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WorkCover insurance 2015/16

Industry Rates and Industry Claims Cost Rates for 2015/16

The Average Premium Rate for 2015/16 is 1.272% of the State's rateable remuneration. This is a continuation of the average rate for 2014/15 and reflects a record low for Victoria.

Industry Rates and Industry Claim Cost Rates (IRs and ICCRs) were gazetted on 27 May 2015. The Gazettal Notice is available from the Gazette website. Individual industry rates are available in a Special Gazette (Special 124 Wednesday 27 May 2015).

A premium simulator for 2015/16 is now available to be downloaded from the Calculating your Insurance page.

Key dates

Please note the following key dates for 2015/2016:
Date Action
Mid June

Online system available to estimate 15/16 remuneration

You can submit your Estimate of Rateable Remuneration online using Online employer services

9 July Employers will receive their Premium Renewal documents for 2015/16
1 August

Due date for annual insurance premium payment (discounted by 5%).

Last day to take up the buy-out option.

1 October

Due date for annual insurance premium payment (discounted by 3%).

Due date for first installment insurance premium (if you pay on a monthly or quarterly plan).

Note: If you pay using a quarterly installment plan, you must pay the installments by the first day of October, December, March and June. If you choose to pay your premium monthly, payment is due in 10 installments on the first day of each month, starting on 1 October 2015 and ending on 1 July 2016.

30 October

Complete your Certification of Rateable Remuneration for 2014/15 (if your rateable remuneration for 2013/2014 was more than $200,000).

You can submit your Declaration of Rateable Remuneration online using Online employer services

1 November Due date for annual insurance premium payment (without discount).
31 March 2016

Certify your Rateable Remuneration for 2014/15 (if your rateable remuneration for 2013/2014 was less than $200,000).

You can submit your Declaration of Rateable Remuneration online using Online employer services

Continuation of the 5% and 3% discount for early payment of premium

A discount of 5 percent per annum is again available for employers who pay their full year's premium by 1 August 2015. A discount of 3 percent per annum is also available to employers who wish to continue to pay their premium in full by 1 October.

To qualify for the 5 percent discount employers must:

  • Pay any outstanding balance from 2014/15 (or previous years); and
  • Pay their full 2015/16 premium (less the 5% discount) by 1 August 2015.

To qualify for the 3 percent discount employers must:

  • Pay any outstanding balance from 2014/15 (or previous years); and
  • Pay their full 2015/16 premium (less the 3% discount) by 1 October 2015.

Information on ways to pay your premium will be set out in your Premium Notice.

If you disagree with the estimated remuneration figure used to calculate your WorkCover insurance premium for 2015/16 you can go online and update your remuneration. You can then recalculate your premium and also pay your premium at this time.

Earlier date for electing to buy-out insurance excess

Each WorkCover claim is subject to an insurance excess consisting of payment of the first 10 days of weekly benefits and the first $667* of reasonable medical and like expenses (*for 2015/16). Employers can elect to remove this excess by paying an additional 10% of their premium (referred to as the buy-out premium).

The effect of removing the excess is that your claims are managed and paid for by your Agent from day 1. This makes it easier for employers to manage the early stages of a claim.

This year, the date by which you have to inform your Agent that you want to remove the excess or reinstate it, has been brought forward to 1 August 2015 (instead of 30 August). This earlier date is due to the fact that premium notices are now being issued in July instead of September.

If you are a new employer you must make your election at the time of registering with WorkSafe

Other key dates and parameters for WorkCover insurance premiums in the 2015/16 Premiums Order

  • Claims Reporting Period – 1 January 2012 to 30 June 2014
  • Remuneration Experience Period – 1 July 2011 to 30 June 2014
  • Minimum premium – $186 ($204.60 inc.GST)
  • Maximum claims cost for an individual claim – $360,200
  • Maximum legal costs for an individual claim – $67,400
  • Maximum recovery for an individual claim allocated to an employers' performance calculation – $360,200

Changes to the Premiums Order

Each year a new Premiums Order is made which sets out the rules for calculating employer premiums, and as well includes the industry classifications which form part of the premium calculation. The Premiums Order for 2015/16 is available as a PDF from the Government Gazette website.

The main changes in the 2015/16 Premiums Order are as follows:

Restructuring of the Premiums Order

The 2015/16 Premiums Order has been restructured so that the provisions included in Schedules 1, 2 and 3 are now contained in 'Parts' which are organised as follows:

  • Part 1 – Preliminary Matters
  • Part 2 – Premium Payable
  • Part 3 – Employers
  • Part 4 – Workplaces
  • Part 5 – Classification and Rates
  • Part 6 – Remuneration
  • Part 7 – Cost of Claims and Recoveries
  • Part 8 – Payment of Premium and Discounts

Schedule 4, which contains the WorkCover Industry Classifications, has now been renamed Schedule 1.

This restructuring has resulted in a complete reordering of the Premiums Order (with the exception of the new Schedule 1). In order to assist you in locating relevant provisions the following conversion tables have been developed.

Note: whilst the location of the clauses in the 2015/16 Premiums Order may have changed, the clauses themselves remain largely unchanged.

More explanatory notes

More explanatory information has been inserted into the Premiums Order to assist users in understanding key concepts of the premium calculation (for instance, buy-out premium, weighted industry rate, capping factor, predecessor workplace and predominant activity). A simplified outline of the overall premium calculation has also been inserted into Part 2 to explain the various components that go into the calculation of employer premiums.

Predominant activity test

The test for determining the predominant activity of an employer workplace has been clarified by including information about the methodology to be used (for instance, value added). The value added approach is an economic method that will be used by WorkSafe to substantiate an employer's predominant activity. This approach identifies and characterises the predominant activity of a workplace based on an economic measure of its production functions. (A production function is the transformation of intermediate inputs, through the application of labour and capital, to produce outputs.)

Further information on the value added approach is set out in 'Premium Guideline: Your WorkCover Industry Classification' which will be available from 1 July 2015 on the Rulings and Guidelines page on WorkSafe's website.

In addition, an amendment has been made to clause 27(2) (formerly sub item 3(2) of Schedule 1) by removing the reference to "sales, cost of goods produced or cost of labour". The purpose of this change is to avoid employers relying on one particular factor rather than all relevant factors. The reference to 'statement' in this clause has been changed to 'financial statement'.

Buy-out premium

The rules concerning take up or discontinuance of buy-out have been included in the Premiums Order so that employers are aware of the manner, and date, elections have to be made.

Classification changes – General Stores

The predominant activity 'general store operation' has been transferred from class G42600 Department Stores to class G42790 Other Store-Based Retailing n.e.c. in order to be consistent with the ANZSIC 2006 classification system.