Complete guide to workers compensation in New South Wales
Note: The information in this guide may not be accurate for workers compensation arrangements or claims made prior to 2012.
In New South Wales, any persons conducting a business or undertaking (PCBU) are required to purchase workers compensation policies to protect their workers including employees, trainees, apprentices and work experience students. If a worker is injured on the job, a workers compensation policy can pay them benefits.
PCBU and worker are the legal terms used in NSW to determine who is obligated to provide workers compensation and who is eligible for its benefits.
- Discounts and exemptions apply for certain PCBUs. These are explained below.
There are six authorised general workers compensation insurers in NSW to choose from, and another five that only offer specialised cover for certain industries. These are known variously as nominal insurers, insurance agents, scheme agents and other variations.
- Workers compensation benefits and premiums in NSW are determined by a set formula, and all insurers will cost the same and provide identical policies with the exception of the specialised insurers who may provide additional benefits for certain industries.
- If you’re in one of the specialised industries listed below, you should use the relevant specialised insurer. You are not required to, but it is strongly recommended.
NSW workers compensation insurers
|NSW Insurers||General or specialised?|
|Employers Mutual NSW Limited||General|
|Catholic Church Insurances||General|
|Coal Mines Insurance Pty Ltd||Coal industry specialist|
|Guild Insurance Limited||Registered pharmacy specialist|
|Hospitality Employers Mutual Limited||Hospitality industry specialist|
|Racing NSW||Thoroughbred racing industry specialist|
|StateCover Mutual Limited||Workers compensation for NSW councils and local government entities|
Am I a PCBU or worker?
It is generally safe to assume that anyone who works on your behalf counts as a worker, unless they are an outside contractor or are otherwise exempt.
PCBU: Any individual, association or partnership that employs a worker. You are not a PCBU if:
- You are engaged solely as a worker or officer
- You are an elected member of a local authority, including residential strata body corporate
- Your organisation is strictly a volunteer group
An officer is someone who has decision-making power in an organisation, but is not in any way responsible for carrying them out. Some corporate board members, for example, might not be PCBUs because they are officers.
Worker: Anyone who carries out work for a PCBU. Some employees, such as salespeople, who might not generally meet the required definition are considered workers as well.
- Contractors do not count as workers, except to their own employers if applicable.
- Volunteers and unpaid work experience students are not workers.
Some people may qualify as both PCBUs and workers. This means you are required to purchase a workers compensation policy, but are also covered by it.
If you are not sure whether or not you qualify as a PCBU, or if your employees qualify as workers, call 13 10 50 for more information.
PCBUs that meet certain criteria are eligible for discounts, while others are entirely exempt from needing to purchase workers compensation. You can learn more about which discounts you may be eligible for, and how to get them, by calling 13 10 50 or asking your chosen insurer.
Exemptions: 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.
Discounts and incentives: To help shape workplace safety in NSW, the state government offers discounts and incentives.
- No excess payment. Inform your chosen workers compensation insurance agent of a workplace injury within five days of you becoming aware of it, and you don’t need to pay a claims excess.
- Discounts for apprentices. If you employ an apprentice and have a valid workers compensation policy, you are entitled to a discount based on how much you pay them. Your insurance agent will calculate this on a case-by-case basis, according to information you provide.
- Safety incentives. There is a range of workplace safety incentives available, from 5% to 15% off, depending on the size of your business and what kind of safety record you have. Having zero workplace injuries in the most recent policy period will entitle you to a discount, as will having only minor injuries from which workers were able to quickly recover.
- Discounts for premiums paid in full. If your workers compensation policy premiums are paid on time and in full, and are more than $175 per policy period (the minimum in all cases), you are entitled to a discount. This discount is subject to change, but as of November 2016 is 3–5%
The cost of workers’ compensation is calculated individually based on a variety of factors including:
- Your industry
- How much your workers are paid
- Applicable incentives and discounts
- The costs of claims made by your workers (for medium and large sized businesses only)
There have been no significant changes to the NSW average workers compensation premium rates in recent years (from 2015 onwards).
If you know you require a workers compensation policy, your chosen insurance agent can calculate your exact premiums. These will generally be the same, regardless of which insurer you choose.
Until you have chosen an agent and received a personalised quote, the calculator above is the most accurate way of estimating your expected premiums. These will be the same for all general workers compensation insurance agents in NSW.
In NSW, injured workers are typically limited to claiming damages for loss of earnings, loss of future earning capacity and direct damages resulting from an accident. If an injury is the result of negligence on their employer’s part, they may sue for additional compensation.
Other than this they are generally only entitled to:
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.
- 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. Only medications covered under the Medicare pharmaceutical benefits scheme are covered more than a month later.
- Rehabilitation expenses will typically require a referral from an approved medical practitioner and will need to meet specific requirements.
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:
- Education and training
- Transport, childcare and other necessities
- 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 or 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 and support
- Funeral expenses and financial assistance
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.
I’ve been injured. How do I make a claim?
If you’ve been injured at work, first get medical treatment if needed. After that, you need to tell your employer. They are required to take care of it.
A worker has been injured. What do I do?
Call an ambulance if needed. After that, you have 48 hours to notify your chosen insurer. If it’s a serious injury you must call WorkSafe NSW on 13 10 50 to report it as soon as you are able. If you’re not sure whether or not it’s serious, call that number and report it anyway. Your insurer and/or WorkSafe NSW will let you know what you need to do next.
What do I need to know about workers compensation legislation?
You should generally be aware of when there are changes to legislation, as these may impact your premiums or obligations. Feel free to contact your insurer and ask them about certain issues, or call WorkSafe NSW on 13 10 50 if you have any specific questions.
How does workers compensation work for grouped businesses?
Grouped businesses are those which share a certain proportion of profits, or have common employees or directors. They are required to purchase grouped workers compensation insurance. Your insurer can tell you more.
What do I need to know about cross-state workers compensation?
If your business is based in NSW, but your workers operate across multiple states, you will generally need to cover them with a NSW workers compensation policy. If your business structure is less centralised then it depends on a variety of considerations. Your chosen insurer can help you work it out.
I depend on my volunteers and want to insure them. What are my options?
Consider voluntary workers insurance to cover your volunteers.
Do I need income protection insurance if I have workers compensation cover?
They are different policies that offer different types of protection. Many people have both.
Do I need to get workers compensation for domestic workers?
Yes, if you qualify as their employer. For example, hiring a personal gardener to manage your landscaping might qualify you as an employer, but contracting a gardener through an agency, or using a landscaping company will generally not. Domestic workers, including cleaners, nannies and others, may require workers compensation. Call 13 10 50 if you have a domestic worker and don’t know whether or not you need to cover them.
I’m a sole trader. Can I take out workers compensation for myself?
No. You will typically require a life insurance policy to access these types of benefits.
I have a workers compensation-related complaint or dispute. Who do I take it up with?
The Workers Compensation Independent Review Office (WIRO) can help settle it. Find them here.
Where can I find a workers compensation lawyer?
You can find free legal assistance or an approved workers compensation lawyer through WIRO.
I have a question about workers compensation that isn’t answered here. Who do I ask?
You can call 13 10 50 for more information. If you know you will need a workers compensation policy, it may be easier to choose an insurer first, and then go to them with questions. The workers compensation premiums you pay are not just for insurance cover, but are also for ongoing assistance and professional expertise.