Employer handbook

Insurance Workplace Insurance Support for the ACT

Explore the latest information related to Workers’ Compensation policy and premium requirements, and injuries in the ACT.

What would you like to know? Explore the following information relating to Workers’ Compensation policy and premium requirements. Has your employee had an injury? Discover answers to support your employees.

What is Workers’ Compensation?

Workers’ Compensation is a compulsory, statutory, ‘no fault’ line of insurance, which provides cover for any employee who suffers a work-related injury or illness.

Each state and territory operates their own Workers’ Compensation arrangements with differing funding arrangements, insurers, benefit design, and premium calculation methodology.

You will require a policy in each state you have employees located or operate.

Who needs a Workers’ Compensation Policy?

An employer must have Workers’ Compensation insurance for any business that has employees.

How do I set up a Workers’ Compensation Policy?

You can contact Mercer Marsh Benefits to set-up the policy. Mercer Marsh Benefits will obtain pricing terms, confirm insurance with the insurer and obtain insurance documents.  

You will need to complete an insurance proposal form for the insurer of choice and Mercer Marsh Benefits will provide you with the invoice, policy documents and certificate of currency.

What are the insurance requirements when acquiring a new business?

You will need to ensure employees of the acquired business are covered by Workers’ Compensation insurance. If a new business entity is created, you will need to set up a new Workers’ Compensation policy or have the entity added to your current policy. 

If the employees are transferring across to your existing business entity, you may be required to update your declared wages, should they increase by 20% or more.

You can contact Mercer Marsh Benefits to discuss the actions required to ensure cover is in place, based on the terms of your acquisition. 

Will the claims history from the business I’m acquiring impact my premiums?

Yes, the history of the acquired business will be taken into consideration when calculating your premium.

How is my premium calculated?

There is no set formula to how your premium is calculated. The insurer considers the following to determine your risk and issue you with a premium rate:

  • Recommended premium rates released by the regulators – provides a guide to your industry rate
  • The size of your wage roll
  • Your claims cost history
  • Claims frequency
  • The insurer’s own performance and profitability

The insurer adjusts the premium rate and will often: 

  • Provide you with a discount if you have low claims numbers and costs over the prior 5 years 
  • Apply a loading if you have high claim numbers and costs over the prior 5 years

In most cases your policy period will run for 12 months. The renewal date is usually determined by the date you commenced the policy.

What influences my premium calculation?

There are three key drivers that influence your premium:

  • The wage roll of your business
  • Industry Rates (these are aligned to the type of work your employees undertake and/or your business activity)
  • Your claims experience (Claims History)

When and how do I pay my premium?

Your premium payment options will be agreed at the renewal of your policy. Instructions on how to pay your premium are detailed on your premium invoice.

Additionally Mercer Marsh Benefits can help arrange a premium funding option.

What happens if I can’t pay my premium in full?

If you are unable to pay your premium in full Mercer Marsh Benefits can assist you with obtaining a competitive premium funding quote.

The premium funding option allows you to take advantage of any discounts available, as the funder will pay your premium in full. You will then pay the funder in agreed monthly or quarterly instalments including interest.

What happens if I don't pay my premium?

If you don't pay your premium you could be fined and penalties may be applied to the amount in arrears. Your policy may also be cancelled leaving your employees without appropriate cover.

If you don't pay your premium on time a late payment penalty will be applied. Further, you will be deemed uninsured and will be liable for any claims costs that arise until all outstanding premium charges are paid in full.

What are wage declarations?

Wage declarations provide the regulator/insurer with the required information to calculate Workers’ Compensation premiums.

Employers are required to provide estimated wages at the renewal of the policy and actual wages at the expiration of the policy.

A policy period runs for 12 months from the date the policy is first incepted.

Refer to the Wage Matrix to determine what wages to declare when completing your declaration.

When do I submit wage declarations?

Employers must lodge their estimated wages for the upcoming period of insurance to Mercer Marsh Benefits within 60 days of the policy renewal and actual wages 30 days post policy expiration.

How do I submit my wage declarations?

Completed estimated and actual wage declaration forms are to be submitted to Mercer Marsh Benefits as part of the policy renewal process.

What happens if I miss the due date for submitting my wage declarations?

If you don’t submit updated wages this may be viewed as ‘non-compliance’ and may leave you exposed to an insurer wage audit or fines.

What payments do you include in your wage declaration?

Discover what components of employee’s remuneration is included in the wage declaration. Click here to download the wage declaration matrix.

Who is a worker?

A worker is generally identified as an individual who is a staff member or employee of a business or entity who receives an income under a 'contract of service'.

Can contractors be considered workers?

If you, as the employer, engage a contractor/s to perform work you may still need to cover the contractor for Workers' Compensation depending on the nature of their engagement.

Contractors may operate as sole proprietors, partnerships, companies or through family trusts.

It is important to consider if any contractor may be deemed a worker and fall under your policy. The ATO assessment tool will assist you in determining whether your contractor is a worker.

Contractors are most likely considered workers if:

  • The employer (you) directs the contractor regarding work to be performed and the time and manner in which it must be performed
  • Paid on time basis arrangement
  • Tools and material supplied by the employer (you)
  • Contractor works only for a single employer (you)

Please note: A person may have been hired as a contractor and be a contractor for other purposes such as tax but still be a worker for the purpose of Workers’ Compensation Insurance. The status of a person for tax purposes bears no direct relationship to that person's status as a worker for Workers’ Compensation insurance purposes.

If a worker works in multiple states, which state’s policy covers them?

If you have an employee who works in more than one state or territory, they will be covered by only one state’s policy. 

All states and territories use a state of connection to determine which policies will cover the employee for Workers’ Compensation. This applies irrespective of where the injury occurs. 

The state of connection test considers: 

  • Test A: The territory or state in which the worker usually works in that employment
  • Test B: If not Identified in (A), the territory or state in which the worker is usually based for the purpose of the employment 
  • Test C: If can’t be identified through (A) or (B), the territory or state in which the employer’s principal place of business in Australia is located.

If the above tests don’t provide a state of connection, the employee will be covered by the state in which their injury occurred.

If an employee is working temporarily overseas or interstate, they will continue to be covered by the Workers’ Compensation Insurance, however, at 6 months an employer needs to reassess this arrangement to ensure ongoing cover or arrange alternative cover if the arrangement will continue at length. You can contact Mercer Marsh Benefits to discuss if additional coverage is required.

Who manages my policy and claims?

WorkSafe ACT is the regulator of the Australian Capital Territory scheme.

WorkSafe ACT issues licenses to certified insurers who manage and control Workers’ Compensation policies and claims.

Licensed insurers in the ACT are: Allianz, GIO, CGU, QBE, Zurich, Guild Insurance and Catholic Church Insurance.

If your employee has a workplace injury, you must lodge the claim with the Licensed Insurer who has provided you with a policy.

How and when do I lodge a Workers’ Compensation claim?

If your employee has had a workplace incident, you must lodge a claim within 5 days of notification. You need to lodge the claim with the insurer who holds your policy:


Do I have to pay an excess on claims?

There is no employer excess. However, if you do not notify the insurer of an injury within 48hrs, you will not be reimbursed for any weekly benefits paid to the injured employee prior to you notifying the insurer.

What expenses are covered under a Workers’ Compensation claim?

In the event a worker has a work place accident, the Workers’ Compensation policy will cover the following costs within the claim:

  • Weekly compensation (Wages)
  • Medical costs, for example doctor consultations, medication, x-rays
  • Hospital costs (public and private)
  • Rehabilitation costs, for occupational rehabilitation and return to work services
  • Travelling expenses (including Ambulance)
  • Investigations costs (medico legal reports and factual investigations)
  • Lump sum payment for permanent impairment
  • Common Law payments
  • Death benefits and funeral expenses
  • Legal costs

How do claims costs impact my premium?

There is no set formula of how claims costs impact your premium, the insurer assesses your risk based on the cost of your historical claims normally over 5 years and compares this to the premium you have paid for the same period. 

The insurer adjusts the premium payable based on your claim performance, including: 

  • Providing you with a discount if you have low claims costs and claims frequency
  • Applying a loading if you have high claims frequency and claims costs

What injuries are covered by the Workers’ Compensation policy?

Your policy covers employees who have sustained either a physical or psychological illness/injury whilst in the workplace.

Cover may also extend to a pre-existing condition, if employment has caused the condition to re-aggravate, worsen or deteriorate. 

What do I need to do in the event of a serious injury/incident? 

If there is a serious injury, incident or a death at the workplace, you need to complete two notifications as soon as you can (specifically within 24hrs of the event): 

  • WorkSafe ACT (the regulator)
  • Notify your insurer of the incident / claim

Each notification is managed separately of each other with the insurer managing the injury and claim and WorkSafe ACT assessing the cause of the event and if corrective actions/fines are required.

What is a serious injury / incident?

A serious incident may not result in an injury that requires ongoing treatment.  Below is a summary of what is considered a serious incident or injury: 

The death of a person

  • A person requiring medical treatment within 48hrs of exposure to a substance
  • A person requiring immediate treatment as an inpatient in a hospital
  • A person requiring immediate medical treatment for:
  1. Amputation
  2. Head injury
  3. Eye injury
  4. De-gloving/scalping
  5. Electric shock
  6. Loss of bodily function
  7. Spinal injury
  • Occupational infectious diseases contracted in the course of work including handling or contact with animals, or animal by products
  • A dangerous incident - is one that exposes (or imminently exposes) someone to a serious health or safety risk

How do I notify a serious injury or incident?

You need to notify Access Canberra, the services hub of WorkSafe ACT (the regulator), of a serious injury or incident as soon as you can by calling 02 6207 3000 or email worksafe@act.gov.au.

Worksafe ACT may conduct an investigation.

Return to Work - Employer Obligations

An employer has a responsibility to ensure the health and safety of their employees, including: 

  • Take all reasonable care to prevent injuries or illnesses occurring at work
  • Attempt to resolve any health and safety issues as soon as possible
  • Do everything reasonable to help an injured employee to return to work

If an employee has an injury, you as an employer are required to support the employee’s recovery and return to work, this includes: 

  • Providing a safe place of work
  • Reporting of an injury to your insurer in a timely manner
  • Developing an appropriate return to work plan to support an injured employee’s recovery
  • Forward all documentation to the insurer as received
  • Ensure ongoing payments are made to the employee, either by you or the insurer, when there is an accepted claim
  • Maintain contact with all parties

Providing Suitable Duties

Suitable duties are provided when an employee is unable to immediately return to their normal pre-injury duties after an injury. Other terms such as suitable employment, suitable work, modified duties, light duties may also be used to describe suitable duties.

Your commitment to provide suitable duties is a fundamental part of any successful recovery at work strategy. When identifying suitable duties consideration needs to be given to:

  • The nature of the worker’s incapacity – this is identified in their medical certificate
  • The worker’s age, education, skills and work experience
  • Any injury management plan in place

Once suitable duties have been identified, a return to work plan / program is created. The return to work plan outlines the duties being completed and the medical restrictions to ensure clarity for all involved. 

Need Support?

If you need assistance with developing a return to work plan for your employee or with a complex claim, please contact Mercer Marsh Benefits – we can support you with either strategic advice or on the ground with our in-house rehabilitation team - Recovre has consultants across Australia (including regionally). We can support you with a single claim or the injury prevention and management across your program. 

Return to Work – Employee’s Obligations

Like Employers, Employees also have obligations both prior to and following a workplace injury/illness, this includes: 

  • Take all reasonable care to prevent injuries or illnesses occurring at work
  • Report any health and safety concerns immediately
  • Participate in the return to work process if an injury occurs

Return to work and Recovery

An injured employee’s role is to focus on their recovery and return to work, there are a number of important aspects of this, including: 

  • Report any injury as soon as the injury happens
  • Provide copies of Medical Certificates (also known as Certificates of Capacity) in a timely fashion
  • Attend medical and other appointments arranged by your treating doctor, or where directed by the insurer such as independent medical specialist appointments
  • If unable to attend an appointment, take reasonable steps to make an alternative appointment as soon as possible
  • Communicate with all parties and reply to reasonable requests
  • Carry out agreed actions to the best of their ability, as outlined in the Return to Work Plan/Program
  • Immediately inform the Injury Management Coordinator and/or line manager of any difficulties carrying out the Return to Work Plan/Program
  • If referred to a workplace rehabilitation provider, actively participate in all aspects of the service and work cooperatively with the service provider
  • Advise of any changes in contact details
  • Advise treating doctor and other treatment providers of any changes
  • Book medical appointments where possible outside of return to work hours
  • Failure to meet obligations, can lead to non-compliance and/or penalties.

Rehabilitation Services

Rehabilitation services are engaged to support an injured employee through the lifecycle of the claim and recovery. This includes the return to work with the same employer or if it is identified, an alternative employer. Examples of the services provided include:  

  • Return to Work support
  • Suitable Duties identification
  • Alternative role identification – vocational / functional assessments
  • Job Seeking support

You can contact Mercer Marsh Benefits if you believe you need rehabilitation support on your claims.

Can a worker be dismissed while they have a Workers’ Compensation claim?

An employer is required to support an injured employee’s recovery and return to work following a workplace injury.

An employer cannot dismiss an injured employee from employment within 26 weeks of the injury occurring if the injury is a contributor to the reasons for dismissal.

In some cases, you can dismiss a worker prior to 26 weeks for situations such as serious misconduct or redundancy, however, great care needs to be taken. 

It is important to discuss any proposed dismissal with your legal advisor, the insurer and Mercer Marsh Benefits prior to taking any action as you will need to ensure you have met your obligations and understand any financial impact. Fines/penalties could apply if you do not meet your obligations.

How are wages entitlements calculated?

If there is an accepted claim and an incapacity for work, an injured employee is entitled to receive weekly compensation for lost earnings.

To calculate a workers entitlement to weekly compensation, the 12 months of earnings prior to the injury are assessed. Employers need to provide the insurer with the required payroll information to calculate the workers’ entitlement.

If the worker hasn't been employed for 12 months prior to the injury, the historical earnings from the date their employment commenced are assessed. Where a worker has been employed for less than 4 weeks, earnings of a comparable employee and/or role will be assessed.

The following is used in the calculation of an injured employees’ weekly entitlement:

  • Salary or Wages
  • Overtime and shift allowances
  • Piece rates (eg. paid by amount packed)
  • Commissions
  • The value of some non-financial benefits (eg. use of motor vehicle, residential accommodation)
  • The value of any part of your salary that is salary sacrificed
  • Annual leave or long service leave

Does the wage entitlement remain the same during the claim?

The entitlement to an injured employee’s benefit can change during a claim, there are two key factors that can impact how an employee may be paid under Workers’ Compensation: 

  • The length of the claim
  • A worker increases their hours of working and/or earnings
Key points during a claim where a change in payment entitlement could occur:
0-26 weeks +26 weeks
0-26 weeks +26 weeks
100% of weekly entitlement less earnings received during the week. Total Incapacity 65% of the average weekly earnings or the statutory rate ($719.20) which-ever is the greater.
Partial Incapacity For partial incapacity, your insurer is will calculate the entitlement for compensation.

The amount paid to the injured employee cannot exceed the weekly maximum rate advised by your insurer.

How are entitlements to weekly benefits reviewed?

An insurer regularly reviews a worker’s entitlement to weekly compensation and the following could alter an entitlement:

  • Injury or incapacity resolution
  • Changes in capacity for work
  • Changes in the relationship between the injury and employment
  • Duration of the claim
  • Compliance with injury management
  • The employee moves overseas

The insurer will advise you if the weekly entitlement changes or ceases and the reasoning.

Are employees covered whilst travelling to and from work?

Yes, employees are covered.

Each claim is reviewed by the insurer to ensure there isn’t a substantial deviation in travel between home and work.

If a worker sustains an injury while on a recess/break, is this covered under Workers’ Compensation?

If an injury occurs while an employee is on an authorised recess or break (i.e. lunch breaks), the injury is covered by your Workers’ Compensation insurance policy.

This includes if the injury occurs either onsite or offsite.

If a worker injures themselves whilst travelling for work, is this covered under Workers’ Compensation?

An employee is covered under the policy for temporary interstate and overseas travel; claims are assessed on individual circumstances to ensure employment is a contributing factor.

If an employee is traveling for greater than 6 months, insurance arrangements may need to be reviewed to ensure continued adequacy of cover.

Also refer to the state of connection information in worker definitions for more information Click Here.  

What happens if an employee has an injury and/or claim and is approaching or has reached retirement age?

If a worker sustains an injury approaching or after retirement age, they have an entitlement to receive up to 2 years of weekly compensation.

Can an employee be dismissed while they have a workers’ compensation claim?

An employer is required to support an injured employee’s recovery and return to work following a workplace injury.

An employer cannot dismiss an injured employee’s employment within 26 weeks of the injury occurring if the injury is a contributor to the reasons for dismissal.

In some cases, you can dismiss a worker prior to 26 weeks for situations such as serious misconduct or redundancy. Great care needs to be taken. 

It is important to discuss any dismissal with your legal advisor, the insurer and Mercer Marsh Benefits prior to taking any action as you will need to ensure you have met your obligations and understand any financial impact. Fines/penalties could apply if you do not meet your obligations.

Have employees in other states and territories? 

Get more answers to the most-asked questions about Workers’ Compensation across Australia. Explore our employer handbook now.

LCPA: 20/648

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Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”