The 2021/22 WorkCover Premium Renewal notices will be issued this week.
In our experience, many employers simply pass the Premium Notice on to accounts for payment without reviewing the detail on the Notice or exploring the potential to reduce the amount they pay – now or down the track.
This year, with so many businesses having employee’s income subsidised by JobKeeper, or having employees stood down and receiving JobKeeper payments – we felt it was particularly important to share some pointers to help you review your Notice to ensure you’re not paying too much. But first, it’s important to understand the different factors that are used to calculate your premium.
The renewal package can contain a Premium Notice, an Adjusted Premium Notice, an Invoice, a Declaration of Rateable Remuneration form and other notices.
How your premium is calculated
Your WorkCover premium is based on three different factors. If the assessment of just one of these factors is incorrect, your premium is affected.
Industry classification for the work your business conducts. This is essentially risk based – the higher the risk associated with the work, the higher the industry rate. For instance, heavy and civil engineering construction is inherently more dangerous than office work, so the industry rate is higher. Make sure you carefully check your Notice to ensure that the right classification has been applied. If it is incorrect, be sure to notify WorkCover asap.
Your workers compensation claims performance for the past 2.5 years. Your historical WorkCover claims and the cost associated with them have a direct impact on your future premiums. For this reason, ensuring your business effectively and proactively manages Workers Compensation claims is important and can save you money in the future. For larger businesses, each dollar of claim costs can cost up to 4 times as much in premium costs, for a number of years. But for smaller businesses, the impact of past performance isn’t nearly as significant. Your Claims Statement, which details your past claims, can be be accessed through WorkSafe’s Employers Online Service.
The size of your business, calculated based on annual remuneration. The other key factor in calculating your premium is the total remuneration paid to your employees. This is something that you should check carefully, particularly this year as JobKeeper payments to staff who have been stood down are not considered Rateable Remuneration, but JobKeeper payments paid to employees who continue to work are. This WorkCover fact sheet provides more detailed information about the treatment of Job Keeper payments when it comes to declaring your WorkCover Rateable Remuneration.
How you can reduce the amount you pay
Pay early While the Annual Payment isn’t due until 1 November, discounts are provided to employers who pay their Premiums early. If you pay by: • 31 August 2021 you’ll get a 5% discount. • 1 October 2021 you’ll get a 3% discount. You also have the option to pay your premium monthly or quarterly. To take advantage of the early payment discounts, many businesses choose to finance their WorkCover premiums – which also helps them to maintain their cashflow by making payments monthly.
Adjust the Rateable Remuneration amount (if it isn’t accurate) You should carefully check the remuneration amount on your Premium Notice. It is estimated by WorkSafe and should include all declared wages and other benefits you pay your workers. If you currently have workers stood down, who are receiving JobKeeper, make sure their income is not included in this calculation. If you feel the estimate is incorrect, you can change it at any time and have your premium recalculated.
Review your current WorkCover claims management processes While it won’t impact your current premium, improving your WorkCover claims management processes and reducing the number of claims you have in the future, will help to reduce your future premiums.
WorkCover management is a highly specialised area and effective management requires an intimate understanding of the different schemes. For many businesses it makes far more sense to outsource this function to a specialist provider, like Risk Strategies. Not only does it ensure that your claims are effectively and efficiently managed, it can save you money on a number of different fronts. This article provides more information about the benefits of outsourcing Workers Compensation management.
If you’d like to talk to a WorkCover specialist about your Premium Notice or improving your claims management processes, we’re here to help – just call us on 03 9863 8408 or email info@riskstrategies.com.au