The introduction of the Australian Government’s JobKeeper subsidy in response to the COVID-19 pandemic has been welcomed by many business owners across the country. As Workers Compensation premiums are calculated based on the actual wages paid by an employer, the program has also raised questions regarding its impact on policy premiums and coverage.
JOBKEEPER AND PREMIUM IMPLICATIONS
We have been working closely with our insurer partners to determine whether or not JobKeeper payments will be considered as declarable remuneration. After weeks of deliberation, each state and territory has finally released their standing, with the general view that Job Keeper is a top up or subsidy payment, and not a payment for work performed.
The table below summarises the position of each State or Territory authority with examples for each scenario, the amount to be declared as wages for Workers Compensation purposes and coverage implications. We recommend that you follow the links to your relevant state or territory for full details, or speak to your allinsure adviser for further information:
- Australian Capital Territory
- New South Wales
- Northern Territory
- Queensland
- South Australia
- Tasmania
- Victoria
- Western Australia
Category |
Employee stood down without pay |
Employee still working and currently earning a wage of more than $1,500 per fortnight |
Employee still working and currently earning exactly $1,500 per fortnight |
Employee still working and currently earning a wage of less than $1,500 per fortnight |
Example |
Employee does not receive pay | Employee earns $2,500 per fortnight | Employee earns $1,500 per fortnight | Employee earns $500 per fortnight |
Employer Obligation to access JobKeeper payment scheme |
Employer pays employee $1,500 per fortnight (top-up payment) | Employer pays employee current wage of $2,500
The employer receives the JobKeeper subsidy of $1,500 |
Employer pays employee current wage of $1,500
The employer receives the JobKeeper subsidy of $1,500 |
Employer pays employee $1,500 per fortnight
INCLUDING: 1. Current wage of $500 per fortnight 2. $1,000 necessary to top-up the employee to $1,500 per fortnight (top-up payment |
Risk Implications |
Employee is not considered to be working and not covered for workers compensation | Employee considered to be covered for workers compensation | Employee considered to be covered for workers compensation | Employee considered to be covered for workers compensation |
Amount Declarable for Workers Compensation purposes (as per each State and Territory’s Workers Compensation Act) |
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Australian Capital Territory |
Nil declarable | $2,500 | $1,500 | $500 |
New South Wales |
Nil declarable | $2,500 | $1,500 | $500 |
Northern Territory |
Nil declarable | $2,500 | $1,500 | $500 |
Queensland |
Nil declarable | $2,500 | $1,500 | $500 |
South Australia* |
Nil declarable* | $1,000* | Nil declarable* | Nil declarable* |
Tasmania |
Nil declarable | $2,500 | $1,500 | $500 |
Victoria |
Nil declarable | $2,500 | $1,500 | $500 |
Western Australia |
Nil declarable | $2,500 | $1,500 | $500 |
*The declared amount for Employers in South Australia will be the total of all payments made to workers during the period less the total amount of JobKeeper payments received. Full details can be found at the ReturnToWorkSA site in the link above.
WORKERS COMPENSATION CLAIMS AND JOBKEEPER
Is my employee eligible if they are receiving Workers Compensation payments?
Eligibility criteria published by the Australian Tax Office states that a person receiving Workers Compensation payments for total incapacitation is not eligible for the JobKeeper subsidy.
Employees that are receiving Workers Compensation payments for partial incapacity or medical expenses only, may be eligible for the payment if they meet the other criteria.
Are JobKeeper payments included in calculating a worker’s Average Weekly Earnings?
Payments received by a worker in exchange for their skills and labour are to be included in the calculation of their Average Weekly Earnings, even if these are subsidised by the JobKeeper scheme. For workers who were earning less than $1,500 a fortnight, earnings paid in the last year would be used as a fair reflection of the workers’ earnings, and the additional top up payment to meet the $1,500 threshold should not be included as pre-injury earnings.
Please ensure you speak to you accountant for advice on which employees are eligible for the JobKeeper payment, and don’t hesitate to contact your allinsure adviser for any Workers Compensation queries.
