Employers in New South Wales are bracing for an average increase of 8% per annum in workers’ compensation premiums over the next three years.
An icare spokesperson confirmed, “This year’s increase is just the second increase in average premiums since 2014. Premium rises were put on hold through bushfires, floods and the COVID pandemic to support employers through difficult pressures. They are now rising in response to longer-term inflationary pressures.”
For aged care employers, the news is especially painful coming on top of premium increases resulting from the recent 15% wage increase for workers. Currently, the average premium rate for a New South Wales employer is calculated at 1.60% of wages, which is below the national average of 1.7%.
Inside Ageing has spoken with a number of aged care providers who are nervously awaiting their insurance renewals, with concerns the increase in on-costs will be far higher than the independent pricing commission has estimated. Some providers cited that aged care managers with RN qualifications are also expecting a 15% pay rise, which when the full effect of the 200 mandatory care minutes becomes a reality, aged care financial performance could be worse than before the mandatory minutes’ policy and AN-ACC implementation.
All those providers Inside Ageing spoke with are concerned that inflation has been underestimated. Providers are heavily affected by waste management, food costs, power costs and insurance, which are all increasing in price.
One provider interviewed is grappling with almost a 100% increase in their workers’ compensation insurance, rising from $334K in FY23 to $675K in FY24 for their single site. Of this, $144K was due to the 15% wage increase alone.
The individual premium amounts charged to employers are determined by a variety of factors, including the nature of the industry they operate in, the total wages disbursed, and the historical claims experience unique to each employer. Premiums are usually higher for workers in occupations or industries where the risk to health and safety is known to be higher – including those with psychological risks such as trauma and fatigue.
To help employers and workers to reduce their risk factors, icare has made major changes that have improved how workers’ compensation claims are managed in NSW.
This includes increasing the number of Claim Service Providers that handle claims, enabling more employers to choose the Claims Service Provider that best suits their needs, some of whom will provide specialised support for psychological injury claims.
Further information for NSW employers can be found here: Calculating the Cost of your Workers Compensation Insurance Premium | icare (nsw.gov.au)