There’s some big changes coming to the Victorian Workers Compensation scheme that will have a huge impact on some industries. We’ve outlined what you need to know as an employer and what you can do to minimise the impact.

Change: Workcover Average Premium Rate changing from 1.27% to 1.8%

The WorkCover scheme as we know is outdated and no longer viable for supporting injured workers and ensuring they can return to work. It is facing an increasing gap between premiums paid by employers and the cost of claims made by injured workers. 

The scheme is funded by the WorkCover insurance premiums paid by employers. After not seeing an increase for the past 20 years, the average premium rate is set to rise for the 2023/24 period to cover rising costs of injury claims. For some businesses this will mean their premiums will skyrocket come July.

What to expect: The effect on businesses 

The average premium rate increase to 1.8% will be effective from July 1 2023 for the 2023-24 period. While individual employer premiums will always vary, with the average premium target increasing across all industries, employers across the board can expect their WorkCover insurance premium to rise when they receive their renewal notices from 8 July 2023.

Employers in the building construction, manufacturing and agriculture industries are likely to see large increases for certain WorkCover industry classifications.

As an example, employer one is a plumbing business with a remuneration base of more than $10 million with claims costs totaling $300,000. They will see an increase in WorkCover premium of greater than 47% for the 23/24 period.

Employer two is a science lab with a remuneration base of greater than $3 million with no claim history. They will see an increase of 65% for the 23/24 period.

Your WorkCover Industry Classification is determined by:

  • The predominant activity of your business e.g. construction, manufacturing, health care
  • What you sell or the services you provide
  • What is involved in delivering what you sell or provide
  • The raw materials, types of equipment, and processes used
  • A breakdown of the sales, cost of goods produced, and the cost of labour
  • Whether the goods involved are owned or not
  • Whether the goods and services are provided internally
  • Whether you’re supplying a business that is associated with your own business

We’ve broken down WorkCover Industry Classifications in detail in a recent blog.

Premium Rate Comparison Table

WorkCover Industry Classification22/23 Premium RateNew 23/24 Premium Rate
Building Construction
Tiling & Carpeting9.828%14.090%
Landscape Construction2.682%4.019%
Road & Bridge Construction2.237%3.010%
Heavy & Civil Engineering Construction1.492%2.065%
Meat Processing4.126%5.719%
Poultry Processing2.591%4.005%
Cheese & Other Dairy Product2.074%3.033%
Cereal, Pasta & Baking Mix3.963%6.367%
Natural Textile3.293%4.169%
Synthetic Textile3.293%6.958%
Log Sawmilling3.107%7.009%
Timber Resawing & Dressing3.107%4.211%
Wooden Structural Fitting & Component3.171%4.552%
Corrugated Paperboard & Paperboard Container2.645%4.444%
Converted Paper Product2.917%5.121%
Aluminium Rolling, Drawing, Extruding1.994%5.287%
Metal Roof & Guttering2.480%5.336%
Structural Steel Fabrication3.481%4.602%
Prefab Metal Building3.109%4.477%
Sheet Metal2.879%4.160%

View the full list of industry and claims cost rates for the 2023/24 period.
View the Victorian Government fact sheet relating to increased WorkCover average premium rate.

Minimising the impact: What can businesses do

Get a WorkCover premium review

The first step is to ensure the WorkCover Industry Classification (WIC) of the business is correct. We recommend having your premium and classification reviewed annually. This ensures you’re appropriately covered, any refunds you might be entitled to are claimed and future savings can be made.

All too often we see employers misclassified due to evolving business activities or misinterpretation of their predominant business activity. Insurers frequently misclassify due to ambiguous or poor description of the company’s activity on policy applications.

Inaccurate classifications lead to payment of incorrect and often higher premiums. With huge increases in premiums for some industries, you want to be sure you’re classified correctly and not paying any more than you need to.

For many employers, it’s more cost-effective and a lot less stressful to hand over the task of WICs to an experienced specialist workers compensation consultant like Jayrose Group Australia. We offer a free initial WorkCover premium review ensuring you’re correctly classified, with a finders fee only applicable if we find you’re entitled to a refund for overpaid premiums.

Some of our clients have received premium refunds of $100,000+, and ongoing savings towards future annual premiums.

Our premium assessment service guarantees:

  • Industry classification accuracy with correct premium
  • Your business is properly insured and covered for workplace injuries
  • Identifies any business changes that your WorkCover Agent needs to be notified about (which may also affect your classification and premium)
  • May even result in refunds and future savings

Consider using premium funding services

Insurance plays a crucial role in our businesses, but we can all think of other areas where we’d prefer to invest our money. Insurance premium funding allows you to pay your annual WorkCover premium in manageable instalments, allowing you to retain working capital.

Jayrose Group Australia is partnered with an accredited premium funding organisation that offers affordable and flexible solutions for financing your WorkCover insurance premium

You’ll have the option to spread the payment of your premium over a series of smaller payments either monthly or quarterly. This will help improve your cash flow and release working capital that can be used for more profitable activities. Interest charges can also be eligible for tax deductions.

Take advantage of early payment discounts

You can also save on your WorkCover premium with:

  • a 5% discount for paying your premium in full by 14 August 2023
  • a 3% discount for paying your premium in full by 1 October 2023

Discounts are automatically applied when making payment to your WorkCover Agent/Insurer. You can also use premium funding to take advantage of the discounts available.

Change: Establishing Return to Work Victoria

Research has shown the longer a person is out of work the harder it is to help them get back to work. In the current workers compensation system, too many workers are being lost to long term claims and failure to return to the workforce.

Return to Work Victoria will bring a dedicated focus to initiatives designed to improve return to work and injury prevention outcomes. The aim is to ensure that every worker who is injured at work gets the support they need to return, prioritising those who have been out of work for longer periods to reduce the adverse health and social impacts associated with long term worklessness. Return to Work Victoria will support employers to prevent injuries and help them intervene early to address emerging mental health concerns, keeping more Victorians at work.

What to expect: The effect on businesses 

The development of Return to Work Victoria is in the early stages, it’s not yet known whether or how businesses will be engaged. We will know more as Return to Work Victoria programs and initiatives are developed, tested and rolled out.

View the Victorian Government fact sheet relating to Return To Work Victoria.

Change: Eligibility for mental injury claims

Since 2010, the amount of money that WorkCover has paid in injury claims has tripled. This increase is partly due to rising claims related to mental injuries, which now make up 16% of all new claims.

With the introduction of new eligibility legislation, workers who make a claim for workplace stress or burnout will no longer receive weekly payments from WorkCover. Instead, they will have access to provisional payments for 13 weeks to cover their medical treatment. Additionally, they will receive increased psychosocial support to assist them in returning to the workplace or pursuing training opportunities.

There will be no changes to physical injury, workplace harassment, bullying or traumatic event claims.

New mental injury claims submitted from the date legislation comes into effect will need to meet the new eligibility threshold to be eligible to receive weekly payments.

What to expect: The effect on businesses

The changes to eligibility for long term claims legislation are scheduled to be brought in the second half of 2023, with planned changes to come into effect in 2024. These changes will affect how an employee receives support for stress and burnout claims, with no substantial effect on businesses.

View the Victorian Government fact sheet relating to long term claims.

Change: Eligibility for claims lasting longer than two-and-a-half years

To be consistent with other states and territories, WorkSafe will improve the assessment process for individuals who have been receiving weekly benefits for longer than 2.5 years. The aim is to have a fairer and more accurate way of measuring their physical and mental impairment, as well as their ability to work.

A Whole Person Impairment of greater than 20%, alongside the capacity test, will be required for a worker to continue receiving weekly benefits after two and a half years.

Workers who have been receiving weekly benefits for more than 2.5 years will keep receiving them as per the current rules, subject to the current ongoing capacity tests. However, workers who have been on the scheme for less than 2.5 years will need to meet the new 20% whole person impairment threshold in order to keep receiving weekly payments after the 2.5 year mark.

What to expect: The effect on businesses

The changes to eligibility for long term claims legislation are scheduled to be brought in the second half of 2023, with planned changes to come into effect in 2024. These changes will affect the beneficiaries of current and future weekly WorkCover payments, with no substantial effect on businesses.

View the Victorian Government fact sheet relating to long term claims.

Victorian Workers comp changes are coming as early as July 1 2023 for the 2023-24 period. To best minimise the impact on business, get on the front foot and chat with our specialist team of Workers Compensation consultants about your circumstances. Get peace of mind knowing you’re properly covered and not paying any more than you need to. Don’t wait for the premium renewal shock, get in touch with our team today.