2022/23 WorkSafe Victoria Workers’ Compensation Renewal Process

The pdf version is available for download here.

Want to save time and renew your policy?

Appointing myWorkCover to manage your policy is the simplest way to renew and declare your wages. We will make certain that your business classification is correct and that you pay the appropriate premium. By renewing your policy with us, you’ll be able to see any discounts you’re entitled to, compare your claims performance to the industry average, and understand the factors influencing your premium calculation (such as wages or industry rate).

Each legislative state publishes its industry rates and claims cost rates every year. These are used to calculate an employer’s premium based on how their workplaces are classified. WorkCover insurance premiums may be affected by any claims you’ve been engaged in. Payments paid about a claim, including an estimate of future costs, are referred to as claim costs. You can find the full article on “How WorkCover Claims Impacting Your Premium”?here.

Workplace Injury Rehabilitation and Compensation Act 2013 WORKCOVER PREMIUMS ORDER (NO. 30) 2022/2023 Specific values and rates are determined by the Authority itself.

All employers’ Victorian Workcover policy has expired on 30 June 2022 and WorkSafe will automatically renew the 2022/23 policy with a Preliminary Estimate of Rateable Remuneration with a pre-loading of an increase in line with the Consumer Price Index (CPI).

The Premium will be calculated using the Preliminary Estimated Rateable Remuneration.?This estimated amount will be based on the most recent estimated 2021/22 remuneration figure available.

Estimating Your Rateable Remuneration

If your 2021–22 estimated rateable remuneration was $200,000 or less then your premium for 2022–23 is calculated using your industry rate and your rateable remuneration. If your 2021–22 estimated rateable remuneration was more than $200,000, then your 2022–23 premium will be calculated using your industry rate and any recent claims experience.

If you believe WorkSafe’s estimate of Rateable Remuneration is either too low or too high, you can provide your estimate of Rateable Remuneration.?Thus, the Premium will be calculated using your estimate of Rateable Remuneration.?

Your estimate of Rateable Remuneration must be submitted before the Discount due date to receive the discounted benefit offered by WorkSafe.?

Please allow sufficient time for WorkSafe to issue an Adjusted Premium Tax invoice for payment.

Dates for certifying your 2021-22 remuneration

Importance Notice:?If you do not certify your Rateable Remuneration for 2021/22 by the due date, WorkSafe will be assessed/deemed the remuneration by assessing a minimum of 20% above the highest previous figures.?Where Rateable Remuneration is not certified or is incorrectly certified, an Underestimation Penalty charge may apply. See Underestimation Penalty

2022/23 Preliminary Premium Tax Invoice

2022/23 Premium Tax invoice is scheduled to be issued on 7 July 2022.

What to do when I receive WorkSafe Premium Tax Invoice based on the Preliminary Estimated of Rateable Remuneration.

• Pay your premium as indicated on the invoice if you agree with WorkSafe's estimated remuneration and no other factors need to be changed. Throughout the year, you can make any necessary changes. This is a good practice to avoid the underestimation penalty.
• If you disagree with the estimated remuneration figure used in your 2022/23 premium calculation, you must provide your estimate based on your rateable remuneration for the financial year 2022/23. This estimate will be used to calculate your initial 2022/23 premium. Premiums must still be paid by the dates specified in the Renewal Notice.
• Buying out your excess - the first 10 days of weekly benefit payments and also for the first $763 (indexed annually) of reasonable medical and related like expenses. The employer's medical excess does not apply for claims where the worker is entitled to provisional payments for a claimed mental injury

Payment Option & Discount Notice

Employers cannot receive two discounts for the same policy period. Employers can only claim one of the two discounts: 3% or 5%. If you choose the 5% discount and then make another change that increases the Premium difference, you will be unable to claim the 3% discount. Additional discounts are only available if the revised adjustment is made before the 5% discount due date.

Payment Options:

1. Annual Payment - Premium under $1,000
2. Monthly Payment - Premium above $50,000 & first instalment due 1 October 2022
3. Quarterly Payment - Premium less than $50,000 & first instalment due by 1 October 2022.

Note: WorkSafe will charge a Late Payment Penalty if payment is paid after the due date and is compounding monthly until the arrears are fully paid. See Penalties.

When to revise your estimated rateable remuneration – to avoid underestimation penalty

When to revise your estimate of rateable remuneration You are required to revise your estimate of rateable remuneration if:

• it exceeds or is likely to exceed the WorkSafe estimate, or your previous estimate, by more than 20%, or
• at any time (before 30 April 2023) the rateable remuneration you have paid, or you are liable to pay, is greater than the last estimate you provided.

Within 28 days of becoming aware of the changed circumstances, you must provide a revised estimate to your agent/insurer. If you fail to notify your Agent of changes to your estimated rateable remuneration, you may be fined up to 100% of the premium difference for the financial year.

2022/23 Premium – key facts

For subclause 29(8) of the Premiums Order, the default industry rate is 15.298% and the default industry claims cost rate is 0.940%

2022–23 Premium - due dates

Definition of Rateable Remuneration

The Rateable Remuneration is made up of:

• Gross Salaries/wages
• Superannuation
• Salary sacrifice (employee self-contribution)
• Contractors
• Fringe Benefits Tax (FBT)
• Director fee paid to a working director
• Other Benefits and Allowances which form part of a worker’s remuneration

For the full list see the remuneration matrix

Apprentices:

An Accredited apprentice’s remuneration is not Rateable Remuneration and is Exempt from Premium calculation.?However, you will still be required to disclose the amount of remuneration paid to the apprentice.

Apprentice has no remuneration threshold.

Trainees:

An Accredited Trainee’s remuneration s also exempts from Premium calculation and is still required to disclose to WorkSafe.

A trainee has a remuneration threshold of:

• $46,130 or less in 2018/19
• $47,610 or less in 2019/20
• $49,120 or less in 2020/21
• $51,320 or less in 2021/22
• $51,770 or less in 2022/23

If your trainee's annualised remuneration is paid above this threshold, then the trainee’s remuneration will be considered Rateable Remuneration for WorkSafe Premium calculation and must be certified as deemed workers under Gross Salary/Wages section.

Fringe Benefits Tax (FBT)

If you are a charitable organisation and your FBT is exempt from ATO, then your FBT will also be exempt from WorkSafe Premium Calculation.

Trust Distribution & Dividends

All listed individual trustees who receive trust distribution are exempt from WorkSafe Premium Calculation.

Dividends paid as profit to directors are also exempt from WorkSafe Premium Calculation.

Employee or Contractor?

It is important to know the differences between an employee and a contractor (also called an independent contractor or sub-contractor) as this will affect your responsibilities, such as paying superannuation contributions.

For full details on ‘contractor provision’ click here.

A worker isn’t automatically a contractor just because they have specialist skills, or you only need them during a busy time. You need to consider the whole working arrangement. The easiest way to determine someone’s status is to use the Australian Tax Office’s (ATO)

https://www.ato.gov.au/Calculators-and-tools/Employee-or-contractor/

In simple terms, employees work in your business and are part of your business, while contractors run their own business and provide services to your business. Other differences are outlined below:

?TIP: A worker with an ABN is not automatically a contractor.

IMPORTANT NOTES:

Volunteers are not regarded as workers. Employers of volunteers are not required to take out workers’ compensation insurance for their volunteers but still have a duty to provide a safe working environment for them.

Employers that operate as sole traders or partnerships are not covered under the WorkCover Scheme in any state or Territories in Australia. These types of policies will only cover their workers and contractors who are deemed workers under the “Contract Provision”. It is compulsory to take out a Workers Compensation policy for employers who pay or expect to pay wages exceeding the minimum threshold in a policy period, or who hire apprentices or trainees to register for WorkCover Insurance. The threshold could vary from State to State, but generally, it is $7,500.

In South Australia, it is $13,760 for the 2022/23 financial year and it is indexed each year. If one of your workers is injured at work, you must contact RTWSA or your Authorised Representative to report the injury and at this time you will need to register and pay our minimum premium.

Note: in the Territory of ACT, NT, TAS, and WA there is no minimum wage threshold.

• Working directors & Contractors are not covered in the state of Queensland.
• Working directors who are operating as an incorporated entity will get cover in the States/Territories of Western Australia, Tasmania, Australian Capital Territory, Northern Territory, Victoria, New South Wales, and South Australia
• In Western Australia, Australian Capital Territory, Tasmania & Northern Territory, for a working company director, working directors’ names & wages must be stated and specify their names on registration or the renewal wage declaration form.

Note: In Western Australia – working director can opt-in or opt-out of coverage only at the start of renewing the policy. Working director for a Public company is excluded.

• A business that operates through a Trust and the Trustee is an individual or partnership is not covered in any States/Territories of Australia. This type of policy only covers its’ workers and contractors who are deemed workers under the “Contract Provision”. If you are unsure, please use the following link from the Australian Taxation Office (ATO) - A Guide to determine if your contractor is deemed a worker.

https://www.ato.gov.au/Calculators-and-tools/Employee-or-contractor/

• Trust Distribution – To trustees, directors and beneficiaries are not deemed as wages in any States or Territories. But if trust distribution to a working director is in lieu of wages then it is considered wages and is rateable for WorkCover Premium purposes.
• An Incorporated Entity- Director Fee paid to a Working Director is deemed as wages and must be declared along with their wages to the WorkCover Authority for Premium purposes.
• An Incorporated Entity – Director’s fees that are distributed to a Non-Working Director are not deemed as wages under the WorkCover Scheme and therefore are not rateable for WorkCover Premium purposes.
• Dividend Paid to Working Director – Profit that distributes as a dividend at the end of the policy year is not considered wages. But if the dividend is distributed in lieu of wages, then it is deemed rateable for WorkCover Premium purposes

Disclaimer:

The information provided is strictly for information only. The information provided should not be relied on for any purpose other than to assist you to understand how Workers’ Compensation insurance work. It is for illustrative purposes only and My WorkCover Solutions Pty Ltd does not accept liability for any loss or damage suffered by any person resulting in any way from the use of or reliance on, the information provided.

This publication may contain information that relates to the regulation of Workers’ Compensation insurance in your State or Territories. To ensure you comply with your legal obligations, we would recommend you refer to the appropriate legislation as currently in force in the State or Territory you conduct your business. You can find up-to-date legislation by visiting each state’s WorkCover Authority website, alternatively contact myWorkCover for updated information.