Your guide to workers compensation in Victoria
All employers in Victoria who pay, or expect to pay, their employees more than $7,500 per year are required to take out workers compensation policies. All paid workers, including family members, need cover.
Trainees and apprentices. If you employ trainees or apprentices, you must have workers compensation cover regardless of remuneration.
Contractors. Sometimes contractors will qualify as employees and will need cover. This is explained further here.
Sole traders and partnerships. Sole proprietors and partners in a partnership are not recognised as workers and cannot take out workers compensation cover on themselves.
Trustees. Trustees cannot take out workers compensation cover on themselves. Trustees who are running multiple businesses on behalf of a trust are required to take out separate workers compensation cover for each if needed.
Receive quotes for workers compensation insurance
Receive a Quote for Business Insurance
First Name*
Last Name*
Industry*
Occupation*
Occupation*
Occupation*
Occupation*
Occupation*
Occupation*
Occupation*
Occupatioddn*
Annual Turnover*
Phone*
Email*
State*
Number of Staff
Preferred Time of Contact
Interested in Professional Indemnity Cover?
Sign up to the finder.com.au business newsletter
By submitting this form, you agree to finder.com.au privacy policy
If you are ready to speak with a consultant about different business insurance options available, simply enter your details in the form. Keep reading if you want to learn more about the different types of cover available.
Find out more Workers Compensation in Victoria
Who provides workers compensation insurance in Victoria?
VIC workers compensation rates
How are premiums determined?
Workers compensation deductions and discounts
What to know about contractors, apprentices and trainees
Workers compensation benefits in Victoria
What are my obligations as an employer?
What else should I know about workers compensation in Victoria?
Find out more Workers Compensation in Victoria
Who provides workers compensation insurance in Victoria?
VIC workers compensation is a state-managed scheme, which means you will get the same rates from each provider. There are five approved workers compensation insurers and you do not need to shop around for the cheapest workers compensation policy in VIC.
VIC Insurers
General or specialised
Allianz
General
CGU
General
EML VIC Pty Ltd
General
Gallagher Basset Services Workers Compensation Vic
General
Xchanging
General
VIC workers compensation rates
The average premium rate for Victoria in 2016/2017 is 1.272% of the state’s rateable remuneration. This means that across the state, employers are paying, on average, workers compensation premiums equal to about 1.27% of what they’re paying in wages.
To get a quick premium estimate
For a quick estimate of your upcoming premiums, you can download the WorkCover VIC premium simulator.
You will always pay at least the minimum premium rate of $206.80 in 2016/2017.
Your premiums will always be dependent on your total annual rateable remuneration.
Your industry classification will always play a big part in determining your rates.
How are premiums determined?
Scenario 1: You pay less than $200,000 per year in annual rateable remuneration
Scenario 2: You pay more than $200,000 per year in annual rateable remuneration
If you pay less than $200,000 per year in annual rateable remuneration, your premiums are based on a combination of:
Industry classification. The premium rates in your industry according to this list
Rateable remuneration. How much you pay your workers in a given year
If you pay more than $200,000 per year, your premiums are based on a combination of industry classification, rateable remuneration and claims experience. Claims experience refers to how many claims you have made recently and how this compares to other businesses in the same industry classification. A better claims experience generally means you have a safer workplace, relative to the industry standard, and can get lower premiums.
Workers compensation premiums for small businesses (under $200,000 rateable remuneration per year) are not affected by claims experience, except as it affects the industry rating as a whole.
Premium rate increases are capped at 30%. Unless your industry classification has changed or you have added another workplace to your cover, your premium rates increases will be capped at 30%.
How to find out your industry classification
Checking the industry classifications list is a good starting point. Remember that your category is determined by your workplace’s predominant activity and by what workers tend to do on a daily basis rather than on which industry the company is most strictly associated with.
Split workplaces: If your workplace is comprised of two or more physically separate areas, each of which carries out different activities, you may apply for split workplace cover, to receive simultaneous classification in more than one industry. This is not available for companies whose main business activity is clerical, management, administration, marketing or sales, or warehousing associated with manufacturing, wholesaling or retailing.
How to determine your worker remuneration
Your annual rateable remuneration is the combined amount paid to all workers in a year, including the following:
Pre-tax salaries, wages or gross pay
Allowances
Annual leave payments, including leave loading
Long service leave
Paid parental leave when funded by an employer, but not government-funded parental leave
Make-up pay and back pay
Bonuses
Directors’ fees and other remuneration for the governing body
Any fees for work performed by workers, or people who might be considered workers
Taxable value of fringe benefits. Refer to this page to see which benefits are taxable and this page for an explanation of how they apply.
It does not include the following:
Motor vehicle allowances
Up to approximately $250 per night accommodation allowance. Any amount over the set threshold for the year counts as rateable remuneration.
Compensation payments to injured workers
Shareholder dividends
GST paid in relation to employee remuneration
Termination payments
Contributions to the Construction Industry Long Service Leave Board or Redundancy Payments Central Fund
Workers compensation deductions and discounts
Deductions and discounts offer ways to reduce workers compensation rates in Victoria.
Deductions
Discounts
Deductions
Businesses operating for the full financial year will automatically get a $15,500 deduction when calculating their premiums. Businesses operating for only part of the year get a pro-rata deduction (eg, a $7,750 deduction for a business that operates 6 months a year)
This deduction will be shown as “remuneration deductible benefit” on your insurance premium notice.
Discounts
Get 5% off your premiums by paying in full before 5 August, or 3% off by paying before October 1.
You might also consider the VIC workers compensation buy-out option. This lets you remove your employer excess at the cost of higher premiums. If a worker is injured, the employer is typically liable for the first 10 days of weekly benefits and up to $682 (indexed annually) of medical bills. Choosing the buy-out option means you will not have to pay these costs, but you will have to pay 10% higher premiums.
What to know about contractors, apprentices and trainees
If you employ trainees or apprentices, you must have workers compensation cover regardless of your annual rateable remuneration. However, you may be eligible for certain deductions.
Trainee and apprentice remuneration is not included in your rateable annual remuneration if
That worker meets the definitions of an apprentice or trainee according to the Education & Training Reform Act 2006, has entered into an authorised training agreement with the employer and has not worked for the same or a former employer in the previous two years unless it was only for a limited period.
Trainee remuneration of $42,920 or less in 2016/2017 is also exempt. If their remuneration is more than this amount, none of it is exempt. This threshold only applies to trainees, not apprentices.
Contractors may count as workers in some, but not all, situations. The Victorian government has provided this worker and contractor assessment tool to help you find out whether a contractor needs workers compensation cover.
Workers compensation benefits in Victoria
Weekly benefit payments
Medical and rehabilitation costs
Permanent impairment
Death benefits
Claimable damages
Weekly benefit payments: An injured worker’s weekly payable benefits are based on their pre-injury average weekly earnings (PIAWE). This is their average weekly income for the last 52 weeks, or since they started if they’ve been working there for less than a year. PIAWE includes base pay, overtime, commissions and other income, but not all bonuses and benefits. As of July 2016, the maximum weekly benefit limit is currently $2150 per week. This limit is set at double the average weekly state income, indexed annually and applies to all benefit periods.
For the first 13 weeks, an injured worker is entitled to 95% of their PIAWE
From 14 to 130 weeks, an injured worker is entitled to 80% of their PIAWE
After 130 weeks and up to retirement, a permanently injured worker who has been assessed as unlikely to be able to work again is entitled to 80% of their PIAWE
Some injured workers are eligible for additional superannuation contributions on top of their weekly benefits. Learn more about the requirements here.
A partially disabled employee who’s working in some capacity, such as returning to work part time, is eligible for all the same benefits, except their maximum weekly benefit limits are reduced by the amount they’re earning per week. After 130 weeks, this reduction is bumped down to 80% of what they’re earning per week.
Medical and rehabilitation costs: Victorian workers compensation can pay the cost of reasonable medical treatments and related services. You can find a full list of approved treatments here, and a breakdown of costs covered per treatment here. Injured workers may choose their doctor or hospital as long as it meets required standards.
Practitioners must be approved to provide specific services. Benefits cannot be claimed for visits to unapproved practitioners or when a practitioner is not approved to provide a particular service.
Only one type of physical treatment, such as physiotherapy or chiropractics, may be funded at a time.
You cannot claim the costs of more than one type of service from the same provider on the same day.
Injured workers may be able to claim benefits for other non-approved healthcare services as long as they have a medical referral and/or specific approval from their WorkSafe VIC agent (their insurer).
Only reasonable treatment costs may be claimed, as determined by your WorkSafe agent. It is preferred that healthcare providers invoice employers or your insurer directly.
Permanent impairment: Impairment benefits are a one-off, lump sum payment that can be claimed in addition to other benefits, even if the injured worker has already returned to the job. A worker who has suffered permanent impairment resulting from a workplace injury or related illness may claim these benefits following an independent impairment assessment. This assessment will give an injured worker a disability score based on their injuries, which is then used to calculate the benefits payable.
You must be at least 18 years old to be assessed for impairments
The impairment must be shown to be a result of a workplace injury or illness
You cannot undertake an impairment assessment less than 12 months after the incident unless the injury has stabilised and is not expected to change over time or after further treatment
Unlike other benefits, permanent impairment benefits must be specially applied for. You do not need legal representation to make a claim, but it may help. WorkSafe VIC will not pay any legal fees associated with this
Death benefits: In the event of a workplace death, workers compensation can cover related medical services such as ambulance, burial expenses, family counselling services, lump sum benefit and weekly pensions for dependents as well as additional damages.
Lump sum benefits are set at $589,650 (as of July 2016, indexed annually) to be shared among all eligible dependents.
Where applicable, partner pension benefits are set at 95% of the worker’s PIAWE to a maximum of $2150 (in 2016) for the first 13 weeks after a worker’s death, and 50% of PIAWE up to the same maximum for the next 14 weeks to 3 years.
Dependent children may receive an allowance of 5% of the worker’s PIAWE from the age of 14 weeks to 16 years and from 16 to 25 years if the child is a full time student or apprentice.
Where there are more than 5 eligible dependent children, a total of 25% of the worker’s PIAWE is distributed among them instead of 5% each.
Where the only surviving dependent children are orphaned children up to the age of 16, or up to 25 for full time students or apprentices, they can receive pension amounts equal to what would have been awarded to a surviving partner.
Claimable damages: In some circumstances, an injured worker may have the right to sue their employer for additional damages. Specific steps must be followed and you should seek legal advice before doing this.
Workers can only sue for additional damages in the event of a serious injury.
The injured worker, or more typically their lawyer, must make a statutory offer and receive a counter-offer before legal proceedings can commence.
The additional damages awarded depend on the specifics of the case.
What are my obligations as an employer?
When you sign up for WorkCover in Victoria, you will be provided with a username and password which can be used to login to Online Employer Services. This is a centralised place for you to manage your policy and make sure you’re meeting your obligations.
In addition to holding appropriate workers compensation cover and paying the premiums, there are other obligations to meet. Many of these can be handled online through Online Employer Services.
Keep WorkSafe VIC up to date. You must notify your WorkSafe agent (chosen insurer) of any changes to your business activity which may affect your premiums as well as any change of business name, address or point of contact. If you expect your employer remuneration to increase by 20% or more, you have 28 days to notify your insurer.
Maintain a safe working environment. You are required, as reasonably practicable, to maintain a workplace without risks to physical or mental health. This includes taking reasonable steps to control work-related stress and create a safe working environment.
Consult employees. Employers should genuinely and effectively consult their employees to monitor health, create a less stressful work environment and encourage them to support implemented safety solutions.
Display the “if you are injured at work” poster.This poster must be clearly displayed where workers can read it.
Have official procedures in place. Employers are required to have a procedure in place for addressing and resolving workplace safety issues and for getting injured workers back on the job. This plan should involve employers, employees and your WorkCover agent, and all parties should be aware of them. You are also required to nominate yourself or another senior business representative as the workplace safety and workers compensation representative so employees know where to turn for related issues.
Report incidents. You must notify WorkSafe VIC on 13 23 60 of any workplace incidents that cause, or could have caused, serious injury or death. If an injured worker is making a claim you have 10 days to pass this onto your WorkCover insurance agent.
Keep records. Maintain a written register of workplace injuries and illnesses. When a worker records an incident in this register, you are required to acknowledge this, to the worker, in writing.
What else should I know about workers compensation in Victoria?
Can I change insurers?
Yes. You can change your WorkCover agent (your chosen insurer) once every 12 months. After changing, you will have to stick with the new agent for at least a year. Any outstanding premiums must be paid first. Note that all workers compensation insurers in Victoria will offer identical rates, and you cannot shop around for lower prices. Learn more about changing insurers here.
Can I cover myself with workers compensation as a sole trader?
No. Sole traders and any other business without other workers cannot take out workers compensation policies. You might consider combined life insurance for a similar type of protection
How do I tell if a worker is a contractor?
It depends on your business and the situation. Use this tool to assess whether or not a worker is a contractor, and whether or not you need to cover them. It takes about 10 minutes to complete.
Do I still need to meet OHS requirements as a sole trader or self-employed person?
Yes. Even if you do not need to take out workers compensation cover, you are still required to follow occupational health and safety requirements.
What if I’m an employer and a principal contractor?
This is not an unusual situation. You are then required to meet all the obligations of both roles.
How does cross-state workers compensation work?
If your employees or your business operates across more than one state, consult this guide to find out how to determine which state they’re technically in.
I have a dispute. How do I resolve it?
Before you look for a workers compensation lawyer in Victoria, you should consider conciliation first. This free government service aims to find a peaceful, mutually acceptable resolution without getting the legal system involved. If that fails, you may then look for a lawyer.
Who can apply to be a self-insurer?
Self-insurance is a way for larger companies to manage their own workers compensation coverage. Businesses must demonstrate significant financial stability and must have the resources to effectively manage their own cover.
How do I compare insurers if they all have the same rates?
All five workers compensation insurers in Victoria offer the same costs and are required to offer the same benefits. Some may offer additional services or resources which might make them a preferable option, or one might be more convenient than others. There is no wrong answer, but there may be one that’s more right for you.
Does workers compensation cover injuries on the way to and from work?
No. VIC workers compensation will not pay for injuries sustained on the daily commute. It will only cover travel injuries when that travel is directly related to work duties.
Does workers compensation cover employees on their breaks?
In Victoria, workers are generally covered during their breaks, both onsite and offsite.
I have a question not answered here. Where do I go?
For general assistance and answers to your questions, you can call the WorkSafe VIC advisory service toll-free on (03) 9641 1444 or email them at info@worksafe.vic.gov.au