This Order sets the maths and rules for calculating New South Wales workers’ compensation insurance premiums for policies taking effect between 4pm 31 Dec 2013 and 4pm 30 Jun 2014. It prescribes the tariff base, experience adjustments, various incentives, contributions, GST/input‑tax adjustments, minimums, discounts for up‑front payment, late‑payment interest and a prescribed excess (cl.3; Schedules 3–13; Sch.2). Employers pay; insurers apply the formulas; the Authority and Governor retain limited discretion (Sch.4 cl.5; Sch.8). Employers must keep wage and vehicle records for compliance.
This Order sets the numerical and formulaic mechanics for calculating workers compensation insurance premiums for policies taking effect between 4 pm on 31 December 2013 and 4 pm on 30 June 2014 (clause 2; Schedule 2 cl 1). It is a subordinate instrument that prescribes the components, caps, discounts, minimums and adjustments that together determine the premium payable by an employer under the Workers Compensation Act 1987 (the Act). The central premium calculation rule appears at clause 3(1), which requires the premium to be calculated for a period of not more than 12 months and, depending on employer size, in accordance with the formulas in clause 3(1)(a) (medium and large employers) or clause 3(1)(b) (small employers). The formula decomposes the premium into constituent elements labelled in the Order: basic tariff premium (T), experience adjustment factor (S), experience premium (E), premiums adjustment contribution (Q), dust diseases contribution (D), input tax credit adjustment (I), Mine Safety Fund premium adjustment (M), apprentice incentive amount (A), employer safety incentive (ESI) and return to work incentive (RTWI) (clause 3(1) and Schedule 1 definitions).
The Order imposes numerical constraints on the experience-adjusted component for higher-loss employers (clause 3(2) and (3)), setting caps on the experience adjusted premium [(T × (1 − S)) + (E × S)] relative to the basic tariff premium T depending on bands of T − A ($50,000, $150,000, $300,000). That cap is applied differently where the employer is a member of a group: clause 3(3) excludes the clause 3(2) treatment and instead requires comparison against aggregated group tariff sums (TG − AG) calculated on a 12‑month-equivalent basis (clause 3(3) and notes on AG/TG).
The Order creates two specified discounts for paying the initial premium in full: a 3% discount for employers other than small employers and a 5% discount for small employers, subject to conditions (clause 4). Those conditions include a 12‑month (or specific short-period) period of insurance, payment in full by the due date, not electing instalments and, for non-small employers, notifying the insurer of a reasonable estimate of wages (clause 4(1)(a)-(d); clause 4(2)).
Current sections
Direct links to the current provisions in Insurance Premiums Order (January–June) 2014.
This Order commences at 4 pm on 31 December 2013 and must be published in the Gazette.
3
Calculation of insurance premium payable by employer
3 Calculation of insurance premium payable by employer
3 Calculation of insurance premium payable by employer
(1) The premium payable by an employer for a policy of insurance is to be calculated by requiring the premium to be calculated for a period of insurance of not more than 12 months and:
(a) if the employer is a medium or large employer for the purposes of the policy, in accordance with the following formula:
(b) if the employer is a small employer for the purposes of the policy, in accordance with the following formula:
where:
P is the premium for the time being payable by the employer in respect of the period of insurance to which the policy relates, being:
(a) except as provided by paragraph (b), the initial premium so payable in accordance with this Order, or
(b) where adjustments are required to be made to that premium by reason of the operation of this Order, the premium so payable by reason of those adjustments.
T is the basic tariff premium for the employer, calculated with respect to the period of insurance in accordance with Schedule 3.
S is the experience adjustment factor for the employer determined with respect to the period of insurance in accordance with Schedule 4.
E is the experience premium, if any, for the employer determined with respect to the period of insurance in accordance with Schedule 5.
Q is the premiums adjustment contribution, if any, for the employer.
D is the dust diseases contribution, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 11.
I is the input tax credit adjustment, if any, for the employer determined with respect to the period of insurance in accordance with Schedule 8.
M is the Mine Safety Fund premium adjustment, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 9.
A is the apprentice incentive amount, if any, for the employer determined with respect to the period of insurance in accordance with Schedule 10.
ESI is the employer safety incentive, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 12.
RTWI is the return to work incentive, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 13.
(2) However, where the basic tariff premium less the apprentice incentive amount [T − A] for a policy of insurance whose total premium is to be calculated under subclause (1) (a):
(a) is less than $50,000 (or, if the period of insurance is to be less than 12 months, where the basic tariff premium less the apprentice incentive amount [T − A] would be less than $50,000 were that period of insurance to be 12 months), the experience adjusted premium [(T × (1 − S)) + (E × S)] is not to exceed one and a half times the amount of that basic tariff premium [1.5 × T], and
(b) is or exceeds $50,000 but is less than $150,000 (or, if the period of insurance is to be less than 12 months, where the basic tariff premium less the apprentice incentive amount [T − A] would be or would exceed $50,000 but would be less than $150,000 were that period of insurance to be 12 months), the experience adjusted premium [(T × (1 − S)) + (E × S)] is not to exceed twice the amount of that basic tariff premium [2 × T], and
(c) is or exceeds $150,000 but is less than $300,000 (or, if the period of insurance is to be less than 12 months, where the basic tariff premium less the apprentice incentive amount [T − A] would be or would exceed $150,000 but would be less than $300,000 were that period of insurance to be 12 months), the experience adjusted premium [(T × (1 − S)) + (E × S)] is not to exceed two and a half times the amount of that basic tariff premium [2.5 × T].
(3) However, if the employer is a member of a group:
(a) subclause (2) does not apply, and
(b) where the sum of the basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] for all the members of that group:
(i) is less than $50,000 (or, if the period of insurance is to be less than 12 months, where the sum of basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] would be less than $50,000 were that period of insurance to be 12 months), the experience adjusted premium for the employer’s policy [(T × (1 − S)) + (E × S)] is not to exceed one and a half times the amount of the employer’s basic tariff premium [1.5 × T], and
(ii) is or exceeds $50,000 but is less than $150,000 (or, if the period of insurance is to be less than 12 months, where the sum of basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] would be or would exceed $50,000 but would be less than $150,000 were that period of insurance to be 12 months), the experience adjusted premium for the employer’s policy [(T × (1 − S)) + (E × S)] is not to exceed twice the amount of the employer’s basic tariff premium [2 × T], and
(iii) is or exceeds $150,000 but is less than $300,000 (or, if the period of insurance is to be less than 12 months, where the sum of basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] would be or would exceed $150,000 but would be less than $300,000 were that period of insurance to be 12 months), the experience adjusted premium for the employer’s policy [(T × (1 − S)) + (E × S)] is not to exceed two and a half times the amount of the employer’s basic tariff premium [2.5 × T],
where:
AG is the sum of apprentice incentive amounts (if any) for all the members of the group calculated:
(a) where the period of insurance to which the premium relates is 12 months—in accordance with Schedule 10 with respect to that period of insurance, or
(b) where the period of insurance to which the premium relates is not 12 months—in accordance with Schedule 10 as if the policies to which the premiums relate had a period of insurance of 12 months.
TG is the sum of the basic tariff premiums for all the members of the group calculated:
(a) where the period of insurance to which the premium relates is 12 months—in accordance with Schedule 3 with respect to that period of insurance, or
(b) where the period of insurance to which the premium relates is not 12 months—in accordance with Schedule 3 as if the policies to which the premiums relate had a period of insurance of 12 months.
4
Discount available for premiums paid in full
4 Discount available for premiums paid in full
4 Discount available for premiums paid in full
(1) An employer (other than a small employer) is entitled to a discount of 3 percent on the initial premium payable by the employer for a policy of insurance if:
(a) the period of insurance to which the policy relates is 12 months (or a period of less than 12 months if the policy is issued to an employer who is member of a group to enable the policy to renew on the same date as the policies of other members of the group), and
(b) the employer has paid the discounted amount of the premium in full by the date on which payment of the premium is due, and
(c) the employer has not elected to pay the premium by instalments, and
(d) the employer has notified the insurer, in accordance with the regulations, of the reasonable estimate of the wages that will be payable during the period of insurance.
Note—
Clause 147 of the Workers Compensation Regulation 2010 requires an employer to notify the insurer concerned of the matter referred to in paragraph (d).
(2) A small employer is entitled to a discount of 5 percent on the initial premium payable by the small employer for a policy of insurance if:
(a) the period of insurance to which the policy relates is:
(i) 12 months, or
(ii) a period of less than 12 months but only if the policy is issued to a small employer who is member of a group to enable the policy to renew on the same date as the policies of other members of the group, or
(iii) a period of less than 12 months but only if the policy is issued to a small employer to enable the policy to expire at the end of a month, and
(b) the small employer has paid the discounted amount of the premium in full by the date on which payment of the premium is due, and
(c) the small employer has not elected to pay the premium by instalments.
5
Recovery of excess from employer: section 160 of Act
5 Recovery of excess from employer: section 160 of Act
5 Recovery of excess from employer: section 160 of Act
For the purposes of the definition of prescribed excess amount in section 160 (1) of the Act, the following excess amount is specified:
(a) if the employer concerned notified the relevant insurance scheme agent of the injury that led to the weekly compensation claim of the worker within 5 days of the employer becoming aware of it—$0,
(b) in all other cases—the lesser of the following:
(i) the amount that is the weekly payment of compensation to which the worker is entitled as determined by section 36 of the Act,
(ii) $1,903.70.
Note—
Under section 160 (2) of the Act, an employer is required to repay the prescribed excess amount to the insurer under a policy of insurance in respect of each weekly compensation claim that the insurer has paid under the policy. However, if the amount that the insurer has paid in respect of any such claim is less than the prescribed excess amount, the amount the employer must repay is that lesser paid amount.
6
Late payment prescribed rates: sections 170 (8) and 172 (5) of Act
6 Late payment prescribed rates: sections 170 (8) and 172 (5) of Act
6 Late payment prescribed rates: sections 170 (8) and 172 (5) of Act
For the purposes of sections 170 (8) and 172 (5) of the Act, the prescribed rate is 0.869% per month compounded monthly.
7
Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation
7 Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation
7 Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation
For the purposes of clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of the Workers Compensation Regulation 2010, the amount specified is $1,903.70.
8
Exemption limit for certain employers: section 155AA (8) of Act
8 Exemption limit for certain employers: section 155AA (8) of Act
8 Exemption limit for certain employers: section 155AA (8) of Act
The exemption limit (within the meaning of section 155AA (8) of the Act) for the following employers for the 2013–2014 financial year is fixed at $0:
(a) an employer who carries on a business that is covered by Table A classes 612310, 612315, 612320, 612322, 612324, 612326, 612330, 931120, 931130, 931920, 931930, 931940 or 931950 (being classes that refer to a per capita rate), regardless of whether the employer carries on any other business,
(b) an employer who carries on a business in the thoroughbred racing industry and who is required by the Rules of Racing (within the meaning of the Thoroughbred Racing Act 1996) to hold a policy of insurance with Racing NSW, regardless of whether the employer carries on any other business.
Note—
The effect of fixing the exemption limit for the specified employers at $0 is that those employers will not be “exempt employers” within the meaning of section 155AA (Exempt employers not required to obtain policy of insurance) of the Act.
9
Schedules form part of Order
9 Schedules form part of Order
9 Schedules form part of Order
Schedules 1–15 form part of this Order.
Schedule 1
Interpretation
Schedule 1 Interpretation
Schedule 1 Interpretation
(Clause 9)
10
Determination of wages—small employers
10 Determination of wages—small employers
10 Determination of wages—small employers
(1) This clause applies in relation to small employers.
(2) In this Order, a reference to wages, in relation to a period of insurance under a policy issued or to be issued to an employer or in relation to a period of 12 months ascertained by reference to any such period of insurance, is a reference:
(a) except as provided by paragraph (b):
(i) if the small employer is required by clause 147 (1) of the Workers Compensation Regulation 2010 to supply a reasonable estimate of the wages that will be payable by the employer during the period of insurance to workers employed by the employer—that reasonable estimate of the monetary value of all wages (not including any wages to which Schedule 7 applies) payable to workers by the employer in respect of the period of insurance or the period of 12 months, as the case may be, as calculated by reference to the returns, if any, furnished in accordance with the regulations by the employer to the insurer, or
(ii) in any other case—to a reasonable estimate of the monetary value of all wages (not including any wages to which Schedule 7 applies) payable to workers by the employer in respect of the immediately preceding period of insurance or the immediately preceding period of 12 months, as the case may be, or
(b) where the monetary value of those wages (not including any wages to which Schedule 7 applies) has been ascertained—to the actual value of those wages.
(3) For the purposes of subclause (2) (a) (ii), if the immediately preceding period of insurance is less than 12 months, the monetary value of the wages concerned is to be adjusted to reflect the wages that would be paid on a 12 monthly basis.
(4) For the avoidance of doubt:
(a) in this Order, a reference to wages payable to workers includes wages payable to apprentices, and
(b) in subclauses (2) and (3), the monetary value (or reasonable estimate) of wages for an employer for the immediately preceding equivalent period of insurance includes the monetary value (or reasonable estimate) of wages for the immediately preceding equivalent period of insurance paid to apprentices.
11
Meaning of “predecessor”
11 Meaning of “predecessor”
11 Meaning of “predecessor”
(1) For the purposes of this Order, a person is the predecessor of an employer if:
(a) Acquisition or otherwise gaining possession of predecessor’s business
the employer has acquired or otherwise come into the possession of the business of the person, or
(b) Transfer of all or majority of predecessor’s workforce
the employer has, during any policy period, employed workers who at any time constituted all or a majority of the workers employed, during any policy period, by the person and those workers have carried out activities or performed services for the employer that were the same or similar to activities carried out or services performed by those workers for the person.
Note—
The claims and wages history of an employer’s predecessor are used in the calculation of the employer’s workers compensation insurance premium—see clause 4 of Schedule 4 and clause 1 (3) of Schedule 5 to this Order.
(2) Subclause (1) (a) applies whether the business acquired is the whole or main part of the business of the person or is the whole or main part of a separate and distinct business of the person, and whether or not the business acquired is carried on at the same location.
(3) Subclause (1) (b) applies whether or not the activities carried out or services performed for the employer were carried out or performed at the same location as those carried out or performed for the person.
(4) In this clause, business has the same meaning as in Division 2B of Part 7 of the Act.
Schedule 2
Application
Schedule 2 Application
Schedule 2 Application
(Clause 9)
Schedule 3
Basic tariff premium
Schedule 3 Basic tariff premium
Schedule 3 Basic tariff premium
(Clause 3)
Schedule 4
Experience adjustment factor
Schedule 4 Experience adjustment factor
Schedule 4 Experience adjustment factor
(Clause 3)
Schedule 5
Experience premium
Schedule 5 Experience premium
Schedule 5 Experience premium
(Clause 3)
Schedule 6
Minimum premium
Schedule 6 Minimum premium
Schedule 6 Minimum premium
(Clause 9)
Schedule 7
Reduction of premium for employers of previously injured workers etc
Schedule 7 Reduction of premium for employers of previously injured workers etc
Schedule 7 Reduction of premium for employers of previously injured workers etc
(Clause 9)
Schedule 8
Input tax credit adjustment
Schedule 8 Input tax credit adjustment
Schedule 8 Input tax credit adjustment
(Clause 3)
Schedule 9
Mine Safety Fund premium adjustment
Schedule 9 Mine Safety Fund premium adjustment
Schedule 9 Mine Safety Fund premium adjustment
(Clause 3)
Schedule 10
Apprentice incentive scheme
Schedule 10 Apprentice incentive scheme
Schedule 10 Apprentice incentive scheme
(Clause 3)
Schedule 11
Dust diseases contribution
Schedule 11 Dust diseases contribution
Schedule 11 Dust diseases contribution
(Clause 3)
Schedule 12
Employer safety incentive
Schedule 12 Employer safety incentive
Schedule 12 Employer safety incentive
(Clause 3)
Schedule 13
Return to work incentive
Schedule 13 Return to work incentive
Schedule 13 Return to work incentive
(Clause 3)
Source text: opening excerpt
Sourced from legislation.nsw.gov.au, CC BY 4.0.
1 Name of Order
1 Name of Order
1 Name of Order
This Order is the Insurance Premiums Order (January–June) 2014.
2 Commencement
2 Commencement
2 Commencement
This Order commences at 4 pm on 31 December 2013 and must be published in the Gazette.
3 Calculation of insurance premium payable by employer
3 Calculation of insurance premium payable by employer
3 Calculation of insurance premium payable by employer
(1) The premium payable by an employer for a policy of insurance is to be calculated by requiring the premium to be calculated for a period of insurance of not more than 12 months and:
(a) if the employer is a medium or large employer for the purposes of the policy, in accordance with the following formula:
(b) if the employer is a small employer for the purposes of the policy, in accordance with the following formula:
where:
P is the premium for the time being payable by the employer in respect of the period of insurance to which the policy relates, being:
(a) except as provided by paragraph (b), the initial premium so payable in accordance with this Order, or
(b) where adjustments are required to be made to that premium by reason of the operation of this Order, the premium so payable by reason of those adjustments.
T is the basic tariff premium for the employer, calculated with respect to the period of insurance in accordance with Schedule 3.
S is the experience adjustment factor for the employer determined with respect to the period of insurance in accordance with Schedule 4.
E is the experience premium, if any, for the employer determined with respect to the period of insurance in accordance with Schedule 5.
Q is the premiums adjustment contribution, if any, for the employer.
D is the dust diseases contribution, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 11.
I is the input tax credit adjustment, if any, for the employer determined with respect to the period of insurance in accordance with Schedule 8.
It prescribes a monetary excess amount for the employer’s repayment to insurers under s 160 of the Act (clause 5). The prescribed excess is $0 where the employer notified the insurance scheme agent of the injury within five days of becoming aware; otherwise the prescribed excess is the lesser of the weekly payment of compensation determined under s 36 of the Act or $1,903.70 (clause 5). The Order also fixes the prescribed rates for late payments for the purposes of ss 170(8) and 172(5) of the Act at 0.869% per month compounded monthly (clause 6).
Several schedules contain the detailed building blocks: Schedule 3 (basic tariff premium T), Schedule 4 (experience adjustment factor S), Schedule 5 (experience premium E), Schedule 6 (minimum premium $175), Schedule 7 (reduction for employers who hire previously injured workers), Schedule 8 (input tax credit adjustment I and the ITC bands table), Schedule 9 (Mine Safety Fund adjustment M), Schedule 10 (apprentice incentive A), Schedule 11 (dust diseases D), Schedule 12 (employer safety incentive ESI) and Schedule 13 (return to work incentive RTWI). Schedule 1 provides definitions and administrative provisions (for example, how to treat motor vehicle and accommodation allowances and definitions of small/medium/large employer). Schedules 14 and 15 (Table A and Table B) provide rate tables and classification systems and are incorporated by reference (Schedule 1 definitions and Editorial notes). Schedules 1-15 form part of the Order (clause 9).
Mechanically, the Order removes scope for simple ad hoc premium setting by mandating formula inputs, creating caps and adjustments, and allocating certain financial consequences for late or missing notifications (for example, the 1.3 multiplier where medium/large employers fail to furnish returns,Schedule 1 cl 9(3); input tax credit entitlement treated as 100% where no notice is given,Schedule 8 cl 2(2)). It also establishes record‑keeping methods for motor vehicle allowances (continuous or averaging methods, Schedule 1 cl 3-7) and enables administrative discretion for the Authority and Governor in specific areas (for example, the Governor sets ICCR2 on the recommendation of the Authority,Schedule 5 cl 1). The Order expressly applies to certain specialised insurers only as limited by Schedule 2 (Schedule 2 cl 1-2).
Main concepts
This Order operationalises a small set of repeating concepts that determine the premium payable. Define and cite each where the Order does.
Basic tariff premium (T). The employer’s base premium before experience or other adjustments. Computed in Schedule 3 by summing parts of total wages attributable to classes in Table A multiplied by the corresponding percentage rates in Column 3 of Table A, or by substituting relevant per‑capita numbers where a per capita rate applies (Schedule 3 cl 1-2). The classification applicable to an employer is determined by reference to Table B (Schedule 1 cl 8).
Experience adjustment factor (S). A factor reflecting an employer’s recent claims history, calculated under Schedule 4. For employers insured for at least two years and who supplied claims particulars, S is derived from a specified formula (Schedule 4 cl 1(a) and the formula). New employers receive scaled factors (0.66 or 0.33 multipliers) depending on length of prior insurance (Schedule 4 cl 1(b)-(d)). Group member employers use aggregated group history to compute S where relevant (Schedule 4 cl 2).
Experience premium (E). A monetary adjustment reflecting claims costs; Schedule 5 provides formulas for initial calculation (before expiry of period) and hindsight recalculation after the period has expired (Schedule 5 cl 1). E uses Employer Claims Cost Rates (Initial ECCR and Hindsight ECCR), industry claims cost rates (ICCR1, ICCR2) and the employer’s cost-of-claims and wages over historical periods (Schedule 5 cl 1 and definitions).
Apprentice incentive (A). A tariff reduction for wages paid to apprentices; Schedule 10 sets the formula as the parts of apprentice wages attributable to classes multiplied by the applicable Table A rates (Schedule 10 cl 1). The Order also contains exceptions, including treatment where employers fail to supply required wage notices (Schedule 10 cl 2).
Input tax credit adjustment (I). Reflects the employer’s entitlement to input tax credits for GST paid on the premium. Schedule 8 sets formulae that convert an employer’s input tax credit entitlement into a percentage discount (B%) from 0% to 6% depending on bands of entitlement, and prescribes special caps to align with the experience adjusted premium caps (Schedule 8 cl 1 and its Table).
Dust diseases contribution (D). A contribution equivalent to insurers’ contributions to the Workers’ Compensation (Dust Diseases) Fund, calculated via Table A Column 5 rates, or, for employers in a particular class from the 1979 Board determination, a flat 4.4% on wages (Schedule 11 cl 1-2).
Mine Safety Fund adjustment (M). A small additional percentage applied to wages in the mining classes (Division B of Table B) using RMSF = 0.661% (Schedule 9 cl 1).
Employer safety incentive (ESI) and Return to Work incentive (RTWI). Performance-based adjustments relative to T. Schedule 12 sets ESI as a positive or negative fraction depending on whether a claim led to failure to return to pre‑injury employment within 4 weeks; Schedule 13 sets RTWI formulas tied to ESI and to return-to-work outcomes within 13 weeks (Schedule 12 cl 1; Schedule 13 cl 1).
Classification, per capita rate, wages and period of insurance. The classification system is the NSW WorkCover Industry Classification System (Table B) and the rate table is Table A. A per‑capita rate in Table A uses counts (e.g. events, licences) instead of wages (Schedule 1 definitions; Schedule 3 cl 2). Wages means wages as defined by s 174(9) of the Act, subject to exclusions for motor vehicle and accommodation allowances as set out (Schedule 1 cl 1 and cl 3).
Other structural concepts: group aggregation rules (Schedules 4, 5, 8 and clause 3(3)), predecessor treatment (Schedule 1 cl 11 and Schedule 4/5 provisions), minimum premium ($175,Schedule 6), caps on experience adjustment (clause 3(2)-(3)), and administrative consequences for missing information (classification at highest applicable rate, estimates and 1.3 multiplier for missing returns for medium/large employers,Schedule 3 cl 2; Schedule 1 cl 9(3)).
The Order embeds interaction with other legislation: it borrows definitions and procedural duties (for example, GST, apprenticeship and corporations definitions) from Commonwealth and State legislation (Schedule 1 cl 1 and multiple cross‑references), and it relies on regulations under the Act (clause 4(d) and Schedule 8 cl 2(1) referencing clause 151 of the Workers Compensation Regulation 2010).
Conceptually, the Order shifts premium setting from an ad hoc charge to a deterministic decomposition of tariff, experience, statutory levies and performance incentives that maps payroll, claims history and specified payments into a single payable premium with numerical caps and statutory minimums.
Who it affects
Primary economic actors affected by the Order are employers who are required to obtain and pay workers compensation insurance premiums and insurers who calculate and demand those premiums. The Order’s definitions treat “employer” broadly to include a person proposing to become an employer (Schedule 1 cl 1). Employers are divided for calculation purposes into small, medium and large categories determined by their basic tariff premium T at the time the insurer demands a premium (Schedule 1 cl 2). That classification governs which formula applies and certain entitlements, for example the different discount rates in clause 4 and different I computations in Schedule 8.
Group structures matter. Employers who are members of a group have aggregation rules applied in several places: clause 3(3) aggregates TG and AG for capping the experience adjusted premium; Schedule 4 cl 2 provides group experience factor S computed from group history; Schedule 5 contains special calculations where a group member departs (Schedule 5 cl 3); Schedule 8 cl 3 deals with ITC adjustments for group members; Schedule 10 cl 2(c) contains special treatment for small employers in groups with aggregate TG not exceeding $30,000. That means owners that organise as group entities may see aggregated tariffs and caps applied across members for experience and incentive calculations.
Specialised insurers are largely exempt from the Order under Schedule 2 cl 2(1), but clause 5 (prescribed excess amount) and Schedule 2 cl 2(2)(b) (Racing NSW) apply in specified limited ways to specialised insurers. Racing NSW is explicitly addressed for thoroughbred racing employers (clause 8(b) and Schedule 2 cl 2(2)(b)) and employers required by Rules of Racing to hold policies with Racing NSW are specified not to be “exempt employers” for 2013-14 under clause 8(b).
Apprentices and their wages are specifically relevant as inputs to A (Schedule 10) and to the S and E calculations where apprentices’ wages are included in the wage totals (Schedules 4 and 5). Employers hiring previously injured workers may apply for premium reductions under Schedule 7, subject to application and guideline requirements (Schedule 7 cl 3-4).
Regulatory and administrative bodies: the Authority (the workers compensation authority referred to in the Act) has delegated functions in the Order. The Authority may develop criteria and issue guidelines for reducing the experience adjustment factor (Schedule 4 cl 5), issue guidelines for applications under Schedule 7 (Schedule 7 cl 4), approve small employer wage notice forms for apprentice incentive calculations (Schedule 10 cl 2(4)), and may direct employers to keep odometer records if employing the averaging method (Schedule 1 cl 5(3)(a)). The Governor has a role in setting ICCR2 on the recommendation of the Authority (Schedule 5 cl 1).
Insurers are required to calculate premiums using the prescribed formulas, may apply estimation methods where employers fail to supply returns (Schedule 1 cl 9(2)-(3), Schedule 3 cl 2), and demand premiums. Insurers also may charge or recover prescribed excesses under s 160 as defined by clause 5, and are subject to contributions such as the Insurance Fund contributions and the Dust Diseases and Mine Safety Fund components that feed through to employer premiums (Schedules 8, 9, 11).
Other indirect stakeholders include: (a) workers, since the premium calculation and incentives (ESI and RTWI) affect employer behaviour around return to work; (b) industry classes listed in Table A and Table B, because class rates and classification rules flow directly into the tariff T; and (c) tax authorities tangentially, because the Order integrates GST input tax credit entitlement (Schedule 8) into premium adjustments.
Finally, the Order affects record-keeping practices and administrative costs for employers: odometer records, wage notifications to insurers (clause 4(d), Schedule 10 cl 2), claims particulars required to secure experience factor S (Schedule 4 cl 1), and the need to provide input tax credit entitlement notices (Schedule 8 cl 2(1)).
Key duties and rights
The Order sets specific duties and associated rights for employers and insurers; many duties have financial consequences if not performed.
Employer duties
Provide wage notifications and returns. Employers must supply reasonable estimates of wages to insurers where required by the Workers Compensation Regulation (clause 4(d); Schedule 10 cl 2(4) and Schedule 8 cl 2(1)). Where a medium or large employer fails to furnish returns, the insurer may estimate wages for the relevant period by multiplying the previous period’s wages by 1.3 (Schedule 1 cl 9(3)). Failure to supply information may also see the business classified in the highest applicable rate (Schedule 3 cl 2; Schedule 11 cl 2).
Keep motor vehicle records if excluding motor vehicle allowances from wages. Employers may elect the continuous recording or averaging calculation method and must keep the records set out in Schedule 1 cl 4-5 (odometer readings, purposes of journeys, distances, and related details). The averaging method imposes specific requirements for an initial 12‑week period and continuing rules for four succeeding insurance periods (Schedule 1 cl 5).
Supply input tax credit entitlement notice. Employers must notify the insurer of their input tax credit entitlement under clause 151 of the Workers Compensation Regulation 2010 for the period of insurance (Schedule 8 cl 2(1)). If an employer fails to notify, their ITC entitlement is taken to be 100% for the purposes of Schedule 8 (Schedule 8 cl 2(2)), which removes the I adjustment and can increase their premium.
Pay premiums and comply with payment terms. Employers must pay the initial premium and ongoing instalments if elected. Paying the premium in full by the due date confers a discount (3% for non‑small employers, 5% for small employers) if other preconditions are satisfied (clause 4). Not electing instalments is a condition for the discount (clause 4(1)(c)-(d)). Late payments attract the prescribed compounding rate (clause 6).
Notify injury to insurance scheme agent within 5 days to avoid prescribed excess. Section 160’s prescribed excess is $0 if the employer notified the relevant insurance scheme agent within 5 days of becoming aware of the injury; otherwise the excess is the lesser of the s 36 weekly payment or $1,903.70 (clause 5).
Apply for available reductions. Employers can apply to the Authority for reductions of the experience factor where there have been breaks in insurance (Schedule 4 cl 5(1)). Employers hiring previously injured workers may apply for premium reductions under Schedule 7, subject to Authority guidelines.
Rights and insurer duties
Right to discounts. Employers satisfying clause 4 conditions are entitled to a discount on the initial premium (clause 4(1)-(2)). That is an entitlement, not discretionary.
Right to select motor vehicle allowance method. Employers may choose between continuous recording or averaging methods for excluding motor vehicle allowances, subject to meeting the record‑keeping requirements (Schedule 1 cl 3(3) and cl 4-6).
Insurers must compute premiums using prescribed formulas. Insurers are required to calculate premiums by reference to clause 3 and the relevant Schedules. They may substitute per‑capita counts where per‑capita rates apply (Schedule 3 cl 2).
Insurers may impose minimum premium and apply statutory caps. The Order requires increasing a calculated premium to the minimum $175 where relevant (Schedule 6 cl 1-2) and instructs insurers to apply the caps on the experience adjusted premium where T − A falls into prescribed bands (clause 3(2)-(3)), and to apply input tax credit bands when computing I (Schedule 8 cl 1 Table).
Administrative and discretionary powers
The Authority may issue guidelines and develop criteria. For example, to reduce S after breaks in insurance (Schedule 4 cl 5(2)), to specify application method for Schedule 7 reductions (Schedule 7 cl 4(1)), and to approve forms for small employer wage notices (Schedule 10 cl 2(4)). The Authority may also direct employers to keep odometer details for the averaging method (Schedule 1 cl 5(3)(a)).
The Governor may determine ICCR2 on the recommendation of the Authority (Schedule 5 cl 1). That produces a variable industry claims cost rate used in E calculations.
Financial enforcement mechanism rather than criminal penalties
The Order primarily enforces duties through monetary and administrative mechanisms: premium increases (minimum premium), caps and adjustments, estimated wages multipliers, loss of discounts, and prescribed excess repayment obligations to insurers under s 160. The late payment rate is compounded monthly at 0.869% (clause 6).
These duties and rights are embodied throughout the Schedules and clauses and are concrete, numerical obligations and entitlements rather than open-ended policy parameters. The Order also contains procedural duties that interact with the Workers Compensation Regulation 2010 (for wage notification and ITC notices) and the Act (for recovery s 160 and late-payment references), making compliance a mix of record-keeping, timely notification and correct classification.
Penalties and enforcement
This Order does not introduce criminal penalties, forfeitures or new enforcement agencies; enforcement mechanisms are primarily financial and administrative, exercised within the statutory framework of the Act and its regulations. The Order creates enforceable monetary outcomes through several devices.
Monetary consequences and recoveries
Prescribed excess repayment (s 160). Clause 5 specifies the “prescribed excess amount” for s 160(1) of the Act. Employers must repay this amount to insurers in respect of each weekly compensation claim the insurer has paid. Clause 5 sets the excess at $0 when the employer notified the scheme agent within five days, and otherwise at the lesser of the s 36 weekly compensation amount or $1,903.70. Clause 5 expressly notes s 160(2) of the Act, which establishes the employer’s repayment obligation. The Order therefore enforces notification timeliness through the employer’s repayment exposure.
Late payment interest. Clause 6 prescribes the rate for ss 170(8) and 172(5) of the Act as 0.869% per month compounded monthly. That is a contractual and statutory financial penalty for late payment and applies to recoverable sums under the Act.
Minimum premium and premium increases. Schedule 6 prescribes a minimum premium of $175 and directs that where the calculated premium would otherwise be less than that amount, the insurer increases the premium to the minimum. That is an enforcement mechanism to maintain a floor on premium receipts.
Information- and compliance‑related enforcement
Estimation and classification consequences for missing information. If an employer does not supply sufficient information to classify the business, the business is classified in the class with the highest percentage rate that appears to be applicable (Schedule 3 cl 2; Schedule 11 cl 2). Medium/large employers who fail to furnish returns may have their wages for the period estimated by multiplying the immediately preceding equivalent period’s wages by 1.3 (Schedule 1 cl 9(3)). For ITC notification failures the ITC entitlement is taken to be 100% (Schedule 8 cl 2(2)). These are administrative penalties implemented through upward adjustments to the premium rather than fines.
Discount loss for paying by instalments or failing to notify. The full‑payment discounts (clause 4) are conditional. Electing instalments or failing to provide requisite notices (for small employers, certain notices in Schedule 10 cl 2) disqualifies the employer from the discount, which increases the employer’s cost relative to the discounted position.
Regulatory and discretionary enforcement roles
Authority powers. The Authority may develop criteria and guidelines for reducing the experience adjustment factor S following breaks in insurance and may issue guidelines for applications under Schedule 7 (Schedule 4 cl 5; Schedule 7 cl 4). It may also serve a notice requiring employers to keep odometer records where averaging has been used (Schedule 1 cl 5(3)(a)). Those powers are internal administrative mechanisms that shape outcomes but the Order does not detail sanctions for non‑compliance beyond the formulaic consequences.
Governor’s role. The Governor determines ICCR2 on the recommendation of the Authority (Schedule 5 cl 1). That is a policy lever for industry-level rate adjustments; the mechanism for enforcing ICCR2 is internal to the premium formulas.
Recovery and insurer rights
Insurers calculate and demand premiums based on the formulas; they recover prescribed excesses under s 160 as specified in clause 5 and may rely on late-payment provisions in the Act per clause 6. The Order therefore embeds insurer recovery mechanisms in statutory calculation and recovery processes.
Limits of enforcement in the Order
The Order does not specify criminal sanctions, administrative fines, or dispute resolution procedures; it relies on the Act and the Workers Compensation Regulation 2010 for the broader enforcement architecture (the Order cross‑references those instruments for notification duties and definitions). Any contested matters (classification disputes, disagreements about wage estimates or predecessor treatment) would proceed under the Act’s dispute framework rather than under this Order alone; the Order provides the computational rules that will be applied by insurers and the Authority.
In short, the Order enforces compliance through financially consequential defaults (loss of discounts, higher premiums via estimation rules or classification, prescribed excess repayments, interest for late payments) and by empowering administrative actors (Authority and Governor) to set auxiliary parameters (criteria, ICCR2). The effect is to translate administrative non‑compliance or late notification into higher premium costs or foregone discounts.
How it interacts with other laws
The Order is explicitly situated within a web of State and Commonwealth legislation and subordinate instruments. It operates as subordinate legislation under the Act and repeatedly incorporates external definitions and duties.
Primary interactions
Workers Compensation Act 1987 (the Act). The Order is made under the Act and references numerous provisions: it sets amounts for s 160 (prescribed excess) (clause 5), prescribes rates for ss 170(8) and 172(5) (clause 6), and otherwise supplies the detailed premium mechanics that give effect to s 155 and related premium‑setting provisions in the Act. The Order also notes that policy and premium definitions are "within the meaning of the Act" (Schedule 1 cl 1).
Workers Compensation Regulation 2010. The Order depends on the Regulation for notification procedures and certain employer duties. Clause 4(d) and the note after clause 4 reference clause 147 of the Regulation requiring employers to notify insurers of reasonable wage estimates. Schedule 8 cl 2(1) references clause 151 of the Regulation for the employer’s ITC notice obligation. Several Schedules explicitly state that classifications and wage allocation are to be determined by reference to returns “if any” furnished in accordance with the Regulations (Schedule 3 cl 1(2), Schedule 5 cl 1(2), Schedule 11 cl 1(3), etc.).
Commonwealth GST law. The Order adopts the term GST and links the input tax credit adjustment I to the A New Tax System (Goods and Services Tax) Act 1999, using employers’ input tax credit entitlements as an input and prescribing a reduction table based on percentage entitlements (Schedule 8 cl 1-2). The Order therefore directly integrates Commonwealth GST treatment into premium calculation.
Apprenticeship and Traineeship Act 2001. The Order borrows the definition of apprentice from that Act and uses apprentice wages as the basis for the apprentice incentive A (Schedule 10 cl 1(3); Schedule 1 cl 1).
Corporations Act 2001. Schedule 1 defines “limited proprietary company” by reference to s 112 of the Corporations Act. This informs the legal characterisation of certain entities for other purposes in the industrial and insurance context.
Workers’ Compensation (Dust Diseases) Act 1942. Schedule 11 uses the Board’s determinations under s 6(3) of that Act for a special dust-diseases contribution calculation for a particular class of employment (Schedule 11 cl 1(2)) and otherwise incorporates the Board’s historical classification for that contribution.
Safety, Rehabilitation and Compensation Act 1988 (Comcare). Schedule 5 includes special formulas relating to “Comcare employers”, reflecting employers who have been licensed under the Commonwealth Act after a declaration of eligibility (Schedule 5 cl 1 definitions).
Thoroughbred Racing Act 1996. Clause 8(b) fixes the exemption limit at $0 for employers in the thoroughbred racing industry who are required by the Rules of Racing to hold a policy with Racing NSW, thereby removing any “exempt employer” status under s 155AA for those employers for the 2013-14 financial year.
Administrative and publication interactions
Gazette publication. The Order requires publication in the Gazette (clause 2) and incorporates Table A and Table B via editorial notes pointing to Gazette No 146 of 31 October 2013 (Schedule 1 cl 1 Editorial notes). Schedule 5 cl 1 includes an editorial note referencing Gazette No 56 of 25 June 2014 for ICCR2 information.
Regulatory discretion and guidelines. The Order gives the Authority the power to develop guidelines and criteria for reductions and applications (Schedules 4 and 7), which will interact with the Act’s administrative structure and the substantive rights in the Regulation.
Limits and dependency
Many obligations in the Order assume or require actions under the Regulation and the Act. For example, the entitlement to the full‑payment discount relies on the employer notifying the insurer “in accordance with the regulations” (clause 4(1)(d)). Failure to comply with such external duties materially affects the premium calculation (loss of discounts, ITC entitlement treated as 100%, wage estimate multipliers, etc.).
The Order does not operate in isolation: it is a computational instrument that applies the statutory framework established by the Act and the Regulation and imports Commonwealth tax rules where relevant. Challenging classifications, recovery of excesses, or disputes about estimation will therefore proceed under the dispute and review mechanisms set out in the Act and the Regulation rather than under the Order itself.
In short, the Order is tightly integrated with the Act, the Workers Compensation Regulation 2010, Commonwealth GST law, apprenticeship legislation, and specialist dust‑disease and racing legislation. It prescribes the arithmetic and administrative inputs that these other instruments require employers and insurers to supply or follow.
Amendment history
The instrument itself identifies as the Insurance Premiums Order (January-June) 2014 and records its commencement at 4 pm on 31 December 2013 and a requirement to be published in the Gazette (clause 2). The Order contains internal editorial notes referencing subsequent Gazette publications where certain Tables or determinations may be found: Schedule 1 refers to Gazette No 146 of 31 October 2013 for the text of Schedule 14 (Table A) and Schedule 15 (Table B) (Schedule 1 cl 1 Editorial note). Schedule 5 includes an editorial note pointing to Gazette No 56 of 25 June 2014 concerning ICCR2 (Schedule 5 cl 1 Editorial note).
The text supplied does not set out later amending instruments or modifications within the document body. It includes the instruction that Schedules 1-15 form part of the Order (clause 9), and it embeds editorial notes (as quoted above) that point to Gazette entries for the rate tables and any Governor determinations. No specific amendment clauses or repeal provisions are contained within the text provided.
Instruments of this type are typically replaced by subsequent insurance premiums orders for later periods. The Order itself anticipates the potential absence of a successor premiums order by providing that, if before 4 pm on 30 June 2014 a further order has not been made, this Order will apply to policies taking effect after that time pending the making of such an order (Schedule 2 cl 1(2)). That language shows a designed interim operation in the statutory cycle.
If an amended premium order were to be made, the common practice (not stated explicitly in the text) would be to either revoke or supersede the prior order. The text provided, however, contains no schedule labelled “amendments” and records no later modification in its body. The editorial notes that refer users to the Gazette are the only internal references provided for locating the rate tables and any Governor determinations that may be notified separately.
For the purpose of compliance or historical review, the Order itself is the authoritative text for the specified period; any subsequent changes or repeals would be reflected in later orders or amending instruments that are not included in the material supplied. The Order does not record litigation, declaratory rulings, or internal amendment history beyond the editorial Gazette references and the commencement note.
Litigation history
The text of this Order does not contain or reference any judicial decisions, challenges, or litigation outcomes. It cites statutory provisions of the Workers Compensation Act 1987 and Regulations and includes editorial notes pointing to Gazette instruments for rate tables and Governor determinations, but it does not record court cases or tribunal decisions about its validity, interpretation or application.
Because the Order is subordinate legislation that prescribes quantitative and administrative rules, disputes arising from its application would generally be litigated under the framework of the Act and the Regulations. Such disputes could concern classification decisions, the calculation of T, S, E or I, the treatment of predecessors and group aggregation, the exercise of Authority discretions, or the insurer’s application of estimation rules where employers fail to furnish returns. The Order itself directs some decision-making roles (for example, the Authority’s power to develop criteria and the Governor’s role in setting ICCR2), so legal challenges about the exercise of those powers would be located in the Act and judicial review jurisprudence under administrative law; however, no such cases are cited in the Order.
The Order does include references to other instruments and statutory provisions that will be relevant in any dispute: s 160 (excess recovery), ss 170 and 172 (late payment), definitions in the Act and Regulations, and the procedures in the Workers Compensation Regulation 2010. Any litigation history would therefore be traceable through the Act’s dispute-resolution mechanisms and the courts or tribunals that determine workers compensation or administrative law challenges.
Because no litigation is mentioned in the Order text, practitioners relying on this instrument should check the Act, the Regulations and authoritative case law databases for any subsequent decisions interpreting equivalent orders, the Authority’s guidelines, or the application of the formulas in practice. The Order itself establishes calculation rules and administrative requirements; the pathways to contesting their application are external to the instrument and are not recorded here.
Gotchas
This Order contains numerous technical features that create concrete traps for employers and insurers if overlooked. A non-exhaustive but specific list of practical "gotchas" drawn directly from the Order is below.
Caps on experience-adjusted premium linked to T − A, not T alone (clause 3(2)). The caps that limit the experience‑adjusted premium to 1.5×T, 2×T or 2.5×T apply based on the basic tariff premium less the apprentice incentive amount (T − A). Failing to account for A in determining which cap band applies creates an error in applying the cap.
Group aggregation overrides individual caps (clause 3(3)). If the employer is a group member, clause 3(2) does not apply; instead the sum of members’ basic tariffs less apprentices’ incentives (TG − AG) is used to determine which cap, if any, applies, and the employer’s own experience adjusted premium is then capped according to the group sum. Groups therefore can trigger higher or lower caps depending on aggregated exposure,individual employers cannot simply apply the single‑employer cap rules.
Discount conditions are prescriptive. The full‑payment discounts require (i) specific period lengths (12 months or a special short-period for synchronising renewals), (ii) payment in full by the due date, (iii) no election to pay by instalments, and (iv) for non‑small employers, notification of a reasonable wages estimate to the insurer in accordance with the regulations (clause 4(1)). Missing one of these elements means forfeiting the discount.
Failure to notify ITC entitlement or wages has automatic adverse financial consequences. If an employer fails to notify its input tax credit entitlement per clause 151 of the Regulation, the employer’s ITC entitlement is taken to be 100% (Schedule 8 cl 2(2)), removing any positive I adjustment and potentially increasing the premium. Similarly, where returns are not furnished, medium/large employers face a 1.3 multiplier on previous wages for estimation (Schedule 1 cl 9(3)), and employers in general may be classified in the highest applicable class if they do not supply sufficient information (Schedule 3 cl 2; Schedule 11 cl 2).
Apprentice incentive for small employers may be zero until a notice is given (Schedule 10 cl 2(3)). For renewed policies, small employers’ A is taken to be zero until they have supplied a specified wage notice, potentially increasing premiums surprisingly for small employers who fail to supply the form.
Minimum premium applies after discount adjustments (Schedule 6 cl 3). The minimum premium of $175 applies after any discount; the clause explicitly includes premiums as discounted under clause 4. Employers expecting the discount to reduce the premium below the minimum will find the minimum re‑applied.
Motor vehicle allowance record-keeping complexity (Schedule 1 cl 3-7). Employers must choose between continuous recording (odometer readings for every business journey) and averaging (an initial 12‑week detailed recording then applying percentage apportionment for up to four future periods). The averaging method has strict rules on the relevant 12‑week period, replacement vehicles, and when fresh recordings are required (Schedule 1 cl 5-7). Failing to follow the chosen method’s rules can create disputes about the extent of allowance excluded from wages.
Prescribed excess is time‑sensitive (clause 5). The employer’s obligation to repay the prescribed excess under s 160 is $0 only if the employer notified the relevant insurance scheme agent within five days of becoming aware of the injury. The difference between $0 and (weekly payment or $1,903.70) is material.
ESI and RTWI are interrelated and outcome‑sensitive (Schedules 12-13). The RTWI formula depends on whether ESI > 0 and on return-to-work outcomes at 13 weeks, creating step changes in the premium. Employers should watch how early return-to-work performance interacts with ESI to avoid unexpected premium adjustments.
Per capita rates and mixed-rate policies require dual calculations (Schedules 3 and 5). Policies that include both per capita rates and wages need separate calculations (E1 and E2; Initial ECCR1/ECCR2) and recombination, which complicates premium computation and increases opportunities for calculation error (Schedule 5 cl 1(5)-(6); Schedule 3 cl 2).
Predecessor and departing member allocations can bring historical liabilities into a current premium (Schedule 1 cl 11; Schedule 5 cl 3). Employers that acquire businesses or take on most of another company’s workforce must account for predecessor claims history; similarly, continuing group members absorb a proportionate allocation of a departing member’s cost-of-claims in Schedule 5 cl 3, potentially changing their E calculation.
Industry claims cost rates (ICCR2) can be adjusted by the Governor on the Authority’s recommendation (Schedule 5 cl 1). This is a policy lever outside an employer’s direct control that feeds into E and therefore can change premiums after rates are published in the Gazette.
Interaction with external regulations. Several entitlements depend on compliance with the Workers Compensation Regulation 2010 (clause 4(d), Schedule 8 cl 2(1), Schedule 10 cl 2). Practitioners must ensure compliance with those regulatory notification clauses to secure discounts, ITC adjustments and apprentice incentives.
Rounding and expressed currency. The Order directs that the value of any amount be expressed in dollars (Schedule 1 cl 1(2)), and many formulas are arithmetic; rounding and currency expression rules can affect final invoices in marginal cases.
Each of these features is a concrete operational rule in the Order; missing them produces predictable financial effects rather than vague compliance breaches. For advisers and compliance officers the practical response is to map each of these mechanics to processes: timely notifications, wage-return cycles, mileage record systems, apprenticeship wage reporting, and group bookkeeping to ensure TG/AG and predecessor histories are properly accounted for.
How to comply
Compliance with this Order is a combination of accurate data provision, timely notifications, record-keeping, and an understanding of how formulaic adjustments will apply. The following is a practical compliance checklist structured to reflect the Order’s mechanics and to cite the relevant clauses.
Identify employer size for formula selection (Schedule 1 cl 2)
Compute or ascertain the basic tariff premium T for a 12‑month equivalent period to determine whether you are a small (T ≤ $30,000), medium, or large (T > $500,000) employer. This determines whether clause 3(1)(a) or 3(1)(b) applies and which discount rules apply (clause 4).
Maintain accurate wage reporting and return schedules (Schedule 3 cl 1(2); Schedule 1 cl 9)
Furnish returns required by the Workers Compensation Regulation 2010 in full and on time. If you are a medium/large employer and fail to furnish returns, the insurer may estimate wages by applying a 1.3 multiplier to the immediately preceding equivalent period (Schedule 1 cl 9(3)).
Use accurate allocations of wages across classes in Table A (Schedule 3 cl 1) and preserve underlying documents in case the insurer seeks to reclassify.
Plan for and, where advantageous, pay premiums in full to claim discounts (clause 4)
To obtain the 3% or 5% discount: ensure the policy period qualifies, pay the discounted amount in full by the due date, do not elect instalments, and for non‑small employers notify the insurer of a reasonable estimate of wages in accordance with the regulations (clause 4(1)-(2)). Small employers must supply specific wage notices for some renewals to secure A (Schedule 10 cl 2(3)-(4)).
Record retention for motor vehicle and accommodation allowances (Schedule 1 cl 3-7)
If you pay motor vehicle allowances and wish to exclude part of them from wages, choose and consistently apply either the continuous recording method (odometer readings per journey,Schedule 1 cl 4) or the averaging method (initial 12‑week detailed recording and percentages applied to subsequent periods,Schedule 1 cl 5-6). Keep records for the periods required and comply with Authority notices to retain odometer details if directed (Schedule 1 cl 5(3)(a)).
Provide the insurer with the employer’s input tax credit entitlement notice under the Regulation for each period of insurance (Schedule 8 cl 2(1)). Absent a notice, ITC entitlement is taken to be 100%, which likely removes the I adjustment (Schedule 8 cl 2(2)).
Report apprentice wages if you expect to claim the apprentice incentive A and ensure documentation supports apprenticeship contracts in accordance with the Apprenticeship and Traineeship Act 2001 (Schedule 10 cl 1(3); Schedule 10 cl 2).
Keep claims particulars up to date to secure accurate S and E (Schedule 4 cl 1; Schedule 5 cl 1)
Supply particulars of claims in accordance with the regulations; S is only calculable where employers have supplied claims particulars (Schedule 4 cl 1(a)(ii)). If you are new or have breaks in insurance, apply to the Authority for consideration of S reductions under Schedule 4 cl 5.
Understand group and predecessor rules (clause 3(3); Schedule 1 cl 11; Schedule 5 cl 3)
If you are a member of a group, assemble TG and AG correctly for cap calculations (clause 3(3), Schedule 8 cl 3). For acquisitions or where a predecessor exists, ensure appropriate historical claims and wages records are supplied because predecessor history is included in S and E calculations (Schedule 1 cl 11; Schedule 4 cl 4; Schedule 5 cl 3).
Prepare for minimum premium and estimation results (Schedule 6; Schedule 3 cl 2)
Ensure the anticipated premium after discounts does not fall below $175; if so, the insurer must raise it to the minimum (Schedule 6 cl 1-3). If insufficient classification evidence is provided, expect classification in the highest applicable class (Schedule 3 cl 2).
Reconcile per capita elements separately (Schedules 3 and 5)
For policies involving per capita rates, calculate tariff and experience elements separately for the per‑capita components as required, then recombine (Schedule 3 cl 2; Schedule 5 cl 1(5)-(6)).
Monitor return-to-work and safety incentive consequences (Schedules 12-13)
Track return-to-work outcomes at 4 weeks (for ESI) and at 13 weeks (for RTWI) and document outcomes rigorously because these result in formulaic premium adjustments in Schedules 12 and 13.
Liaise with insurers and the Authority on discretionary matters
If you have breaks in insurance, are a new employer or need S reductions, apply to the Authority and provide the supporting documentation required by any guidelines the Authority issues (Schedule 4 cl 5; Schedule 7 cl 4). For questions about classification or ICCR2, pursue clarification via the Authority or insurer, noting the Governor sets ICCR2 on recommendation (Schedule 5 cl 1).
Ensure timely injury notifications to avoid excess repayment (clause 5)
To secure the $0 prescribed excess under s 160, notify the relevant insurance scheme agent of injuries that lead to weekly compensation claims within five days of becoming aware (clause 5).
Maintain governance around data and internal controls
Payroll systems must be able to allocate wages to Table A classes, record apprentices’ wages separately, record motor vehicle mileage if applicable, and provide evidence of wage notices and ITC notifications. Internal compliance checklists should map each required notification to the Department/insurer contact and the Regulations’ clause numbers.
Review published Tables and Governor determinations
Consult the Gazette references for Table A and Table B and for any ICCR2 notices (Schedule 1 cl 1 Editorial note; Schedule 5 cl 1 Editorial note). Ensure that your classifications and rate inputs reflect the Gazetteed tables that are incorporated by reference.
Practical administrative steps
Create a compliance calendar tied to policy renewal dates that lists (a) wage notification deadlines, (b) ITC notification deadlines, (c) records required for any averaging periods, and (d) deadlines for applying for S reductions or Schedule 7 appeals.
Reconcile payroll and industry classification with insurers at least 60-90 days before renewal so reclassification or input corrections can be made in time.
For groups, maintain a consolidated ledger showing TG and AG calculations, and document any departing member events under Schedule 5 cl 3 so the continuing employer can compute Ga as required.
Where possible, obtain written confirmations from insurers about the applied classification, T, S, E and any estimates used; this reduces disputes later and creates an audit trail.
Following these steps and mapping obligations to the specific clauses and schedules will materially reduce the risk of upward adjustments, forfeited discounts, and other financially adverse outcomes that are the principal enforcement mechanisms in the Order.
Section 6Late payment prescribed rates: sections 170 (8) and 172 (5) of Act
M is the Mine Safety Fund premium adjustment, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 9.
A is the apprentice incentive amount, if any, for the employer determined with respect to the period of insurance in accordance with Schedule 10.
ESI is the employer safety incentive, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 12.
RTWI is the return to work incentive, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 13.
(2) However, where the basic tariff premium less the apprentice incentive amount [T − A] for a policy of insurance whose total premium is to be calculated under subclause (1) (a):
(a) is less than $50,000 (or, if the period of insurance is to be less than 12 months, where the basic tariff premium less the apprentice incentive amount [T − A] would be less than $50,000 were that period of insurance to be 12 months), the experience adjusted premium [(T × (1 − S)) + (E × S)] is not to exceed one and a half times the amount of that basic tariff premium [1.5 × T], and
(b) is or exceeds $50,000 but is less than $150,000 (or, if the period of insurance is to be less than 12 months, where the basic tariff premium less the apprentice incentive amount [T − A] would be or would exceed $50,000 but would be less than $150,000 were that period of insurance to be 12 months), the experience adjusted premium [(T × (1 − S)) + (E × S)] is not to exceed twice the amount of that basic tariff premium [2 × T], and
(c) is or exceeds $150,000 but is less than $300,000 (or, if the period of insurance is to be less than 12 months, where the basic tariff premium less the apprentice incentive amount [T − A] would be or would exceed $150,000 but would be less than $300,000 were that period of insurance to be 12 months), the experience adjusted premium [(T × (1 − S)) + (E × S)] is not to exceed two and a half times the amount of that basic tariff premium [2.5 × T].
(3) However, if the employer is a member of a group:
(a) subclause (2) does not apply, and
(b) where the sum of the basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] for all the members of that group:
(i) is less than $50,000 (or, if the period of insurance is to be less than 12 months, where the sum of basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] would be less than $50,000 were that period of insurance to be 12 months), the experience adjusted premium for the employer’s policy [(T × (1 − S)) + (E × S)] is not to exceed one and a half times the amount of the employer’s basic tariff premium [1.5 × T], and
(ii) is or exceeds $50,000 but is less than $150,000 (or, if the period of insurance is to be less than 12 months, where the sum of basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] would be or would exceed $50,000 but would be less than $150,000 were that period of insurance to be 12 months), the experience adjusted premium for the employer’s policy [(T × (1 − S)) + (E × S)] is not to exceed twice the amount of the employer’s basic tariff premium [2 × T], and
(iii) is or exceeds $150,000 but is less than $300,000 (or, if the period of insurance is to be less than 12 months, where the sum of basic tariff premiums less the sum of apprentice incentive amounts [TG− AG] would be or would exceed $150,000 but would be less than $300,000 were that period of insurance to be 12 months), the experience adjusted premium for the employer’s policy [(T × (1 − S)) + (E × S)] is not to exceed two and a half times the amount of the employer’s basic tariff premium [2.5 × T],
where:
AG is the sum of apprentice incentive amounts (if any) for all the members of the group calculated:
(a) where the period of insurance to which the premium relates is 12 months—in accordance with Schedule 10 with respect to that period of insurance, or
(b) where the period of insurance to which the premium relates is not 12 months—in accordance with Schedule 10 as if the policies to which the premiums relate had a period of insurance of 12 months.
TG is the sum of the basic tariff premiums for all the members of the group calculated:
(a) where the period of insurance to which the premium relates is 12 months—in accordance with Schedule 3 with respect to that period of insurance, or
(b) where the period of insurance to which the premium relates is not 12 months—in accordance with Schedule 3 as if the policies to which the premiums relate had a period of insurance of 12 months.
4 Discount available for premiums paid in full
4 Discount available for premiums paid in full
4 Discount available for premiums paid in full
(1) An employer (other than a small employer) is entitled to a discount of 3 percent on the initial premium payable by the employer for a policy of insurance if:
(a) the period of insurance to which the policy relates is 12 months (or a period of less than 12 months if the policy is issued to an employer who is member of a group to enable the policy to renew on the same date as the policies of other members of the group), and
(b) the employer has paid the discounted amount of the premium in full by the date on which payment of the premium is due, and
(c) the employer has not elected to pay the premium by instalments, and
(d) the employer has notified the insurer, in accordance with the regulations, of the reasonable estimate of the wages that will be payable during the period of insurance.
Note—
Clause 147 of the Workers Compensation Regulation 2010 requires an employer to notify the insurer concerned of the matter referred to in paragraph (d).
(2) A small employer is entitled to a discount of 5 percent on the initial premium payable by the small employer for a policy of insurance if:
(a) the period of insurance to which the policy relates is:
(i) 12 months, or
(ii) a period of less than 12 months but only if the policy is issued to a small employer who is member of a group to enable the policy to renew on the same date as the policies of other members of the group, or
(iii) a period of less than 12 months but only if the policy is issued to a small employer to enable the policy to expire at the end of a month, and
(b) the small employer has paid the discounted amount of the premium in full by the date on which payment of the premium is due, and
(c) the small employer has not elected to pay the premium by instalments.
5 Recovery of excess from employer: section 160 of Act
5 Recovery of excess from employer: section 160 of Act
5 Recovery of excess from employer: section 160 of Act
For the purposes of the definition of prescribed excess amount in section 160 (1) of the Act, the following excess amount is specified:
(a) if the employer concerned notified the relevant insurance scheme agent of the injury that led to the weekly compensation claim of the worker within 5 days of the employer becoming aware of it—$0,
(b) in all other cases—the lesser of the following:
(i) the amount that is the weekly payment of compensation to which the worker is entitled as determined by section 36 of the Act,
(ii) $1,903.70.
Note—
Under section 160 (2) of the Act, an employer is required to repay the prescribed excess amount to the insurer under a policy of insurance in respect of each weekly compensation claim that the insurer has paid under the policy. However, if the amount that the insurer has paid in respect of any such claim is less than the prescribed excess amount, the amount the employer must repay is that lesser paid amount.
6 Late payment prescribed rates: sections 170 (8) and 172 (5) of Act
6 Late payment prescribed rates: sections 170 (8) and 172 (5) of Act
6 Late payment prescribed rates: sections 170 (8) and 172 (5) of Act
For the purposes of sections 170 (8) and 172 (5) of the Act, the prescribed rate is 0.869% per month compounded monthly.
7 Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation
7 Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation
7 Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation
For the purposes of clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of the Workers Compensation Regulation 2010, the amount specified is $1,903.70.
8 Exemption limit for certain employers: section 155AA (8) of Act
8 Exemption limit for certain employers: section 155AA (8) of Act
8 Exemption limit for certain employers: section 155AA (8) of Act
The exemption limit (within the meaning of section 155AA (8) of the Act) for the following employers for the 2013–2014 financial year is fixed at $0:
(a) an employer who carries on a business that is covered by Table A classes 612310, 612315, 612320, 612322, 612324, 612326, 612330, 931120, 931130, 931920, 931930, 931940 or 931950 (being classes that refer to a per capita rate), regardless of whether the employer carries on any other business,
(b) an employer who carries on a business in the thoroughbred racing industry and who is required by the Rules of Racing (within the meaning of the Thoroughbred Racing Act 1996) to hold a policy of insurance with Racing NSW, regardless of whether the employer carries on any other business.
Note—
The effect of fixing the exemption limit for the specified employers at $0 is that those employers will not be “exempt employers” within the meaning of section 155AA (Exempt employers not required to obtain policy of insurance) of the Act.
9 Schedules form part of Order
9 Schedules form part of Order
9 Schedules form part of Order
Schedules 1–15 form part of this Order.
Schedule 1 Interpretation
Schedule 1 Interpretation
Schedule 1 Interpretation
(Clause 9)
1 Definitions
1 Definitions
1 Definitions
(1) In this Order:
apprentice has the same meaning as in the Apprenticeship and Traineeship Act 2001.
apprentice incentive amount, in relation to an employer, means the amount calculated in accordance with Schedule 10.
basic tariff premium, in relation to a policy, means the basic tariff premium for the policy calculated in accordance with Schedule 3.
claim means a claim made by a person against an employer to which a policy relates.
dust diseases contribution, in relation to an employer, means an amount equivalent to the contributions, if any, payable by an insurer in respect of the employer to the Workers’ Compensation (Dust Diseases) Fund (plus any GST payable) that is calculated in accordance with Schedule 11.
employer includes a person who proposes to become an employer.
input tax credit entitlement, in relation to an employer, means the amount of input tax credit that may be claimed by the employer in accordance with the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth in respect of the issue or renewal of a policy of insurance expressed as a percentage of the GST payable by the employer in respect of the issue or renewal of that policy.
insurer means a licensed insurer, or a former licensed insurer, within the meaning of the Act.
limited proprietary company means a proprietary company limited by shares as referred to in section 112 of the Corporations Act 2001 of the Commonwealth.
NSW WorkCover Industry Classification System or NSWWIC System means the industry classification system set out in Table B.
per capita rate means a rate specified in Column 3 of Table A that is expressed otherwise than as a percentage.
period of insurance, in relation to a policy, means a period for which an insurer assumes risk under the policy, being a period that commences on the first day on which the policy is in force after having been issued or renewed.
policy or policy of insurance means a policy of insurance within the meaning of the Act.
predecessor—see clause 11.
premiums adjustment contribution, in relation to an employer, means an amount equivalent to such part of the contributions, if any, payable by an insurer to the Insurance Fund under section 208 or 208AA of the Act as relates to the premium payable by the employer to the insurer.
regulations means regulations under the Act.
Table A means the Table set out i
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