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Do WorkCover Claims Influence Employer Premiums?


Do WorkCover claims influence the cost of insurance premiums paid by employers?

Claims lodged by employees with WorkCover Queensland do affect the cost of WorkCover premiums paid by employers. Even if claims are not made by employees, the minimum amount payable for a WorkCover insurance premium is $1650 per financial year. (As at 29 June, 2015.)

How are premiums calculated?

Quite simply, an employer’s WorkCover premium is calculated according to their employee’s occupation type and the employer’s claim history.

Occupation type: The premium rate payable by an employer is classified according to whether or not an employee’s occupation involves manual labour or not. Manual labour includes work activities involving pulling, lifting, moving, pushing, holding, carrying or any other task that is physically demanding.

Employer’s claim history: WorkCover Queensland will review an employer’s claim history when working out the cost of an employer’s insurance premium.

If an employer pays more than $1.5 million in employee wages, WorkCover will use an experience based rating (EBR) to calculate an employer’s insurance premium. Both statutory and common law claims made by employees over the last three financial years will be used to calculate the cost of the premium.

If the employer pays $1.5 million dollars or less in employee wages, WorkCover uses the EBR to work out how much the employer’s insurance premium will be. Both statutory and common law claims made by employees from the most recent financial year will be used to calculate the cost of the employer’s WorkCover premium.

WorkCover will use the total cost of an employer’s claim’s history when they calculate an employer’s insurance premium. The total cost WorkCover has paid an employee includes:

  • An employee’s lost wages;
  • Medical and or rehabilitation costs;
  • Any lump sum payments made; and
  • Damages.

Does the number of claims made by employees affect insurance premium costs?

The amount of claims made by an employee to WorkCover Queensland will not affect the cost of an employer’s WorkCover premium.

Do all types of WorkCover claims effect an employer’s insurance premium costs?

Not all claims made by employers will affect the cost of an employer’s WorkCover insurance premium. Such claims include:

Journey claim: If an employee is injured on their way to or from work, they may be entitled to compensation. However, if an employee was injured as result of driving dangerously or being under the influence of drugs or alcohol, the employee may be excluded from making a compensation claim.

Recess claim: If an employee is injured during a recess period, for example, if they are off-site having lunch or a coffee break, they may still be entitled to compensation.

What does WorkCover’s insurance cover?

An employer is required by law to insure their employees under an accident insurance policy.

A policy with WorkCover Queensland usually covers:

  • Up to 85% of an employee’s wages. The calculation of an employee’s wages are based on the wages declared to the Australian Taxation Office;
  • Medical expenses, including costs incurred while at hospital;
  • Costs associated with rehabilitation;
  • Costs associated with travel for example, to be seen by medical specialists;
  • Lump sum payment (compensation). This is paid in the instance an employee has been permanently impaired as a result of their workplace injury. Once an employee receives this lump sum amount, they are no longer entitled to ask for further amount of statutory compensation. (Please refer to information on common law claim);
  • Death benefits payable to the employee’s beneficiaries in the event of the employee’s death as a result of their workplace injury.