2023/24 icare (NSW) Workers Insurance - LPR Model & Conventional Policy Renewal Guide
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Want to Renew Your Policy and Save Time?
Renewing and managing your policy with myWorkCover can simplify the process of renewing and declaring your wages. When you appoint myWorkCover to handle your policy, we ensure that your business classification is accurate and that you pay the appropriate premium. By renewing your policy with us, you gain various benefits. Firstly, you’ll have the opportunity to identify any discounts you’re eligible for. Additionally, you can compare your claims performance to the industry average, allowing you to assess how well your business is performing in terms of claims. Moreover, renewing your policy will help you understand the factors that influence the calculation of your premium, such as wages or industry rates.
It’s important to note that each legislative state publishes industry rates and claims cost rates annually, which play a significant role in calculating an employer’s premium based on their workplace classification. Additionally, the claims you’ve been involved in can affect your WorkCover insurance premiums. Payments associated with a claim, including estimates of future costs, are known as claim costs.
Your policy renewal is explained!
Watch this video to learn more about your icare Workers' insurance policy renewal.
Changes & Premium updates for 2023-24
The Nominal Insurer's workers' compensation scheme in New South Wales will experience an average premium rate increase of 8% for the fiscal year 2023-24. This increase will raise the premium rates from 1.48% of wages to 1.60% of wages. Loss Prevention and Recovery (LPR) clients can also anticipate an average 8% rise in LPR claims adjustment factors. Comparatively, Victoria's similar scheme is undergoing a more significant average premium increase of 42%.
Starting from 31 December 2023, icare, the workers' compensation insurer, will discontinue issuing refund cheques and will exclusively process refunds through Electronic Funds Transfer (EFT). Consequently, organisations that do not provide their bank details will not receive any refunds.
For small employers who do not report actual wages, the estimated wages for future years will be increased by 30%. However, for those participating in the Loss Prevention and Recovery (LPR) program, premium refunds will not be issued until the submission of actual wages.
The Employer Safety Incentive (ESI) will be replaced by the Safe Employer Reward (SER) incentive, which is a performance-based reward granted at policy renewal. The SER is based on good claims performance.
It's time to renew your icare Workers Insurance policy.
Regardless of being a small or established employer, your policy will renew automatically. If you haven't cancelled your policy, it will continue to renew, ensuring ongoing coverage. Prior to the policy's expiration, icare will send you an invitation to renew. You can select from the following options:
Your policy will automatically renew at the end of the current period of insurance unless otherwise specified.
Industry Rates
The 2023-24 rates apply to policies renewing on or after 30 June 2023. NSW businesses with a June 30 renewal will receive their workers' insurance premium notices from May 31 onwards, with premiums due on 31 July 2023. icare now offers monthly instalments for annualised premiums of $1,000 or more, benefiting 130,000 employers. Out of 526 industry classifications, 45 will remain unchanged, 264 will increase by less than 8%, and 217 will increase by more than 8%, with the highest increase at 16.7%. The average 8% rise in workers' compensation premiums will cost most businesses around $8 per week, but some will pay more or less. icare assigns premium rates based on each industry's safety performance over the past five years.
What is the Safe Employer Reward (SER)?
The Safe Employer Reward (SER) is an incentive program that recognises employers who maintain safe workplaces and demonstrate good claims performance. To be eligible for the reward, employers must have a minimum of three years of policy history and no catastrophic claim charges within the 36 months prior to policy renewal. The highest-performing employers will receive a rebate similar to the previous Employer Safety Incentive (ESI) program (see comparison table below). However, the SER rebate may decrease based on claims costs, and employers performing below the industry average will not receive any rebate.
The introduction of the Safe Employer Reward (SER) marks the replacement of the previous ESI program. The SER operates on a sliding scale that aligns with employer performance. While the highest-performing employers will still receive a rebate comparable to the ESI, claims costs will impact the overall amount of the SER rebate. Employers who perform below the industry average will not be eligible for any rebate under the SER program.
The implementation of the SER aims to incentivise employers to prioritise workplace safety and reduce the frequency of workplace accidents and injuries. By linking the reward to claims performance, the program encourages employers to actively manage and mitigate risks within their workplaces. This initiative aligns with the broader objective of promoting safer work environments and fostering a culture of safety within organisations.
Employers must understand the significance of maintaining a safe workplace and the impact it can have on their claim's performance. By adhering to best practices in occupational health and safety, employers can reduce the likelihood of workplace accidents and subsequent claims. This includes implementing robust safety protocols, providing adequate training to employees, and conducting regular risk assessments to identify potential hazards.
Moreover, employers should focus on developing a strong safety culture within their organisation. This involves fostering open communication channels, encouraging employee involvement in safety initiatives, and recognising and rewarding positive safety behaviours. By prioritising safety and creating a supportive environment, employers can enhance their claims performance and increase their chances of qualifying for the SER rebate.
The below table shows the experienced rated employer and small employer rebate and incentive.
Claims Performance Adjustment (CPA)Table
The Scheme Performance Measure (SPM) is a metric used in the premium calculation to evaluate the claims performance of an experienced-rated employer in comparison to the overall scheme performance. The premium formula considers the SPM, as well as discounts and charges that are specific to the employer type. These discounts and charges are presented in tables for each policy year. In the premium calculation, a table is used to translate the claims performance of each experience-rated employer into a discount or penalty against their Industry rate. For the 2023/2024 year, icare has introduced additional subtleties to this table, which may provide premium relief for employers who are considered poor performers.
Premium Capping in 2023-24
Premium capping is a measure implemented by icare Workers Insurance to limit the increase in an employer's premium rate if it exceeds a certain threshold. When renewing their workers' compensation insurance policy, experience-rated employers whose premiums are influenced by their claims performance may find that their premium is capped. The premium cap applies in two scenarios:
However, it's important to note that premium capping does not come into effect due to changes in an employer's wages or a change in their business resulting in a different industry classification being applied. These factors do not trigger the premium capping mechanism.
By implementing premium capping, icare Workers Insurance aims to provide stability and mitigate excessive premium rate increases for employers whose premiums are experience-rated. It ensures that premium movements remain within a reasonable range while accounting for changes in claims cost and premium methodology adjustments.
Note: Capping does not apply to policies under the?Loss Prevention and Recovery model?which uses a different method of calculating premiums based on claims costs rather than wages. Capping can be removed in exceptional or contentious circumstances but only with the prior written approval of SIRA.
The Loss Prevention and Recovery (LPR) Premium Model & Renewal
The Loss Prevention and Recovery (LPR) Premium Model offered by icare (Insurance and Care NSW) is an alternative method for calculating workers' insurance premiums for large employers in New South Wales (NSW), Australia. This model aims to incentivise eligible employers to improve workplace safety and reduce workers' compensation insurance costs.
Under the LPR premium model, each period of insurance is individually calculated based on the employer's claims costs as they mature over four years, providing a more customised approach to premium calculation compared to the conventional model that relies on wages. When an employer initiates a policy under the LPR model, they pay an initial deposit premium based on their Average Performance Premium (APP). Additionally, adjustment contributions are calculated at set intervals of 24 months, 36 months, and 48 months after the renewal date.
The adjustment contributions in the LPR model are directly linked to the employer's claims experience and costs, which are influenced by their success in injury prevention and effective claims management. At the start of each policy period, the employer must choose a large claim limit of either $350,000 or $500,000, which determines the adjustment factors associated with the limits.
Eligibility for the LPR product is determined based on the Average Performance Premium (APP), with employers considered large if their APP exceeds $500,000. Large employers have the option to choose between the experience-rated premium model (conventional) and the LPR model. By opting for the LPR model, employers can access more immediate financial rewards for active loss prevention and recovery solutions compared to the conventional premium calculation model.
The LPR premium model encourages employers to implement effective risk management policies and safety measures in the workplace, offering a cost-effective approach to premium management. It allows employers to have better control over workers' compensation insurance premium costs by focusing on improving workplace safety and implementing loss prevention strategies. Participating employers need to complete an application and renewal form to continue benefiting from the incentives provided by the LPR model in subsequent periods.
Determining LPR Eligibility: Who Qualifies and Who Doesn't?
To qualify for this model, an employer must meet either of the following criteria: their average performance premium (APP) exceeds $500,000 for a 12-month insurance period, or they are a member of a group where at least one member's APP exceeds $500,000.
The following conditions apply to employers who are not eligible:
This model is specifically designed for employers of this size because they possess the necessary capacity and resources to effectively manage and enhance loss prevention and recovery systems at the workplace. If employers are part of a group, a group decision must be made to enter or exit the LPR premium model, as split arrangements are not permitted.
How are premiums calculated in the LPR model?
Premiums are calculated based on each employer’s individual claim costs each year which are then multiplied by pre-determined adjustment factors, banded by minimum and maximum premium.
Members of a group should be aware premiums are calculated at the group level and then distributed across its members proportionately. Our team will assist you to understand the specific impacts.
The maximum premium for LPR participants has been aligned with the maximum premium that applies to the conventional premium model. The base calculations are noted in the table below, plus applicable levies and charges.
At renewal, an employer (or group) must elect a large individual claim limit of either $350,000 or
$500,000 for the period of insurance. This choice sets the adjustment factors and the minimum premium
At the commencement of any period of insurance, employers must choose an option to provide a security deposit or pay a Renewal Premium Adjustment for the term of the insurance period.
Option 1: Security is represented by cash, bank guarantee or insurance bond which is to ensure funds are available if employers are not able to meet their workers' compensation liabilities. This is released after payment of the 48-month adjustment if all premium payments and actual wage declarations are up to date.
Option 2: The Renewal Premium Adjustment is an additional 25% of your Deposit Premium. This is released after payment of the 24-month adjustment if all premium payments and actual wage declarations are up to date.
How are premium adjustment contributions calculated in the LPR model?
The calculation of adjustment premiums involves determining an employer's claim costs for each year of insurance and multiplying them by a claim's adjustment factor. The adjustment factor is based on the employer's selected large claim limit. These adjustments can have a positive or negative impact, resulting in a refund or an additional payment, depending on the development of claims between adjustment periods.
Each policy period has a minimum and maximum amount payable. The adjustment amounts include any relevant charges, incentives, and adjustment factors outlined in the policy documents and on the insurer's website. The maximum amount represents the total contribution an employer can pay for a specific policy period, including claims adjustment factors. This maximum amount provides security to the employer against higher-than-expected claim frequency, claim costs, or a significant one-time event.
To calculate adjustment premiums, the following factors are considered:
Adjustment factors are used to modify the total claims costs, taking into account the potential impact and cost to the scheme when the claim exceeds the employer's chosen large claim limit. These factors also consider any additional expenses that may arise for claims that remain active after the completion of the four-year LPR contribution period.
Please note that the information provided is a simplified explanation of the concept of adjustment premiums based on the context provided. If you require more specific information or have additional questions, feel free to ask.
Example:
From 2021/22 the maximum premium is capped as per the following table, based on the employer's APP, plus the standard levies. The minimum premium is the same as the scheme minimum of $175.
For grouped employers, from 2021/22 the maximum premium for the group is based on the Group APP, which is apportioned out to all group members.
LPR Premium Payment Cycles
Once the employer has paid the initial deposit premium at the beginning of the policy period, LPR (Long Period Rate) policyholders can expect to make adjustment contributions at specific intervals: 24 months, 36 months, and 48 months after the renewal date.
By the time an employer has been in the LPR model for five years, they will need to make four payments each year, as indicated in the Year 5 column of the table below:
LPR Cost of claims
What claim costs are included in the premium calculation?
The premium calculation for the period includes the total cost of claims, encompassing both costs incurred and estimated costs for future claim payments. This calculation takes into account various types of payments, such as weekly benefits, medical and hospital expenses, lump sum benefits, and service provider costs, including investigation and legal costs. The total cost of claims is an essential component in determining the premium for the policy period
What claim costs are excluded from the premium calculation?
The following claims costs are excluded from an LPR policyholder’s contribution calculation:
LPR Application & Renewal
What information does icare need to calculate the premium?
A completed and signed LPR application ensures that we possess all the necessary information required to process your LPR deposit premium. This includes your estimated wage declaration, details about your business operations (such as the structure and primary business activity), as well as information about the goods or services provided. In addition to these factors, your adjustment premium will take into account your claims costs at the relevant point in time.
Important Note: From 2023/24 onwards, there will be no premium refunds issued until actual wages are submitted.
LPR - Paying your premium in instalments?
Deposit premiums can be paid either in a lump sum or through instalment payments. Adjustment premiums and securities must be paid in their entirety. Your invoice will provide detailed information regarding the various payment methods available to settle your premium.
Cancel your icare Workers insurance policy
The insurer may cancel your policy at any time with the authority’s written permission by notifying the employer in writing. The insurer cannot cancel your policy under any circumstances without your consent. The cancellation becomes effective on the cancellation day specified in the cancellation notice, which must occur within 7 days of the cancellation notice being delivered to the employer. Section 184 of the 1987 Act applies as if no policy existed.
If your company closes, is sold, stops hiring, or a liquidator is appointed, don’t forget to cancel your workers’ compensation insurance. If you do not cancel the policy, the insurer will continue to renew it because workers’ compensation is mandatory.
The insurer requires information on your actual wages for the time period preceding your cancellation date. This will allow the insurer?to determine if there are any outstanding premium amounts or if you are eligible for a refund. If your policy is cancelled, your company will still be covered for claims arising from injuries sustained while the policy was in effect.
When to cancel your policy
You can cancel your policy only under certain conditions.
Your policy cannot be cancelled if:
Who do you need to insure?
If your total wage exceeds $7,500, you must have?workers’ compensation insurance. Employers must obtain a policy that covers their employees and "deemed workers," excluding contractors, subcontractors, and labour-hire employees (on-hire workers).
A deemed worker is someone who is considered a worker and thus eligible for workers' compensation. A comprehensive list is included in?Schedule 1 of the Workplace Injury Management and Workers' Compensation Act of 1998. Some contractors and subcontractors are considered workers for compensation and insurance purposes. See?Contractor Provision. Because this is a complex area for employers, it may be worth seeking legal advice for your specific situation to ensure you have the proper understanding and approach for each of your employees. Contact?myWorkCover?if you need help.
Who needs a policy?
If you have employees in NSW, you will most likely require workers' compensation insurance. A workers' compensation policy protects an employer if one of their employees suffers a work-related injury or illness. The policy will protect your company from the cost of supporting your injured employee and may include the following:
Who is an employer?
Any business that employs or hires full-time, part-time, or casual workers under an oral or written contract of service or training contract is considered an employer. Working directors of a corporation are considered employees of the corporation.
Examples:
Strata body corporates and other businesses should ensure that contractors performing work on their property have a valid workers compensation policy to avoid becoming liable as a 'principal' to pay workers compensation for uninsured contractors.
When you first apply for coverage, the cost of your premium is determined by the industry you work in and the amount of wages your company pays. Incentives, discounts, and premium adjustments are also taken into account.
Penalty for failing to maintain Workers' Compensation Insurance
Except for "exempt employers," all employers in NSW are required to have a workers' compensation policy. If you don't have one, your company could face a fine or penalty of up to $55,000, as well as a 6-month jail sentence.
Exempt employers
As an employer, you’re not required to get an insurance policy if:
Even if you are exempt, you must still report workplace injuries to the icare workers' insurance. Exempt employers must assist employees with injury management and return to work.
A $175 administration fee (also a minimum premium) applies to any claim filed against an exempt employer. The claim will be assigned to icare claims agent EML.
The administration fee is the same for each reported injury. If your circumstances change in a way that affects your obligations (for example, your annual wage bill has risen above $7,500), you must immediately contact icare and obtain a workers’ compensation policy.
If you are still unsure about whether you need a policy, contact?myWorkCover?to discuss your situation.
Workers and contractors
Workers are not all covered by workers’ compensation insurance. Some people are ‘deemed’ to be workers for the purposes of workers’ compensation insurance. People who work for you on a contract or through a subcontractor arrangement are examples of this.
You can find more information on contractor provision?here.
Wage declaration for contractors:
What can wages include?
What not to include
The following types of payments do not need to be declared as wages:
Non-wage-based activities
If you're a taxi operator, you'll need to provide the following additional information:
Not-for-profits
Non-profit organisations, public benevolent institutions, and charities should continue to declare at the net value worker benefits that are not subject to fringe benefits tax. When employee benefits exceed the Australian Tax Office fringe benefits threshold, the employer is required to declare the benefit at the grossed-up value.
Director's fees paid to a working director & non-working director
In the case of a proprietary limited company where the company acts as the trustee of a trust, any individual trustees listed (such as nominated directors or family members) who receive trust distribution (whether it's income or capital) are exempt from premium calculation.
Trust Distribution & Dividends
Trust distributions are not considered rateable remuneration unless they are paid for work performed or services provided by an employee and paid in lieu of wages (wholly or in part). Similarly, company dividends paid to beneficiaries or shareholders, even if they are also employees of the business, are not considered rateable remuneration for premium purposes. However, they will be considered rateable remuneration if they are paid for work performed or services provided by an employee and paid in lieu of wages (wholly or in part). Finally, dividends paid as profit to directors are exempt from premium calculation.
Trusts and trustees' obligations
A working beneficiary of a trust is one who has PAYG tax deducted from payments or receives a superannuation contribution from the trust. Any beneficiary who works for an incorporated trust is also regarded as a Trust employee. Workers' compensation is available to work beneficiaries who are injured on the job. Certain trust distributions are wage distributions.
When a payment is made to a worker in lieu of wages (regardless of the terminology used to describe the payment), it is considered remuneration for the purposes of calculating workers' insurance premiums. Wages are not paid to beneficiaries who are not the Trust employees.
Distributions of Profit
Payments that represent distributions of profit to individuals who are both proprietors and employees of the business are generally not considered rateable remuneration under the Act. However, it's important to clearly identify these payments in the business's books of account as profit distributions, not expenses. If these payments are made for work performed or services provided by an employee and are paid in lieu of wages (either wholly or in part), they will be considered remuneration.
Sole Traders and Partnerships Type of Policy
Sole traders and members of a partnership are not considered workers of their own businesses and are not covered by WorkCover insurance. However, they can protect themselves from loss of income due to work-related sickness or injury by considering a personal accident and illness policy or income protection insurance policy as an alternative. It's important to note that purchasing a personal accident and illness policy or income protection insurance policy is not a legal requirement.
If they employ workers, including contractors, trainees, and apprentices, they must have a workers' compensation policy in NSW. This policy covers medical expenses, rehabilitation costs, and loss of income due to time off work for employees who suffer an injury or illness as a result of their work.
If you are not an exempt employer, you must obtain workers' compensation insurance to cover any employees you may have. If you are hired as a worker by a sole proprietorship or partnership, your employer may be required to obtain workers' compensation insurance to cover you.
Examples:
Barry the electrical contractor
Barry owns an electrical contracting company. Barry is a one-man show with no employees. Barry is ineligible for workers' compensation.
Steve and Jason, the tilers
Steve and Jason are tiling professionals who run their business as a partnership and employ an apprentice. They must obtain workers’ compensation insurance to protect the apprentice. Steve and Jason are not covered under the workers’ compensation insurance.
Volunteers
Volunteers and unpaid work experience students are not considered "workers" under the Workers' Compensation Act of 1987, and you are not required to insure them. You still have a "duty of care" to provide a safe working environment for volunteers and work experience students.
Loans
If a business makes a loan to a beneficiary or shareholder who is also an employee of the business, the loan will not be considered rateable remuneration for premium purposes if it's regarded as income to the shareholder or beneficiary under the Income Tax Assessment Act 1936 (ITAA) and the Fringe Benefits Tax Assessment Act 1986 (the FBT Act). However, if the loan is regarded as a loan benefit under the FBT Act, the taxable value for FBT purposes will constitute rateable remuneration. If the loan is a repayment to offset against the beneficiary's or shareholder's remuneration, it will be included as rateable remuneration. On the other hand, if the loan repayment is offset against trust distributions to the beneficiary or dividends to the shareholder, the amount offset will not be included as rateable remuneration.
Workers or contractors are classified for worker insurance purposes
Make certain that your company has adequate coverage by correctly identifying which employees require coverage under your policy. It is your responsibility as an employer to protect your company and its employees. Wages for all relevant workers must be declared using the legislative definition of "workers."
Some people are ‘deemed’ to be workers for the purposes of workers’ compensation insurance. Use the definitions and guidelines below to better understand your legal responsibilities. A number of factors are considered by the courts when determining whether a person is a worker, a "deemed worker," or a contractor for the purposes of NSW workers’ compensation. Under NSW workers’ compensation legislation, many contractors are considered employees for workers’ compensation purposes. The employer is considered a "principal" in these cases and is responsible for declaring remuneration for workers’ compensation purposes. The criteria used by a court in any given case cannot be considered exhaustive or even indicative, as some or all of these criteria may be irrelevant in certain circumstances. This means that only individual legal decisions can be made.
Identifying?'deemed' workers
Some people are 'deemed' to be workers for the purposes of workers' compensation insurance. These 'deemed workers' include, but are not limited to:
See?Schedule 1(external link)?of the?Workplace Injury Management and Workers Compensation Act 1998(external link)?for a comprehensive list.
A worker is distinguished from a contractor
Contractors are not required to have workers’ compensation insurance, except for deemed workers. A worker and a contractor are distinguished by a number of factors. An independent contractor is any business structure (e.g., an individual, company, partnership, sole trader, or trustee) that enters into a contractual arrangement with a hirer for the performance of services. To determine whether a worker is an independent contractor for workers’ compensation schemes, the well-known multi-factor test used by Australian courts is generally applied. There is no single factor that is decisive.
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A contractor is more likely to:
Important Note:?An ABN by itself is not a definite indicator of a person(s) status. See Contractor Provisions
Definition of a worker
A "worker" is any person who has entered into or works under a service or training contract with an employer (including some contractors), whether through manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, verbal or written. See?section 4 (1)?of the Workplace Injury Management and Workers' Compensation Act 1998 for the full definition of "worker" (1998 Act).
A worker is more likely to:
Important Note:?A person may have been hired as a contractor and be a contractor for tax purposes, but still be a worker for workers compensation purposes. A person's tax status has no direct relationship to that person's status as a worker for workers' compensation purposes.
A number of different types of workers are classified as ‘deemed workers’ for the purposes of workers' compensation in NSW.?Schedule 1?of the 1998 Act details this group in full. They include:
SIRA's Worker Status Service
The State Insurance Regulatory Authority (SIRA) provides a tool to assist in determining whether a person should be classified as a worker, a deemed worker, or a contractor for the purpose of workers' insurance. However, it's important to note that this tool is only a guide. To officially determine a worker's status, you will need to submit a private ruling application to SIRA using the provided form. If you require assistance, you can reach out to myWorkCover for support.
Given the complexities involved in classifying workers and contractors, it is recommended to utilise the WorkerStatus tool kit provided by the State Insurance Regulatory Authority. This tool is designed to help you assess whether an individual should be categorised as a worker, a deemed worker, or a contractor for workers' compensation insurance. However, please bear in mind that this tool should be used as a general guide, as the court may consider additional factors in determining an individual's status.
The self-assessment tool typically takes around 10 minutes to complete, and it's necessary to perform the assessment for each person individually. Make sure to have any relevant contracts and agreements readily available for reference. Additionally, if needed, it is advisable to seek legal advice.
Calculate your premium
The Workers' Compensation Market Practice and Premium Guidelines are used to calculate the premium for an icare Workers' insurance policy. icare will calculate your premiums using the wage information already on file with your company, including apprentice wages if you employ apprentices.
If you are an experienced-rated employer, icare will consider your claims costs over the previous three years. You are required to revise the premium amount. You must do so if:
Discounts for premiums paid in full
If you pay your annual premium in full (on or before the due date), you are entitled to a discount on your premium. The discount is available to all policyholders with a premium of over $175, regardless of their entitlement to instalment payments.
The discount rate is subject to change and is currently 5% for small employers and 3% for experience-rated employers.
It's important to note that the discount is based on your initial premium payable and will not be adjusted as part of the hindsight premium calculation process or if wage estimates are adjusted mid-term. However, if the discounted premium falls below the minimum premium, the minimum premium will apply.
Premium information packs for renewal
icare will send you a renewal pack that includes information confirming your policy renewal, a Declaration of Actual Wages form, and payment options. Your tax invoice and premium calculation show how much you must pay over the next year.
If you believe the amount of premium paid and your WorkCover Industry Classification (WIC) are incorrect, contact myWorkCover to have your policy reviewed.
Six weeks before the policy renewal date, small employers will receive the renewal pack. Experience-rated employers, on the other hand, will receive the renewal after the policy renewal date.
Estimating your own remuneration for renewal
If you believe icare's estimated remuneration is either too low or too high, you can provide your own estimate. The premium will be calculated using your estimate and icare will re-issue your premium invoice. Your own estimate must be submitted before the Discount due date to receive the discounted benefit offered by icare Workers Insurance.
When it comes to estimating remuneration for policy renewal with icare Workers Insurance, the process involves declaring your wages or estimated wages for the policy period. This declaration is made at the end of the workers' compensation insurance policy period. By declaring your actual or estimated wages, icare can calculate the appropriate premium for your policy.
icare uses the wage information they already have on your business to calculate the premiums. They also take into account a percentage increase in the wage price index. If you are experience-rated, icare considers your last three years of claims costs as well.
To update your estimated wages for policy renewal, icare provides an online platform where you can make the necessary adjustments. It's important to ensure that your estimated wages are accurate and up to date as it helps icare calculate a fair and accurate premium for your policy.
Please note that the specific details regarding the process of estimating remuneration for policy renewal may vary, and it's always recommended to refer to the official icare website or contact myWorkCover for the most accurate and up to date information regarding your specific policy.
Declaration of actual wages
To avoid a penalty and a wage audit, you must declare your prior years’ actual wages. You must declare your annual wages once a year to help calculate your premiums. Every company with an icare Workers' Insurance policy is required to declare the amount of wages paid during the fiscal year. You must file a declaration at the end of your workers’ compensation insurance policy period. This allows Icare to ensure that you pay the correct premium and that everyone contributes to the scheme equally. Your current policy period’s premium may be adjusted based on how much you’ve paid in wages during the policy period. This means you may be required to make an additional payment or receive a refund.
Wage audit
To ensure that the proper wages were used in calculating employer premiums. This allows icare to calculate a fair and accurate premium for all employers based on their risk profile. The State Insurance Regulatory Authority (SIRA) mandates that icare have an employer premium compliance program that includes wage audits. Policies are typically audited based on data analytics, a number of potential risk factors, or a referral (for example, from other government agencies such as SIRA or SafeWork NSW). You may be selected for a wage audit if you have not submitted a Declaration of Actual Wages for a specific policy period.
The auditor will contact you to schedule an audit. The timeframes are generally adaptable and can be modified to meet your requirements. The auditor, on the other hand, is required to complete their final report within four months of being hired. The length of time will be determined by the business’s size and complexity, as well as the wage records provided. The auditor’s fees are usually covered by Icare. However, if the audit finds that your wages were under-declared by 25% or more, the cost of the audit can be recovered from you. Icare is not liable for any costs.
Note: Wages are defined differently for ATO and NSW Workers Compensation purposes, for example, in the treatment of contractors / deemed workers. Furthermore, ATO data may not be detailed enough to identify all payments considered wages for Workers Compensation purposes. The ATO receives wage information on a federal level, whereas icare only requires information pertaining to NSW.
Apprentice Incentive Scheme & Trainee
Apprentice wages must be reported separately from other workers’ wages in order to qualify for a premium reduction. If you hire an apprentice under this scheme, you are entitled to a premium reduction based on the apprentice’s wages. You must have a valid workers’ compensation policy and a Training Services NSW-approved contract with the apprentice to be eligible for the discount. In the training contract, the apprentice must be identified. LPR policyholders are still eligible for the?Apprentice Incentive Discount?which is applied in the same way as for a conventional policyholder.?
While an Accredited apprentice's remuneration is exempt from the premium calculation and not considered rateable remuneration, the amount of remuneration paid to the apprentice must still be disclosed. It's important to note that there is no remuneration threshold for apprentices. On the other hand, trainees are not exempt from the NSW workers' compensation scheme and are treated as normal workers. Therefore, their wages must be declared.
Large employers
If your basic tariff premium exceeds $500,000, it will impact the calculation of your premium based on your claims experience. icare has introduced an optional alternative premium model called Loss Prevention and Recovery (LPR) for large employers. The LPR model is based on commercial arrangements for LPR schemes and aims to provide a more accurate reflection of an employer's individual experience and success in managing injuries and claims over several years.
Under the LPR model, large employers in New South Wales have the choice between the Conventional model and the experience-rated premium model LPR. This alternative model allows large employers with good injury management and safety practices to benefit from reduced premiums that align with their claims experience. It provides incentives for improving workplace safety and offers more immediate financial rewards for active loss prevention and recovery solutions. To be eligible for the LPR model, your average performance premium must exceed $500,000 for a 12-month period of insurance.
Medium and large employers
If your basic tariff premium is between $30,000 and $500,000, the cost of claims will affect your premium. However, the impact on your premium can be reduced to some extent by considering your basic tariff premium.
Unless the employer contacts icare before renewal and provide the necessary details, apprentice wages will be deducted automatically during renewal. The discount will be calculated based on the wage declaration, so it is important to include information about any apprentices you employ, including their wages and Workers' Compensation Industry Classifications (WICs), in the wage declaration forms.
Small employers
If you have a basic tariff premium of $30,000 or less. The cost of any claims will not impact your premium and you may also be eligible for additional discounts based on getting injured workers back to suitable duties within specified timeframes.
Apprentice wages will be automatically deducted at renewal unless the employer contacts icare prior to renewal and advises the details. In retrospect, the discount will be calculated based on your wage declaration. If you employ apprentices, you can include information about them on the wage declaration forms, such as their wages and Workers' Compensation Industry Classifications (WICs).
For small employers who don’t submit actual wages, they will increase the estimated wages for future years by 30%.
The minimum premium is $175
Even if the apprentice incentive and other premium adjustments total less than the minimum premium, the total workers' insurance premium payable by all employers cannot be less than $175. Your apprentice wage records, as well as your apprentice training contract and the letter from Training Services NSW confirming the approval of your training contract application, must be kept. In the event of a wage audit, these documents must be produced. Section 174 (2) of the Workers Compensation Act of 1987 requires employers to keep records of apprenticeships and apprentice wages for at least five years.
Workers' compensation for contractors and other non-employee workers in the construction industry. You could face fines if you fail to manage your subcontractors' workers' compensation insurance properly.
One of the largest employers of subcontractors is the construction and building industry. This makes sense, given that many jobs in these industries require highly specialised skills, and you would hire someone who specialised in the area to complete the task. As a result, it is critical that you understand your responsibilities as an employer of subcontractors and other non-employee workers, including when you must pay workers’ compensation.
How are workers different from contractors?
Workers and deemed workers are distinguished from contractors by a number of factors; no single factor is sufficient to classify a worker or deemed worker. Some of the most common criteria used to determine who is a worker and who is a contractor are as follows:
See Contractor Provision for more information.
What responsibilities do construction employers have?
You have a duty of care to provide a safe and healthy workplace as an employer of contractors, subcontractors, and labour-hire (who are not considered workers). To provide a safe working environment, manage hazards, and minimise risks, you will need to collaborate with general contractors and labour-hire companies.
Your health and safety responsibilities include the following:
Visit?Safework NSW(external link)?to read more about your work health and safety obligations.
Principal contractor responsibilities
Principal contractors, as well as their subcontractors, are responsible for safety and insurance. The person running a business or undertaking that commissions construction work worth $250,000 or more is known as the principal contractor (often referred to as the client). On the other hand, a client can appoint another person running a business or undertaking as a principal contractor by giving them management or control of the workplace where the construction work will be done. (From the?SafeWork NSW website (external link)).
Principal contractors must:
Labour hire agency responsibilities
A labour-hire agency must provide workers' compensation for their employees. Labour hire agencies must collaborate with the host organisation (the host employer) to ensure workplace health and safety. This includes ensuring that workers are not exposed to hazards on the job site. As you can see, hiring workers, contractors, and subcontractors can be a difficult process, particularly when it comes to knowing where you and they stand in terms of workers' compensation insurance. Understanding your SafeWork NSW responsibilities for these different types of workers, as well as when you may be required to pay compensation to keep your business out of trouble, is critical.
Find more information?on the SafeWork NSW website:
What exactly is labour hire?
The employment relationship that exists between:
Labour hire workers are both skilled and unskilled individuals hired for either short-term or long-term positions. They work for the labour-hire agency rather than the host employer for whom they provide labour.
Labour hire in NSW workers compensation refers to the employment relationship between a labour hire agency, the labour hire worker, and the host PCBU (Person Conducting a Business or Undertaking) or host employer. In this arrangement, the labour hire worker is employed by the labour hire agency and provides their services to the host employer.
Regarding health and safety responsibilities in the labour hire industry, all parties involved share the responsibility. The labour hire agency has certain duties, including providing an induction to the worker and ensuring that the host employer also provides an induction. They are also responsible for assessing the safety of the host workplace before the worker starts their placement and monitoring the host employer throughout the placement to ensure health and safety requirements are met.
As for workers' compensation for labour hire workers in NSW, employers generally need to provide workers' compensation for workers, including labour hire workers, in the event of an injury. This means that both the labour hire agency and the host employer may have obligations to ensure workers' compensation coverage for labour hire workers.
It's important to note that the specific details and requirements regarding labour hire and workers' compensation may vary, and it is advisable to consult official sources such as the State Insurance Regulatory Authority (SIRA) or relevant legal resources for the most accurate and up-to-date information.
Claims Service Providers
Notify icare of an injury or make a claim
You must notify your claims service provider of a work-related injury or illness within 48 hours of becoming aware of it.
The Claims Service Providers (CSPs) are companies that manage claims on behalf of icare, which is an organisation providing workers' compensation insurance in New South Wales, Australia. As of June 2023, there are six Claims Service Providers on the panel. These include Allianz, EML, GIO, QBE, Gallagher Bassett, and DXC Technology.
Allianz, EML, GIO, and QBE have been managing claims for icare since January 2023. Later in 2023, Gallagher Bassett and DXC Technology will join the panel as two new providers. These Claims Service Providers handle all types of workers' compensation claims, including both physical and psychological injuries. Notably, Allianz, DXC, EML, and Gallagher Bassett specialise in managing psychological injury claims and have Case Managers with specific training and experience in handling these complex claims.
The introduction of new Claims Service Providers and the expansion of the panel aim to enhance the claims management process within the Nominal Insurer scheme and offer more options to employers [5]. By increasing the number of providers, icare intends to improve the overall standard of case management and facilitate the return to health and work for injured workers [3].
Related reading: icare Workers Insurance - Updates to Claims Management in the Nominal Insurer from 2023
Ways to notify and contact your claims service provider
You can report an injury to your claims service provider using our online form, or by phone, email, or postal mail. You can download an employer/third-party lodgment form below if you want to email or mail your notification. Later in 2023, our panel of Claims Service Providers will expand to include firstly Gallagher Bassett followed shortly after by DXC Technology.
All offices listed below are closed on public holidays.
Note: An excess may be payable if notification is not provided to your insurer within five days of when you became aware of the injury.
First steps: What you need to do
It is your responsibility as an employer to meet specific obligations when an incident occurs. You must notify icare or your claims provider within 48 hours if a worker covered by your policy reports a work-related injury or illness.
You also need to:
If it is a notifiable incident, you must also notify SafeWork NSW. You can find more information here.
First, notify SafeWork NSW that a workplace fatality has occurred
If a notifiable incident occurs, you must notify SafeWork NSW immediately on?13 10 50.
A "notifiable incident" under the work health and safety legislation relates to:
If you fail to report an incident, you will face severe penalties. SafeWork NSW may be required to conduct an urgent investigation and to preserve the incident site until an inspector arrives. SafeWork NSW has a notification fact sheet that explains what constitutes a serious injury, illness, or dangerous incident. For those who have been affected by a notifiable incident, SafeWork NSW may be able to provide undefined support.
Report a fatality
If there is a fatality at work, you to provide icare with support and information. To find out more, please read more about fatalities at work. Report a fatality
After reporting a fatality
When you get a fatality notification, you will be assigned a dedicated fatalities Case Management Specialist who will guide you through the claims process. Within two business days, your Case Management Specialist will:
Entitlements?for?families
If?the?investigation?finds?that?the?death?of?a?worker?was?work-related,?compensation?is?payable.
Benefits?include:
Your?Case?Management?Specialist?will?provide?further?information?about?entitlements?once?the liability?decision is made.
Support?for?families?following?a?fatality
Families who have lost a loved one in a work-related catastrophe are eligible for free grieving counselling. Your Case Management Specialist will instruct you on how to make an appointment. More information on counselling and other support services can be found in the icare Grief support pack (PDF 0.5MB) that your Case Management Specialist will provide you.?
icare's Community Support Services can also provide further assistance to families (CSS). CSS can connect you with other government agencies and community-based programs. Your Case Management Specialist will explain CSS to you.
Support?for?workplaces
In some cases, workplace trauma debriefing services are offered. If you do not already have access to an Employee Assistance Program or other help, your Case Management Specialist will speak with employers regarding onsite debriefing.
Lodging an injury notification
A worker must notify you as soon as possible after an injury. After that, document the injury in your injury register and notify your current claims service provider.
An occupational injury must be reported within 48 hours of its discovery. If you do not report a work-related injury within 5 days of becoming aware of it, you may be required to pay a "claims excess payment" equal to one week's weekly pay. Your claims service provider will assign you an injury notification number when you report an injury (sometimes referred to as a claim number).
What you’ll need to lodge an injury notification
Although you may not have all of the information required to notify your claims service provider of an injury, the more information you provide, the sooner they can determine the appropriate level of support for you. For more information and advice, call icare on 13 77 22 or your current claims service provider. If you need assistance, contact myWorkCover.
Information you’re required to provide
When you lodge an injury notification, you’ll need to provide the following information:
Optional information you may need to provide
The following information, if available, may also be provided at the time of notification:
You may also need some of the following documents:
Your register of injuries
Even if a workplace injury does not result in a workers' compensation claim, you must keep records of what occurred. This is known as an injury registry. The workplace injury register must be kept in a prominent location.
Near misses should also be documented as a method of injury prevention. The injury register, which includes every reportable incident, can be kept on paper or on a computer. To access the register, you must ensure that your team is properly trained.
The State Insurance Regulatory Authority (SIRA) may also grant you permission to use the injury register as notification of any workplace injury. We encourage you to do so even though it is not required by law. Download the SafeWork NSW injury register template(external link)??
Note: There are penalties for failing to keep a register of injuries.
The register of injuries must include the following details of each injury:
The injury register can be kept in writing or on a computer. Each notifiable incident must also be documented. There are consequences for failing to keep an injury log.
Return to work?
When a worker is recovering from a work-related injury or illness, you have an obligation in assisting your worker in their journey back to work.
Cross-border coverage
Companies based in NSW that send their workers overseas or interstate on a temporary basis for specific projects are covered under their NSW Workers Insurance Policy as long as the time spent out of the country or state is less than six months at a time. However, in addition to your obligations under NSW law, you should check any requirements of the country or state to which you are sending workers.
NSW workers temporarily working overseas or interstate
Wages, salary, fringe benefits, and/or any other consideration provided by an employer to any worker who is ordinarily based in NSW while temporarily employed or working overseas is considered remuneration. This applies regardless of whether the payments are made within or outside of Australia. Employers should also confirm the relevant overseas authority's legislative requirements.
Details of the payments made to workers while overseas can be found in the?Wages Definition Manual(external link).
NSW workers permanently working overseas
When an NSW employer hires a worker to work in another country, the employer must implement a workers’ compensation policy (or equivalent) in accordance with the country’s legal requirements. Wages, salary, fringe benefits, and/or any other consideration to the worker are not considered remuneration for the purposes of the NSW workers’ compensation policy.
You can also refer to the?Cross-border arrangements for workers’ compensation?(external link)?details through the SIRA website.?
Author: Yon Ta, 11 June 2023
Disclaimer:
The information presented in this post, article or book is intended solely for informational and educational purposes and should not be considered legal advice. It does not express specific opinions on individual cases. Before taking any action based on the information provided, it is strongly advised to seek additional professional advice. This information should only be used to gain a better understanding of how Workers’ Compensation insurance functions and is purely illustrative. My WorkCover Solutions Pty Ltd disclaims any liability for any losses or damages resulting from the use or reliance upon the information provided. The information in this article is believed to be accurate as of its publication date. However, please note that changes in applicable laws may affect its accuracy. This article provides general information and does not take into account any specific person’s circumstances. It may contain information about Workers’ Compensation insurance regulations in your State or Territory. To ensure compliance with legal obligations, it is recommended to refer to the current legislation in force in the State or Territory where your business operates. Up-to-date legislation can be found on the respective WorkCover Authority websites for each state or by contacting myWorkCover for updated information.