Guide to Workers Compensation for Household Employers in Australia

You may be adding a new string to your bow when taking on a nanny. As well as being a parent, you’ll become an employer. If you’ve never taken on anyone before, the red tape can feel a far cry from what you might use to wrap the kids’ birthday presents with.

It’s important to have your ducks in a row. That includes an understanding of the types of insurance you’ll need. One of these is Workers’ Compensation insurance. Read on for the lowdown.

What Is Workers’ Compensation Insurance?

There are workplace risks in any kind of job. This includes the work a nanny does. Workers’ Compensation is a type of insurance payment for employees. It kicks in should they suffer an injury or get sick because of the work they do. It covers:

●     A person’s wages while they're unfit for work

●     An employee’s medical expenses and any potential rehabilitation costs

By law, employers in every state or territory must take out Workers’ Compensation insurance. They also have to pay the premiums.

Workers’ Compensation by State and Territory

WorkCover’s been a one-size-fits-all term that refers to Workers’ Compensation across Australia. How it works varies depending on where you live.

Recent changes in some areas may also mean the name we call it could now vary too. The Australian government administers some schemes. In other states and territories, private insurers underwrite the scheme or act as scheme agents. Here’s a breakdown:

1.   New South Wales

Three agencies now manage what used to be WorkCover. These are:

1. SafeWork NSW. It Does the following:

• Gives advice about workplace health and safety (WHS)
• Grants licences and registrations for any dangerous work
• Investigates workplace incidents and enforces WHS safety laws

2. icare (short for Insurance and Care NSW). It does this:

• Provides Workers’ Compensation insurance
• Provides treatment to those severely injured at work or on the road

3. SIRA (short for State Insurance Regulatory Authority). It’s responsible for this:

• The regulation of motor accidents and compulsory third party (CTP) insurance
• The regulation of Workers’ Compensation insurance

2.   Victoria

Here, WorkCover insurance gets funded by employers’ contributions: These will cover:

• Replacement of lost income
• Medical, rehabilitation treatment and legal costs
• Lump-sum compensation after a serious injury

3.   Queensland

The state’s WorkCover offers its own Household Workers’ Insurance policy. As a useful reminder, it cites two examples of when the policy might cover your nanny:

• While they are taking the kids to school
• Carrying out a task away from but connected to your home

The benefit of WorkCover in Queensland is that it only costs $25 per year (excl GST) for household employers.

4.   Western Australia

WorkCover WA is the government agency responsible for regulating the Workers’ Compensation scheme.

You can get insurance through a “WorkCover WA Approved Insurer.” You could also use the services of an insurance broker to negotiate for you.

5.   Tasmania

Here, employers have to take out a Workers' Compensation insurance policy with a licensed insurer. WorkCover Tasmania has a list of these available.

It is possible to self insure against Workers Compensation claims. This usually only applies to large businesses, however.

6.    South Australia

SafeWork SA enforces the state’s work health and safety laws.

ReturnToWorkSA is responsible for providing work injury insurance. It also regulates the South Australian Return to Work scheme.

7.   Northern Territory

NT WorkSafe operates a no-fault workers' rehabilitation and compensation scheme. If a worker suffers an illness or injury while at work they may be eligible for entitlements like:

• Payment of medical and other reasonable expenses
• Weekly payments of income maintenance while away from work
• Rehabilitation services
• Assistance to return to work

As well as this, if an accident results in the death of a worker, their family may be able to receive a lump-sum payment and/or income maintenance.

8.   The Australian Capital Territory (ACT)

The ACT Government does not run the Workers’ Compensation scheme. It is under private ownership and operation. Insurers approved by WorkSafe ACT offer Workers’ Compensation insurance to employers.

WorkSafe ACT holds the responsibility for regulating the Workers' Compensation legislation. It has inspectors who ensure employers are compliant with their Workers’ Compensation responsibilities.

Making Claims

As a whole, Australia operates on a “no-fault” principle, meaning workers don’t need to prove an employer has been negligent. They only need to demonstrate that an injury or disease is work-related.

How to make a claim will again depend on where you live. That’s because a person would need to claim with the relevant insurance provider in their state or territory. On top of that, some aspects of the policies themselves have slightly different nuances.

A key benefit of using Pay the Nanny is that we sort any Workers’ Compensation obligations on your behalf. That means you can relax knowing that you’ll always be compliant. It also saves you the time and effort needed to figure out how to apply or make a claim.

Free Yourself Up

We are your one-stop-shop for all your nanny payroll needs. That includes taking care of your legal requirement to take out Workers’ Compensation insurance.

Get in touch with us now to find out how Pay the Nanny can help. Our team of qualified experts will sort everything from taxes to payslips freeing up you to spend precious time with your family.