Woman smiling

Grouping of related entities for workers compensation purposes: FAQs

Do I have to register for grouping?

Related employers with combined wages greater than $750,000 are required to be grouped.

What is meant by related employers?

Employers are ‘related’ when there is common ownership and/or a controlling interest and/or shareholding of more than 50 per cent. Related entities who share common employees are also required to be grouped. The Workers Compensation Act 1987 (the WC Act) requires related employers to register for grouping for workers compensation purposes and is similar to the requirements for pay-roll tax.

My business is a part of a group, what must I do now?

You need to complete a Grouping registration form and return it to icare workers insurance. All members of your group must also complete a Grouping registration form.

icare workers insurance will write to you and your scheme agent to advise the group number and details of other registered employers in your group.

Download the Grouping registration form or contact icare workers insurance on 13 44 22 for a copy.

How do I submit the Grouping registration form?

Completed forms can be returned to icare by:

  • email to premium.services@icare.nsw.gov.au
  • post to Premium Services, icare workers insurance, Locked Bag 2906, Lisarow, NSW 2250.

Who is not required to be grouped?

Grouping does not apply to:

  • self and specialised insurers
  • government departments
  • members of a group where the combined group annual wages payable to workers does not exceed $750,000.

Why must all group members hold their policies with the same insurance agent and have a common renewal date?

It’s a legislative requirement for grouped employers to hold their policies with the same insurance agent and have a common renewal date. If the policies don’t share a common renewal date and are not held with the same insurance agent, it’s not possible for the insurance agent to accurately calculate the premium for the group members.

Can the group choose any date as the common renewal date?

The common renewal date for a group’s policies should be the renewal date of the first policy due on or after the date that the employers became related for the purposes of grouping. This may mean that one or more of the grouped policies will be required to be short-termed to the common renewal date.

What if the first renewal date for the group is not the preferred renewal date for the group?

The group can choose a renewal date that best matches the group's accounting period or some other convenient date. If the first renewal date is not a suitable renewal date for the group, all group members can organise with the insurance agent to short-term their policies to the preferred common renewal date.

How does grouping impact my premium?

As a group member, the combined basic tariff premium of the group will be used to determine your employer category (basic tariff premium range) when determining the claims performance adjustment rate. However it is the employer's own claims performance that will have the greatest impact on the premium payable.

Does the group basic tariff premium reduce the premium of an employer in a group which has not lodged any claims?

There are eight Employer Category ranges by basic tariff premium. If your Employer Category increases as a result of the group basic tariff premium being used in your premium calculation and your claims performance rate is better than the NSW workers compensation scheme performance rate, your premium will be reduced.

Are there any caps in place that limit the impact of claims costs on an employer's premium? How will this affect employers that are grouped?

The following premium caps are in place:

Category

Group Basic Tariff Premium range

Maximum premium payable

1

>$30,000 - $50,000

1.75 x basic tariff premium

2

>$50,000 - $100,000

1.85 x basic tariff premium

3

>$100,000 - $200,000

2 x basic tariff premium

4

>$200,000 - $300,000

2.25 x basic tariff premium

5

>300,000 - $500,000

2.5 x basic tariff premium

6

>500,000 - $1,000,000

2.75 x basic tariff premium

7

>$1,000,000 - $2,000,000

3 x basic tariff premium

8

>$2,000,000

3.5 x basic tariff premium

Note: ‘premium payable’ is the premium before adjustments have been applied, for example, employer safety incentive discount (ESI), dust diseases contribution, apprentice incentive discount).

The employer category for a grouped employer will be based on the combined basic tariff premium of the group. This may mean that, for premium calculation purposes, your business is placed in a higher category with a larger premium cap.

Do the claims costs of other group members impact my premium?

No. The claims cost of one member in the group does not impact the other group members, unless a member ceases to trade.

There is an exempt employer in my group who pays annual wages equal to or less than $7500. Does an exempt employer need to register for grouping?

Yes. If the exempt employer is a related entity they are required under the Workers Compensation Act 1987 to maintain a policy and be grouped.

Will there be any penalties for short-terming to align policies for grouping?

There may be changes to premiums depending on a number of factors associated with short-terming policies. An employer's entitlement to pay their premiums by instalments and/or the number of instalments may also be affected. Employers should contact their insurance agent for more information on how short-terming their policy will affect them.

Our group members are engaged in a range of different industries and a different Workers Compensation Industry Classification (WIC) applies to each of the policies. Will all of the policies need to have the same industry classification?

No. As long as the businesses are considered separate and distinct in line with current provisions, the classification that most accurately reflects the predominant business activity of the group member will apply to the member's policy.

Many of our group companies have policies with multiple WICs. Are they still able to do so under the grouping arrangements?

Yes. If employers within the group carry out separate and distinct business activities under a single policy, multiple WICs can be allocated to the policy.

I am a member of a group of companies that has a combination of small and medium sized employers. How does grouping affect my group?

Where the combined basic tariff premium of a group exceeds $30,000, all employers within the group, including small employers, will be experience adjusted. If the combined basic tariff premium of the group does not exceed $30,000 group members premium will not be experience adjusted.

What will happen if one of the members of the group ceases trading and closes down?

The wages history and any claims cost history for the group member that has closed will be proportionally allocated to the other members of the group for both the current policy period and the three consecutive policy periods following the period in which the employer closed down. Allocation of the wages history will not affect the basic tariff of the remaining group members.

Are charities exempt from grouping?

Charities and other not-for-profit organisations can apply to icare workers insurance for exclusion from grouping status for those group members not in direct competition with for-profit businesses. However, charities and other not-for-profit organisations must first register for grouping before applying for exclusion.

The employer will need to complete an Application for exclusion from grouping form. The form can also be obtained by contacting icare workers insurance on 13 44 22.

What are the procedures for excluding a not-for-profit employer from a group?

Employers who wish to apply for exclusion from grouping must first register for grouping. Employers should complete the Application for exclusion from grouping form and provide documentary evidence that they are a not-for-profit employer, such as their constitution and letter of endorsement from the Australian Taxation Office.

Employers who apply for exclusion will also need to show that they do not compete with the private sector. These employers should provide information about such things as the goods and services they provide, the target market, sources of funding as well as details of other employers in the same area who provide the same goods and services.

Once all of the required information is received, icare workers insurance will determine within 30 days whether a not-for profit employer can be excluded from a group. icare workers insurance will provide the results of the determination in writing to the employer and to the insurance agent.

Are there any other grounds for exclusion from a group other than not-for-profit employers who do not compete with the private sector?

Yes, employers can also apply for exclusion from a group in the following cases:

  • groups arising from the use of common employees
  • employer who carries on a business as a trustee of a trust(s).

Related Content

Contact Us

Telephone
13 44 22
7am to 7pm
Mon to Fri