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COVID-19 and Jobkeeper payments

Impact of JobKeeper payments and other COVID-19 wage subsidy programs on NSW workers compensation premiums

In NSW, workers compensation premiums are calculated by insurers based on a range of factors, including the amount of wages paid by an employer to their workers during the period of insurance.

On 25 May 2020, SIRA introduced changes to its guidelines to minimise the impact on employer premiums from payments to workers subsidised by COVID-19 related government programs, such as JobKeeper payments.

In summary, payments made to a worker under their ordinary employment arrangements will be included as wages for premium purposes; however any additional government-subsidised payments must be excluded from wages for premium purposes.

This amendment aims to ensure that premiums are not inflated by government programs designed to support workers and employers during the COVID-19 pandemic. Premiums will be based only on payments that the employer would ordinarily make to the worker.

Please see the below examples for further clarification.

Scenario 1

Worker Situation

A worker is stood down without pay. The worker does not perform any work and does not receive normal pay, nor does the worker access any paid leave entitlements. The worker instead receives the JobKeeper payment of $750 per week via their employer.

Employer Situation

The JobKeeper payment of $750 is excluded from wages because the worker was not entitled to the payment (or any part of the payment) under their usual employment arrangements. For example, the payment was not a payment for work performed or a paid leave entitlement.

Included or excluded in definition of wages

Employer pays worker $750 per week.

The employer receives the JobKeeper subsidy of $750 per week.

Scenario 2

Worker Situation

A part-time worker works 15 hours per week and, under their ordinary employment arrangements, is entitled to receive $450 for the work performed during their 15‑hour work week.

The worker receives $750 per week due to the JobKeeper payment.

Employer Situation

The employer pays the worker $750 per week, which includes:

  1. The $450 payment to the worker for work performed, consistent with the worker’s usual employment arrangements
  2. A $300 “top-up” to bring the total payment to the worker to $750 per week to enable the employer to access the JobKeeper scheme.

The employer receives the JobKeeper subsidy of $750 per week.

Included or excluded in definition of wages

$450 is included as wages, as the worker is entitled to receive this amount for work performed under their ordinary employment arrangements.

The ‘additional’ JobKeeper-subsidised payment of $300 is excluded from wages.

Scenario 3

Worker Situation

A worker usually earns $500 per week. The worker takes 1 week of paid leave, and receives $750 for the week, subsidised by the JobKeeper payment.

Employer Situation

The employer pays the worker $750, which includes:

  1. The worker’s paid leave entitlement of $500 for the week
  2. A $250 “top-up” to bring the total payment to the worker to $750 to enable the employer to access the JobKeeper scheme.

The employer receives the JobKeeper subsidy of $750 per week.

Included or excluded in definition of wages

$500 is included as wages, as the worker was entitled to this amount under their ordinary employment arrangements.

The ‘additional’ JobKeeper subsidised payment of $250 is excluded from wages.

Scenario 4

Worker Situation

A full-time worker earns $1000 per week. During the COVID-19 pandemic, the worker continues to work full time and earns $1000, $750 of which is subsidised by the JobKeeper payment.

Employer Situation

The employer pays the worker’s wages of $1000 per week.

The employer receives the JobKeeper subsidy of $750 per week.

Included or excluded in definition of wages

$1000 is included as wages because the worker is entitled to this amount under their ordinary employment arrangements.