Tag Archives: Insurance premium

Workers’ compensation premiums going up or down over ten years?

Aurenda has been the leader in injury management for ten years and we have seen some interesting changes over that time.

In 2002 the average workers compensation premium rate in Australia was 2.6% of wage roll, compared to 1.6% in 2012 (WorkCover WA).

Average weekly earnings, however, were $697 in 2002 compared to $1526 in 2012 (Australian Bureau of Statistics “ABS”).

This means that if you employed the same 500 people in 2002 as in 2012, your premium would have increased from $470k to $635k. So, you will have to hand over 40% more money and it will be presented as a good news story – maybe some things never change!

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Filed under Aurenda, Uncategorized, Workers Compensation

WOP/WOL Payment of Wages while a Claim is Pended

In the Western Australian workers’ compensation system, it is generally accepted that entitlements such as medical investigations and treatment, and even vocational rehabilitation, can be funded on a Without Prejudice/ Without Admission of Liability (WOP/WOL) basis while liability on a claim is being determined.

A recent situation experienced by one of our clients has caused us to consider WOP/WOL issues in greater depth.

An insurer advised an employer – a client of both Aurenda and the insurer – to pay wages to an injured worker on a WOP/WOL basis even though the claim was pended and the worker was not at work.

When queried on this advice, the insurer stated that they sometimes advise employers to pay wages when in all probability the claim will be accepted. The insurer believes that paying wages will negate the need for the employee to lodge an application at Conciliation and Arbitration Services (CAS), where an order to pay wages may be granted anyway. The insurer also feels that by paying wages in these circumstances, the employee may be deterred from seeking legal advice.

In our experienced opinion, under NO circumstances should wages be paid – even on a WOP/WOL basis – until the claim has been accepted.

Our reasons for this are as follows:

  • If you’re going to pay wages – why pend the claim?
  • If you think in all probability the claim will be accepted – why not just accept the claim, why bother with the investigations?
  • Paying the wages gives no incentive for the employee to make any attempt to return to work – especially in circumstances when the workers’ compensation rate of pay is greater than their base rate of pay.
  • There is no evidence that the employee will not seek legal advice while the claim remains pended.
  • If an application is made at WorkCover for wages to be paid (when the claim is pended) an order is not always granted in favour of the employee.
  • Once wages payments have commenced, it is difficult to stop them – this would no doubt require a visit to CAS at WorkCover in any case. This could also be an incentive for workers to drag out the resolution process.
  • A worker could justifiably assume their employer has accepted liability for their injury if wages are paid prior to investigations taking place.
  • It doesn’t set a great precedent for other workers if everyone who lodges a claim is paid, regardless of whether their claim is accepted.
  • If the claim is accepted, the employer will be obliged to back-pay wages. If the claim is declined, however, and the employer has paid wages on a WOP/WOL basis, it is not possible to recoup these wages from the worker.

We believe that all workers who suffer a legitimate workplace injury are entitled to fair compensation for their injury. Sometimes, however, claims are pended because more information is required to assess the injury and determine liability – and sometimes injuries are not compensable. A very small percentage of workers fall into this situation. The fact that the employer has identified significant cause for concern, in our opinion, means that they should not bear the additional onus of paying wages when there is no legal obligation to do so. The best interests of all parties are served by everyone, including the worker, focusing on a fast determination of liability. A focus on a solution is always Aurenda’s preference.

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May 6, 2012 · 6:55 am

What expenses am I liable for when someone has a workplace injury?

Q. What expenses am I liable for when someone has a workplace injury?

Managing Director:  The insurance company that underwrites your workers’ compensation policy is liable for wages up to $190,000 and medical expenses up to $50,000 (which can be extended by another $50,000 for a worker with a severe injury). These expenses can be extended by another $100,000 in serious cases, if the worker chooses to take the $100,000 and forego their Common Law entitlement. Rehabilitation can add another $12,000 and there are additional minor expenses, such as travel, that can also be reimbursed.  The consequence of these expenses is that it only takes one significant injury to add significant costs to your claims history. 

Client Service Manager:  A particularly important reminder for businesses with a monthly payroll is that employers must pay an injured worker their wage entitlements within 14 days of the insurer approving the claim. There is a $2,000 fine for failure to do so.

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Filed under Aurenda, Injury Management, Insurance premiums, Workers Compensation, Workplace Injury

How can I reduce my workers’ compensation premium?

Q. How can I reduce my workers’ compensation premium?

Managing Director of Aurenda: For a small to medium sized organisation (SME), your premium is based on the gazette rate, which is set by WorkCover. The government sets a rate according to the industry you operate in. For example it may be that your industry on average pays 5% of wages in workers compensation. That 5% becomes your premium. If you have a good broker, within that, they may negotiate a claims experience discount (CED) where you may get up to 15% of the premium back if you either have no injuries or if you manage them really well.

Aurenda Client Service Manager: Contact Aurenda immediately on (08) 6389 8900 and we can advise you on how to implement best-practice injury management processes to reduce the cost of claims, which will lead to reduced premiums.

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Filed under Aurenda, Injury Management, Insurance premiums, Workers Compensation, Workplace Injury