icare to hike premiums up to 16.7%

Some employers could still see premium increases as high as 16.7%, according to Business NSW, despite state insurer icare complying with the government's eight-per-cent cap on the average premium hike.

"While the state government describes the increase as an average increase of eight per cent, in reality, the increases range between two per cent and 16.7%," Business NSW CEO Daniel Hunter said, citing icare's premium filing update.

The increases will impact 2,200 small employers and especially hurt regional businesses, according to Business NSW.

"This means that, to avoid an unnecessary increase in premiums, they will now need to invest more time and energy into ensuring their claims are managed properly," Hunter said in a media release.

Hunter pointed out the challenge that the premium increase will bring as it follows the recent modern award minimum wage increase of 5.75%.

"These wage increases mean even more employers will be pushed into this higher cost bracket," Hunter said.

Risk profiles considered

icare's hike is in line with the government order to limit average increases to eight per cent amid previous reports that it is proposing a 22% hike.

On the above-average rates, a spokesperson for icare told the Sydney Morning Herald that the increases were unavoidable for some businesses.

"Small businesses in the NSW Workers Compensation scheme pay a premium based on their wages and their industry profile. Premiums can increase due to business growth, higher wages, changes in industry profile, or increases in average premium rates," the representative said as quoted by the news outlet.

"Riskier industries will pay more. Safer industries will pay less. Taking into account these risk profiles, some increases will be lower than the average and some higher."

$669-million fund extended

icare is a government agency that carries out the functions of the Nominal Insurer, which covers more than three million employees for weekly payments and any medical treatments should they get injured at work.

But the Nominal Insurer is "so seriously run down it will not regain financial sustainability without significant premium increases," according to Work Health and Safety Minister Sophie Cotsis.

To ease its woes, the NSW government injected this month $669 million of fund to help public sector workers receive financial support when they need it most.

"This additional contribution will likely result in an increase in gross debt impacting the Budget in September, but it is necessary to ensure our public sector workers and property are properly insured," Treasurer Daniel Mookhey said in a media release.

Business NSW, however, said extending taxpayer money to icare is "further evidence of poor management."

"Business NSW is calling for urgent reform to the workers' compensation system to ensure employers and taxpayers are not forced to pay for bad claims management practices," Hunter said.