If you're a new business or are unsure whether you need WorkCover Compensation insurance, this information is for you.
1. What is WorkCover Compensation Insurance?
WorkCover compensation insurance is a compulsory insurance arrangement to provide businesses with insurance coverage for the cost of workers compensation entitlements if any of the workers are injured or become ill because of their work.
Entitlements may include:
- Replacement of lost income;
- Medical and rehabilitation treatment costs;
- Legal costs, or;
- Lump sum compensation in the event of a serious injury.
2. Why is WorkCover compensation insurance needed?
WorkCover compensation insurance is to cover the amount payable to any worker who suffers a work-related injury or compensable industrial disease. It’s certainly not an area to neglect.
3. The threshold for WorkCover compensation insurance
Generally, business owners must register for WorkCover compensation insurance if they or the company employs any workers in Victoria. When a business is owned through a family discretionary trust or a company and they receive income in the form of profits distributed to them each year, or they can pay themselves a wage, he or she is a worker of their own company and need to register.
Exemptions
- One doesn't need to register if he or she, or the company has no apprentices, and pays, or is liable to pay, less than $7,500 a financial year in remuneration.
- Sole traders, partnerships and trusts: Sole traders, an individual in a partnership or an individual trustee of a trust who do not employ any other people as workers do not need to register.
- Companies: Companies who do all contract works for the company’s one and only business client do not need to register.
A Certificate of Currency can help business owners prove that they are an employer registered for WorkCover. The Certificate of Currency verifies that one is currently registered for WorkCover compensation insurance. Only employers required to register for WorkCover compensation insurance will have a certificate. Some government grants application require business owners to provide the certificate of currency to verify that the business registered for WorkCover compensation insurance.
A certificate might be required when negotiating a labour hire contract. Business owners might be called on to prove that they are registered for WorkCover compensation insurance in which the certificate will serve this purpose.
Chang Accounting Advisory Pty Ltd, we are CPA practice and tax agent. If you or your families or friends need our services, please feel free to contact our team for any assistance.
This article is for informational purposes only and does not form part of our advice. This article is based on WorkSafe Victoria’s guidelines. Please contact our team if you need any assistance.
Claire Chang, 0497 131 419, claire.chang@changadvisory.com.au, wechat: clairechang26
Michelle Cui, 0433 539 870, michelle.cui@changadvisory.com.au, wechat: michellejc
Claire Chang