Comcare premium scheme fully funded (Media release)
04 July 2017
The Comcare workers’ compensation scheme is fully funded for the first time since 2010, three years ahead of the 2020 target for scheme recovery.
Comcare Chief Executive Officer Jennifer Taylor said the result marks a return to financial health for the scheme that covers almost 210,000 employees at 165 Australian Government agencies and departments.
“We believe this turnaround in performance is the most significant of any large workers’ compensation scheme in Australia,” Ms Taylor said. “Fewer claims and better return to work outcomes have seen claims liability reduce by more than $700 million over the past three years.”
Significant increases in time off work for claimants receiving incapacity payments were the main cause of rising costs up to 2013, when the scheme funding ratio of assets to liabilities reached a low of 64 per cent.
“Claim duration after injury has levelled off since then and is showing signs of improvement in the critical first six months after injury,” Ms Taylor said. “These trends have seen the funding ratio improve steadily to reach 107 per cent for 2016-17.
“Achieving full funding is an outstanding result and provides greater certainty for the premium paying scheme. We intend to maintain a funding ratio of 105-110 per cent to protect the scheme against any future shocks.”
The overall scheme premium rate for 2017-18 is 1.23 per cent of payroll – down 28 per cent on last year and driven by continued improvement in claim frequency and return to work outcomes. This represents an estimated saving of $87 million for Commonwealth agencies in the year ahead.
The operating surplus for 2016-17 is estimated at $540 million, driven by a $450 million reduction in claims liabilities. Comcare has also removed the additional margin – a percentage of the central estimated premium pool that was charged to agencies to help the scheme recover over the past four years.
The number of new claims received by Comcare has reduced by 30 per cent over the past five years. Mental disease claims reduced by 26 per cent over that time.
“Comcare will continue to focus on early intervention efforts to help improve recovery and return to work outcomes in the first six months of a claim,” Ms Taylor said.
“We are also working to reduce the cost of longer-term claims by finding opportunities for rehabilitation and better liability management. This is starting to show results with the number of long-term incapacity claims falling for the first time in many years.”
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