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Workers compensation bulletin - Issue 98

Consultation: Cost-sharing mechanism for COVID-19 workers compensation claims

SIRA is now consulting on a proposed cost-sharing mechanism for COVID-19 workers compensation claims.

Amendments to the Workers Compensation Act 1987 that commenced in May 2020 introduced a rebuttable presumption that workers in prescribed employment who contract COVID-19 contracted the virus in the course of their employment. These amendments also established new powers enabling the regulations to make provision in relation to the sharing of financial risk arising out of COVID-19 between all insurers. The proposed cost-sharing mechanism for COVID-19 claims could be established in the regulation using the new powers.

There is a strong public interest case for all insurers and employers in NSW to contribute to the cost of COVID-19 workers compensation claims. The cost-sharing mechanism will enable COVID-19 claims costs to be redistributed across the workers compensation system. This will prevent individual employers and insurers bearing a disproportionate and inequitable amount of risk and will help to maintain a healthy and competitive workers compensation market in NSW. It is anticipated that redistributed costs will largely be passed on through employer premiums. In this way, all employers will contribute to supporting workers who contract COVID-19 at work.

Head to the SIRA consultation webpage to provide your feedback on the proposed cost-sharing mechanism at: https://www.sira.nsw.gov.au/consultations/cost-sharing-mechanism-workers-compensation-regulation.

Feedback can be submitted until 5pm, Friday 18 December 2020.

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