Oh, oh. I don't have WorkCover insurance

Oh, oh. I don't have WorkCover insurance

A compulsory 'WorkCover' scheme protects all Victorian workers if they become injured during the course of employment. Under this scheme, employers who pay workers more than $7,500 in the financial year must register for WorkCover insurance to cover them. However, not everyone who is earning money in Victoria is considered to be a worker under the law.

Rateable remuneration

Insurance premiums are determined by remuneration paid out by a business. Remuneration is the gross amount of wages and other benefits paid to workers, before tax. There are a few exceptions.

How much rateable remuneration a business pays to workers determines whether the business needs to register for WorkCover insurance, and the threshold is currently $7,500.

Sole traders and partnerships may not need WorkCover insurance

Individuals running businesses are generally not recognised as workers when it comes to WorkCover insurance. This includes sole traders or sole proprietors, partners in a partnership and trustees of trusts who do not have workers . They are also not employers so they cannot register for WorkCover insurance.

Employers who are paying, or expect to pay, workers more than $7,500 in the financial year must register for WorkCover insurance to cover them.

Companies and trustees running businesses generally do need WorkCover insurance

Companies and trusts are separate legal entities to the people who own or work for them. It is possible for the company or a trustee to register for insurance. In fact, if a company or trust is going to pay more than $7,500 a year in rateable remuneration to any person, even if it is only the person owning or running the company or trust, they should register for WorkCover insurance.

Directors and employees of proprietary limited companies or of trusts are covered by WorkCover insurance.

Who is a worker

It is not always clear who is a worker for the purposes of the WorkCover scheme. Employees are clearly workers, but contractors may not be. If a contractor is a consultant, agent or outworker they are likely a worker but contractors may also operate as sole proprietors, partnerships, companies or through family trusts.

As a guide, WorkCover says, if the work the contractor is undertaking for you makes up more than 80% of their total workload, it is likely that what you are paying them needs to be included as part of your rateable remuneration.

I was injured in a workplace accident and do not have insurance, what do I do?

If you are not classified as a worker you are not eligible for WorkCover insurance. To cover your expenses or losses, you should look to lodging a claim against your personal insurance or superannuation.

If you have been exempt from paying WorkCover premiums because you pay less than the rateable remuneration to workers, but are now an injured worker or have an injured worker, you can call WorkSafe and get assistance. You will have to start paying premiums from that time. The current minimum for premiums is $206.80 per year.

If you report an injury to WorkSafe and have not previously been paying WorkCover premiums, there may be financial implications.

You may or may not have insurance for your injury.

I was injured at work, but it was the fault of a third party - what do I do?

If you are a worker , you can access assistance through the WorkCover scheme, from your WorkCover insurer. You can lodge an application form with your employer. The WorkCover insurer will decide whether or not to recover what they pay from the third party.

If you are not a worker , you can sue the third party under the Wrongs Act 1958 for any expenses or losses, including lost earnings. If your permanent injury is bad enough to meet the legal threshold, you can also sue for your pain and suffering.

Take home message for employers

If you employ workers and pay them more than $7,500 per year, or own a company or trust which employs you as a worker, you need WorkCover insurance. You are running a significant risk not having this insurance and could be denying you and your workers access to assistance at a critical time.

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