In a recent announcement by Victorian Premier Daniel Andrews and Minister for WorkSafe Danny Pearson, the Victorian Government announced changes that are underway regarding WorkCover in Victoria.
At Tactium we have been anticipating that 2023 will be the first time in many years the Victorian Government will introduce a significant overhaul regarding both premium calculations and claims management due to the fact the scheme has been running at a loss and has been described as “not fit for purpose”.
Key points that employers need to be aware of include:
- An increase in the state’s average premium rate from 1.27% (where it has been for several consecutive years) to 1.8%. This represents a 41% overall increase in premium rates across the state
- Changes to eligibility decisions regarding mental health claims that may result in fewer such claims being accepted
- Changes to weekly payment entitlements post-130 weeks that may result in fewer long tail claims
- Introduction of “Return To Work Victoria”, a new government body that will focus on returning employees to their pre-injury employer or a new employer.
Within the next 2 to 4 weeks we expect to obtain the relevant government gazette that underpins this announcement as we expect there are more details that will be highly relevant to employers. Importantly, we are seeking confirmation regarding whether there is any change to the 30% capping on premium rate increases that has been in place for many years.
Employers must be prepared for the fact that industry rates will increase significantly in 2023, to a degree that is unprecedented in our experience in the WorkCover industry. These industry rate increases will lead to premiums being invoiced at a higher cost than may have been previously projected. Premiums could increase by 30% or more for employers, even if they had no claims in recent years.
In previous years, industry rates rarely fluctuated so significantly. Eg. An industry rate of 1.61% in one year might be expected to go up to 1.64% the following year. However, using that same example, an industry rate last year of 1.61% in 2022/23 could become 2.27% in 2023/24. That is a massive increase.
You can read the full press release here – https://www.premier.vic.gov.au/getting-victorians-healthy-and-back-work
We at Tactium are preparing further analysis as more details come to hand regarding the rates for specific industries and other possible changes that could be made to the premium calculation formula and will be sure to keep our professional network informed.
If you would like to discuss the changes or review your company’s WorkCover situation for savings and improvement opportunities, contact Tactium for a free consultation.
