Annual Statistical Report for WorkCover WA

Financial years 2013-14 to 2016-17

Published July 2018 by the Business Intelligence Services branch in the Scheme and Corporate Services Division of WorkCover WA.

About WorkCover WA

WorkCover WA is the government agency responsible for overseeing workers' compensation and injury management scheme of Western Australia. WorkCover WA undertakes a range of educational, advisory, enforcement and performance monitoring activities to ensure the WA workers' compensation scheme is fair, accessible and cost-effective for all participants.

WorkCover WA is part of the Government of Western Australia.

There is no objection to this publication being copied in whole or part, provided there is due acknowledgment of any material quoted from the publication.

Office address is 2 Bedbrook Place Shenton Park Western Australia 6008.

Visit our website at workcover.wa.gov.au.

Email us .

Call us on 0893885555.

Follow our twitter @WorkCoverWA.

Table of Contents

The 2018WorkCover WA Annual Statistical Report is divided into 11 sections:

  • Section 1. About this report
  • Section 2. Scheme overview
  • Section 3. Premium rates
  • Section 4. Claim activities
  • Section 5. Claim management
  • Section 6. Disputes
  • Section 7. Scheme Exits
  • Section 8. Claimant characteristics
  • Section 9. Injury and disease attributes
  • Section 10. Glossary of terms
  • Section 11. Disclaimer.

Section 1. About this report

Purpose of report

The Annual Statistical Report of WorkCover WA is designed to provide stakeholders with an understanding of the overall activity and key trends within the workers' compensation scheme of WA. The report contains information about:

  • workers' compensation premium rates
  • claim activities (numbers and payments)
  • claim management
  • disputes
  • scheme exits
  • claimant characteristics, and
  • injury and disease attributes.

Where does the data come from?

WorkCover WA collects data from approved insurers and self-insurers about all workers' compensation claims lodged in the WA scheme. This includes data from all current and former approved insurers, self-insurers and the Insurance Commission of Western Australia as at 31 January 2018.

WorkCover WA applies national classification standards to claims data supplied by insurers to obtain information about injury and disease attributes, industries where injuries and diseases occurred, and occupations of claimants.

Timeframe and standards of data

  • Average recommended premium rates data is reported between financial years 2009-10 and 2018-19.
  • Average actual premium rates data is reported between 2007-08 and 2016-17.
  • Claims data is reported between financial years 2013-14 and 2016-17 for both finalised and unfinalised claims.
  • As claims develop over time, there is a higher proportion of unfinalised claims in the most recent financial year (2016-17p). The “p” indicates preliminary data for this year.
  • Claim statistics are derived from data supplied by insurers and exempt employers in accordance with the Q2 specification found on WorkCover WA's website.
  • Claimant characteristics data is reported between financial years 2013-14 and 2016-17for lost-time claims only.
  • Industry classification is based on the Australian and New Zealand Standard Industrial Classification (ANZSIC) system 2006 published by the Australian Bureau of Statistics.
  • Occupational classification is based on the Australian and New Zealand Standard Classification of Occupations (ANZSCO) published by the Australian Bureau of Statistics.
  • Data regarding injury and disease attributes is reported between financial years 2013-14 and 2016-17for lost-time claims only.
  • Injury and disease attributes data is classified according to Type of Occurrence Classification System (TOOCS) 3rd edition published by the Australian Safety and Compensation Council.

Section 2. Scheme Overview

In 2016-17, there were 29,602 claims lodged within the WA workers’ compensation scheme, which comprised of 28,161 work-related injury and disease claims, 101 asbestos-related disease and journey claims and 1,340 disallowed claims. For the purposes of this report, only work-related injury and disease claims are reported.

In the same year, there were 12,567 claims (or 45% of claims) with no time off work, and 15,594 claims (or 55% of claims) had time lost. Claims with no lost-time are those with treatment and expenses only, while claims with lost-time are those with an absence of a day or shift or more off work.

As a proportion of lost-time claims, 90% of those are for work-related injuries, while the remaining 10% related to work-related disease claims.

Section 3. Premium Rates

Every year, WorkCover WA determines the recommended premium rates, taking into account the latest available data on claims experience provided by insurers, as well as broader economic factors, such as movements in wages, employment rate, interest rates and inflation.

Recommended premium rates

Recommended premium rates are expressed as a percentage of remuneration (that is, wages). For example, an average premium rate of 1.53% means employers pay a premium of $1.53 for every $100 of wages paid to their employees.

For 2018-19, the average recommended premium rate was 1.585% of total wages, 3.9% up from last year. The increase in the average recommended premium rate was driven by an increase in incurred cost of claims, increase in the average claim size, and a decrease in forecasted wages.

Over a ten year period, the average recommended premium rate increased from 1.582% in 2008-09 to 1.585% in 2018-19, equating to a rise of 0.2%.

The recommended premium rates from 2008-09 to 2018-19 were:

Financial year / Percentage of payroll / Annual movement
2008-09 / 1.582% of payroll / Decrease of 14.4%
2009-10 / 1.738% of payroll / Increase of 9.9%
2010-11 / 1.497% of payroll / Decrease of 13.9%
2011-12 / 1.569% of payroll / Increase of 4.8%
2012-13 / 1.691% of payroll / Increase of 7.8%
2013-14 / 1.668% of payroll / Decrease of 1.4%
2014-15 / 1.556% of payroll / Decrease of 6.7%
2015-16 / 1.483% of payroll / Decrease of 4.7%
2016-17 / 1.478% of payroll / Decrease of 0.3%
2017-18 / 1.525% of payroll / Increase of 3.2%
2018-19 / 1.585% of payroll / Increase of 3.9%

Actual premium rates

In addition to recommended premium rates, WorkCover WA annually calculates the average actual premium rate. The average actual rate is total premiums paid as a percentage of total remuneration (or wages) paid by employers in a given year.

The actual average premium rates since 2007-08to 2016-17were:

Financial year / Percentage of payroll / Annual movement
2007-08 / 1.6% of payroll / Decrease of 16.4%
2008-09 / 1.432% of payroll / Decrease of 10.5%
2009-10 / 1.439% of payroll / Increase of 0.5%
2010-11 / 1.401% of payroll / Decrease of 2.6%
2011-12 / 1.332% of payroll / Decrease of 5%
2012-13 / 1.417% of payroll / Increase of 6.4%
2013-14 / 1.403% of payroll / Decrease of 1.0%
2014-15 / 1.362% of payroll / Decrease of 2.9%
2015-16 / 1.316% of payroll / Decrease of 3.4%
2016-17 / 1.275% of payroll / Decrease of 3.1%

Section 4. Claim Activities

Claim numbers

Between 2013-14 and 2016-17, the number of claims lodged decreased by 21% to 28,161 claims. Claims with no lost-time fell by 29%, and the number of lost-time claims dropped by 12%.

In 2016-17, 45% of claims had no time off work, 36% had 1 to 59 days off work, and the remaining 19% of claims had 60 or more days off work.

The number of lodgedclaimsbroken down by days lost group from 2013-14 to 2016-17were:

Days lost / 2013-14 / 2014-15 / 2015-16 / 2016-17 / Four year trend
0 days / 17,789 claims / 15,839 claims / 14,307 claims / 12,567 claims / Decreasing
1 - 4 days / 4,266 claims / 3,904 claims / 3,656 claims / 3,090 claims / Decreasing
5 - 19 days / 5,086 claims / 4,871 claims / 4,706 claims / 4,003 claims / Decreasing
20 - 59 days / 3,343 claims / 3,255 claims / 3,184 claims / 3,092 claims / Decreasing
60 - 119 days / 1,723 claims / 1,647 claims / 1,744 claims / 1,851 claims / Increasing
120 - 179 days / 827 claims / 853 claims / 845 claims / 1,129 claims / Increasing
180 or more days / 2,422 claims / 2,68 claims / 2,449 claims / 2,429 claims / Stable

The frequency rate indicates the prevalence of claims by measuring the number of lost-time claims per million hours worked.

Over four years, the lost-time frequency rate decreased by 6% from 8.2 to 7.7. The frequency rate for claims with 1 to 59 days lost decreased by 14% overfouryears from 5.9 to 5.1. However, the rate for claims with 60 days or more lost increased by 16% from 2.3 to 2.7.

Over the last four years, the proportion of claims with 1 to 59 days lost to all lost-time claims reduced from 72% to 65%. In contrast, the proportion of claims with 60 days or more lost increased from 28% to 35% over the same period.

Within the last four years, half of lost-time claims were for workers having less than 20 days off work.

Claim payments

Adjusted claim payments are payments adjusted for inflation to allow meaningful comparisons over time.

Over the last fouryears, total adjusted claim payments increased by 0.1%, from $948.9 million in 2013-14 to $950.2 million in 2016-17. When looking at unadjusted claim payments (that is, payments unadjusted for inflation), total claim payments increased by 5% over the same period.

Total claim payments comprise of payments paid directly to the worker (that is, direct compensation), and payments for services such as medical, hospital, allied health, and workplace rehabilitation.

Direct compensation payments

In 2016-17, 67% of claim payments related to direct compensation. Over four years, total direct compensation claim payments increased by 2%, from $629.2 million in 2013-14 to $639.9 million in 2016-17.

The components of direct compensation payments are income replacement payments and lump sums.

Income payments accounted for more than half (57%) of direct compensation payments to workers in 2016-17, whilst the remainder 43% were for lump sums.

Service payments

In 2016-17, total service payments made up around a third (33%) of claim payments. Service payments, over four years, decreased by 3% from $319.7 million in 2013-14 to $310.3million in 2016-17.

Over four years, medical and hospital services accounted for the majority of service payments.

In the current year, 43% of service payments related to medical and hospital services, 15% were for allied health, 11% were for workplace rehabilitation, and the remaining 31% were in relation to legal and miscellaneous service payments.

Claimcosts

Claim costs are estimates for costs for unfinalised claims and are not adjusted for inflation.

Total claim costs

The total claim costs for lost-time claims reduced from $815.8 million in 2013-14 to $733million in 2016-17.

Total claim costs by days lost group over four years from 2013-14 to 2016-17 were:

Days lost group. / 2013-14 / 2014-15 / 2015-16 / 2016-17 / Four year trend
1-4 days lost / $12.8 million / $10.9 million / $10.4 million / $8.8 million / Decreasing
5-19 days lost / $39.3 million / $40.2 million / $37.2 million / $30.9 million / Decreasing
20-59 days lost / $78.5 million / $85 million / $79 million / $73.5 million / Decreasing
60-119 days lost / $94.1 million / $93.5 million / $98.5 million / $99.4 million / Increasing
120-179 days lost / $70.7 million / $79.9 million / $79.7 million / $99.8 million / Increasing
180 days or more lost / $520.3 million / $509.8 million / $514.2 million / $420.6 million / Decreasing

Average claim costs

The average claim costs for all lost-time claims increased by 2% over fouryears, from an average of $46,176 per lost-time claim in 2013-14, to $47,005 in 2016-17.

Claims with lost-time between 180+ days experienced the largest decrease (19%) over four years.

The average claim costs by days lost group over four years were:

Days lost group. / 2013-14 / 2014-15 / 2015-16 / 2016-17 / Four year trend
1-4 days lost / $2,995 / $2,787 / $2,842 / $2,853 / Stable
5-19 days lost / $7,735 / $8,253 / $7,910 / $7,713 / Stable
20-59 days lost / $23,490 / $26,117 / $24,820 / $23,773 / Stable
60-119 days lost / $54,630 / $56,777 / $56,455 / $53,695 / Stable
120-179 days lost / $85,504 / $93,678 / $94,304 / $88,433 / Stable
180 days or more lost / $214,822 / $224,762 / $209,971 / $173,143 / Decreasing

Claim costs by days lost group

Long duration claims are commonly defined as workers' compensation claims which involve 60 or more days or shifts off work.

Although these claims represent only a minor proportion of total claims, these claims account for the majority of costs.

For shorter claims (that is, 1 to 59 days lost), the total claim costs decreased by 13%between 2013-14 and 2016-17. In the current year, shorter claims totalled $113.2 million.

For longer claims (that is, 60 days or more off work), the total claim costs decreased by 10% and currently stands at $619.8million.

Over the past four years, the ratio between short and long duration claim costs remained stable. In the current year, claims with shorter duration accounted for 15% of total claim costs, while 85% of claim costs were associated with long duration claims.

Section 5. Claim Management

Timeframe for income claims

Over the last four years, timeframes for claim lodgement by employers to insurers improved, and the average days for insurers to make a decision regarding liability remained stable at 12 days.

Overall, it took longer for insurers to finalise income claims, increasing from a median of 5.5 months to 6.0 months over the last four years.

In 2016-17, the average number of days between an employer receiving a worker’s compensation claim and lodging with an insurer was four days, an average of 12 days for insurers to make a liability decision of a claim, and an average of 11.1 months between insurer lodgement and initial finalisation of a claim (where the median claim duration is six months).

Income claims with weekly payments

Claims with weekly payments at one month remains stable, while claims with weekly payments at 12 months decreased by 6% over four years.

The number of income claims with weekly payments from 2013-14 to 2016-17were:

2013-14 / 2014-15 / 2015-16 / 2016-17 / Four year trend
Claims with weekly payments at one month / 6,626 / 6,671 / 6,735 / 6,607 / Stable
Claims with weekly payments at three months / 4,542 / 4,532 / 4,657 / 4,436 / Decreasing
Claims with weekly payments at six months / 3,243 / 3,283 / 3,297 / 3,058 / Decreasing
Claims with weekly payments at 12 months / 2,132 / 2,041 / 2,105 / Not available at the time of publication / Decreasing

Continuance rates for income claims

The continuance rate provides insight into claim duration and scheme exits.It shows the number of claims involving weekly income replacement payments at three, six and 12 months as a proportion of claims involving weekly income replacement payments at one month.

The continuance rate at three months was 68.5% in 2013-14, and decreased to 67.1% in 2016-17.The continuance rate at six months decreased from 48.9% in 2013-14to 46.3% in 2016-17.The continuance rate at 12 months decreased from 32.2% in 2013-14 to 31.3% in 2015-16. The 12-month continuance rate for2016-17 was not available at the time of publication.

Return to work status

The number of workers returning to work (either full or partial hours) as a proportion to all lost-time claims increased over the last four years.

For claims lodged in 2016-17, a total of 83.9% of claimants successfully returned to work. This consisted of 69.2% returning to full hours and 14.6% returning to work partial hours.

In the same year, 8% of claimants of lost-time claims had not returned to work due to injury and 6.5% did not return to work for other reasons.

Section 6. Disputes

The majority of workers’ compensation claims progress to the satisfaction of all parties involved, including the injured worker, the employer and their insurer.

Disputes can occur at any stage of a claim and arise over a broad range of matters, including the liability to pay compensation, the amount of weekly benefits to be paid, medical and related expenses, and return to work programs.

The Conciliation and Arbitration Services aims to provide an independent and transparent system for the fair, timely and cost-effective resolution of workers’ compensation disputes in WA.

Conciliation applications

A conciliation involves parties in dispute reaching an agreement, with the assistance of an independent and impartial Conciliation Officer.

In 2013-14, there were 1,945conciliations increasing to 2,084conciliations in 2016-17.

The disputation rate is the number of dispute applications as a proportion of active claims, where active claims have at least one transaction payment within the financial year.

Between 2013-14 and 2016-17, the disputation rate increased from 3.1% to 4.1%.

Conciliations with subsequent arbitrations

Disputes must have been conciliated by the Workers’ Compensation Conciliation Service (or a certificate issued by the Director of Conciliation advising the matter is not suitable for conciliation) before an application can be made to the Workers’ Compensation Arbitration Service.

In 2013-14, 25% of conciliations had subsequent arbitrations, increasing to 27% in 2016-17.

Arbitrations

An arbitration is a formal proceeding at which evidence is heard and a legally qualified Arbitrator makes a final determination of a dispute.

From 2013-14, the number of arbitrations show an increasing trend from 463 to 554 in 2016-17.

Dispute resolution timeframes

The trend from 2015-16 to 2016-17 dispute resolution timeframes are consistent for matters resolved within three, six, and nine months.

For disputes lodged in 2016-17, 79% of matters were resolved within three months, 88% of matters were resolved within six months, and 95% of matters were resolved within nine months.

Section 7. Scheme Exits

Over a fouryear period, the total number of finalised claims that exited the scheme dropped by 15%. In 2013-14, 38,269claims were finalised decreasing to 32,348 claims finalised in 2016-17.

A lump sum payment is a single payment made for all outstanding liabilities, as opposed to having a number of smaller payouts or instalments. Acceptance of a lump sum generally finalises a claim.

From 2013-14 to 2016-17, the number of claims finalised with lump sum payments increased from 6,691 to 7,830. In turn, the proportion of claims finalised with lump sums increased from 17% in 2013-14 to 24% in 2016-17.

The number of finalised claims without lump sum payments dropped by 22%, from 31,578 claims in 2013-14 to 24,518claims in 2016-17. As a result, the proportion of claims finalised without lump sum payments to finalised claims decreased from 83% in 2012-13 to 76% in 2015-16.

Workplace rehabilitation includes services such as case management, workplace activities, reports (general), and travel. The proportion of lost-time claims utilising workplace rehabilitation services increased from 22% in 2013-14 to 27% in 2016-17.

The proportion of all claims incurringlegal payments increased from 11% to 17% over fouryears.

Settlements

The Act provides different pathways for settling workers’ compensation claims depending on whether the settlement relates to a statutory compensation claim or a common law action.

A section 92(f) deed allows for resolution of common law actions that do not proceed to judgement in a Court.

A Memorandum of Agreement is a legal instrument which records a statutory settlement of a worker’s compensation claim if registered with the Conciliation and Arbitration Services of WorkCover WA.

Both pathways to settle a workers' compensation claim increased over the last fouryears. Memorandum of Agreements increased from 3,996 to 4,116 over four years, and Section 92(f) deeds increased from 1,916 to 2,206 over the same period.

The settlement rate is the proportion of settlements to finalised claims. Along with the increase in settlement numbers, the settlement rate for both Memorandum of Agreements and Section 92(f) deeds increased from 2013-14 to 2016-17.

Settlement rates for Memorandum of Agreements increased from 10.4 to 12.7 over fouryears, and Section 92(f) settlement rates increased from 5 to 6.8 over the same period.

Overall, settlement payments increased over fouryears, mainly attributed to payments relating to Section 92(f) deeds. Memorandum of Agreement payments decreased by 5% from $122 million in 2013-14, to $116.3 million in 2016-17. Section 92(f) payments increased by 28% from $122.5 millionin 2013-14 to $156.8 million in 2016-17.

Settlement payments as a proportion of finalised claim payments decreased from 2013/14 to 2016/17.

Section 8. Claimant Characteristics

Males versus females

Consistent with previous years, males lodged more lost-time claims than females (66% and 34% respectively in 2016-17).

For males, the overall trend for lost-time claims decreased by 14% from 2013-14 to 2016-17, and currently stands at 10,249 lost-time claims. The largest portion of claims lodged by males were for 5-19 days off work(26.5% or 2,713 claims) in 2016-17. The number of lost-time claims for males in 2016-17 were: