Aged Care and Nursing Home Safety Premiums set to Cause Crisis

South Australia’s “Adelaidenow” publication reported today on a growing crisis in the Aged care and nursing home areas of healthcare.

These services are warning that because of significant increases in their WorkCover premiums that staff and services will need to be cut as a consequence.

According to Alan Graham, the Chief Executive of Aged and Community services in South Australia, some operators will be questioning the viability of their business.

As it stands, he said, operators are already thinking about reducing staff numbers and resident social activities where the opportunities for resident’s involvement could be seriously impaired. There may also be reductions in administrative areas as well.

He went on to say that this will affect people’s lifestyles as opposed to the quality of care that they receive.

Some of the increases that have been reported to Aged and Community Services include:

- A provider in Glynde had their WorkCover charges increased by $ 247,000, which brought the total WorkCover amount to $ 1.5 million

- A provider in Port Lincoln experienced a 49% increase in their levy to a total of $ 156,712

- A home support service provider in Payneham had their WorkCover levy doubled to $ 50,000

- Other smaller care centre’s are also reporting their premiums doubled

A new system of premium calculation

On July 1st this year the way that WorkCover premiums are determined was altered and the individual claims experience, for medium and large employers, is now factored into the equation.

 The premium payable by any business is calculated using:

  • Remuneration – a calculation consisting of all payments made either to or for the benefit of a companies workers
  • Base premium (BP) – where the remuneration amount is multiplied by the businesses industry premium rate
  • For medium and large employers, claim costs from previous years
  • Claim costs for medium and large employers.
  • An occupational health, safety and welfare registration fee (OHS fee).

Generally this new system will affect businesses that pay over $ 20,000 in WorkCover levies and who pay a minimum of $ 300,000 in workers remuneration.

The WorkCover Response

WorkCover supports workers that are injured in the workplace and manages the administration of the compensation system.

Rob Thomson, the CEO of WorkCover SA, said in “Adelaidenow’s” report that the new scheme was introduced after a consultation period of 2 years and that it would not be fair if some employers had to pay more to protect one industry over others.

Rob Lucas, the finance spokesperson for the Opposition, has warned that staff cuts could increase the likelihood of an increase in WorkCover claims. As the providers have already indicated that they need to reduce the quality of services for the elderly and infirm to be able to afford the newly calculated WorkCover premiums.

Mr. Graham, whose organization represents 95% of the not for profit aged and community organisations in South Australia, is set to meet with WorkCover tomorrow to see how these issues can be addressed.

OHS News

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