Workers Compensation premium relief for NSW businesses

NIBA has welcomed the relief being provided to employers in NSW by maintaining workers compensation premiums at the current rate.

NSW Treasurer Dominic Perrottet has confirmed premium rates for the Nominal Insurer, which protects more than 325,000 businesses and their 3.2 million workers, will remain unchanged from 30 June 2020, saving businesses across the State more
than $325 million.

NIBA CEO Dallas Booth said, “We still remain very concerned that the significant increase in the Emergency Services Levy (ESL) collections is going to have a major impact on the capacity of NSW business owners to purchase adequate cover for their risks. With the residual risks of the drought across the state, the very significant impact of the fires right down the eastern half of NSW and the ongoing issues and challenges arising from COVID-19, this is not the time to increase ESL collections in New South Wales.”

“One major insurer has already announced it will increase its ESL rates for SME business  owners from 25 per cent to 30 per cent as from 1 July. The need to increase ESL rates at this point in time is very disappointing.”

“The Government has deferred or waived a number of taxes, fees, and levies and I have asked icare to do the same despite the scheme being heavily impacted by market volatility associated with coronavirus,” Perrottet said.

icare has already reduced premiums by $52 million for more than 10,000 businesses who have adjusted their estimated wages as a result of challenges related to COVID-19. In addition, icare has paused more than $43 million in premiums for 2,000 customers facing financial hardship.

Minister for Finance and Small Business Damien Tudehope said there was no doubt businesses had been hit hard during this challenging time.

“We’re taking action to ensure a higher insurance premium is one less thing businesses have to worry about,” Tudehope said.

icare NSW CEO John Nagle said despite economic pressures on the workers compensation scheme, premiums would be maintained at 1.4 per cent of average base wages.

“We are working hard to keep premiums as low as possible for NSW businesses and despite the recent volatile economic conditions which have impacted our investment returns and our funding ratio, we are able to absorb the initial impacts and rebalance the funding gradually in coming years as the economy recovers,” Nagle said.

“We recognise there is still ongoing change for many businesses across the State and customers are encouraged to get in contact to discuss their individual needs.”

Further details on COVID-19 measures and impacts are available on the icare website.