Workers Compensation Insurance
The Safe Work Australia Act 2008 was established to protect workplace safety and health. One of the provisions of the legislation was a worker's compensation requirement. The law was passed by the federal government, but territories were responsible for setting the coverage requirements. Every business must have workers compensation insurance for employees. Businesses don't generally need to purchase insurance for independent contractors, except in South Australia. However, some exceptions apply. The insurance must offer a wide range of coverage for employees that could be injured while working. However, there are some nuances that they may not need to be covered for. Employers must provide coverage for employees travelling to and from work in NSW, Queensland, South Australia and the Australian Capital Territory. Work-related travel and onsite breaks must always be covered in every territory. Breaks taken offsite must also be covered in every territory except South Australia and Tasmania.
Standard compensation requirements
Compensation requirements vary slightly between jurisdictions. Every territory except Tasmania requires worker's compensation to cover overtime. The entitlements for regular work are tiered to the duration of the benefits. For the first 13 weeks, compensation is between 85% and 100% of typical weekly wages. The only states that don't guarantee 100% coverage are NSW, Victoria, and Queensland.
There are some other entitlements that must be provided under Safe Work Australia. Here is a summary. Permanent impairment The worker's compensation scheme must cover compensation for incidents leading to permanent impairment. In NSW, employers must provide coverage of $577 050 for injuries on or after August 5, 2015. They must provide coverage of $220 000 for injuries prior to this date. An additional 5% is added to the award if the injury involves back impairment. The coverage requirements for other territories are listed below:
- Queensland - $314 920.00
- Victoria- $589 650.00
- Western Australia - $221 891.00
- South Australia - $361 476
- Tasmania - $343 009.95
- Northern Territory - $314 808.00
- Australian Capital Territory - $211 952.00
Medical and hospital Every compensation scheme must also provide coverage for medical and hospital care. Most territories don't have monetary limits on care, but coverage for non-serious conditions is limited to one year in Tasmania and South Australia. Victoria ceases medical and hospital treatment 52 weeks after premiums are discontinued.
Every territory also has penalties for uninsured employers. Here is a summary:
- NSW: 500 penalty units or up to six months imprisonment, or both
- Queensland: The full cost of payments to the worker with 50% of the penalty and the cost of unpaid premiums
- Western Australia: liability for all damages, $5,000 in fines per worker, statutory fines, legal costs, up to five years of unpaid premiums and an additional penalty if workers are still uninsured after the date of conviction
- South Australia: Liability for all debt if ReturnToWorkSA must make payments to workers
- Tasmania: Liability for damages and any fines assigned by the court
- Northern Territory: Liability for all damages and requirement to pay back premiums at the highest possible rate set by the insurer
Penalties are severe to discourage employers from failing to pay for insurance. Every case is unique. If you need specialist advice on what coverage you need then contact a trusted insurance advisor in your area. Find insurance brokers.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Andy Jamieson.