On the 3rd of June, NSW WorkCover announced the latest changes designed to further improve the scheme, effective 30 June 2014. If a business has not had a similar % improvement in claims performance, then they will possibly face significant 2014/15 premium increases. Additional changes relate to maximum premium caps and extended instalment options. We recommend that all medium to large businesses contact their broker or ABILITY GROUP to determine the likely financial impact on their business.
NSW Workers Compensation Changes 2014 take effect on 30 June 2014 and are far-reaching.
With previous changes from NSW WorkCover aimed at reducing the costs of workers compensation, the latest changes could have the opposite effect some businesses.
A summary below, and please refer to the links below for further information:
1) Industry Cost of Claims (ICCR) Rate
WorkCover has reduced the ICCR rates by approximately 25%. This effectively means that if a business has a claims experience premium (i.e. >$30,000 workers compensation premium) and has not had a similar percentage improvement in claims performance, they may face material renewal premium increases. This also means it will be increasingly important for businesses to actively manage claims and our specialist Injury/Claims Management Services will assist.
2) Maximum Premiums
For companies with wages >$500,000, the capping is 3 X Tariff (Base Tariff Premium).
3) Grouping Threshold
The government lifted the wages threshold for grouping from $500,000 to $750,000, aligning it with the Office of State Revenue’s payroll tax threshold.
4) Extended Instalment Option
NSW WorkCover has introduced a new 3-month instalment option for adjustment premiums of more than $1,000. This is designed to assist with business cash flow and will alleviate financial pressures for some businesses. It should be noted however, that this is only available for adjustment premiums renewing on or after 30 June 2014. This means that businesses that renew on 30 June 2014 will miss this option until the following year
5) Actual Wages Declarations
The time frame available to report actual wages has been extended from 2 to 4 months after policy expiry. For policies renewing 30 June 2014, actual wages will be due to the insurer by 31 October 2014.
Additional information can be found below:
Source: NSW WorkCover
Title: Premiums for medium and large employers
Read Time: < 2 Minutes
Source: NSW WorkCover
Title: Premiums rates (IPO)
Read Time: 2 Minutes