Workers compensation and JobKeeper

Last Updated:14 May 2020 11:14am

Please check this page and these links regularly for updates

The information in this section is current at 11 May 2020. Please check the Australian Tax Office’s JobKeeper Payment webpage (external link) for any updates or changes.

About JobKeeper

The JobKeeper Payment Scheme is a Commonwealth Government scheme to help keep workers in jobs and support businesses affected by the significant economic impact caused by COV1D-19. Find specific details about the JobKeeper Payment Scheme at the Australian Tax Office’s JobKeeper Payment webpage (external link) and the Treasury's JobKeeper payment webpage (external link).

About the Tasmanian workers compensation scheme

As the Tasmanian workers compensation scheme is a privately underwritten scheme, the relationship between employer and insurer is determined by their insurance contract and by legislation. Neither WorkSafe Tasmania (the State of Tasmania) nor the WorkCover Tasmania Board is a party.

However, WorkSafe Tasmania provides the following guidance about how the JobKeeper Payment should be treated for the purposes of the Workers Rehabilitation and Compensation Act (external link). However, workers, employers and insurers may wish to obtain their own legal advice about their own situations.

JobKeeper and workers compensation

The fundamental question is whether the JobKeeper Payment represents ‘earnings’. The general view is that earnings are monies paid in return for the exercise of labour or skill on the part of the worker.

This means that a JobKeeper payment to a worker is only to be considered for the purposes of workers compensation insofar as the payment is a return for the exercise of labour or skill on the part of the worker.

In short, this means that Job Keeper payment is not included in the calculations for an employer’s wage declaration or a worker’s weekly compensation benefits, where:

  1. the JobKeeper payment is made to a worker who has been stood down and is not working; or
  2. the JobKeeper payment is above the worker’s normal wages (and the worker is working).

The tables below provide examples of how the JobKeeper payment should be treated in differing circumstances.

Table 1: Wage declaration and premium setting

Category

Example

Employer obligation to eligible employee

Expected consequence

Risk implications

Employee stood down without pay

Employee does not receive pay

Employer pays employee $1,500 per fortnight (top-up payment)

The $1,500 top-up payment will not be considered ‘wages’

Employee is not considered to be working and will not be covered for workers compensation

Employee currently earning a wage of more than $1,500 a fortnight

Employee earns $2,500 a fortnight

Employer pays employee current wage of $2,500

$2,500 is wagesand will be required to be included in wages declaration

Employee considered to be covered for workers compensation

Employee currently earning exactly $1,500 a fortnight

Employee earns $1,500 a fortnight

Employer pays employee current wage of $1,500

$1,500 is wages’ and will be required to be included in wages declaration

Employee considered to be covered for workers compensation

Employee currently earning less than $1,500 a fortnight

Employee earns $500 a fortnight

Employer pays employee $1,500 per fortnight made up of:

1. current wage of $500 per fortnight; and

2. $1,000 necessary to top-up the employee to $1,500 per fortnight (top-up payment)

$500 is wagesand will be required to be included in wages declaration

The $1,000 top-up payment will not be wages

Employee considered to be covered for workers compensation

Table 2: Calculation of weekly benefits

Condition

Example

Impact to Employee

Impact to Insurer

Risk

Full-weekly benefit

Employee is not working and receiving full entitlement benefits

Employee is not eligible for JobKeeper payment. Weekly benefit will be calculated without reference to JobKeeper

Insurer will continue to pay the full weekly benefits

No change

Partial-weekly benefits

Employee is paid equal to or less than $1,500 a fortnight

If employee is eligible for JobKeeper subsidy they will be paid $1,500 from employer

Insurer does not pay weekly benefits, and employer must pass on full $1,500 a fortnight

Claims experience will be reduced for employer

Partial-weekly benefits

Employee is paid more than $1500 a fortnight

If employee is eligible for JobKeeper subsidy they will be paid $1,500 from employer

Insurer will pay the difference after the employer pays $1500 a fortnight

Claims experience will be reduced for employer

Medical only claim

 

If employee is eligible for JobKeeper subsidy they will be paid $1,500 from employer

Insurer will continue to pay the medical component of claim

No change

See also Coronavirus Economic Response Package (Payments and Benefits) Rules 2000 (Cth), Part 2 (external link)

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