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Workers compensation insurance

Need workers compensation for your employees? Find out what to look for when comparing cover.

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warningAlert: If your employee has the coronavirus (COVID-19), and their job played a significant role (COVID-19)in them catching the disease, they may be covered by workers compensation.

Workers compensation is mandatory for Australian employers. It is purchased by business owners to protect themselves and their workers, pays benefits in the event of a workplace or work-related accident, injury or illness. workers compensation schemes are managed at a state level, and the cost of policies and benefits they deliver varies by location.

The brokers which finder.com.au partners with can only provide quotes for applicants in Western Australia, Tasmania, Northern Territory and the Australian Capital Territory.

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Understanding your requirements as an employer can be complicated, but you don't have to work it all out on your own. When you take out a workers compensation policy, your chosen insurer will offer a range of ongoing assistance and practical resources to help you understand and meet your obligations. This guide will outline how workers compensation works and what to look for when comparing policies on offer.

Workers compensation in Australia: How does it work?

Workers compensation varies between states, but some factors are the same Australia-wide:

  • Workers compensation insurance policies are mandatory in Australia. You are required to hold policies for all workers who are being remunerated, regardless of whether your contract with them is written, oral or implied.
  • The premium costs of workers compensation policies are largely determined by your industry classification and your employee remuneration.
  • Self insurance is an option in all states. This is for eligible large companies with the resources to administer their own workers compensation plans.
  • Interstate workers should be covered by a policy from the state or territory in which they usually and regularly work or operate from. If this is not applicable, such as for interstate shipping workers, they will typically need to be covered by a policy from the state in which their employer or ship is registered.

What will workers compensation actually cover?

Will it cover employees during their breaks? Workers are generally covered in all states if you're on-site. If you're off-site, employees are covered in NSW, VIC, QLD and NT. In TAS, they're generally not covered (though there are exceptions), and in SA, they're not covered at all.

Will it cover employees on their daily commute? The ACT is the only state where workers are covered for the commute without restrictions. QLD and NT are generally covered but with limits, while NSW and TAS are generally not covered, though there are exceptions. WA, SA and VIC employees are usually covered at all.

Will injuries and illnesses outside of the workplace be covered? In all states, employees may still make claims for injuries or illnesses which occur outside the workplace, as long as the job is shown to have been a significant contributing factor. The precise terms and definitions vary in all states.

Will it cover work-related travel? In all states, employees are covered while undertaking work-related travel. Conditions around this provision are stricter in VIC than in other states.

What workers compensation won't cover

Exclusions are circumstances in which workers compensation policies will not pay benefits. Many exclusions are broadly similar in each state, but were legislated independently of each other and so can vary in subtle ways. They include:

Serious and wilful employee misconduct. This includes being under the influence of drugs or alcohol on the job. The exact definition of "under the influence" and the circumstances in which it may be allowable varies between states. However, employees in all states can still claim certain benefits for death or serious injury, even if these were the result of serious misconduct.

Self-inflicted injuries. In all states in Australia, you can't make a claim for death, injury or illness due to deliberately self-inflicted harm.

If the employee provides false information. If a worker was asked about pre-existing conditions and lied about not having any, they are generally not able to make related claims.

Psychological injuries resulting from reasonable employer actions. If you fire, demote, promote, discipline, restructure or otherwise take similar reasonable actions, an employee cannot make claims for resulting injury, illness or psychological damage.

Handy hints before you start comparing

States with varied premium

In the ACT, NT, TAS and WA, premiums vary between insurers so it's worth comparing quotes by price.

States where premiums stay the same

You'll get the same premium price in NSW and VIC, no matter which insurer you choose.

States where you only need to register for cover

In QLD and SA, you can't choose your insurer so you don't need to compare. All you need to do is register for cover.

Speak to a qualified adviser

Here's how workers compensation compares across Australia

Here's a brief guide on workers compensation by the main states in Australia.

In New South Wales, any Persons Conducting a Business or Undertaking (PCBU) are required to purchase workers compensation policies to protect their workers.

Who needs workers compensation in NSW?

  • Employees
  • Trainees
  • Apprentices
  • Work experience students

Benefits of having workers compensation in NSW

  • Weekly payments for loss of income. These benefits are dependent on the injured party's ability to work. They are only available for up to 130 weeks, unless the injured worker has been medically assessed as still unable to work after this time. Benefit payments will stop after 260 weeks (five years) unless the worker has been assessed as having more than 20% permanent impairment and being unable to work at this time.
  • Injured workers may continue to claim weekly compensation payments past these cutoff points if they are assessed as being partially disabled, but with some ability to work, and are working for 15 hours or more per week and earning at least $183 per week.
  • Medical, hospital and rehabilitation costs. Emergency medical treatment and ongoing needs are covered by workers compensation if treatments are required to be carried out by approved practitioners.
    All medications are covered if they have been prescribed by the treating doctor within one month of the injury, and rehabilitation expenses will usually be covered if referred by an approved medical practitioner.
  • Return to work assistance. Benefits are available to help injured workers find a new job if they are unable to return to their previous one. If an injured worker has a written offer of employment for three months or more they may claim a cumulative total of $1,000 for expenses such as education, training, transport, childcare, required clothing and equipment.
  • Property damage. Injured workers can claim up to $600 for clothing damaged in a workplace accident, or up to $2,000 for damage to artificial aids including false teeth and eyes, crutches and artificial limbs, glasses and vision aids.
  • Death and family support benefits. Dependents of workers who have died or been seriously injured in a workplace accident may be eligible for grief counselling, funeral expenses and financial assistance.

How do insurers get the rate?

Workers compensation premiums in NSW are determined by a set formula. An insurer will take your industry classification rate then multiply it by how much your business pays in wages. This is known as the average performance premium.

Other factors that contribute to this price are applicable incentives and discounts, and the costs of claims made by your workers (this is for medium and large businesses only).

Who offers workers compensation in New South Wales?

There are six authorised general workers compensation insurers in NSW to choose from, and another five that only offer specialised cover for certain industries.

NSW InsurersGeneral or specialised?
AllianzGeneral
CGUGeneral
Employers Mutual NSW LimitedGeneral
Catholic Church InsurancesGeneral
GIOGeneral
QBEGeneral
Coal Mines Insurance Pty LtdCoal industry specialist
Guild Insurance LimitedRegistered pharmacy specialist
Hospitality Employers Mutual LimitedHospitality industry specialist
Racing NSWThoroughbred racing industry specialist
StateCover Mutual LimitedWorkers compensation for NSW councils and local government entities

You can find out more about your premium at icare.nsw.gov.au.

Are there any businesses exempt from buying worker's compensation insurance?

Certain businesses may be exempt from needing to purchase workers compensation.

  • You are not required to purchase workers compensation if you pay less than $7,500 in annual wages. You are still required to call WorkCover NSW on 13 10 50 and inform them of injuries, and will need to pay a $175 fee for each workplace injury claim made against you.
  • Large and consistently profitable companies, able to pay workers compensation benefits out of their own resources and maintain a high standard of workplace safety, may apply to be a self-insurer.

Your obligations as an employer

As an employer, or relevant PCBU, you must:

  • Have workers compensation insurance
  • Have a written and documented return to work program outlining the steps you will take if a worker is injured. Your insurance agent can assist you with this
  • Notify your insurer of injuries within 48 hours
  • Provide suitable, paid, equivalent work for injured employees that are still able to perform relevant tasks, as far as is reasonably practicable

You cannot dismiss a worker because of a work-related injury within six months of them becoming unfit for the job as a result of injury.

Who needs worker's compensation insurance in VIC?

Generally, if you employ workers in Victoria then you'll need to register for 'WorkSafe'.

Workers compensation benefits in Victoria

  • Weekly benefit payments. An injured worker's weekly payable benefits are based on their pre-injury average weekly earnings (PIAWE). This is their average weekly income for the last 52 weeks, or since they started if they've been working there for less than a year. PIAWE includes base pay, overtime, commissions and other income, but not all bonuses and benefits.
  • Medical and rehabilitation costs. Victorian workers compensation can pay the cost of reasonable medical treatments and related services. You can find a full list of approved treatments here, and a breakdown of costs covered per treatment. Injured workers may choose their doctor or hospital as long as it meets required standards.
  • Permanent impairment. Impairment benefits are a one-off, lump sum payment that can be claimed in addition to other benefits, even if the injured worker has already returned to the job. A worker who has suffered permanent impairment resulting from a workplace injury or related illness may claim these benefits following an independent impairment assessment. This assessment will give an injured worker a disability score based on their injuries, which is then used to calculate the benefits payable.
  • Death benefits. In the event of a workplace death, workers compensation can cover related medical services such as ambulance, burial expenses, family counselling services, lump sum benefit and weekly pensions for dependents as well as additional damages.
  • Claimable damages. In some circumstances, an injured worker may have the right to sue their employer for additional damages. Specific steps must be followed and you should seek legal advice before doing this.

How are premiums determined?

If you pay less than $200,000 per year in annual rateable remuneration, your premiums are based on a combination of:

  • Industry classification. The premium rates in your industry according to this list. Look for 'industry rate'.
  • Rateable remuneration. How much you pay your workers in a given year

If you pay more than $200,000 per year, your premiums are based on a combination of industry classification, rateable remuneration and claims experience. Claims experience refers to how many claims you have made recently and how this compares to other businesses in the same industry classification. A better claims experience generally means you have a safer workplace, relative to the industry standard, and can get lower premiums.

Who provides workers compensation insurance in Victoria

VIC workers compensation is a state-managed scheme, which means you will get the same rates from each provider. There are five approved workers compensation insurers and you do not need to shop around for the cheapest workers compensation policy in VIC.

VIC InsurersGeneral or specialised
AllianzGeneral
CGUGeneral
EML VIC Pty LtdGeneral
Gallagher Basset Services Workers Compensation VicGeneral
XchangingGeneral

For a quick estimate of your upcoming premiums, you can use WorkSafe Victoria's online calculator tools or you can quickly see rates across industries here.

Some exemptions to the rule

There are a few types of situations which won't need to take out workers compensation.

  • Your company has no apprentices.
  • Your company pays less than $7,500 out in salary
  • Sole traders, individuals in partnerships and individual trustees in trusts

What are my obligations as an employer in VIC?

When you sign up for WorkSafe in Victoria, you will be provided with a username and password which can be used to login to Online Employer Services. This is a centralised place for you to manage your policy and make sure you're meeting your obligations.

In addition to holding appropriate workers compensation cover and paying the premiums, there are other obligations to meet. Many of these can be handled online through Online Employer Services.

  • Keep WorkSafe VIC up to date
  • Maintain a safe working environment
  • Display the "if you are injured at work" poster
  • Have official procedures in place
  • Report incidents
  • Keep records

Who needs workers compensation in Queensland?

All employers in Queensland are required to hold a workers compensation insurance policy for their workers. In QLD, this is often known as accident insurance. There are no remuneration thresholds to meet. If someone qualifies as a worker you must cover them, regardless of how much they are paid.

A worker can be defined as anyone who a business employs who are not contractors or self-employed or owners of the business. Most employees will naturally fall into this category. Contractors don't count as employees and do not require cover.

Queensland workers compensation benefits

  • Weekly compensation payments. If an injury requires a worker to take time off or cut back their hours, they may be entitled to benefits for loss of income. Whether this is necessary will be included on the injured worker's work capacity doctor's certificate. Weekly benefits will depend on the length of time someone is certified as being unfit for work, when the injury occurred and other specifics of the situation.
  • Medical and rehabilitation costs. Once a claim has been accepted, WorkCover QLD may pay reasonable medical and rehabilitation expenses relating to a claim. There are set fee lists for medical services, much like with Medicare. You can find the set fees for essential medical treatments here, and the set fees for allied healthcare services, such as physiotherapy, here. If you use a provider who charges more than the fees listed on those pages, you will be responsible for paying the difference.
  • Travel and other expenses. Necessary and reasonable travel costs, including for medical treatments and medical assessments are covered by QLD workers compensation. Travel for one-way trips less than 20km away or where there is a closer option available is not covered.
  • Lump sum permanent impairment payments. If an injured worker has permanent impairment as a result of a workplace injury they may be entitled to lump sum compensation. Impairment can generally be distinguished by the permanent loss of efficient use of a specific body part, or of a general part of the body.
  • Death benefits. Dependents of a deceased worker may claim lump sum or quarterly benefit payments, as well as reasonable funeral expenses. The requirements can be complex and WorkCover QLD encourages claiming dependents to call 1300 362 128 for a clear idea of what is required.
  • Common law damages. When an injured worker sues their employer for damages, WorkCover QLD represents the employer and can pay the damages, including past and future loss of income, medical treatments, pain and suffering and legal costs.

How are workers compensation rates calculated in QLD?

Accident insurance workers compensation premiums are calculated based on:

  1. The size of your business
  2. Your industry
  3. Your claims history (if any)

For businesses who pay $1.5 million or less in wages:

Businesses are assigned a rating from 1 to 5 based on their claims experience relative to the industry standard - a safer than usual workplace will lead to better ratings.

These ratings directly affect your premiums, getting you either a discount or a surcharge on the industry standard rates.

For businesses who pay more than $1.5 million in wages

Accident insurance premiums for these companies are calculated with an experience based rating (EBR). This determines your premiums based on a combination of:

  • Claims regardless of fault (statutory claims). This is known as statutory claims. It refers against you in the last three years, when an injured worker claims no-fault benefits after an injury
  • Any common law workers compensation claims made against you in the last four years, when an injured worker sues for at-fault benefits, alleging their employer is at least partly liable for the accident
  • Your business size relative to the size of your industry, as determined by wages

Types of workers compensation insurance in Queensland

Workers compensation in Queensland is managed by the state government. Although you cannot shop around for different insurers, you are able to choose from several different policy types (depending on who it's for).

Insurance typeWho is it for?Details
Accident insurance
  • Employees for your business
This is standard, mandatory workers compensation for your employees. It covers you against employee claims for workplace injuries and death, including psychological, gradual and latent injuries, and aggravation of pre-existing conditions
Household worker insurance
  • Employees for your private residence e.g. contractors.
This covers compensation costs if employees are injured around your home e.g cleaners, nannies, gardeners, in-home carers, etc.
Workplace personal injury insurance
  • This is for individuals e.g. owners, contractors, directors, partners of a company.
This is optional cover that you, other individuals or contractors can take out. It covers accidental injuries.
Self- Insurance
  • Employees for your business
This is insurance not bought through the government. Eligible large companies with 2,000+ employees may register as self-insurers.

Who needs workers compensation in Western Australia?

In Western Australia, employers are required to take out workers compensation policies to protect anyone who's considered a 'worker'. A worker can include:

  • Full time workers on wage or salary
  • Casual, part-time and seasonal workers
  • Workers paid on commission
  • Piece workers
  • Contractors (in some cases)

What benefits are covered?

  • Compensation for loss of earnings. Depending on the nature of the injured worker's employment and other factors, they may be entitled to varying weekly benefit payments to compensate them for loss of earnings.
  • Medical benefits. Much like Medicare, WA workers compensation can pay set medical benefits. These are readjusted annually. Workers compensation in WA does not necessarily pay the full cost of required medical treatments. You may be left with out-of-pocket expenses if your practitioner costs more than the medical benefits payable. The limits are generally reasonable enough to ensure effective treatment, however. Approved therapies and rehabilitations, such as physiotherapy and specialist treatments, are covered.
  • Workplace rehabilitation. If a workplace requires modifications, or an injured worker requires assistance to return to the job, workplace rehabilitation benefits may help cover the costs.
  • Travel expenses. Reasonable travel expenses can be claimed for trips to and from medical and rehabilitation facilities. Injured workers who live in regional areas may also claim accommodation and reasonable meal expenses.
  • Permanent impairment. Other benefits, including lump sum and ongoing compensation payments, may be awarded to permanently disabled or impaired workers. Compensation can be awarded for both physical and psychological injuries.

Workers compensation rates in WA

Insurers in WA are free to set their own premiums in line with the WA industry premium rates. These costs are determined by the chance of injury faced by workers in different industries. Workers compensation rates are also affected by factors including, but not limited to, your total annual remuneration paid to all workers and your previous workplace safety and claims history. Insurers may charge up to a 75% surcharge based on your risk profile, or more with special approval.

  • Predicted wages. At the start of each policy period, you predict your wages paid and premiums are adjusted based on actual wages paid at the end of each policy period. The difference needs to be paid to you or the insurer as applicable.
  • What counts as wages? Wages include all salaries, commissions, bonuses, overtime, allowances and other pre-tax benefits paid to workers. It does not include termination, retirement and retrenchment payments, pensions or compulsory superannuation contributions.
  • I disagree with my premium rates. If you disagree with the premium rates set by your insurer, you can appeal within one month of being informed of them. You are still required to keep paying premiums even if you intend to appeal, and if successful can get the difference refunded.

Approved insurers for Workers Compensation in WA

InsurerGet quotes
ALLIANZ AUSTRALIA INSURANCE LTDSpeak to a broker
CATHOLIC CHURCH INSURANCES LTDCall: 1300 655 001
or 9421 6000
AAI LIMITED T/AS GIOCall: 1300 655 001
or 9421 6000
GUILD INSURANCE LTDCall: 9368 8600
INSURANCE AUST. LTD T/AS CGU WORKERS COMPENSATIONSpeak to a broker
QBE INSURANCE AUSTRALIA LTDSpeak to a broker
WFI INSURANCECall: 1300 934 934
ZURICH AUSTRALIAN INSURANCE LTDSpeak to a broker

What are my obligations as an employer in Western Australia?

In the event of a workplace injury, ensure the worker immediately receives appropriate first aid and that the incident is reported to your insurer.

Other obligations you may have include;

  • Maintain written systems
  • Pass claims onto your insurer
  • Work with your insurer
  • Consider using a broker

Unlike in other states, insurers in WA are not necessarily obligated to provide additional services or assistance other than paying claims, making settlements and handling similar issues. Instead, this is left to specialised insurance brokers.

Who needs workers compensation insurance in Tasmania?

All employers in Tasmania must hold workers compensation policies to cover their workers. A worker is defined as anyone who works under a contract of service or training agreement, whether full-time, part-time or casual, and whether that contract is explicit, oral, written or merely implied. The only exception are large, financially secure companies who may apply to be a self-insurer instead.

Generally, you can assume that all workers need workers compensation cover, with the exception of contractors and excluded workers. Deemed workers, meanwhile, are special exceptions where an employee will need cover even if they don't meet the definition of a worker.

Workers compensation benefits in Tasmania

There are three different types of benefits available to injured workers in Tasmania.

  • Statutory benefits. "No fault" payouts for all eligible injured workers. The employee is not required to prove an employer's negligence or fault in order to claim these. An injured worker can claim both common law damages and statutory benefits, although their common law payout will typically be reduced according to statutory benefits already claimed. You might consider statutory benefits to be the "core" of workers compensation cover. All benefits listed in the sections below are statutory benefits.
  • Common law damages. These may be payable only when an employer has been found at fault for a workplace injury or illness. Only injured workers suffering more than 20% impairment may pursue common law damages, and proceedings must be commenced shortly after the injury.
  • Settlements. The agreement reached between the injured worker, the employer and their insurer. They take the form of a single lump sum payout, and are meant to include the cost of future medical expenses, loss of income, rehabilitation needs and anything else. After a settlement has been reached, the employer can no longer make any further workers compensation claims for that injury.

Tasmanian workers compensation rates

The proposed average workers compensation premium rates for 2016/2017 is 2.25% of wages, meaning that employers will on average pay 2.25% of what they're paying in total wages as workers compensation premiums. Your rates may be higher or lower than this depending on your industry.

Workers compensation in Tasmania is market-driven, and workers compensation rates are generally set in three stages:

  1. Risk premium. A "base" rate is established for each year based on the expected cost of claims relative to wages paid across the state in the coming year. This base rate is broadly intended to cover insurer costs, including time spent processing claims and managing policies.
  2. Individual industry rates. Your business's rates are increased, or potentially decreased, according to your industry risk levels and your claims history relative to other companies in similar industries. In other words, more dangerous industries may face higher premiums, but safer than average workplaces in any industry can get lower premiums.
  3. Gross premium. Rates are adjusted by insurers to ensure an acceptable risk level and an appropriate profit margin.

Your premiums may vary between insurers, and finding the cheapest Tasmanian workers compensation policy is largely a matter of getting quotes from each insurer.

Options for workers compensation insurance in TAS

Tasmanian insurersGet a quoteMore info
AllianzSpeak to a brokerMore info
Catholic Church Insurances LimitedSpeak to a brokerN/A
CGUSpeak to a brokerMore info
Employers Mutual NSW LimitedSpeak to a brokerN/A
GIOSpeak to a brokerMore info
Guild Insurance LimitedSpeak to a brokerN/A
QBESpeak to a brokerMore info
ZurichSpeak to a broker/a>More info

Who doesn't need workers compensation in TAS?

Contractors do not count as workers in Tasmania, and you are not required to provide workers compensation cover for themThe only exception is when they do not hold a personal accident insurance policy and you have hired them to perform work not related to their usual area and worth more than $100, such as hiring an accountant to do $101 of gardening work.

Other excluded workers include;

  • Workers employed on a casual basis for purposes other than the employer's trade or business
  • Outworkers
  • Domestic workers with private families who have done less than 48 hours of work prior to being injured
  • Crew members of a fishing boat who are paid mostly or entirely with a share of the profits from the boat's gross earnings
  • Unemployment work participation programs

Your obligations as an employer

In Tasmania's workers compensation scheme, employers are liable for initial statutory benefit costs, and may be liable for common law damages. These liability costs are some of the key expenses covered by workers compensation insurance policies.

As an employer, you are required to start paying statutory benefits almost immediately after a valid claim. For example, you will need to begin paying statutory weekly disability payments if a worker has been medically assessed as disabled, whether permanently or temporarily, but are not required to if they have not been medically assessed as disabled.

Employers are also required to take a range of steps to ensure injured workers are able to get back to the job as soon as reasonably able by:

  • Making a positive contribution to an injured worker's recovery and wellbeing
  • Providing alternative duties to an injured worker where reasonably possible

Who needs workers compensation in the ACT?

All employers in the ACT are required to purchase workers compensation policies to cover their workers.

  • An employer is anyone who employs workers under a contract of service, regardless of whether it's written, oral or implied. It is possible that you, as an employer, have entered into a contract of service without even knowing it. Any registered Pty Ltd company is an employer as long as it has a single worker, even if it's dormant or not earning any income.
  • A worker is anyone who performs a job under a contract of service, and personally carries out any part of that job, regardless of whether or not they are paid or earning any form of remuneration.
  • A contractor may or may not qualify as a worker, depending on the situation and the nature of their employment.

Workers compensation benefits in Canberra and the ACT

  • Weekly benefit payments. Injured workers are eligible for ongoing weekly benefit payments in line with their earnings before the accident.

For the first 26 weeks after injury, a worker can receive weekly benefits equal to their average pre-injury weekly earnings. Where there was a clear pattern of overtime or other additional employment, this is also factored into the amount received. After 26 weeks, benefit payments cease, and different procedures begin to apply.

  • Partial incapacity. When an injured worker recommences duties, but due to partial disability is earning less than they were before the injury, they are paid the full difference for up to 26 weeks after the date of injury.
    After 26 weeks they will be paid a partial difference based on how many hours they're working per week post-injury compared to pre-injury, and how much they're earning. Generally, an injured worker will receive at least the minimum wage from their combined work pay and benefits.
  • Medical and other expenses. An injured worker can claim any required medical treatment, plus related expenses such as accommodation and travel, and lost wages from time spent receiving treatment. They can also claim clothing or belongings that were damaged or lost as a result of the accident.
    Although a worker is entitled to claim the full amount of any of the above costs, the insurer will consider each claim individually, and may accept some and reject others.
  • Permanent injuries. Injured workers may claim up to a maximum of $150,000 for permanent injuries, but only in certain circumstances.
  • Death. Funeral and compensation benefits are payable as a lump sum in the event of a workplace death. Benefits will be reduced if other compensation payments for the same accident have already been paid.

How do insurers set workers compensation rates?

Each insurer uses very similar criteria when setting premiums, but may interpret them in different ways, leading to differences in cost. Factors considered by insurers include, but are not limited to:

  • Your industry type
  • Your business' claims and workplace safety history
  • How many workers you have
  • Charges in commissions and brokerage fees
  • The current default insurance fund levy

What is the default insurance fund levy (DIFL)?

The DIFL is an extra cost added to workers compensation rates in the Australian Capital Territory. It is designed to cover the cost of claims made by people who were injured on the job when their employer didn't have workers compensation or were bankrupt. It is regularly reassessed and insurers are required to include the current DIFL rate in their premium statements. You can see how much you're paying in DIFL by looking at your insurance statements.

Which insurers offer workers compensation in the ACT?

There are seven licensed workers' compensation insurance providers in the ACT. If you need a workers' compensation policy, and your business is not eligible as a self-insurer, you must choose one of the following insurers.

InsurerGet a quote
AllianzSpeak to a broker
Guild Insurance Ltdn/a
Catholic Church Insurancesn/a
QBE InsuranceSpeak to a broker
CGU Workers CompensationSpeak to a broker
Zurich Financial ServicesSpeak to a broker
GIO Workers Compensationn/a

Workers compensation obligations for employers in the ACT

Employer obligations include the following;

  • Hold a current workers compensation policy for all employees in the territory
  • Comply with the injury management program set out by your chosen insurer
  • Establish and display a written return-to-work program in consultation with your workers, your insurer, an approved rehabilitation provider and any relevant unions
  • Clearly display a notice that outlines the name of your insurer and policy details, and the requirements for making workers compensation claims
  • Provide six-monthly wage reports to your insurer as well as any other specific information they require
  • Make a register of previous injuries that occurred in your workplace available to your employees, regardless of whether or not they resulted in a claim. This register should include the names of all relevant businesses and individuals involved, as well as details about the accident, treatment given, names of any witnesses, and the name of the person registering the injury.
  • You must notify your insurer of any workplace injury within 48 hours of it occurring, and receive written confirmation from them that you have done so. Failure to do so may incur penalties.

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What affects the cost of workers compensation cover?

Workers' compensation premiums and rates are adjusted each year and vary between states. They are based on:

  • Total worker remuneration. The more you pay your workers in total, the higher your premiums. The way these impact your premiums, and whether remuneration includes bonuses, overtime, severance payments and other pay arrangements depends on circumstances and which state you are in.
  • Your industry. Certain industries are inherently more dangerous than others and will consistently attract higher premium rates.
  • Your business claims history. A business with a disproportionate number of previous workers' compensation claims, compared to equivalent companies in the same industry, may stand out as being particularly unsafe even if it meets all occupational safety requirements. This may incur higher rates, depending on the situation and the state.
  • The size of your company. Each state has several thresholds, such as business income or total amount paid in worker remuneration, which affect the cost of workers' compensation policies.

Who sets the premiums for cover?

In some states rates are set by the government, and in others by the insurance companies.

  • States where it's set by the government. In NSW, VIC, QLD and SA rates are set by the government, and are the same with all insurers.
  • States where cost is set by the government but adjusted by the insurer. In WA rates are set by the government, but insurers may raise or lower them as desired up to a change of 75%, or more with special approval.
  • States where premiums are controlled by insurers. In TAS, ACT and the NT premium rates are determined entirely by the insurers. The government might suggest rates but insurers have no obligation to use them.
NSWVICQLDSAWAACTNTTAS
Suggested Average premium rates 2016–2017Not available1.2721.201.951.4782.702.2 (in 2015)2.25
Download industry rates tableIndustry ratesIndustry ratesIndustry ratesIndustry ratesIndustry ratesIndustry ratesVaries by insurerIndustry rates
Who sets the rates?GovernmentGovernmentGovernmentGovernmentPrivate insurersPrivate insurersPrivate insurersPrivate insurers

Workers' compensation premium rates are typically expressed as the cost of premiums per $100 paid in worker remuneration. For example, a premium rate of 1.70% means workers compensation policies will cost employers, in that industry and in that state, $1.70 for every $100 they pay to employees.

  • You must declare annual wages paid to your insurance agent in order to calculate premiums. If you are declaring these in advance for the coming year, you are able to claim reimbursement if you overestimate, but may have to pay an additional amount later if you underestimate.
  • One of the ways state governments manage workers' compensation schemes is with discounts and incentives. These are different in each state and change frequently, but a number are accessed through improved workplace safety. When comparing insurers, consider asking how they can help you access discounts and incentives.

When is workers' compensation mandatory and who need's it?

Anyone who employs paid workers is required to take out a workers' compensation policy, unless the worker:

  • Is a contractor under the definition used in that state. Contractors can be characterised as having their own equipment, being hired to work independently on a specific task and having their own ABN.
  • Earns less than a specified amount per year. This amount is generally less than the equivalent of full-time minimum wage, so you will usually be above this amount with normal employees in normal circumstances.

Employment types where it's more ambiguous

  • Sole traders and self-employed individuals, and the owners of other one-person companies are not required to take out workers' compensation policies on themselves. In some states you may still choose to do so as long as you meet all other definitions of a worker, and in others you are not allowed to. In Queensland you are only able to take out a "workplace personal injury insurance" policy on yourself.
  • Sole traders and self-employed individuals are still required to provide workers' compensation policies for all workers who meet requirements, regardless of their business status.
  • Contractors may or may not require workers' compensation policies. A principal contractor who employs subcontractors will usually need to cover them, but an independently operating contractor without employees will not. Some people are considered contractors for business purposes and workers for compensation purposes.
  • "Deemed workers" are those who might not meet all definitions of a worker, but for whom you are still required to provide cover if they meet certain requirements. Each state has its own regulations and description of deemed workers which can include, but is not limited to, outworkers, salespeople, entertainers, and contractors under labour hire service arrangements.
  • A trustee might be considered a worker of the trust if they have PAYG contributions deducted from payments they receive from the trust, or receive superannuation contributions from the trust, in which case they may require workers' compensation. Certain trust distributions, when made in lieu of wages, can also qualify a trust beneficiary as a worker.
  • Volunteers and unpaid work experience students do not require workers' compensation cover. A volunteer is someone who is not working for payment or reward, although they may still receive payment for out-of-pocket expenses, and unpaid work experience placements may qualify someone as a volunteer. As a business owner you are still obligated to provide a safe working environment and meet OHS obligations.
  • Volunteer organisations are not required to provide workers' compensation, and do not need to meet the same OHS requirements as businesses. A volunteer organisation is one composed entirely of volunteers. Once an organisation pays someone in a way that qualifies them as a worker, the organisation is qualified as a business and must provide appropriate workers' compensation policies and OHS arrangements.
  • Self insurance refers to the practice of large companies making their own workers' compensation arrangements. The requirements for self insurance vary between each state, but companies generally need to have the resources and scale to provide compensation and manage recovery for workers in line with state standards.

What you should know about workers' compensation and tax

Contact your insurer or tax agent for specific answers about workers' compensation and tax. The following is general information for Australia as a whole, but specific details may be different in your state.

Your workers' compensation insurance provider should be an effective first point of contact for all workers' compensation questions, including those that are tax-related.

  • Workers' compensation premiums are tax-deductible, provided you claim them in the same year. It can be written off as a revenue expense like other business insurance.
  • Workers' compensation benefit payments are usually tax-free, but you must declare them anyway. Ongoing workers' compensation benefit payments are usually not taxable, but you must declare them for assessment. Lump-sum benefit payments, such as those awarded following a personal injury claim, are tax-free if they meet state requirements.
  • GST, if applicable, is not considered when determining a worker's wage for eligibility purposes.
  • Insurers will typically make payments through the business owner, who is responsible for ensuring that all appropriate tax deductions are made. Business owners need to work closely with insurers to make sure all obligations are met.

Cross-border workers' compensation

A cross-border worker is someone who undertakes work in more than one state. Employers are required to hold appropriate workers' compensation policies for any cross-border workers who are employed in their state according to the state of connection test. This test applies to each individual employer-worker contract, and might need to be checked again if circumstances change.

The state of connection is the state in which someone is considered to be an employee for workers' compensation purposes. Read down the list until you find a clear answer.

Workers' compensation state of connection test

If...Then...
Someone usually works within a single state or territory, with consideration to the last 12 months and likely future plansThat state or territory is their state of connection
The above doesn't settle it, but the worker has an office in, is expected to operate out of, or receives work-related instruction from a single stateThat state or territory is their state of connection
The above doesn't settle it, but the employer is headquartered in a specific state of Australia according to their ABN or mailing addressThat state or territory is their state of connection
The above doesn't settle it and the worker is employed on a shipThe state or territory in which the ship was most recently registered is their state of connection for as long as they're working on the ship
None of the above have settled it and a worker is injuredThe state of connection is the place where the injury happened, unless they're eligible for compensation from a place outside Australia

Some common questions you may have

Compare workers compensation from a range of insurers

Will workers compensation help with the coronavirus?

According to the Australian government, the coronavirus may be covered under workers' compensation, if the employee can prove they caught the disease largely because of their job.

This might be difficult for many jobs but there are still plenty out there which put employees at a significantly higher risk of catching the coronavirus.

For example, the employment may involve travel to an area with a known outbreak, it may include interaction with people who have contracted the coronavirus, or it may have responsibilities which contravene Department of Health recommendations.

Each claim would be considered on a case-by-case basis, but there is certainly a possibility that workers' compensation could help many impacted staff.

Remember: Under the Work Health and Safety Act 2011, business operators are required to ensure, so far as is reasonably practicable, the health and safety of workers and others at their workplaces.

Operators must identify hazards at the workplace as well as any associated risks - and act on them, by implementing practicable control measures. If you're aware the coronavirus is a risk in your workplace, and don't act on it, you might be in breach of the act.

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