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Victorian WorkCover Premiums set to increase significantly

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WorkCover premiums are increasing at a time when virtually every other cost is increasing and causing Victorian businesses considerable headaches.

In early July 2023, Victorian businesses will officially receive their 2023/24 WorkCover Premium notice. The vast majority of businesses will be surprised to find that their annual premiums increase by an average of 42%. The average premium rate in Victoria will increase from 1.27% to 1.8%. Individual businesses will experience differing levels of change based on specific claim cost experience in their industry. To name a few, Bricklayers will see their rate increase from 4.9% to 8.5%, Dairy Farmers 4.2% to 6.1%, Supermarkets 1.8% to 2.5% and spare a thought for tilers and carpet layers, already impacted by the advent of silicosis claims, from 6.7% to a whopping 14%.

Since 2002, WorkCover premium increases caused mainly by claims, have been limited to 30% year-on-year. Given the severity and breath of 2023/24 industry rate increases, WorkSafe has decided to lift the year-on-year premium rate limit to 75%. As a result, businesses experiencing significant increases in their industry rate, coupled with worsening claims experience, could find their premiums increasing by up to 75%.

Why has this occurred? WorkSafe have been quick to point out that the Victorian scheme is “fundamentally broken – no longer meeting the modern needs of those it was designed to assist more than 30 years ago.” The growing number of mental injury claims has played a significant role in the Victorian schemes $1 Billion funding black hole for 2023/24. No doubt these claims have also accelerated in number due to the pandemic, and WorkSafe has been slow to react. Victorian lockdowns caused more Victorians than ever before to lodge claims. At the same time, scheme Agents, who are tasked to manage claims, have faced resourcing shortfalls and been unable to retain experienced staff.

To make matters even worse, the independent medical professionals who are the schemes referees, have vacated the scheme in droves. Agents and employers are now having to wait for more than 6 months for an independent medical provider to review a workers ongoing entitlement to benefits.

The Victorian Government has stated that the scheme needs to be modernised. Others would suggest that to start with, the scheme needs to be resourced properly so that it can get back to critically assessing claims to ensure that they align with eligibility criteria. Whilst there is much to do to fix the scheme, the government has already taken measures to ensure that workers with stress and burnout claims will no longer be able to access weekly payments from WorkCover.

Contact our Adroit Workers’ Compensation team, ReWork, for a no obligation review of your WorkCover policy and claims. This could help reduce the impact of your premium increase and help you navigate this change.

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All information above has been provided by the author.

Adroit Insurance & Risk, ABN 75 078972 700, AFSL 244 348

This article originally appeared on Adroit Blog and has been published here with permission.