Page 3073 - Week 10 - Thursday, 15 August 2013
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In February this year the government determined that it would gradually unwind this subsidy by incrementally transferring these costs from the territory’s budget to a levy on workers compensation insurers. Insurers are expected to pass on some or all of these costs to employers via workers compensation premium prices. Consequently, once the new funding arrangements have been fully implemented, the price of a workers compensation policy will more accurately reflect the true cost of work injury prevention and management in the territory.
New work injury management system funding arrangements commenced in July this year with the introduction of a levy on insurers to cover workers compensation regulatory costs. This levy will collect around $2 million per annum and cover infrastructure and services costs, including the workers compensation inspectorate within WorkSafe ACT, actuarial support services, policy and information technology system costs. Existing provisions within the Workers Compensation Act 1951 allow these workers compensation administration costs to be so apportioned to insurers without changes to the legislation. An amendment is required, however, to similarly apportion the cost of regulating work health and safety laws, and that is what this bill does.
Subject to the passage of the bill the government intends to expand the scope of the regulatory levy on workers compensation insurers to include work health and safety costs commencing from July next year. To smooth the transition to the new arrangements and protect employers from unreasonable workers compensation premium increases, the government has put procedures in place to cap the amount of money that can be collected under the new levy. This will mean the new arrangements will come online gradually, over a period of up to five years. Once fully implemented, the work health and safety component of the regulatory levy will cover infrastructure and services, including the cost of work safety inspectors and WorkSafe ACT investigative staff, work health and safety licensing and certification staff, work health and safety hotline staff plus associated information technology and policy support services. The bill also enables all workers compensation levies to be administered in a more efficient and streamlined manner.
The Workers Compensation Act currently provides for default insurance fund costs to be met by a levy on workers compensation insurers. The default insurance fund is the territory’s safety net insurer. It provides workers compensation benefits and services to injured workers whose employers do not hold a policy of insurance or if the insurer cannot meet their liabilities. Insurers also make a financial contribution towards Magistrates Court workers compensation arbitration service costs.
To provide for administrative efficiencies and reduce red tape for insurers, the bill also makes changes necessary to align the timing and method for apportioning all new and existing insurer levies between insurers for a particular financial year. These changes are expected to reduce costs for insurers and government and provide further protections against employers being overcharged for workers compensation insurance.
The government is committed to the cost-effective and efficient delivery of a regulatory environment that improves health and safety and supports workers in the
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