Quite often our clients approach us with questions pertaining to their obligations for WorkCover. Our blog article here examines the important details of Workcover – minus the technical jargon – so you, the business owner, are absolutely clear on how it affects you and your business.
Workers’ compensation is a compulsory statutory form of insurance for all employers in every state and territory in Australia and provides protection to workers if they suffer a work-related injury or disease.
Any business that employs or hires workers on a full-time, part-time or casual basis, under a verbal or written contract of service or apprenticeship, must have workers compensation insurance that covers all workers
If a worker employed by you suffers a workplace injury or disease, the workers compensation scheme may provide the injured worker with weekly benefits, medical and hospital expenses, rehabilitation services, certain personal items and a lump sum payment for permanent impairment on the basis set by the particular scheme.
The most common question we are asked as small business specialists are:
As a company Director without employees, do I still need to pay WorkCover?
The answer to this is clear cut. If you receive a total salary and/or wages in excess of $7,500 over a 12-month period, then yes, you are required to have WorkCover insurance.
How does WorkCover apply to Sole Traders and Partnerships?
WorkCover does not consider you to be an employee, and you are therefore not required to pay WorkCover insurance under the scheme. However, it is recommended that you take out some form of insurance in the event of an accident where you are unable to work.
How is my WorkCover insurance premium calculated?
The rate at which workcover insurances premiums are calculated depends on your business’s ‘rateable remuneration’. Rateable remuneration is defined as the combined total salary and wages, superannuation and other benefits paid to employees. A small employer is one whose rateable remuneration is less than $200,000. Conversely a large employer is one whose rateable remuneration is more than $200,000. The industry in which your business operates, and that state or states in which your business is situation will further impact the rate at which your Workcover premium is calculated.
Must all entities have Workcover insurance?
No, not all entities are required to have Workcover. Not-for-profit, public benevolent institutions, religious institutions are exempt from needing a Workcover insurance policy, however it is recommended that you do effect a level of cover.
How do I register for Workcover?
Registering for WorkCover is as simple as completing an online form (paper application forms are still available). Before completing your application form, you will need to have the following business information handy:
- Number of employees, physical location of work, activities undertaken, materials and equipment used, etc.
- Projected revenue, direct costs and labour expenses.
Given the nature of the information required it is wise to consult with your accountant before completing the form. Platinum Accounting & Taxation can look after your WorkCover requirements as a stand-alone service or as part of our comprehensive business packages.
I have multiple businesses – how does this impact my obligations?
For the purposes of Workcover, multiple entities or businesses are grouped where: the two businesses are related, a person has controlling interest in two or more businesses or have employees who work between both business. There may be circumstances where you wish to have a business excluded from a group; WorkCover can provide you with a conclusive determination to this end.
Who is covered by Workcover?
Anyone who receives wages from your business or within your business group is effectively covered by your WorkCover policy. It’s absolutely essential to declare the correct value of wages and number of employees covered by your WorkCover policy. This will ensure than, in the case of a claim, that the employee is in fact covered.
- An employee or contractor for the purposes of Workcover is broad and includes:
- Supplies services to another person for or in relation to the performance of work
- Receives services from another person for or in relation to the performance of work
- Gives out goods to natural persons for work to be performed by those persons in respect of those goods and for re-supply of the goods to the first mentioned person, or where that person is a member of a group, to another member of that group.
- In short, a relevant contract exists where the contractor uses labour services to complete the contract. There are some exclusions, and these include: Owner-drivers (goods transport where contractor provides vehicle), insurance agents and door-to-door sellers.
What happens if I don’t have a WorkCover policy?
If you fail to register for WorkCover insurance and one of your workers suffers an injury at work, the WorkSafe may still pay compensation. However, the cost of compensation provided to your worker will be recovered from you and you may also face a significant fine. The penalties are outlined in WorkSafe’s premium rulings on their website.
To continue the conversation about WorkCover, or any other matter, please get in touch with us at Platinum Accounting & Taxation (03) 9746 6479 or firstname.lastname@example.org or hit us up on Facebook. We’re responsive. We reply. Promptly.