How do previous claims affect your premium?
Any claims you have been involved with may affect your WorkCover insurance premium.
If your rateable remuneration is less than $200,000, your premium will not be affected.
If your rateable remuneration is over $200,000 your 2020/21 premium will be calculated taking into account your WorkSafe claims between 1 January 2017 and 31 December 2019.
Different ways claims can affect your premium
The primary factors that determine the premium payable by an employer are its remuneration and the applicable industry rate.
- How much you pay your employees (remuneration)
Remuneration is defined broadly in the Act so as to include wages, salaries, superannuation and other benefits payable to workers.
- What industry you work in (industry rates)
- Your history of claims (performance rating)
Will my premium increase?
Employer premium-rate increases from year to year are generally capped at 30%. Capping generally applies to workplaces that continue from one year to the next and that retain the same industry classification. Capping also applies to the imputed workplaces of labour hire employers.
Other factors that affect the premium payable by an employer are the deductible benefit, the minimum premium and any buy-out premium).
The premium payable is subject to GST, which is applied after the premium is calculated.
What are claims costs?
These are payments made in relation to a claim, including an estimate of future costs. This includes:
- compensation payments
- costs and expenses relating to the claim
- settlement payments
- the estimation of future payments, expenses, and costs.
All employers have their claim costs measured in the same way – measuring your performance compared to your industry.
How do future claim costs work?
WorkSafe uses a model to estimate the lifetime cost of WorkSafe claims. The model uses WorkSafe's experience over 25 years to estimate the average cost of a similar claim.
The main factor impacting an estimate is your return to work rate. If a worker returns to work and compensation ends, the estimation of future costs is reduced. The longer a worker remains back at work, the more the estimate will fall, reflecting the reduced likelihood of the worker requiring further time off work to recover.
Each estimate is made after a three-month delay, to allow all invoices and reimbursements for a claim to be received. This allows a more accurate cost calculation of the claim.
You can influence the estimated future claim costs by ensuring your WorkSafe agent has up to date claim information including:
- medical certificates
- requests for reimbursement
- return to work plans
- other documentation the WorkSafe agent requests.
What happens with rejected or closed claims?
Rejected or closed claims may still have a cost estimate allocated to them. This is because claims can reopen, and workers may have the ability to appeal the rejection of their claim. A claim estimate will only be included in your premium calculation if compensation has been paid.
What is the employer performance rating?
If you have had WorkCover insurance claims in the period between 1 January 2017 and 31 December 2019, WorkSafe will give you a performance rating. This rating will be displayed on the premium notice you receive in July 2020.
This rating is an indication of your performance relative to other employers operating within the same industry and is used to recalculate your premium rate. The larger your rateable remuneration, the greater the weight that is given to your past experience.