Premium updates for 2024-25

Workers compensation insurance premium rates will increase by an average of 8% for the 2024-25 financial year. This complies with a direction from the NSW Government.

However, different industries present a different level of risk. So, to calculate a premium that is fair for each business, icare applies a rate based on the past 5 years safety performance of the industry in which they operate. This means for 2024-25, some businesses will see an increase less than the scheme average of 8%, and some will be greater.

For more information on what rate your business will pay, visit the Workers Compensation Industry Classification (WIC) System and Premium Rates page. 

The rates for 2024-25 apply to policies that start or renew on or after midnight on 30 June 2024. NSW businesses with a 30 June renewal will start to get their notices from 29 May 2024 onward. These premiums for the 30 June policies need to be paid by 31 July 2024.

The number of workers compensation claims, as well as claims costs, have been increasing for a number of years. For instance, in the 2022 financial year $3.9 billion in claims were made, increasing to $4.4 billion in the 2023 financial year.

The premiums icare collect go directly towards helping injured workers, so to ensure our workers compensation scheme remains sustainable, premiums need to be priced accordingly.

The key factors driving the increasing costs and the subsequent need to raise the premiums are:

• Increasing claims numbers, both physical and psychological.
• Of the physical injury claims we receive, we are seeing more people seriously injured, who at the end of their claim have higher levels of impairment. This leads to more work injury damages, longer weekly and medical compensation.
• Psychological claims are increasing and on average they also tend to take longer to resolve than physical claims.
• The cost of medical treatment has been rising more than the average rate of inflation (high medical inflation). This increase is across all claims costs.

The most important thing for all employers to be aware of is that premium costs overall can only be kept down if employees are working in safe, healthy, injury free workplaces.

The minimum premium charge for a policy of $175 has remained unchanged since the establishment of icare in 2015. Updating the minimum premium to $225 reasonably covers icare's policy administration costs and allows for Consumer Price Index (CPI) increases over time.

About 7% of policy holders in the workers compensation scheme will see an increase this year due to the change to minimum premium.  

icare offers a range of incentives, rewards, and other adjustments to help businesses in NSW lower the cost of their insurance premiums, including a discount for payment in full, on or before the due date. Please see icare's How to lower your workers insurance premium page for further details. 

If an employer's annual Average Performance Premium is $1,000 or more, they can pay their premium in monthly instalments. This helps employers manage their costs over time. It should be noted however that icare gives a discount for annual premiums that are paid in full, on or before the due date.

Your premium has been calculated using information previously provided to icare with a slight increase for wage inflation. Wage inflation is known as the Wage Price Index (WPI).

WPI, as explained by the Australian Bureau of Statistics, is seasonally adjusted, and measures the change in the price of labour, unaffected by compositional shifts in labour force, hours worked or employee characteristics. icare applies the WPI as part of the premium calculation each year, and for 2024-25 to the WPI is 4.9%.

In 2023-24, icare reintroduced a 30% wage loading for small employers. In 2024-25, this has expanded to experience-rated employers to help encourage them to submit their actual wage declaration on time.

The wage loading will apply to any renewal calculation where the employer has outstanding actual wage declarations for expired policy periods. You can submit your outstanding wage declarations using icare's self-service option.

Declaring wages ensures employers are paying the right premium, helping icare calculate a premium that is fair and accurate. It also informs icare of other ways that employers could potentially lower premiums including incentives, discounts and an employer's correct business activity. For more information, visit Declaring your wages and paying the right premium.

The risk of getting injured varies for workers in different industry sectors. To charge a fair amount to each industry, icare's premiums need to reflect that risk. Each industry is therefore given a classification rate based upon that level of risk (a Workers Compensation Industry Classification Rate or WIC) which is based upon the actual safety performance of the industry. Every employer's business is given a classification (WIC) based on their predominant business activity.

An employer's premium starts with a calculation multiplying their company’s wages by their WIC rate. Every year, all 538 WIC rates are revised to reflect the recent past performance of each industry.

Find out more on the Workers Compensation Industry Classification WIC System and Premium Rates page. 

icare is an NSW state government agency. Our workers compensation scheme is well-funded and able to meet its obligations to help injured workers now and in the future.

All workers compensation schemes in Australia are dealing with economic challenges from unstable investment markets, high inflation, and increasing psychological claims. This average 8% increase in premium rates for the 2024-25 financial year strengthens the financial viability of the NSW workers compensation scheme and ensures icare can continue to provide care and support to injured workers when they need it most.

'Premium capping' prevents an employer's premium rate rising more than 30% above that of the previous year. 'Premium capping' only applies if the increase is caused by the employer's own claim costs or a change in the premium calculation method.

'Premium capping' does not apply if the increase is due to a change in the employer's wages or a change in the employer's industry that leads to a different industry classification.

For more information visit the What is premium capping and how does it work? page.  

If you are a large employer, that meet specific criteria, you may be eligible for one of icare's Loss Prevention & Recovery products.

You are considered a large employer if:

• your Average Performance Premium exceeds $500,000 for a 12-month period of insurance (this can be pro-rated for shorter periods of insurance), or
• you are member of a group of which at least one member's average performance premium exceeds $500,000.

LPR Plus is designed to meet the needs of the largest and most sophisticated employers in the workers compensation scheme with an Average Performance Premium (APP) greater than $3 million.

If you think you qualify for either of these products, please visit our Loss prevention and recovery product page.

Employers can phone icare's Underwriting team on 13 44 22, or use the online chat.