Workcover Insurance


A Few days ago, we have received an urgent call from one of our customers that one of his employees was injured during the work. The employee asked to WorkCover for a compensation and there was an inspection from WorkCover. The problem was that the employee got injuries before our customer joined the insurance.

He was frustrated because he thought that there is no need of inspection that the employee could just cancel the claim if he did not join the insurance. Our customer was not aware that it is mandatory to join WorkCover.

WorkCover in Australia, which is an Industrial Accident Compensation Insurance, is supervised by Government by itself and it is compulsory that employers need to join. WorkCover is an insurance that protects employees from work-related injury or illness and compensates for damage, rehabilitation, permanent damage and death. It is an essential matter that it can bring up to $55,000 fine and 6 months in prison if employers did not join the WorkCover.

In New South Wales, employers who hire employees in full-time, part-time or casual under written or verbal agreement are the ones who need to join the WorkCover and sole traders do not have an obligation to join the WorkCover. However, not all employees are necessary to join the WorkCover. For example, employees with an annual salary of $ 7,500 or less are not required to join. People often misunderstand that they don’t need a WorkCover if you have a safe work environment such as a desk clerk. This is a misleading information that WorkCover requires employers to sign up if they hire employees regardless of industry.

Insurance must be made immediately as the employer satisfies all the requirements. WorkCover is currently managed by an institution called icare. Insurance fee differs according to the industry, number of employees and salary and at the time of initial enrolment, the insurance fee is calculated at the expected level, and later the settlement will be made based on actual information such as the actual number of employees, salary, etc. The settlement amount will be adjusted in the next payment, which means that additional/less payment can be accrued when there are more/less employees and salaries. Payments can be made in either lump sum or instalment payment, but it is better to pay in full because you can get some discount for that.

The State Insurance Regulatory Authority (SIRA) will conduct an inspection if there is any issue, including not joining the WorkCover and our customer mentioned above had to pay a high penalty after SIRA’s inspection. The penalty related to the ATO can be reduced all or partially if the taxpayer was unintentional and did not recognise the related tax law. However, WorkCover does not relieve the taxpayer if he/she didn’t know the relevant laws so employers who hire employees need to be careful when operating a business.

Therefore, employers who still don’t have the WorkCover yet, they should check whether they are required to join in order to prevent future disadvantages. You can get a further information from the insurance broker or your accountant if you have any difficulty in completing the registration process.