COMPARISON OF WORKERS' COMPENSATION ARRANGEMENTS
Compliance continues to be an ongoing priority for the NSW Government and, to that end, a report entitled Review of
Employers' Compliance with Workers Compensation Premiums and Pay Roll Tax in NSW was recently released.
The report recommendations include:
Alignment of the definitions of wages and worker
Revision of pay roll tax grouping provisions and their adoption for workers' compensation purposes
New provisions to oblige principals to be concerned with the workers' compensation policies of contractors, and
Revised audit and collection methods.
The Government is considering the report and is expected to release a response later this year.
An independent review of the NSW Workers' Compensation Scheme has been established to consider issues relating
to scheme design. The objectives of the review are to inquire into and make recommendations for the optimum
underwriting and insurance arrangements for the Scheme, and on how to achieve better outcomes for the scheme.
Premium bonus/penalty arrangements SafeWork Incentive
The SafeWork Incentive is a new program from WorkCover Corporation that links employers' workers' compensation
levy rates with the implementation of safe work practices in their workplaces. Under the existing levy structure,
employers are allocated bonuses or penalties based on their recent workers' compensation claims experience. This
means bonuses may be allocated because their employees do not make any claims, not necessarily because of good
workplace safety management.
The new SafeWork Incentive will provide employers with access to bonuses by awarding points for the
implementation of safe work strategies in the workplace. Each year, businesses will be allocated a program of safe
work activities designed for their industry and business size. There will be a range of compulsory and optional
activities that employers can choose to complete to accrue their 100 SafeWork Points. These activities combine
legislative requirements with processes that are internationally proven to reduce workplace injury and illness.
This changes the emphasis of the bonus system from past claims performance to a system that provides incentives
for implementing safe work practices. WorkCover Corporation will assist employers by providing the relevant
information and tools to establish these strategies and practices. This will include a step by step coaching program
to help employers and workers.
The SafeWork Incentive is entirely optional, but only participating employers may be eligible for annual levy bonuses.
The SafeWork Incentive will be available in a secure, personalized format via WorkCover Corporation's website at
Following the passage of the Accident Compensation (Amendment) Act 2001, the VWA is now implementing a
major project that enables settlements of certain classes of workers' future entitlements to weekly compensation.
Settlement amounts are determined by reference to statutory formulae and are not negotiable. The settlement
amount is derived by multiplying the worker's weekly compensation (net of PAYG tax) by a multiplier that varies
depending on the worker's age on their next birthday and the particular statutory class.
The program has two steps, lodgement of an Expression of Interest (EOI) followed by a formal application. The
worker receives a response to the EOI giving the settlement amount and is then required to seek independent legal
and financial advice before submitting a formal application for a settlement within six months of receiving the
response. The reasonable costs of the advice are met by the VWA or self insurer up to a maximum of $400
Heads of Workers' Compensation Authorities 52