The Victorian Labor government is mulling significant changes to the state’s workers’ compensation scheme, including cuts to benefits and premium increases, following the end of a review period which has resulted in the government declaring the scheme unworkable.

While the language might sound alarming, it’s critical to note that for the scheme to function as intended, a certain balancing act is required between the costs paid and the cost of premiums. In the last 12 years, premiums have not increased despite the rate of liabilities increasing three-fold. According to government figures, the number of active WorkCover claims past the 130-week mark has almost doubled since June 2016, while there have also been significant increases in the payouts for mental injuries, which are highly complex.

Victorian Trades Hall Council secretary Luke Hilakari said that they back a higher premium rate for businesses, explaining that the state has “some of the lowest contributions from businesses, as a percentage, of any state or territory. That’s a major problem. But we want to make sure workers’ support is maintained. And we want clever ways to intervene early to get them back to work. Mental health claims are on the rise, so we need a really well-functioning scheme.”

While any changes to premiums won’t be confirmed until the premium 2023/24 audit is gazetted, it’s worth considering whether your business will be affected. The likely changes include higher industry rates and the introduction of premium flooring, which will be familiar to NSW clients, but new to Victorian clients.

Proposed changes like industry reclassification, limits to claim cost recoveries and the reintroduction of lump sums and death benefits in premium-impacting claims costs are in the hands of the government, making it highly unlikely that you can take any action to influence your premiums. However, claims costs and effective claims management are among the few areas where you can positively impact any likely premium forecast.

Claims management plays a crucial role in working to manage your costs, and Eighteen33 are ideally positioned to discuss your risks with you, with a focus on ensuring your business has optimal safety standards and is actively preventing injury and illness at work whilst ensuring we utilise all of our available tools to assist your employees return to work quickly and safely after a work-related injury or disease.

Contact us today for a complimentary review of your insurances.