Workers’ compensation is a no-fault statutory compensation that an injured worker may claim under their employer’s compulsory workers’ compensation insurance policy. The no-fault principle means that compensation is available to the worker if they are unable to work due to a work-related injury, even if they or their employer committed no wrong.

If you operate a business and employ any workers, you are legally required to take out workers’ compensation insurance to cover injuries to your workers that occur during the course of their employment.

Workers’ compensation schemes in each jurisdiction have four aims:

  1. to return injured workers to work in a timely, safe and sustainable manner;
  2. to compensate injured workers for some of their economic loss during their period of recovery;
  3. to cover the cost of any necessary medical treatment; and
  4. to achieve a balance between returning injured workers to work as soon as possible and ensuring that injured workers are able to fully recover and do not aggravate their injuries.

However, workers’ compensation insurance does not cover you for injuries caused to third parties, such as members of the public. Your business also needs public liability insurance for any of these type of claims.

Each jurisdiction has its own workers’ compensation legislation. Commonwealth legislation applies for federal public sector employees and employees of certain national private sector employers.

If your business operates in more than one jurisdiction, you must comply with the separate laws and workers’ compensation authorities. This will depend on where the particular worker is based.

The Safe Work Australia website has all the contact details for each jurisdiction (www.safeworkaustralia.gov.au).

2 types of workers’ compensation schemes

There are two major workers’ compensation schemes: managed fund schemes and privately underwritten schemes.

In a managed fund scheme, premium rates are set by a central authority based on forecasts of claim costs across all industries. Managed fund schemes operate in the Commonwealth, New South Wales, Queensland, South Australia, and Victoria. In New South Wales, South Australia, and Victoria, the government in each state underwrites the scheme and appoints scheme agents, i.e. private insurers, to sell the insurance to employers at premiums determined by a central premium guide. In Queensland, there are no scheme agents and the Queensland government directly sells the insurance.

The Commonwealth Comcare scheme generally applies only to federal employees, i.e. public servants, and other national businesses, such as Australia Post and John Holland. Comcare now offers coverage for those eligible corporations wishing to be covered by self-insurance.

A privately underwritten scheme means that private insurers sell the insurance and charge premiums for each employer based on a commercial underwriting analysis of the particular employer’s claims history and risk profile.

Workers’ compensation privately underwritten schemes apply in the ACT, Northern Territory, Tasmania and Western Australia. In this scheme type, the government does not underwrite the scheme. Instead, the relevant state or territory government approves private insurers to sell the insurance.

Workers’ compensation premiums

A premium is the annual fee an employer pays to a government insurer or government-authorised insurer for insurance protection against injuries arising in the course of their workers’ employment.

Your premiums help fund the financial and medical support provided to injured workers as well as the costs of any dispute management, and the scheme’s administration.

Each jurisdiction has its own method of calculating premiums. However, they all take into account:

  • the amount of money paid to your workers annually, including bonuses and commissions;
  • your industry risk rating; and
  • your claims experience rating.

An industry risk rating is given to each industry. It is important that you accurately characterise the work performed in your business so that the correct industry risk rating can be applied.

Your claims experience rating is the cost of previous workers’ compensation claims made in your business. Your claims experience rating is determined by:

  • the frequency and severity of injuries resulting in claims;
  • the way you handled these claims, e.g. whether you provided suitable alternative duties; and
  • how quickly workers can be safely returned to work (the biggest contributor to claims costs is time away from work).

There is a greater emphasis on return to work as a primary goal of all workers’ compensation schemes. This means there are more resources and incentives for businesses to achieve this goal.

Read more...

Top stories for Workers' Compensation

Articles


Random audit leads to worker’s high blood pressure injury

Workers' Compensation

A worker who suffered a high blood pressure injury after being audited twice in one day has successfully claimed for workers’ compensation. The South Australian Employment Tribunal found the employer, Moran Earthworks, liable for the worker’s aortic dissection injury when […]

By Portner Press on July 9th, 2019

Your questions answered: Are we required to have a return to work coordinator in each state?

Workers' Compensation

Q Is it a legal requirement to have a return to work coordinator in each state the business is based in? Does the business need a certain number of employees in the state before this is required? Also, do return […]

By Portner Press on June 25th, 2019

Your questions answered: Can workers accrue leave while absent on workers’ compensation?

Workers' Compensation

Q Can workers accrue or be paid leave while getting Workers’ Compensation? Our company is based in NSW.   A Whether an employee who is absent from work and receiving Workers’ Compensation is also entitled to accrue or take and […]

By Portner Press on June 21st, 2019

Worker compensated for injuries sustained at home

Workers' Compensation

In Roberts v Return to Work South Australia (2017), the South Australian Employment Tribunal awarded a former truck driver $17,351 to compensate for an injury he sustained at home, after his employment had been terminated. He successfully argued that it […]

By Portner Press on June 11th, 2019

Injury sustained during work hours was NOT work-related rules AAT

Workers' Compensation

The Administrative Appeals Tribunal (AAT) has rejected an appeal of a Comcare decision where a worker was denied compensation for an injury she sustained while on a coffee break. The information manager at ACT Health had left her workplace to […]

By Portner Press on June 6th, 2019

Worker loses compensation claim for ‘unfair’ deadline

Workers' Compensation

A carefully planned and implemented performance management process will support a defence of reasonable management action should your worker claim compensation for a work-related psychological injury. This has been demonstrated in Adam and Comcare (Compensation) (2017), when a Commonwealth Government […]

By Portner Press on June 4th, 2019

Foolhardy worker not entitled to PTSD damages

Workers' Compensation

A security guard who suffered post-traumatic stress disorder (PTSD) after he confronted an armed intruder has lost his claim for damages against three companies. The man was working after hours in a CCTV control room at a shopping centre when […]

By Portner Press on May 23rd, 2019

Your questions answered: What is a lost time injury and how long does it last?

Workers' Compensation

Q: What is a lost time injury and how long does it last?

By Portner Press on April 9th, 2019

Your questions answered: Do workers’ compensation records have to be kept separate from our workers’ personnel files?

Workers' Compensation

Q: Are we required to keep any workers’ compensation records separate from the worker’s personnel files?

By Portner Press on March 15th, 2019

Your questions answered: Does our policy cover gym injuries?

Workers' Compensation

Q: Does our Workers’ Compensation policy cover any injuries or fatalities that occur due to accidents in the gym?

By Portner Press on March 12th, 2019