WorkSafe has confirmed a change to the way Victorian premiums will be calculated in 2020/2021.
For more than 10 years, each year’s premium rate was impacted by the cost of claims received in a prior 2.5 year window.
For example, the 2019/2020 premium rate was impacted by the cost of claims received in the period 01/01/2016 to 30/06/2018.
Once gazetted it is expected that from 2020/2021 the claims reporting period will be expanded to 3 years. As such the 2020/2021 premium rate will be impacted by the cost of claims received in the period 01/01/2017 to 31/12/2019 rather than 01/01/2017 to 30/06/2019.
This will mean that going forward claims received between 1st July to 31st December each year will impact the premium rate in 3 policy periods rather than 2 previously.
For all those claims received between 01/07/2019 to 31/12/2019 (i.e. last 6 months of the reporting period), only weekly compensation payments will impact the premium rate – all other payments and the Statistical Case Estimate (future payment reserve against each claim) will be excluded from the costs used.
As such employers that lodged claims in the period 01/07/2019 to 31/12/2019 with high levels of weekly compensation payments as at 31/03/2020 will be adversely impacted by this change in their 2020/2021 premium renewal. The same impact will apply in future years as well.
The scheduled date of claims costs extraction remains unchanged as late March (expected 31st March 2020).
If you are likely to be affected by this change please do not hesitate to contact me 0457 730 245 or my colleagues at ReWork on 1300 471 234 to discuss how we can assist.