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Changes to Workers Compensation Premiums effective from 30th June 2014

WorkCover NSW have announced a number of changes to the way premiums will be calculated. These changes also include some further options in relation to payment timeframes and for submitting actual wage declarations.

One of the constant criticisms of the NSW Scheme is how much premium can increase from year to year without much certainty. For large employers who have no cap on how much a premium could rise to it’s a potentially perilous situation. The current capping system in place can still result in large premium increases which in the most serious cases can put a business in danger of not being financially viable.

As part of the changes announced from 30th June 2014, the capping system has been changed. The changes allow for more certainty for employers when it comes to premium increases and extends the cap for larger employers. The capping is based on the initial tariff premium (wages multiplied by industry classification rate). Depending on what level of tariff premium an employer is at will determine the maximum amount that their premium can increase to.

The new capping thresholds are outlines as follows:

Tariff Premium

Capping

< $30,000

Claims do not impact on Premium

< 50,000

1.5 times Tariff

< 100,000

1.75 times Tariff

< 200,000

1.85 times Tariff

< 300,000

2.0 times Tariff

< 500,000

2.5 times Tariff

> 500,001

3.0 times Tariff

What this means is that the maximum that an employer will pay irrespective of their claims history is the multiple outlined against their tariff premium.

Other changes that were announced include:

  • Reporting of Actual Wages increased from 2 months to 4 months
  • Premium adjustments over $1,000 can be paid over 3 months without charges for policies commencing or renewing from 30/6/14. This means that for 30th June 2014 policies their 14/15 adjustment will be eligible.
  • Grouping wages threshold increased from $600,000 to $750,000

For further information or to see the services offered by Affida and how they may be able to help you, please visit our Dedcate pageAffida – Workplace Insurance

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