COMPARISON OF WORKERS' COMPENSATION ARRANGEMENTS

PREMIUM SETTING NOTES TO THE 

INDUSTRY RATES COMPARISON TABLE

1.

It is difficult to make exact comparisons between states. The following qualifications should be noted:

Industry classifications vary from jurisdiction to jurisdiction. For example, Victorian industry classifications are based 

on the Australian Bureau of Statistics ASIC code, and Western Australian and NSW on ANZSIC. South Australian 

industry classifications are based on the Australian Bureau of Statistics code and are progressively being aligned to 

ANZSIC, with some alterations designed specifically for SA localised conditions.

On 1 July 1997, Queensland introduced an industry classification system based on the ANZSIC system, with some 

alterations specifically designed for Queensland. The classifications have been named the WorkCover Industry 

Classifications. Current rates were published in an Industrial Gazette notice on 31 May 2002. 

On 30 June 2001, NSW introduced an industry classification system based on the ANZSIC system, with some alterations

specifically designed for NSW.  The classification system has been named the WorkCover Industry Classification 

System (or WIC system).  For the 2001 2002 premium year, increases between previous and new industry rates were 

capped at 15% to mitigate adverse financial impacts on employers.  Current industry classes and rates were published 

in a NSW Gazette notice on 22 June 2001. Refer to the Insurance Premiums order on WorkCover's website, 

www.workcover.nsw.gov.au

Levy/Premium category comparisons are done on a `best match' basis and should not be regarded as exact equivalents

The number of self insurers   those companies which fund their own liability for workers' compensation claims 

separately from the central system   varies across the different jurisdictions. Both South Australia and New South 

Wales have large numbers of self insurers, which means that the coverage of these schemes is smaller than in some 

other jurisdictions (New South Wales: 51 self insurers, 15 group self insurers, 6 specialised (or industry specific) 

insurers and separate arrangements covering most public sector employers; South Australia: 68 self insurers plus 

most Government public service and Government instrumentalities). Victoria has 35 self insurers, while Queensland 

has 24 self insurers. Western Australia has 28 self insurers.

In some jurisdictions, particular industries have traditionally been excluded from the central system. For example, 

in New South Wales the coal industry is excluded.

Charges in addition to the workers' compensation premium may be levied in some jurisdictions. An example, is the 

Dust Diseases surcharge in New South Wales, which is levied from time to time as funding requirements for these 

diseases warrant. An occupational health and safety loading on assessed premium is applicable in South Australia.

Jurisdictions vary in their application of GST to premiums. NSW's published industry rates include the 10% GST. 

Other jurisdictions generally exclude GST from their published industry premium rates.

2.

The maximum and minimum figures given for experience rated premium rates represent the extent to which the  

published rate may be varied according to the various forms of experience rating (i.e. based on claims rate in a 

given period).

the bonus and penalty system in South Australia, which generally comprises a bonus of up to 30% of levy and a penalty 

of up to 50% of levy

the experience rating in New South Wales and Victoria is based on the size of the employer

the extent to which insurance companies may discount or load premiums according to experience may vary. 

For example, amendments to Western Australia's legislation, effective from 5 October 1999, mean that recommended 

premium rates can be surcharged up to 100%, and with the Commission's approval can be surcharged in excess of 

100%.  There are no limitations on discounting.

Figures given for highest and lowest experience rated premium rates should be treated with some caution; those for 

South Australia and New South Wales represent actual maximums and minimums; those for Victoria, and the lowest 

experience rate in Queensland, represent theoretical limits that would only rarely be reached in practice.

3.

An Amendment to the Workers' Rehabilitation and Compensation Act 1988 now requires the WorkCover Tasmania 

Board to publish suggested premium rates for various businesses or groups of businesses. This work was undertaken 

by an independent actuary and encompassed:

identifying major scheme trends, including the effect of recent legislative change

developing the required premium pool and the average premium rate for the scheme for the 2002 2003 policy year

developing premium rates at the 4 digit ANZSIC level for the 2002 2003 policy year.

The suggested rates are intended as a guide only, as insurers are not bound by these rates.

Heads of Workers' Compensation Authorities  43