Annual Adjustment = Release Factor × [(Claims × Runoff Factor) – (EBR + All Prior Adjustments)]
   • Min/Max Premium Cap: The calculated annual adjustment is subject to a minimum and maximum premium cap. The cap limits the adjustment to be within +/- 50% of the EBR premium.
   • Claims: Your claims costs include various components such as 4 years of run-off (claims development) per injury year, individual event-based claim caps: $350,000 or $500,000 (combined statutory and common law costs), and all ‘net’ claim costs (including journey and recess away from work claims and investigation costs).
   • Updated Factors: The run-off factor and release factor are updated annually and appear in the Queensland Government Gazette.
   • Release Factor: The release factor controls or reduces the volatility of the retrospective adjustment. It increases with claims development.
   • Runoff Factor: The run-off factor is a gross-up factor used to determine ultimate claims costs for the injury year. It allows for remaining claim development, administrative costs, and cost spreading. The run-off factor reduces with claims development.

Employers should prioritise controlling what they can, such as ensuring correct wages, classification, and premium strategy. They should also consider alternative risk solutions like LEAP or self-insurance. Injury prevention and effective injury and claim management with a focus on return to work are crucial. While these measures won’t completely shield employers from increases in workers’ compensation costs, they can help mitigate the impact.

In conclusion, LEAP is a premium pricing model offered by WorkSafe Queensland that provides an alternative to the traditional Experience Based Rating calculation method. It rewards employers who focus on injury prevention, rehabilitation, and the return to work of their employees, and it is available to large employers in Queensland who meet the eligibility criteria.

Here is an example to illustrate how the LEAP program works:

Let’s say there is a construction company in Queensland with a high level of commitment to workplace safety and a comprehensive injury management program in place. This company has experienced lower claim costs compared to the average claim costs in the construction industry. However, due to the overall higher claim costs in the construction industry, their premium calculated using the traditional Experience Based Rating (EBR) method might still be relatively high.

In this case, the company can choose to participate in the LEAP program. WorkCover Queensland will consider their eligibility for LEAP, taking into account factors such as their industry, claims experience, and commitment to injury prevention and return to work practices. If approved for the LEAP program, the company’s premium calculation will be based on a model that recognises its proactive efforts in injury prevention and management. This might result in a more favourable premium rate compared to the EBR method, reflecting the company’s lower claim costs relative to their industry.

By participating in the LEAP program, the company can benefit from a premium pricing model that aligns with its commitment to workplace safety and injury management, ultimately helping to reduce costs and promote a safe working environment.

New employer/new policy

If you are a new business without any claims experience, the calculation of your premium for work injury compensation insurance will be based on multiplying your wages by 100% of the industry rate for the first 18 months. After 18 months, you will start to accumulate your own paying premium rate.

To obtain a quotation and policy placement services, you can contact myWorkCover, who will assist you in determining the premium based on your specific circumstances.

Succession

Your claims and wage history may be carried over to your new policy if your employing entity changes. This is known as succession. If your policy has succession applied to it and you believe WorkCover Queensland’s decision is incorrect, contact myWorkCover for a free confidential health check.

Household WorkCover Policy

A household worker policy covers you against potential compensation costs if a household worker you employ is injured while working for you. It cannot be taken out when the worker’s employment is in connection with a business. This type of policy covers household workers for both statutory and common law claim costs due to injuries sustained in the course of employment.

What if you already have an Accident Insurance (Workers’ Compensation) Policy?

When an employer has an accident insurance policy for workers and also engages household workers, the household workers are covered under the accident insurance policy.

If household workers are also covered under an accident insurance policy, the wages for those household workers do not need to be declared. This ensures household workers are insured under accident insurance policies consistent with the arrangements of a household worker policy.

Cost of a Household WorkCover Policy

WorkCover Queensland’s Household Workers’ Insurance policy is $50 for a two-year term. This is a set time frame where all policies have a common end date irrespective of when the policy commenced.

The premium is not pro-rated; however, a reduction of the rate to $25 is applied if the time remaining to the common end date is less than 12 months.

Period of Insurance for Household WorkCover Policy

The current period of insurance runs from 1 January to 31 December for 2 years.

You will receive a renewal notice in late November or early December. To be insured for another two years, simply pay your premium by the due date. If you have ceased employing household workers and do not want your policy to continue, do not make payment and your policy will automatically cancel.

Important Note

Under the Workers’ Compensation and Rehabilitation Regulation 2003 (Qld), the definition of household worker includes the following important concepts:

• a private dwelling house or the grounds of the dwelling house
• ‘in and about’ (a private dwelling house or the grounds of the dwelling house); and
• ‘in connection with’ (a private dwelling house or the grounds of the dwelling house).
• Public liability insurance is usually included in your home and contents insurance; however, it only covers visitors to your home, not those you employ.

WorkCover Queensland offer workplace Personal Injury Insurance

Workplace personal injury insurance is optional insurance and covers anyone deemed an eligible person under Section 23 of the Act. An eligible person is an individual who, other than as a worker, receives remuneration or other benefit for performing work or providing services such as:

• a contractor
• a self-employed individual,
• a director of a company,
• a partner of a partnership,
• a trustee of a trust.

Workplace personal injury insurance provides coverage to individuals who are not covered under an accident insurance policy. This insurance policy protects you in case of a work-related injury. It also covers injuries that occur while travelling to or from work, during work breaks, or while temporarily working in another location, either interstate or overseas.

It’s important to note that workplace personal injury insurance is different from income protection insurance and does not provide 24-hour coverage.

The minimum premium for this insurance is $1,650, which is based on $50,000 in wages per individual. It is advisable to explore options from third-party insurance providers to find a competitive rate. Please check with WorkCover Queensland for updated figures.

Author: Yon Ta, 11 June 2023

Disclaimer:

The information presented in this post, article or book is intended solely for informational and educational purposes and should not be considered legal advice. It does not express specific opinions on individual cases. Before taking any action based on the information provided, it is strongly advised to seek additional professional advice. This information should only be used to gain a better understanding of how Workers’ Compensation insurance functions and is purely illustrative. My WorkCover Solutions Pty Ltd disclaims any liability for any losses or damage resulting from the use of or reliance upon the information provided. The information in this article is believed to be accurate as of its publication date. However, please note that changes in applicable laws may affect its accuracy. This article provides general information and does not take into account any specific person’s circumstances. It may contain information about Workers’ Compensation insurance regulations in your State or Territory. To ensure compliance with legal obligations, it is recommended to refer to the current legislation in force in the State or Territory where your business operates. Up-to-date legislation can be found on the respective WorkCover Authority websites for each state or by contacting myWorkCover for updated information.

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