Social
By Sharon Rutherford - Head of Risk Consulting
The Victorian Auditor-General’s Report released in November 2021 outlined the outstanding insurance claims liabilities (provision for claims relating to insured events that have not yet been paid); specifically addressing the performance of the Victorian WorkCover Authority (WorkSafe). With a significant increase in the volume of injury claims and time spent accessing benefits, an independent review in 2020-21 found WorkSafe's financial trajectory to be unsustainable.
To limit the impact to businesses, the State Government provided WorkSafe with $550 million to help support its financial position in the short term, allowing WorkSafe time to explore options to manage its long-term financial sustainability.
Similar to icare in NSW which is also reporting major deficits, workers' compensation schemes are often identified as unsustainable (and while reforms are one key change seen thus far), regulators will usually seek the easiest route to improve performance, which is through industry rate increases.
Also in NSW, The Workers Compensation Amendment Bill 2021 (NSW), which has the objective of repealing Section 19B of the Workers Compensation Act 1987 (NSW), passed in the lower house in November. This amendment seeks to remove the presumptive right to compensation for certain workers diagnosed with COVID-19 in NSW and was introduced in 2020 to provide essential workers in certain industries the right to compensation.
As we enter the second half of the financial year, and with most workers' compensation renewals due on 30 June, we expect to see rate increases across certain
States. We encourage clients with concerns about changes to premiums (particularly where they have had an increase in claims made) to contact their Honan advisor to understand how they may be impacted.
Victorian employers can expect 30 June industry rates to be under scrutiny. As announced in early 2021, NSW will be increasing its premium rates by 2.9% over a 2-3 year period, commencing 30 June 2021.
The ongoing challenges of COVID-19 mean the return to workplaces remains uncertain. We will continue to communicate with all clients – both businesses and staff - about their unique challenges and how these can be managed. As always, businesses should continue to ensure their policies and procedures (including COVIDSafe Plans) remain robust and relevant to the changing environment.
In February, Honan is hosting a webinar focused on the impact of COVID-related claims and liability determinations in this evolving landscape. We look forward to sharing the invite shortly.
