Appendix 2: Practice guidance - making weekly payments

Overview

It is the insurer’s responsibility to ensure the worker receives their correct weekly entitlement.

Weekly payments to workers are usually made by the employer at the time wages are paid to all workers. An insurer may pay the worker directly in some circumstances, so it is important to ensure that key stakeholders are kept informed of the claim’s progress.

If an insurer makes weekly payments directly to the worker, the employer’s obligations under Chapter 3 of the 1998 Act continue to apply.

Insurers should also consider the expectations outlined in ‘Standard of practice 8: Insurer making weekly payments’.

When an insurer may make payments directly to the worker

An insurer may commence making weekly payments directly to the worker for the following reasons:

• when a worker ceases employment with their pre-injury employer
• when an insurer elects to take over the responsibility due to delays or disputes regarding payment.

Insurer actions when making weekly payments to the worker

Where reasonably practicable, the insurer should obtain the employer’s agreement to take over payments. As stated in ‘Standard of practice 8: Insurer making weekly payments’, before the insurer begins paying the worker directly, it is to:

• consult with the employer and advise that claims costs continue to accrue
• ask the worker to complete an Australian Taxation Office tax file number declaration form and arrange for tax to be paid in-line with income tax law.

As part of the consultation with the employer the insurer may also remind the employer that their obligations under the workers compensation legislation continue even though the weekly payments are being made by the insurer.

Insurers are expected to observe the requirements for the protection of tax file number information in accordance with Privacy (Tax File Number) Rule 2015 issued under section 17 of the Privacy Act 1988 (Cth).

The frequency of weekly payments should align with the worker’s pay cycle or as otherwise agreed between the worker and insurer (and if reasonably practicable, the employer).

Written advice to the employer and worker

The standard of practice requires insurers to advise the employer and worker as soon as practicable after commencing weekly payments directly to the worker.

The written advice to the employer should inform them of:

• the date payments of weekly compensation to the worker will commence
• the amount of the weekly payment the insurer will make to the worker
• the employer’s continuing obligations under Chapter 3 of the 1998 Act, regardless of who makes weekly payments to the worker.

The written advice to the worker should include:

• the date payments of weekly compensation by the insurer will commence
• the amount of the weekly payment the insurer will make to the worker
• a request for the Australian Taxation Office tax file number declaration form to be completed (with a copy of the blank form provided to the worker).

The worker should also be provided with information about the collection, storage and use of their tax file number in accordance with the Privacy (Tax File Number) Rule 2015.

Insurers can refer to Privacy agency resource 5: The Privacy (Tax File Number) Rule 2015 and the protection of tax file number informationby the Office of the Australian Information Commissioner for more information on this.