The COVID-19 pandemic has been devastating for many businesses across numerous sectors. To see some relief offered via more affordable WorkCover Premiums for some businesses, in particular those operating in Victoria, is pleasing news, however it unfortunately does not apply to all.

The average premium rate for 2020/21 will remain unchanged at 1.272%. When we compare this rate with the average rates across other jurisdictions for 2019/20, this puts Victoria near the bottom with only Queensland (1.20%) and Comcare (0.85%) being lower. Tasmania has the highest average premium rate of 2.08%. However, different benefit entitlement levels and the financial levels across jurisdictions can explain some of the differences in average premium rates.

There are two main changes in the Premium Order for 2020/21. Firstly, the claims reporting period used for the employers’ experience rating has been extended to three years. This means that, consistent with previous years, in the period of 1 January 2017 to 30 June 2019, claims costs including statistical case estimates will be used, and in the period 1 July 2019 – 31 December 2019, only weekly payments will be included as statistical case estimates will be excluded.

Secondly, the date for employers to take up the five per cent discount option for early payment has been extended to 31 August 2020.

The key dates for 2020/21 are as follows:

• 4 July – 2020/21 premium notices will be sent to all employers;
• 31 August – Pay 2020/21 premium in full to receive a five per cent discount;
• 1 October – Pay 2020/21 premium in full to receive a three per cent discount;
• 23 October – Large employers to certify remuneration for 2019/20 year; and
• 26 March 2021 – Small employers to certify remuneration for the 2019/20 year.

The distribution of rate changes for individual employers for 2020/21, (subject to change as employers update their individual details including remuneration estimates), means that for industry rated employers with remuneration less than or equal to $200,000.00, some 58,486 (41.1%) will receive decreases in costs; 49,828 (35%) will see no change and 34,136 (24.0%) will receive increases.

For experience rated employers, 49,218 (58.5%) will receive decreases, 2,058 (2.4%) will see no change in costs and 32,872 (39.1%) will see their premium costs rise.

In addition to the options for employers to take up discounts on premiums, they also have the opportunity to buyout their excess. A 10% increase in premium eliminates both employer’s medical excess and the 10 days of weekly payments excess. However, employers must elect to do this by 1 August 2020.

COVID19 and JobKeeper Payments

WorkSafe Victoria’s Insurance Agents are working flexibly with employers on premium collection, delaying any outstanding premium debt until 1 October 2020 where the employer has indicated a difficulty in their capacity to pay. Agents may also consider longer term payment plans of up to two years (longer with WorkSafe’s approval) if this assists the employer to meet their obligations.

Employers are being encouraged to update or reduce, where appropriate, their 2019/20 remuneration to provide immediate premium credit to offset debts owed by them or to provide premium refunds. 20/21 remuneration estimates can also be updated online or via the employer’s WorkCover Insurance Agent.

All overdue debt notices and late payment penalties for premiums have been suspended.

In addition, all COVID-19 related claims will have no financial impact on an employer’s 2019/20 or 2020/21 premiums. WorkSafe will consider how to treat this cohort of claims for premium periods beyond 2020/21.

JobKeeper payments will not be considered as rateable remuneration in most cases and therefore will not have an impact on premium for JobKeeper eligible employers. An information Sheet and FAQs is available on the WorkSafe Victoria website. Click here for further information. 

For more information on how the Victorian Chamber’s team of expert Health, Safety and Wellbeing Consultants can assist your business to better manage its workers compensation and Return to Work issues, please contact 8662 5196, or email hsw@victorianchamber.com.au