Workers compensation insurance for Australian employers
Workers compensation provides statutory protection when an eligible worker suffers a work-related injury or illness. RMA Insurance Brokers helps employers review workforce information, remuneration and the workers compensation arrangements that may apply to their business.
Supporting employers as workforces and obligations change.
Overview
Workers compensation overview
Workers compensation is a statutory system designed to provide benefits and support to eligible workers who suffer an injury or illness arising from their employment.
Depending on the applicable scheme and circumstances, benefits may include income support, medical and hospital expenses, rehabilitation and certain lump-sum benefits.
Workers compensation arrangements are not identical throughout Australia. Each state and territory operates its own scheme, alongside Commonwealth arrangements, and requirements differ in areas such as worker eligibility, remuneration, benefits and return-to-work obligations.
Who it is for
Who needs workers compensation insurance?
Workers compensation obligations apply broadly to Australian employers, but the precise requirements depend on the jurisdiction, business structure, people engaged and applicable statutory definitions.
- Full-time employees
- Part-time employees
- Casual employees
- Apprentices and trainees
- Seasonal and agricultural workers
- Contractors who may be treated as workers under the applicable scheme
It should not be assumed that calling someone a contractor means they fall outside workers compensation.
Cover
What benefits may be available?
Workers compensation benefits are set by the legislation and scheme that applies to the worker and the employer, rather than by a single national policy.
The benefit areas below are commonly available in some form, subject to the applicable jurisdiction, the accepted claim and the worker’s circumstances.
Weekly income support
Where an eligible worker cannot work, or has a reduced capacity for work because of a work-related injury or illness, the applicable workers compensation scheme may provide weekly payments.
The amount, duration and calculation of benefits depend on the applicable scheme and the worker’s circumstances.
Medical & hospital expenses
Workers compensation may meet eligible medical, hospital, medication and treatment expenses associated with an accepted work-related injury or illness.
What is payable depends on the applicable scheme and the accepted claim.
Rehabilitation & return to work
Workers compensation schemes generally place significant emphasis on rehabilitation and helping injured workers return to suitable employment.
Depending on the jurisdiction and circumstances, this may involve treatment, rehabilitation services, workplace adjustments and return-to-work planning.
Permanent impairment benefits
Where a worker suffers an eligible permanent impairment, a statutory lump-sum benefit may be available.
How permanent impairment is assessed, and the benefit payable, differ between jurisdictions.
Death & dependency benefits
Workers compensation schemes may also provide statutory benefits where a work-related injury or illness results in death.
The benefits available to dependants and the way entitlement is determined depend on the applicable jurisdiction.
Other statutory benefits
Other eligible expenses or benefits may be available depending on the scheme and the injury or illness.
These should not be assumed to apply uniformly, because eligibility is determined by the relevant legislation and scheme.
Jurisdiction
Workers compensation is different in each jurisdiction
Australia does not operate one workers compensation arrangement for every employer. Separate statutory schemes operate across the states and territories, together with Commonwealth arrangements.
Businesses operating across jurisdictions may need to consider:
where workers usually work
interstate and cross-border workers
which scheme applies
whether obligations arise in more than one jurisdiction
worker and contractor definitions
remuneration declarations and jurisdiction-specific return-to-work requirements
How workers compensation is arranged also differs between jurisdictions. Depending on the scheme, employers may obtain cover through a statutory arrangement, an authorised insurer or service provider, or in some circumstances operate under an approved self-insurance arrangement.
RMA Insurance Brokers helps clients identify which workers compensation arrangement applies to the business and what information may be required.
Jurisdiction matters. The scheme rules that apply to a business, and to each worker, should be checked rather than assumed.
Classification
Who is treated as a worker under the scheme?
One of the most important workers compensation questions is not simply how many employees a business has. It is who is treated as a worker under the applicable scheme.
Depending on the jurisdiction and working arrangement, people described as contractors or subcontractors may still be treated as workers for workers compensation purposes.
The tests used to determine this differ between states and territories and should be checked under the applicable scheme rather than assumed.
Businesses relying heavily on contractors should review these arrangements rather than assume every contractor carries their own workers compensation responsibility.
Labour hire arrangements may involve separate workers compensation responsibilities between the labour hire provider and host business, depending on the jurisdiction and arrangement.
Boundaries
Where other insurance applies
Workers compensation is designed around work-related injury or illness suffered by eligible workers.
Management Liability Insurance, including Employment Practices Liability where provided, addresses different employment-related allegations such as certain claims involving dismissal, discrimination, bullying or harassment.
Public and Products Liability Insurance generally addresses third-party personal injury or property damage rather than statutory workers compensation benefits owed to workers.
Workers compensation does not replace an employer’s responsibility to provide a safe workplace. For farms and agricultural businesses, our Insight on farm safety from an insurance perspective looks at how machinery, vehicles, livestock, contractors and workplace controls interact with insurance and claims.
These arrangements are not interchangeable and may each need consideration.
Information
What information may be needed for a review?
When reviewing workers compensation arrangements, we usually look at:
legal entity, ABN and jurisdictions of operation
business activities and worker numbers
estimated or actual remuneration
apprentices, trainees and seasonal workers
contractor, subcontractor and labour-hire arrangements
interstate workers, previous workers compensation arrangements and claims information
The applicable scheme may require additional information.
Eligibility
Eligibility depends on the applicable scheme
Workers compensation entitlement is determined under the relevant legislation and scheme. Whether a person or claim is eligible depends on the applicable jurisdiction and circumstances:
- the person must meet the applicable definition of a worker
- the injury or illness must satisfy the relevant statutory connection with employment
- business owners or working principals may be treated differently depending on business structure and jurisdiction
- contractors may or may not be treated as workers depending on the applicable scheme
- only benefits available under the relevant statutory scheme are payable
- non-work-related injury or illness generally falls outside workers compensation
This is not a complete summary of eligibility requirements.
The insurer, statutory authority or scheme administrator determines eligibility and benefit entitlement under the applicable legislation.
When should workers compensation arrangements be reviewed?
A review is particularly worthwhile when a business is:
- first employing staff
- starting operations in another state or territory
- materially changing worker numbers or remuneration
- engaging apprentices, trainees or seasonal labour
- materially changing contractor, subcontractor or labour-hire arrangements
- changing the principal business activity
- acquiring or restructuring a business or legal entity
- experiencing a significant workplace injury or change in claims experience
Employers should also keep workforce, remuneration and business information current.
Workplace safety measures reduce injury risk, while accurate worker records help the business respond if an incident occurs.
Broker support
Workers compensation support built around your workforce
Workers compensation arrangements depend on more than the number of people employed. The jurisdiction, workforce structure, remuneration, contractor arrangements and business activities all help determine what obligations may apply.
We help employers review that information, identify the relevant workers compensation arrangements and keep workforce information current as the business changes. Where a claim or workers compensation question arises, we also help with communication and administration where appropriate.
RMA Insurance Brokers works with employers across rural, regional and metropolitan Australia, including agriculture, retail, construction, transport, professional services and other SMEs. Through our relationship with rma network Livestock & Property Agents, we have connections throughout regional Australia. We also support clients outside the rma network and across other parts of Australia.
How we help
How we help employers
review the business and workforce structure
identify the relevant state or territory arrangements
review worker, contractor and labour-hire information
review remuneration information
consider interstate workforce issues
assist with scheme, renewal and claims information where appropriate
The insurer, statutory authority or scheme administrator remains responsible for determining eligibility and claim entitlements under the applicable legislation.
What happens after you enquire?
We contact you
A broker from RMA Insurance Brokers will get in touch to understand the business, where it operates, the workforce structure, worker numbers, remuneration and whether workers compensation arrangements are already in place.
We confirm what is needed
We will explain what information is needed, answer your questions and confirm the next step with the relevant workers compensation arrangement.
Useful information to have available
- current workers compensation policy or scheme information, if applicable
- legal entity and ABN
- states or territories where workers are engaged
- worker numbers and remuneration
- contractor, subcontractor and labour-hire arrangements
- previous claims and workers compensation information
FAQs
Frequently asked questions
Is workers compensation insurance compulsory?
Workers compensation obligations apply broadly to employers throughout Australia, but the registration and insurance requirements differ between jurisdictions.
Each state and territory operates its own scheme and statutory rules, alongside Commonwealth arrangements, and some exemptions or thresholds may apply.
What does workers compensation insurance cover?
Depending on the applicable scheme and circumstances, workers compensation may provide eligible workers with income support, medical and hospital expenses, rehabilitation services and certain lump-sum benefits following a work-related injury or illness.
Benefits differ between jurisdictions and are determined under the relevant legislation.
Are contractors covered by workers compensation?
Sometimes. Whether a contractor is treated as a worker depends on the applicable scheme and how the working arrangement operates, not simply whether the person is called a contractor or holds an ABN.
Some contractors and subcontractors may be treated as workers for workers compensation purposes, so these arrangements are worth reviewing rather than assuming.
Does workers compensation cover business owners?
It depends on the business structure, jurisdiction and whether the person falls within the scheme’s definition of a worker.
Sole traders, partners, company directors and working owners can be treated differently, so their position should be checked under the applicable scheme rather than assumed.
Do I need workers compensation in more than one state?
Potentially. Businesses employing people across state or territory borders may need to consider cross-border provisions and the jurisdiction to which each worker is connected.
The applicable scheme rules should be checked for each jurisdiction in which workers are engaged.
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Review your workers compensation arrangements
Workforces change as businesses grow, engage contractors and begin operating in new jurisdictions.
RMA Insurance Brokers helps employers review whether their workers compensation arrangements and workforce information still reflect the way the business operates today.
The information on this page is general information only and does not take into account your objectives, financial situation or needs. Workers compensation entitlements are determined under the applicable state, territory or Commonwealth legislation and scheme. Requirements and benefits differ between jurisdictions. Please review the relevant scheme and policy documentation and obtain advice appropriate to your circumstances before making a decision.