By Simon Booth
The quirks of the Victorian Workers’ Compensation system can result in employers investing time and energy in managing claims that provide absolutely no financial benefit.
The two quirks that are extremely relevant at this time of year are:
- Claims costs for the calculation of an employer’s 2022/2023 premium are taken at the end of March 2022
- Closed claims continue to carry an estimate.
With this in mind, we know that any outcome achieved on a claim between 31 December 2021 and 31 March 2022 is unlikely to achieve a significant reduction in the cost of claims used for the calculation of the 2022/2023 premium. This is because there is insufficient time for claims estimates to reduce to a level to achieve a meaningful premium result.
Furthermore, an outcome achieved on a claim between 31 March 2022 and 30 June 2022 will have absolutely no impact on the 2022/2023 premium calculation. This is because the claims costs used in calculating the 2022/2023 premium are taken on 31 March.
What does this mean?
- Employers should now be identifying the claims that will impact on the 2023/2024 premium calculation and ensure that strategies to contain and reduce claims costs by 31 March 2023 are implemented.
- Employers should identify ‘stuck’ claims that will cease to impact premium after 2022/2023 and explore alternate resolution strategies to return to work. This may include severing the employment contract.
- To maximise financial benefit, employers should limit the resources, energy and emotion, invested into claims that will cease to impact premium after the 2022/2023 premium calculation.
Important Note:
Any changes to the employment status of an employee should be made post 31 March. Although it can take significant time for claims estimates to reduce, these same estimates can spike immediately based on certain actions, such as withdrawal of duties and termination of employment. Employers should seek appropriate advice before commencing any activities related to severing the employment contract.
