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Workers’ compensation laws – insurance and income compensation explained

By CCIWA Editor 

Is your business prepared for the new workers compensation laws? With a start date of July 1, 2024, looming our WHS team examines the rules around insurance and income compensation. 

Employer insurance requirements 

The new Workers Compensation and Injury Management Bill 2023 maintains the fundamental employer obligation to effect and maintain a workers’ compensation insurance policy, clarifies the information required to be given to insurers, and provides for a new record keeping requirement. 

  • A workers' compensation policy must provide a declaration of aggregate remuneration of workers employed. This is consistent with the current Act and assists with the assessment of the premium.  
  • There is greater flexibility to set out all elements of “remuneration” in regulations. This will provide clarity about the treatment of some elements that can sometimes cause confusion, such as fringe benefits.  
  • You must provide to the insurer any other information required by the regulations to ensure sufficient information about your business’ risk profile.  
  • A new employer record keeping obligation relates to the number of workers employed, the appropriate industry classification, and total remuneration paid or payable for each period of insurance. Records must be retained for not less than seven years. 
  •  An insurer may recover the cost of undertaking an audit of employer records if there is a serious misstatement in the information provided.  
  • The penalty for failing to effect or renew a workers’ compensation policy, or failing to provide a remuneration declaration (or one that is provided but is known to be false and misleading) has doubled to $10,000 for every worker to whom the offence relates. 

Reducing, suspending or discontinuing income compensation 

Under the new laws, once an entitlement to income compensation is established and payments commence the payments cannot be reduced, suspended or discontinued, except in specific circumstances such as: 

  • a reduction in income compensation payments after the first 26 weeks of incapacity, or where the maximum limit has been reached for income compensation or medical and health expenses compensation; 
  • to comply with a direction of a conciliator or an order of an arbitrator; 
  • reducing or discontinuing income compensation payments on the basis of medical evidence; 
  • suspending income compensation payments when a worker is not residing in WA and fails to provide declarations required by the regulations; 
  • suspending income compensation payments when a worker is in custody; or 
  • with the consent of the worker in an approved form. 

You no longer have to wait 21 days to reduce or discontinue income compensation payments when a worker has returned to work.  

However, workers must be informed about the basis for the reduction or discontinuation of income compensation payments and the amount, if any, of income compensation payable for partial incapacity for work. A worker must be clearly informed about whether they are receiving wages only (return to work with full capacity) or a combination of wages and income compensation (return to work with some residual incapacity). 

A worker may dispute the reduction or discontinuance of income compensation in WorkCover WA’s Conciliation and Arbitration Services. 

Reducing, suspending or discontinuing income compensation – medical evidence 

The new laws essentially replicate the same provisions and processes for discontinuing or reducing weekly payments on the basis of a medical certificate indicating a worker has total or partial capacity for work, or the incapacity is no longer a result of the injury 

If you intend to reduce or discontinue income compensation payments on the basis of medical evidence, you must give the employee written notice in accordance with the regulations. 

A copy of the medical evidence you are basing your decision on must also be given to the employee.  

After receiving the required documents, the employee may within 21 days make a dispute resolution application if they do not agree with the proposed reduction or discontinuing of income compensation payments. 

Injury management obligations 

An employer’s obligations with respect to injury management systems and return to work (RTW) programs have been retained under the new laws. 

RTW programs assist workers to return to work in a timely, safe and durable way. They are only necessary where a worker is partially incapacitated for work or in circumstances prescribed by regulations. 

If a worker cannot carry out duties in the pre-incapacity position or it is not practicable to do so, other suitable employment must be provided. 

The obligation runs for 12 months from the date of the worker’s incapacity for work (the employment obligation period). 

A worker cannot be dismissed solely or mainly due to their incapacity for work and cannot be dismissed for any reason unless you have given the worker notice in the approved form at least 28 days before the dismissal takes effect. 

CCIWA has a new Workers’ Compensation and Injury Management Course to prepare for the necessary changes. Register here or to find out more email [email protected] or call (08) 9365 7746. 

Is your business prepared for the new workers compensation laws? With a start date of July 1, 2024, looming our WHS team examines the rules around insurance and income compensation. 

Employer insurance requirements 

The new Workers Compensation and Injury Management Bill 2023 maintains the fundamental employer obligation to effect and maintain a workers’ compensation insurance policy, clarifies the information required to be given to insurers, and provides for a new record keeping requirement. 

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