Providers battling work comp hikes

Aged care providers in NSW found out from their insurers recently that their workers compensation premiums would rise significantly, with some providers reporting 45 per cent increases and others over $1 million.


Aged care peaks have welcomed the New South Wales Government’s decision to reassess increases to workers compensation premiums but are still seeking meetings to convey the implications of forthcoming and last minute changes to costs for service providers.

NSW employers including aged care providers found out from their insurers late last week that their workers compensation premiums would rise significantly, with some providers reporting 45 per cent increases and others over $1 million, due to the new Industry Claims Cost Rates (ICCR) released by WorkCover.

In response, intense lobbying followed from the state’s employer groups and peak bodies from all sectors, including Leading Age Services Australia NSW-ACT and Aged and Community Services NSW and ACT.

Some light relief came on Tuesday with the State Government announcing in its State Budget an on average reduction of 5 per cent to WorkCover headline premiums. Then insurer CGU said in a statement on Wednesday that WorkCover told insurers in a briefing that day the recently released ICCR would now not be used to calculate premiums and that increases to the rate would be phased in over three years with full details expected at the end of the month.

As AAA has previously reported, LASA NSW-ACT CEO Charles Wurf and ACS NSW & ACT CEO Illana Halliday have been petitioning government since Friday, and sent a joint letter to Premier Mike Baird on Tuesday highlighting the impact of the increase to aged care providers.

Peak bodies push for resolution
Charles Wurf
Charles Wurf

Mr Wurf said he was satisfied with the government’s response to the lobbying but that the peaks would continue to press requests to meet the Finance Minister and Treasurer to ensure Government understood the implication of increases to workers compensation costs.

“I can’t yet be satisfied about an outcome because I don’t have one and no aged care employer can have one until we get the recalculation later in the month,” Mr Wurf told AAA.

He said he would “welcome the outbreak of common sense” and a proper consultation process from WorkCover and Government to employers in the state.

“We want a functioning workers compensation system, we want decent benefits for those who get injured at work but it needs to be as affordable as possible for every employer,” he said.

Illana Halliday
Illana Halliday

Ms Halliday said while the outcome still remained unclear this seemed a more rational approach.

“There was intense lobbying of politicians on this, with solid data to show unacceptable impacts. It was a flawed process by WorkCover and a pleasing response from government,” Ms Halliday said.

“We want to see the outcomes and we want to know more about why any increases are needed.”

The impacts of changes announced last week were over $1 million for several members, she said.

Big increase for providers

Royal Freemasons Benevolent Society chief operating officer Frank Price said the industry claims rate change equated to a 45-per-cent increase to their premiums over two years.

“Based on the increase announced last Friday, 30 per cent would be added onto our current year for the 2013-14 premium, which is about $209,000. For next year the increase will be $650,000. So we are looking at about $860,000 straight up,” Mr Price told AAA.

He said in the aged care industry where 80 per cent of costs are labour costs, increases to workers compensation, which is exclusively a labour cost, had an obvious impact.

“We can’t cut wages, we can’t cut hours. We’re about a providing care to the people most vulnerable. It is not a case that we will reduce or change our rosters. It just comes off the bottom line.”

Tags: acs-nsw-act, charles-wurf, illana-halliday, lasa-nsw-act, royal-freemasons-benevolent-society, workers-compensation,

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