Nation’s highest WorkCover bills rise again

South Australian employers have paid more for their WorkCover insurance premiums than any other state for many years, and with the introduction of a new system, they are set to rise again.

Above: CEO of Aged and Community Services SA & NT, Alan Graham.

By Stephen Easton

Some South Australian aged care providers face massive increases to their WorkCover premiums, which were already much higher than in any other state.

Starting from 1 July, WorkCover SA has changed the way it calculates the premiums, meaning some aged care providers face a much higher bill in 2012-13 than they would have under the old system.

Transitional arrangements to reduce the impact of the changes are in place until 30 June 2016, preventing any employer’s premium from going up by more than 25 per cent from one financial year to the next.

The CEO of Aged and Community Services SA & NT, Alan Graham, has surveyed 20 aged care providers and found that most are looking at a much bigger bill this financial year, which could result in cuts to staff and services.

Mr Graham said that in the few cases where the premiums had gone down, the savings were generally small, but in the many cases where the cost had increased, it had increased quite markedly.

He said that in the most extreme case, a small aged care provider’s WorkCover premium would have gone up by over 300 per cent, if the 25 per cent cap was not in place. 

The state industry body believes that, based on current figures, 17 of its members would hypothetically pay a combined $11.5 million extra to WorkCover under the new arrangements, again looking at the scenario without accounting for the 25 per cent cap. 

Mr Graham said that even with the 25 per cent cap, the cost increases over the next four years were “alarming” to the state’s aged care sector.

“For some of these providers, the financial impact of this increase is more marked than what will result as a consequence of the loss of COPO [indexation on residential aged care subsidies], and the changes to ACFI,” he said, referring to the impact of two decisions made this year by the primary aged care funding body, the Department of Health and Ageing

While the changes to the SA WorkCover system have been developed in consultation with employers over two years, Mr Graham said the details of how the premiums would be calculated were not known until very recently.

“We knew there was going to be a change in the system to this new ‘experience rating’ arrangement, but at no stage was there any detail or figures provided in that context,” he said. “We knew there would be winners and losers, but there was no detail provided.”

Aged care industry representatives met with the CEO of WorkCover SA, Rob Thomson, on Monday this week to discuss the issue and the group will reconvene in a fortnight.

Above: Paul Carberry, CEO of Leading Age Services Australia SA.

Chief executive of the South Australian branch of Leading Age Services Australia (LASA SA), Paul Carberry, said he broadly agreed with Mr Graham and pointed out that the state’s aged care providers have been paying far more for WorkCover premiums than their interstate colleagues for many years. 

“I guess Alan’s point and my point would be we’re an industry that doesn’t have the capacity to absorb higher costs because of the way we’re funded and the ways our fees are regulated by the Commonwealth,” Mr Carberry said.

Many employers have argued the South Australian WorkCover system has been more lenient on employees compared with the other states, meaning employees take much longer to return to work and employers pay more for the insurance scheme.

“Firstly, its not because we have worse claims, it’s just that our whole system costs more,” Mr Carberry said. 

“The frank answer [to why it costs more] is because it’s been a very badly run system over the years. It’s been poorly managed and I think Rob Thomson’s trying to do a better job with it.

“Return-to-work rates in this state are the worst in the country, and there are a range of reports around that indicate that. The cost of our system is higher and the people who have to pay for that are the employers, through their premiums.

“As with all these things, the legislation is a big factor and the South Australian Government did bring in some reforms a few years ago. Rob [Thomson] can only work within the system he’s given.”

Mr Carberry agreed that higher bills could make it more difficult for aged care providers to improve workplace safety, and said that the physical nature of work in aged care, and its ageing workforce, made injury claims “part and parcel” of the industry.

Tags: injury, ohs, workforce,

2 thoughts on “Nation’s highest WorkCover bills rise again

  1. One of the Australian Government’s more insightful programs is the Corporate Champions initiative which helps aged care, manufacturing, construction and health care organisations (and others) with analytics on risk management in the workers comp area.

    While an ageing workforce is an asset rather than a liability, South Australian organisations especially need to have a ‘hands on’ understanding of the demographic profiles of their organisations. This is simply good business planning.

  2. Pick up your bat and ball and go self insured as an industry. If you wait for Workcover and the government to get their collective heads around the mess they have created and continue to create then you are asking for more cost and aggravation.

    Poor return to work rates can be directly attributable to extremely aggressive and poor claims management, whereby injured workers feel they are not being treated with dignity and respect and their health and well being is not a major consideration in their claims management. Maybe the payment incentives to the managing agent for early return to work is to blame given the internal pressure placed on Claims managers.

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