All employers in Victoria will be receiving their WorkCover premium renewal notices early next month.
Many will simply pass it on to accounts for processing without getting past the first page. Some may be surprised by the cost, while others will be wondering how best to fund the payments. Very few will look closely at the details. And even fewer will question if there is the potential to reduce the amount they pay.
In this article we explain what the Notice means, the sections to refer to for information about how your premium is calculated and what you can change or improve to reduce the amount you pay.
How your premium is calculated
For many employers their WorkCover insurance premium is not really insurance, it is a user pays arrangement. It is a government regulated scheme in Victoria that is administered by specialist claims agents, some of whom are also insurance companies, on behalf of the government (WorkSafe). The amount each business pays reflects a number of factors:
Industry classification for the work your business conducts. For instance, as heavy and civil engineering construction is inherently more dangerous than, say, office work, the industry rate will be higher.
Your workers compensation claims performance for the past 2-3 years, meaning whether any of your workers claimed workers compensation and if so, how expensive the claims were.
The size of your business, calculated based on annual remuneration. The smaller your business, the less impacted your premium will be by its performance (point 2 above). For larger businesses, each dollar of claim costs will cost up to 4 times as much in premium costs for a number of years.
There are penalties payable for not declaring your business’s remuneration accurately and within a prescribed timeframe.
What to look for on your WorkCover Premium notice
To discuss your premium or any other WorkCover needs, please contact us on 03 9863 8408 or via info@riskstrategies.com.au