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What is workers’ compensation?

Workers’ compensation is a form of insurance paid by employers to a government or a private insurer. It is also called Workcover in some states.

Workers’ compensation is compulsory insurance. Any employer with at least one employee is legally required to have workers’ compensation insurance to cover themselves and their employees.

The funds collected from employers by workers’ compensation schemes are intended to provide financial support and services to workers if they become sick or injured due to work.

The payments made by insurers can cover part of a worker’s wage while they’re not able to work, and funding for medical expenses, rehabilitation and return to work services (if needed).

In Australia, workers’ compensation is organised at a state and territory level. Each state or territory has their own system, with a government authority (known as a regulator) responsible for overseeing the system. Each state or territory system
covers the people who work in that state.

There are also three federal government workers’ compensation systems, for employees of the federal government, defence personnel and maritime workers.

About 250,000 people make a workers’ compensation claim in Australia every year. Most people return to work within a few weeks or months. A small percentage of people have a longer time off work lasting for many months or years.

In 2021/22 Australian workers’ compensation schemes spent more than $10 billion providing income support to workers, paying for medical treatment and rehabilitation, and running the schemes.