VIC WorkCover Premiums Frozen In Landmark Deal

Victorian WorkCover premiums will be frozen for the 2024-25 financial year under a deal struck with the state’s Opposition to secure support for a Bill aimed at modernising and re-establishing the health of the “broken” scheme.

Since 2010, WorkCover’s claims liability has tripled, mainly driven by the increased cost of weekly income support and many workers staying on the scheme long-term.

The increase has been partially driven by mental injury claims – now representing 16 per cent of new claims, which was never envisaged when the scheme was designed.

Under landmark reforms, workers with stress and burnout claims will no longer be able to access weekly payments from WorkCover. Instead, they will be able to access provisional payments for 13 weeks to cover medical treatment, alongside enhanced psychosocial supports to help them return to the workplace or training pathways.

Additionally, to align with other states and territories, WorkSafe will update the test for people who have been receiving weekly benefits for two-and-a-half years, to more objectively measure the degree of physical and mental impairment alongside work capacity.

After this change is implemented, a whole-person impairment of greater than 20 per cent will be required alongside the capacity test for a worker to continue receiving weekly benefits after two-and-a-half years.

To support these changes a new body will be established, Return to Work Victoria, to provide workers with the support they need to return to employment, including training and job placement incentives.

The Victorian head of the peak employer association, Ai Group, Tim Piper, says the Government’s deal with the Opposition will ensure there’s no rise in WorkCover premiums next year.

The average premium for businesses was lifted from 1.27 per cent to 1.8 per cent last July after the government declared the scheme was broken and in need of an overhaul.

Piper adds that the agreement will also enable business to have a more influential say in the WorkSafe business.

Among other amendments are an independent review into the impact of the reforms, expanding WorkSafe’s board from five members to six, and setting up an advisory committee on the creation of Return to Work Victoria.

“The Minister, Danny Pearson, and the Shadow Minister, Cindy McLeish, together with the Leader of the Opposition, John Pesutto, have worked hard on this Bill and in so doing have achieved a win for the state economy and a win for employers,” he says.

“The Opposition was able to stick to its plan and deliver a freeze on premiums to business. That’s a big deal for employers.

“It also enables the Government to offer a new and improved WorkSafe business model, together with a future review, which will look at how to improve the WorkSafe system further.”

The deal with the opposition means the legislation was expected to pass the upper house as early as Tuesday.