Download - Annual report 2018-2019 - WorkSafe Queensland · • Emerging trends in claims, workforce and employment arrangements including the gig economy • Evolving the claims management

ANNUAL REPORT 2018–2019

WELCOME .......................................................................................................................... 1

ABOUT THIS REPORT ......................................................................................................................................... 1 LETTER OF COMPLIANCE ................................................................................................................................... 2

ABOUT WORKCOVER ....................................................................................................... 3

WHO WE ARE ................................................................................................................................................... 3 WORKING TOGETHER ........................................................................................................................................ 3 CUSTOMER SERVICE COMMITMENT .................................................................................................................... 4 CORPORATE PLAN 2018–2022 ......................................................................................................................... 5 STATEMENT OF CORPORATE INTENT 2018–2019 .............................................................................................. 7

HIGHLIGHTS 2018−2019 .................................................................................................. 11

PERFORMANCE OVERVIEW .............................................................................................................................. 12

STATISTICS ...................................................................................................................... 13

LEADERSHIP .................................................................................................................... 16

CHAIR AND CEO REPORT ............................................................................................................................... 16 BOARD OF DIRECTORS ................................................................................................................................... 20 EXECUTIVE LEADERSHIP TEAM ........................................................................................................................ 22

OUR CUSTOMERS ........................................................................................................... 24

ENGAGED PEOPLE ......................................................................................................... 26

CORPORATE GOVERNANCE ......................................................................................... 29

ETHICS, COMPLIANCE AND RISK MANAGEMENT ............................................................................................... 33

FINANCIAL PERFORMANCE .......................................................................................... 37

FINANCIAL STATEMENTS .............................................................................................. 39

COMPLIANCE CHECKLIST ............................................................................................. 88

GLOSSARY ..................................................................................................................... ..89

CONTENTS

WorkCover Queensland annual report 2018–2019 1

WELCOME Welcome to WorkCover Queensland’s annual report. WorkCover is committed to open communication with our customers and stakeholders. This report summarises WorkCover’s results, performance, outlook and financial position for 2018–2019.

About this report Under the Workers’ Compensation and Rehabilitation Act 2003, WorkCover is required to produce an annual report. This report has been prepared to meet the needs of stakeholders and the accountability requirements under the Financial Accountability Act 2009.

WorkCover is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you have difficulty in understanding the annual report, you can contact us on 1300 362 128 and we will arrange an interpreter to effectively communicate the report to you.

To view previous reports, please visit our website worksafe.qld.gov.au.

If you wish to speak to us about this report, please contact:

Communications WorkCover Queensland GPO Box 2459 Brisbane Qld 4001 1300 362 128 [email protected]

ISSN 1329-6539

© WorkCover Queensland 2019

Licence:

This annual report is licensed by WorkCover Queensland under a Creative Commons Attribution (CC BY) 4.0 International licence.

CC BY Licence Summary Statement:

In essence, you are free to copy, communicate and adapt this annual report, as long as you attribute the work to WorkCover Queensland.

To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/deed.en

Attribution:

Content from this annual report should be attributed as: WorkCover Queensland annual report 2018–2019.

https://www.legislation.qld.gov.au/view/html/inforce/current/act-2003-027


https://www.worksafe.qld.gov.au/forms-and-resources/publications/annual-reports

mailto:[email protected]

https://creativecommons.org/licenses/by/4.0/deed.en

2 WorkCover Queensland annual report 2018–2019

Letter of compliance

20 August 2019

The Honourable Grace Grace MP Minister for Education and Minister for Industrial Relations 1 William Street BRISBANE QLD 4000

Dear Minister

I am pleased to submit for presentation to the Parliament the 2018–2019 WorkCover Queensland annual report.

I am pleased to acknowledge both the contribution of our Board as well as the care and dedication of our people in providing excellent workers’ compensation cover in Queensland.

I certify that this annual report complies with the:

• requirements under the Workers’ Compensation and Rehabilitation Act 2003• prescribed requirements of the Financial Accountability Act 2009 and the Financial and

Performance Management Standard 2009, and• detailed requirements set out in the Annual report requirements for Queensland

Government agencies.

A checklist outlining the annual reporting requirements can be found at page 88.

Yours sincerely

Flavia Gobbo Chair



https://www.austlii.edu.au/cgi-bin/viewdb/au/legis/qld/consol_reg/fapms2009335/


https://www.forgov.qld.gov.au/manage-government-performance

https://www.forgov.qld.gov.au/manage-government-performance


ABOUT WORKCOVER

Who we are WorkCover Queensland is a self-funded statutory body providing workers’ compensation insurance since 1997. Over the 2018–2019 year, we provided tailored insurance solutions to more than 162,500 Queensland businesses.

WorkCover strives to maintain the lowest possible average premium rate by continuously investing in efficient online customer services and experienced in-house claims management capability to support employers and make a positive difference to the lives of injured workers.

We maintain high return to work rates by partnering with our customers, unions, industry associations, medical and allied health providers and legal industry.

We are passionate about striking the right balance between keeping premium costs low for employers and providing injured workers with access to rehabilitation and the best possible return to work support.

Working together WorkCover partners with various government agencies and key stakeholders to give Queensland businesses and the broader community efficient access to specialist advice on safety, rehabilitation, return to work and workers’ compensation matters.


Customer service commitment WorkCover Queensland is committed to putting the customer first and providing quality experiences. We partner with our customers and stakeholders to deliver innovative and sustainable outcomes, creating value for Queensland businesses and workers.

Our values of excellence, integrity, responsiveness and respect are incorporated into everything we do. Our people also aim to live our customer strategy principles – easy, fair and transparent, empowered, consistent and valued – with every customer interaction.

Service WorkCover’s aim is to deliver excellent customer service and to make doing business with us easy. We will always strive to meet our customers’ expectations by:

• personally answering calls during business hours• listening first, then responding in a timely way• communicating openly and in plain language• providing contact details of a person to assist• being fair and impartial in all our interactions.

Engagement WorkCover cares about its customers and stakeholders and wants to engage with them in a positive way for mutual benefit through:

• understanding individual requirements• asking how we can improve• providing regular updates• proactively building relationships• offering value added services.

Recovery from injury WorkCover is here to support the often difficult and emotional experience of a work-related injury. We are committed to assisting people to recover at work and liaising with all parties involved to achieve the best possible outcome by:

• communicating regularly with everyone involved• undertaking necessary rehabilitation• facilitating an early and safe return to work• providing support to reduce the impact of the injury• assisting to reduce the disruption an injury can cause.

Information and feedback WorkCover values customer and stakeholder feedback to help continually improve services. We are also committed to protecting the privacy of our customers. We take all reasonable precautions to protect the information given to us by:

• storing personal information securely• allowing our customers to access their information quickly and easily.


Corporate Plan 2018–2022

Who we are WorkCover Queensland is the main provider of workers’ compensation insurance in Queensland. We are a government-owned statutory body established under the Workers’ Compensation and Rehabilitation Act 2003.

Our vision To be the best workers’ compensation insurer and make a positive difference to people’s lives

Our purpose We partner with and support our customers to keep Queenslanders working

• Trusted partnerships underpin our focus on return to work outcomes• Tailored quality experiences for workers and employers• Creating value for business through innovative and sustainable outcomes• Influencing and investing in injury prevention

Our values Excellence To deliver outcomes that are highly valued by our customers

Integrity To always do the right thing

Responsiveness To provide an experience that meets the individual needs of our customers

Respect To be considerate of the rights and dignity of everyone

Our customers Our customers are injured workers and employers, supported by various stakeholder groups.

Challenges • Designing and delivering products, services and experiences that are valued by our customers, now

and in the future• Engaging with customers and stakeholders to achieve mutually beneficial outcomes• Influencing to prevent and better manage injuries• Achieving optimal return to work outcomes whilst managing the cost of claims• Emerging trends in claims, workforce and employment arrangements including the gig economy• Evolving the claims management model to support the changing workforce and nature of injuries• Rapid technology changes• Retaining and growing our customer base• Maintaining an engaged, skilled and capable workforce




Our goals and performance indicators

Customer: Our customers are at the heart of everything we do − We understand our customers deeply and deliver valued experiences− We provide tailored, innovative solutions for our customers

Performance indicators • Overall customer experience measure for workers and employers (CX)• Final RTW %

People: Our people are remarkable − Create an environment that inspires our people to make a difference− Ensure our people are connected to our purpose, which drives positive outcomes− Enable a continuous learning culture that uplifts the capability of our people

Performance indicator • Employee engagement index

Claims management: We work smart and innovate − We deepen partnerships to create better outcomes− Optimise the value and efficiency of what we do− Execute the right projects and activities at the right time− Explore and test opportunities for innovation and ‘disruption’

Performance indicator • Average claims costs (statutory and common law)

Corporate: We are financially secure − Perform at an optimal balance between premium, claims costs and investment return− Invest in injury management and prevention− Maximise the value of our spend for better return to work outcomes and operational efficiencies− Maintain our financial stability

Performance indicators • Funding ratio• Average premium rate


Statement of Corporate Intent 2018–2019

Introduction This Statement of Corporate Intent has been prepared under the direction of, and is submitted by, the WorkCover Queensland Board of Directors (WorkCover), in accordance with the Workers’ Compensation and Rehabilitation Act 2003 (the Act).

This Statement of Corporate Intent should be read in conjunction with the 2018−2022 WorkCover Queensland Corporate Plan.

1 Goals • Our customers are at the heart of everything we do• Our people are remarkable• We work smart and innovate• We are financially secure

2 Main undertakings WorkCover is a government owned statutory body and is the main provider of workers’ compensation insurance in Queensland. A WorkCover accident insurance policy covers injured workers for their lost wages and medical and rehabilitation costs after a workplace accident, and covers employers against these costs and possible common law claims.

The main provisions of the Act provide the following for workers and employers: • compensation• appropriate access to damages• employers’ liability for compensation• employers’ obligation to be covered against liability for compensation and damages under a• WorkCover accident insurance policy• management of compensation claims by WorkCover• injury management, emphasising rehabilitation of workers particularly for return to work (RTW).

It is intended that WorkCover will: • maintain a balance between:

— providing the best possible benefits and RTW programs for injured workers, and — ensuring the lowest possible sustainable premiums for employers

• ensure that injured workers (and/or their dependants) and employers are treated fairly• provide for injured workers and employers to participate in effective RTW programs• allow flexible, tailored and innovative insurance arrangements suited to the particular needs of

industry.




3 Nature and scope of activities during 2018–2019 Goal Strategies

Goal Strategies

Customer Our customers are at the heart of everything we do

Engage with customers, stakeholders and our people to understand our customers’ needs and deliver an excellent end to end customer experience:

• Partner with the Office of Industrial Relations and other keystakeholders to educate and influence customers on improvedsafety, injury prevention and return to work

• Continue to implement our new customer segmentation, regionalengagement and tailored solutions for employers and workers

• Enhance our customer research and insight program• Research, design and implement improvements to our customers’

end to end experience for claims, premium and relationshipmanagement

• Improve common law experiences for injured workers and employers• Redesign our brand strategy and website to achieve better alignment

to our customers’ needs

People Our people are remarkable

• Continue to develop our people including leadership developmentand specialist knowledge through our learning and capabilityframework

• Implement a strategy to enable contemporary workforce flexibilityand mobility

• Continue our commitment to diversity through inclusive workpractices and community engagement

• Prioritise our employee engagement, workplace safety and wellbeinginitiatives

Claims management

We work smart and innovate

• Design, pilot and implement our ‘Recovery Blueprint’ claimsmanagement model

• Engage with key stakeholders and providers to review and developoptions to optimise: treating services costs, provider monitoring andclaim outcomes

• Continue to use technology to develop digital solutions and dataanalytics to support our people, customers and providers

• Enhance our specialist claims management models to addressemerging trends including psychological injuries, latent onsetconditions and catastrophic injuries

• Implement new common law panel arrangements• Research and implement return to work strategies to increase

sustainable return to work outcomes

Corporate We are financially secure

• Appropriately price and collect premium, considering emerging trendsin claims, workforce and employment arrangements including the gigeconomy

• Review and design innovative products that meet changing customerneeds, focused on increasing choice and incentives for improvedsafety and claims experience

• Retain and grow our customer base• Continue our focus on education and compliance activities so that

Queensland businesses have the right level of insurance coverage• Manage and monitor the investment strategy


4 Financial and non-financial performance targets Performance indicators are focused at the corporate level. As part of WorkCover’s performance management system, managers and their people have indicators specifically directed to their business units.

Indicator 2018–2019 target

Customer/stakeholder Overall customer experience measure (CX) Final RTW

7.3/10 93.5%

People Employee engagement index 8.1/10

Claims management Average cost of Statutory Claim Average cost of Common Law Claim

<$9,500 <$180,000

Financial Funding ratio Average premium rate

>120%$1.20

5 Capital structure and payments to the consolidated fund In accordance with the Act, WorkCover is taken to be fully funded if it is able to meet its liabilities for compensation and damages payable from its funds and accounts and maintain capital adequacy as required under the Workers’ Compensation and Rehabilitation Regulation 2014 (the Regulation). The Regulation states that in order to maintain capital adequacy, WorkCover’s total assets must at least be equal to total liabilities (this correlates to a funding ratio of 100%).

The Act allows for payments to be made to the consolidated fund. The WorkCover Board will make a recommendation to the Minister with respect to such a payment (if any) following certification of the 2017–2018 financial statements.

WorkCover will also contribute to levies administered by the Regulator by way of a levy.

6 Borrowings made, proposed to be made WorkCover currently has no borrowings and there are none planned for the immediate future. Investment funds are used to manage all cash flow requirements. WorkCover’s borrowing policy is outlined in 7.3.

7 Policies adopted to minimise and manage risk of investments and borrowings that may adversely affect financial stability 7.1 Investment risk WorkCover currently invests all excess funds with QIC. WorkCover maintains a balanced investment profile with a long-term outlook commensurate with being a long-term insurance operation. Derivative instruments are used as part of the investment strategy to hedge foreign exchange risks and rebalance asset classes.

An Investment Management Agreement governs the arrangement. In addition, the WorkCover Board monitors investment on a bimonthly basis and receives at least quarterly presentations from QIC. The Board reviews the investment strategy annually and an independent review is conducted every two years.

7.2 Business risk WorkCover has a risk management program in place. Risk registers are maintained and monitored by each business group. Strategies to manage risk are incorporated into each group’s

https://www.legislation.qld.gov.au/view/html/inforce/current/sl-2014-0189


business planning process. The WorkCover Risk and Audit Committee is responsible for overseeing the risk management program, including reviewing and monitoring WorkCover’s top strategic risks on a quarterly basis.

7.3 Borrowing risk The Act provides the framework for WorkCover’s procedures for borrowing. WorkCover may enter into such arrangements to procure equipment up to an amount and on such terms as it considers appropriate. All financing arrangements will be made in conjunction with Queensland Treasury Corporation in order to establish that applicable rates are competitive and conditions are appropriate. Board approval will be required for all financing arrangements over pre-defined expenditure limits. All limits are as stated in the WorkCover delegation manual.

8 Policies and procedures relating to acquisition and disposal of major assets In acquiring or disposing of major assets, WorkCover complies with the Financial and Performance Management Standard 2009 and Queensland Treasury guideline—Non-Current Asset Policies for the Queensland Public Sector.

Major assets may be acquired via purchase, finance lease agreement, donations, or transfer from other government entities. A business case must be submitted to the CEO and/or Chief People and Finance Officer seeking approval. The CEO will present any major initiatives to the Board for approval.

Approval limits are as stated in the WorkCover delegation manual.

In disposing of major assets, approval must be sought from the appropriate delegated authority. Approval limits are as stated in the WorkCover delegation manual.

9 Accounting policies applying to preparation of accounts WorkCover’s accounting policies are outlined each year in the Annual Report and are reviewed as part of the financial statements audit process. Further information on accounting policies is provided in WorkCover’s Financial Management Practice Manual (FMPM).

10 Community service obligations It is not envisaged that the government will require WorkCover to perform any specific community service obligations.

11 Employment and industrial relations plan WorkCover prepares an employment and industrial relations plan annually in accordance with the Act.

12 Information to be reported to the Minister 12.1 Quarterly reporting A quarterly report will be provided to the Minister within one month of the end of the relevant quarter as required by the Act. The report will contain information regarding WorkCover’s performance against the Statement of Corporate Intent.

12.2 Annual reporting A full annual report will be provided to the Minister in accordance with the Act and in compliance with the Financial and Performance Management Standard 2009, which requires WorkCover to give the annual report to the Minister to allow the report to be tabled in the Legislative Assembly within three months after the conclusion of each financial year.





HIGHLIGHTS 2018−2019


Performance overview The following scorecard provides an overview of our performance, including targets from our Statement of Corporate Intent.

Aim What did we achieve?

Customer/stakeholder

>93.5% final return to work 93.5%

Overall customer experience measure > 7.3 / 10

Average for 2018–2019 7.3 / 10

Most recent quarter results (Q4 2018–2019) 7.4 / 10

Financial

Funding ratio (excl DTA) > 120% 171%

Average premium rate $1.20 $1.20

People

Employee engagement index: > 8.1 / 10 7.6

Claims management

Average cost of statutory claim < $9,500 $9,726

Average cost of common law claim < $180,000 $170,812


STATISTICS

Injury natureNo. % No. % $M % $M %

Burns 1 469 2.2% 1 555 2.3% 7.3 0.8% 9.4 1.1%Fractures 4 897 7.4% 4 779 7.1% 139.5 14.7% 121.8 14.8%Intracranial injuries and injuries to nerves and spinal cord 311 0.5% 482 0.7% 15.0 1.6% 13.2 1.6%

Mental disorders 1 270 1.9% 982 1.5% 60.3 6.3% 49.5 6.0%Musculoskeletal injuries and diseases 35 011 53.0% 35 028 52.1% 447.1 46.9% 392.2 47.6%Nervous system and sense organ diseases 1 413 2.1% 1 359 2.0% 26.7 2.8% 22.6 2.7%Other injuries and diseases 6 405 9.7% 6 627 9.9% 140.6 14.8% 114.1 13.9%Respiratory system diseases 380 0.6% 180 0.3% 17.0 1.8% 10.0 1.2%Skin and subcutaneous tissue diseases 266 0.4% 336 0.5% 1.9 0.2% 1.6 0.2%Wounds, lacerations, amputations and internal organ damage 14 652 22.2% 15 866 23.6% 96.1 10.1% 88.9 10.9%

Total 66 074 100.0% 67 194 100.0% 951.5 100.0% 823.3 100.0%

Statutory claims and payments by injury location

Injury locationNo. % No. % $M % $M %

Back 11 007 16.7% 11 433 17.0% 147.3 15.5% 134.2 16.3%Foot and toes 2 238 3.4% 2 326 3.5% 26.0 2.7% 23.2 2.8%Hand and fingers 11 243 17.0% 12 037 17.9% 80.3 8.4% 70.7 8.6%Head and face 6 169 9.3% 6 574 9.8% 55.4 5.8% 51.2 6.2%Lower limbs 11 671 17.6% 11 925 17.7% 151.0 15.9% 134.7 16.4%Multiple Locations 1 860 2.8% 1 491 2.2% 37.6 4.0% 24.8 3.0%Neck 2 221 3.4% 2 345 3.5% 31.5 3.3% 27.2 3.3%Systemic* 1 606 2.4% 1 392 2.1% 63.9 6.7% 51.9 6.3%Trunk 3 276 5.0% 2 998 4.5% 109.9 11.6% 83.2 10.1%Unspecified location 1 060 1.6% 1 211 1.8% 19.0 2.0% 22.2 2.7%Upper limbs 13 723 20.8% 13 462 20.0% 229.6 24.1% 200.0 24.3%Total 66 074 100.0% 67 194 100.0% 951.5 100.0% 823.3 100.0%*Note: Systemic includes Psychological injuries

Injury IndustryNo. % No. % $M % $M %

Accommodation and Food Services 4 230 6.4% 4 318 6.4% 38.7 4.1% 36.1 4.4%Administrative and Support Services 2 114 3.2% 2 355 3.5% 35.9 3.8% 32.2 3.9%Agriculture, Forestry and Fishing 2 195 3.3% 2 061 3.1% 37.5 3.9% 29.0 3.5%Arts and Recreation Services 991 1.5% 1 000 1.5% 14.1 1.5% 11.0 1.3%Construction 7 850 11.9% 8 849 13.2% 156.4 16.5% 139.4 16.8%Education and Training 5 645 8.5% 5 587 8.3% 52.7 5.5% 48.4 5.9%Electricity, Gas, Water and Waste Services 899 1.4% 956 1.4% 13.6 1.4% 12.0 1.5%Financial and Insurance Services 410 0.6% 390 0.6% 6.0 0.6% 5.6 0.7%Health Care and Social Assistance 9 814 14.9% 9 633 14.3% 124.1 13.1% 103.2 12.5%Information Media and Telecommunications 311 0.5% 292 0.4% 3.1 0.3% 4.0 0.5%Manufacturing 10 578 16.0% 11 466 17.2% 113.3 11.9% 101.7 12.4%Mining 1 248 1.9% 1 132 1.7% 38.5 4.0% 35.4 4.3%Other* 403 0.6% 357 0.5% 13.9 1.5% 11.2 1.4%Other Services 2 284 3.5% 2 163 3.2% 32.9 3.5% 30.0 3.6%Professional, Scientific and Technical Services 1 254 1.9% 1 203 1.8% 16.2 1.7% 13.8 1.7%Public Administration and Safety 4 183 6.3% 3 903 5.8% 70.6 7.4% 55.8 6.8%Rental, Hiring and Real Estate Services 797 1.2% 799 1.2% 12.8 1.3% 11.2 1.4%Retail Trade 4 235 6.4% 4 237 6.3% 49.4 5.2% 40.0 4.9%Transport, Postal and Warehousing 3 299 5.0% 3 185 4.7% 79.4 8.3% 63.5 7.7%Wholesale Trade 3 334 5.0% 3 308 4.9% 42.4 4.5% 39.8 4.8%Total 66 074 100.0% 67 194 100.0% 951.5 100.0% 823.3 100.0%*Note: Other includes Household worker, WPII, Voluntary etc.

Statutory claims and payments by injury natureNumber of accepted claims Financial year costs

2019 2018 2019 2018

Number of accepted claims Financial year costs2019 2018 2019 2018

Statutory claims and payments by industry classificationNumber of accepted claims Financial year costs

2019 2018 2019 2018


Common law claims and payments by injury nature

Injury natureNo. % No. % $M % $M %

Burns 21 0.8% 22 0.9% 2.7 0.7% 2.9 0.8%Fractures 249 9.8% 226 9.3% 42.0 11.7% 43.8 11.8%Intracranial injuries and injuries to nerves and spinal cord 18 0.7% 17 0.7% 7.7 2.1% 7.1 1.9%

Mental disorders 223 8.8% 222 9.2% 31.8 8.8% 36.1 9.7%Musculoskeletal injuries and diseases 1 520 59.8% 1 462 60.3% 205.3 57.0% 216.5 58.0%Nervous system and sense organ diseases 36 1.4% 43 1.8% 4.2 1.2% 5.8 1.6%Other injuries and diseases 187 7.4% 164 6.8% 27.7 7.7% 23.5 6.3%Respiratory system diseases 41 1.6% 36 1.5% 4.8 1.3% 3.0 0.8%Skin and subcutaneous tissue diseases 7 0.3% 6 0.2% 1.2 0.3% 0.4 0.1%Wounds, lacerations, amputations and internal organ damage 239 9.4% 226 9.3% 33.1 9.2% 33.5 9.0%

Total 2 541 100.0% 2 424 100.0% 360.5 100.0% 372.6 100.0%

Common law claims and payments by injury location

Injury locationNo. % No. % $M % $M %

Back 699 27.4% 715 29.6% 112.5 31.3% 115.9 31.0%Foot and toes 68 2.7% 46 1.9% 8.9 2.5% 9.8 2.6%Hand and fingers 200 7.9% 190 7.8% 22.7 6.3% 24.2 6.5%Head and face 76 3.0% 78 3.2% 14.6 4.0% 17.7 4.8%Lower limbs 332 13.1% 295 12.2% 38.7 10.7% 44.4 11.9%Multiple Locations 53 2.1% 43 1.8% 8.0 2.2% 7.3 2.0%Neck 82 3.2% 87 3.6% 13.2 3.7% 15.0 4.0%Systemic 241 9.5% 231 9.5% 32.9 9.1% 37.5 10.1%Trunk 131 5.2% 117 4.8% 19.8 5.5% 17.0 4.6%Unspecified location 26 1.0% 18 0.7% 5.4 1.5% 2.2 0.6%Upper limbs 633 24.9% 604 24.9% 83.8 23.2% 81.6 21.9%Total 2 541 100.0% 2 424 100.0% 360.5 100.0% 372.6 100.0%

Common law claims and payments by industry classification

Injury IndustryNo. % No. % $M % $M %

Accommodation and Food Services 115 4.5% 122 5.0% 18.0 5.0% 19.9 5.3%Administrative and Support Services 79 3.1% 71 2.9% 4.8 1.3% 9.6 2.6%Agriculture, Forestry and Fishing 81 3.2% 78 3.2% 16.8 4.7% 10.3 2.8%Arts and Recreation Services 30 1.2% 21 0.9% 4.6 1.3% 2.7 0.7%Construction 400 15.7% 370 15.3% 65.6 18.2% 70.8 19.0%Education and Training 91 3.6% 90 3.7% 10.9 3.0% 11.4 3.1%Electricity, Gas, Water and Waste Services 42 1.7% 46 1.9% 10.6 2.9% 6.9 1.9%Financial and Insurance Services 15 0.6% 13 0.5% 1.5 0.4% 1.9 0.5%Health Care and Social Assistance 351 13.8% 320 13.2% 38.3 10.6% 40.0 10.7%Information Media and Telecommunications 4 0.2% 15 0.6% 1.1 0.3% 1.2 0.3%Manufacturing 395 15.5% 401 16.5% 55.4 15.4% 65.4 17.6%Mining 113 4.4% 103 4.2% 23.7 6.6% 23.7 6.4%Other 100 3.9% 106 4.4% 11.5 3.2% 10.1 2.7%Other Services 64 2.5% 80 3.3% 13.8 3.8% 7.8 2.1%Professional, Scientific and Technical Services 31 1.2% 29 1.2% 5.0 1.4% 3.8 1.0%Public Administration and Safety 117 4.6% 104 4.3% 14.6 4.0% 17.6 4.7%Rental, Hiring and Real Estate Services 29 1.1% 29 1.2% 4.0 1.1% 5.7 1.5%Retail Trade 152 6.0% 141 5.8% 17.5 4.9% 17.5 4.7%Transport, Postal and Warehousing 192 7.6% 154 6.4% 24.9 6.9% 26.9 7.2%Wholesale Trade 140 5.6% 131 5.5% 17.9 5.0% 19.4 5.2%Total 2 541 100.0% 2 424 100.0% 360.5 100.0% 372.6 100.0%

Number of new common law claims Financial year costs2019 2018 2019 2018

Financial year costs2019 2018 2019 2018

Number of new common law claims

Number of new common law claims Financial year costs2019 2018 2019 2018


Payment type$M % on gross $M % on gross

Statutory claimsWeekly Compensation 412.7 31.5% 344.2 28.8%Medical/Rehabilitation 260.2 19.8% 226.4 18.9%Lump sum

Permanent impairment 99.0 7.5% 98.7 8.3%Fatal lump sum 27.2 2.1% 18.3 1.5%Latent onset lump sum 50.4 3.8% 43.6 3.6%

Hospital 89.1 6.8% 78.7 6.6%The 2015 Statutory Adjustment Scheme 0.7 0.1% 3.1 0.3%Other 12.2 0.9% 10.3 0.9%Gross statutory payments 951.5 72.5% 823.3 68.9%

Common law claimsSettlements 308.2 23.5% 317.3 26.5%Legal and investigations 52.3 4.0% 55.3 4.6%Gross common law payments 360.5 27.5% 372.6 31.1%

Total gross payments 1312.0 100.0% 1195.9 100.0%

Statutory and common law payments

2019 2018


LEADERSHIP

Chair and CEO Report We are pleased to present the WorkCover Queensland annual report for 2018–2019.

This year, we have focused on furthering our journey into improving our customers’ experience, piloted new claims management initiatives, and continued our valuable partnerships with stakeholders.

We work together with customers and stakeholders to deliver our vision of being the best workers’ compensation insurer by maintaining a strong financial position, which enables us to continue our focus on improving return to work outcomes, customer experience and making a positive difference to people’s lives.

Maintained average premium rate WorkCover’s 2018–2019 average premium rate remained at $1.20 per $100 of wages for the fifth consecutive year.

Queensland businesses continue to benefit from several of our initiatives including the exclusion of apprentice wages from premium calculations, interest-free payment plans, a minimum premium price of $200, and step-by-step online policy renewal assistance.

In response to customer feedback, from 1 July 2019, we will also provide the largest employers in Queensland with a choice between two methods of premium calculation: the existing Experience Based Rating (EBR) method, and the new Large Employer Alternative Pricing (LEAP) method. We have developed the LEAP model as a choice for the largest of our customers, who are eligible for self-insurance, which provides shared risk and can promote improved claims performance sooner.

Our disciplined financial management and prudent investment approach ensure that WorkCover continues to be fully funded and able to offer these benefits to businesses, as well as maintain the lowest average premium rate of any Australian state.

The following diagram illustrates the breakdown of our $1.20 average premium rate.

*Other, understatutory claims

includes asbestos and

firefighters allowance.


Customer experience WorkCover places the customer at the heart of everything we do and we have a commitment to constantly improve the experience for our customers.

We have a number of strategic projects to deliver on this objective and better meet the needs of our customers including:

• redesigning our website, with partners Workplace Health and Safety Queensland, Workers’Compensation Regulator, and Electrical Safety Office

• improving our claims registration process, written communications and the common law journey• new customer insights and feedback systems.

We have continued our quarterly survey to gather feedback from our customers about their experience with us, measuring our performance against five customer strategy principles – easy, fair and transparent, empowered, consistent, and valued. We achieved a rating of 7.3 out of 10 for workers and 7.5 out of 10 for employers during the quarter ending June 2019, averaging to an overall customer experience score of 7.4.

Offering tailored care and support to meet individual needs We are enhancing the way we help workers and employers during their claims by giving tailored care and support to meet individual needs. With research partner Monash University, and input from external stakeholders and our people, we designed and tested an evidence-based approach to identify and support injured workers at risk of poor return to work outcomes. We have been piloting this improved approach since July 2018, and will continue to analyse the results until late 2019.

Trusted partnerships Fostering trusted partnerships with customers and stakeholders enables WorkCover to continue to focus on improving outcomes, creating value for business and keeping Queenslanders working.

Two rounds of CEO forums were held with key stakeholder groups in July 2018 and March 2019 to share and gain input into WorkCover’s corporate direction. Stakeholders included industry bodies, unions, medical and allied health providers and legal associations.

Injury risk reduction initiatives Through consultation with stakeholders including Workplace Health and Safety Queensland, and data analytics, WorkCover has identified a number of potential injury risk reduction initiatives to pilot aimed at reducing WorkCover’s and its customers’ exposure to injury and associated costs/impact. These pilot initiatives will include risk advisory activities for high risk industries and employers as well as return to work incentives for small business and new employment opportunities.

Silicosis and support for stonemasonry workers and employers On 18 September 2018, the Office of Industrial Relations (OIR) issued a safety alert to highlight the significant health risks for those in the engineered stone benchtop fabrication industry caused by exposure to silica dust. Industrial Relations Minister Grace Grace announced that WorkCover would assist stonemason employers to meet their obligations by funding a screening program for all Queensland workers in this industry. Since then, WorkCover has funded more than 1,000 health screens for these workers and is now supporting more than 160 workers with silica-related conditions.

In November 2018, the Office of Industrial Relations and WorkCover hosted an information session for employers and workers to discuss the recent emergence of workplace injuries caused by exposure to respirable crystalline silica. We have since shared information with workers and employers through face-to-face meetings, webinars and our website.

Our centralised team of Customer Advisors work closely with medical specialists to facilitate efficient disease diagnosis, treatment and ongoing health and wellbeing support to these workers and their families. WorkCover and the Office of Industrial Relations are also working with academics to support research into the most effective treatment and recovery options for workers diagnosed with silicosis. We have just announced a research project with experts from Monash University and the University of Illinois to understand best practice rehabilitation and return to work services for workers with silicosis.

https://www.worksafe.qld.gov.au/injury-prevention-safety/alerts/whsq/2018/prevent-exposure-to-silica-for-engineered-stone-benchtop-workers

http://statements.qld.gov.au/Statement/2018/9/18/safety-alert-issued-for-engineered-stone-benchtop-workers


Connecting with providers WorkCover introduced Provider Connect, a new-look platform for providers who work with us electronically. Provider Connect is designed to make it easier for providers to work with us, with intuitive design and easily accessible key information.

With key medical and allied health stakeholders and providers, we have been reviewing and developing options to optimise treating services costs and claim outcomes. Our treating services strategic project has identified a number of initiatives to improve price, quality, timeliness and outcomes for customers.

As a result of an analysis into the overall service delivery and location coverage of the return to work services panel, we improved our coverage in the identified employment growth regions of Cairns, Central Queensland, Gold Coast, Ipswich, Logan-Beaudesert, Moreton Bay North, Sunshine Coast and Wide Bay. We added seven new providers to our return to work services panel from 1 August 2018, following an open tender process.

5-year scheme review improvement opportunitiesFollowing on from the independent review of Queensland’s workers’ compensation scheme, tabled in Parliament on 29 June 2018, WorkCover has been working with the Office of Industrial Relations to investigate and implement the recommended improvement opportunities. This has included feedback through stakeholder reference groups chaired by the Office of Industrial Relations in relation to legislative changes. We will continue to work with the Office of Industrial Relations to implement any legislative and administrative changes.

Our people Our annual confidential employee engagement survey achieved an excellent response rate of 84% and a sustainable engagement index of 76%. The survey provides insights into our culture, which allow us to celebrate our strengths and develop action plans to address opportunities for improvement.

We conducted the discovery pilot and implementation of our Contemporary Mobile Workforce remote working initiative to help our people balance work and personal responsibilities. We are excited to continue the journey in providing flexible working opportunities for our people.

Financial and investment performance WorkCover’s operating profit for 2018–2019 was $77 million after tax.

The net return on investments for the year was 6.44% (2017–2018: 7.56%). We will continue to work with QIC, our fund manager, on sound investment strategies for the future.

WorkCover continues to be fully funded and will maintain a strong financial position as a direct result of our disciplined financial management, prudent investment approach and cost control focus. Our strong financial position will ensure we can continue to invest in improving the experience and outcomes for our customers.

Outlook Looking to 2019–2020 and beyond, we are well positioned to respond to emerging trends, such as the rising impact of mental illness and other complex conditions in the workplace, increasing customer expectations and the opportunities presented by technology and data.

We have claims management strategies in place to improve our tailored care approach to mental injury claims with early intervention, access to quality treatment, education activities, promotion of helpful resources for workplaces, a commitment to continuous improvement, and ongoing development for our people. We will also continue our partnership with Monash University to implement our new approach to identifying and supporting those workers who face a higher risk of not achieving a sustainable return to work.

We will continue to deliver our program of customer experience improvements, including the development of an enhanced joint website with Workplace Health and Safety Queensland, Workers’ Compensation Regulator, and Electrical Safety Office.

We will ensure our customers and our people are assisted by data and information to provide actionable insights and support sustainable return to work outcomes. We will provide a stable technology base that supports the current business and is ready for emerging opportunities.


The results from our pilot injury risk reduction initiatives will enable WorkCover to influence and invest in injury prevention, in collaboration with Workplace Health and Safety Queensland, industry groups and other stakeholders.

We will continue building on our valuable partnerships and collaborations with stakeholders, including Queensland Government, LeadingWell Queensland mental health joint initiative, industry groups, the medical and allied health profession, unions, the legal profession, and Safe Work Australia.

We remain committed to diversity in our workforce and will prioritise our employee engagement, workplace safety and wellbeing initiatives.

Thank you We would like to thank and acknowledge the hard work of our Board members, executive management team and all our people. We particularly thank our outgoing Board Deputy Chair Roslyn McLennan for her contribution and wish her well in her appointment to the Queensland Industrial Relations Commission.

We pay tribute to Michael Roche, our Board Director and Risk and Audit Committee Chair, who sadly passed away in July 2019. Michael will be remembered for his dedication and commitment to improving the lives of Queenslanders.

We would also like to thank the Honourable Grace Grace MP, Minister for Education and Minister for Industrial Relations, and the Queensland Government for their ongoing support.

Flavia Gobbo Bruce Watson Chair CEO

https://leadingwellqld.com.au/


Board of Directors Flavia Gobbo BA/LLB, GAICD Chair Flavia is a Solicitor of the High Court of Australia and the Supreme Court of Queensland and has extensive experience as a senior corporate lawyer with one of Australia's top publicly listed companies. She is Chair of the Emergency Services Telecommunication Authority, a Director of Employers Mutual Limited, Deputy Chair of Rowing Australia and Deputy Chair of SecondBite, a not for profit national food rescue organisation. Flavia was Chairperson of the former Queensland workers' compensation regulatory authority.

Roslyn McLennan BEcon Deputy Chair Roslyn is General Secretary of the Queensland Council of Unions. She is a Director of Safe Work (Queensland), a Trustee of Sunsuper and is a Member of the ACTU Executive. Roslyn was formerly Assistant General Secretary of the Queensland Independent Education Union.

Roslyn has since resigned from the Board, effective 8 July 2019.

John Crittall BEcon (Hons), MAdmin (IR) Director John has extensive experience providing strategic guidance in the key areas of industrial relations, workplace health and safety and legislative compliance. He is currently the Chair of the Building Employees Redundancy Trust, Director of Mates in Construction, Chair of Construction Income Protection Limited and Chair of Electro Group. John was formerly a Director at Master Builders, a role he held for over 10 years.

Kerriann Dear BSc, BSocWk (Hons) Director Kerriann has worked in the field of industrial social work since 1999. She has overseen the development and operations at a number of industrial advisory programs for vulnerable people including Working Women Queensland, Young Workers Advisory Service and Domestic Violence Work Aware and is also on the Social and Community Services Industry Committee for the Services Union. Kerriann was formerly a Board member and CEO of the Queensland Working Women's Service Inc.

Ian Leavers Director Ian is General President and CEO of the Queensland Police Union, a position he has held since 2009. He has been involved with the Queensland Police Union and as a union official since 1997. Ian is also a Director of QBank.


Sarah Morris BEcon, GDip Applied Finance and Investment, GDip Applied Corporate Governance, ACA, FGIA, GAICD Director Sarah Morris is Executive Manager – Strategy and Finance at TUH Health Fund. Sarah has held senior and executive positions with several organisations across defence services, finance, insurance, resources and professional services industries. She is a former state and national councillor of the Governance Institute of Australia.

Michael Roche BComm (Hons), MComm (Hons), GAICD Director Michael had extensive senior executive experience in the government and private sectors, including 11 years as Chief Executive of the Queensland Resources Council. He was a Strategic Adviser to law firm McCullough Robertson and Principal of Michael Roche Advisory. He was the Chair of disability services group Multicap Ltd. He was a Director and Investment Committee Chair of industry superannuation fund Mine Super. Michael was also the WorkCover Risk and Audit Committee Chair.

Michael sadly passed away in July 2019.

Lyn Rowland BA, PostGradDipHR/IR Director Lyn’s career has spanned both public and private sectors with 35 years’ experience in human resources management and industrial relations, providing strategic and transformational leadership in executive roles in Normandy Mining, Queensland Rail, MacMahon Holdings, Limitless Holdings (UAE) and Queensland Health. Lyn has held Director roles with the Queensland Museum, Southern Cross Soloists and the Normandy Mining Superannuation Fund.

Ben Swan GradDipStrategicLeadership, DipSuperannuation, CertChangeLeadership, GAICD Director For over 20 years, Ben has represented workers in industrial tribunals, boards and committees across a diverse range of national industries, including mining, oil and gas, pastoral, aviation, retail, tourism and hospitality, manufacturing, engineering and refining and smelting. Ben is the former Secretary of The Australian Workers’ Union (AWU) in Queensland, and had previously held the positions of AWU Assistant National Secretary, AWU Assistant Secretary (Qld) and AWU National Industrial Officer.


Executive Leadership Team

Bruce Watson MOL, Dip Fin Services, FAICD, FASFA Chief Executive Officer

Bruce commenced as WorkCover Queensland CEO on 1 January 2017. He was previously CEO of Mine Wealth and Wellbeing Super Fund for 11 years and was awarded ‘Executive of the Year’ in 2010 by the Fund Executive Association for his contributions to business and industry. Bruce is a highly experienced and proven CEO, recognised by industry for delivering sustainable financial performance and customer service excellence in the financial services sector. Bruce is committed to achieving WorkCover’s vision of being Australia’s leading workers’ compensation insurer by driving the delivery of technologically advanced claims management platforms and outstanding customer experience.

Trevor Barrenger BA, GAICD Chief Information Officer

Trevor has had extensive experience in the delivery of business solutions and technology systems in a number of global consulting organisations. He has had the opportunity to work on large projects across Europe, America and Australia, and his experience supports his ability to deliver technology solutions to meet WorkCover's business needs and customer service outcomes.

Trevor has since resigned from WorkCover, effective 29 August 2019.

Christina Carras BComm, ACA, SIA (Aff), AGIA, GAICD Chief Customer Officer

Christina leads the Customer Group to ensure the end-to-end claims management process meets WorkCover’s corporate goals and balances the interests of both Queensland employers and injured workers. She oversees the claims, premium and relationship management of our industry-aligned customer service model. She plays an integral role in delivery changes that benefit both our employers and injured workers, while at the same time engaging with our people to deliver the best outcomes.

David Heley BAdmin, FCPA, DFP, AGIA, GAICD Chief People and Finance Officer

David has more than 21 years' experience in the finance and insurance sector. As Chief People and Finance Officer, David's focus is on ensuring a strong financial position and a committed and capable workforce both now and for the future. His group provides people and financial strategies to secure WorkCover as Australia's best workers' compensation insurer. These strategies are underpinned by learning and development, IR and ER, reporting and analysis, taxation, treasury, compliance, and audit functions that support the business. David is also the Company Secretary.


Janine Reid BLaws, MBA, GIA (Cert), GAICD Legal Counsel

Janine has worked in personal injuries for over 21 years. Her knowledge and experience in personal injuries support her ability to manage our common law strategy and legal panel. She is also responsible for providing legal advice to the business and the WorkCover Board and engaging with external stakeholders.

Nick Wenck BBus and Law Chief Strategic Development Officer

Nick commenced at WorkCover in July 2017 and leads teams across strategy development, strategic projects and portfolio management, experience design, communications and stakeholder relations. Nick’s career spans strategic leadership roles across financial services, insurance, health, government, and management consultancy. Nick is passionate about the delivery of world-leading customer experiences and claims outcomes underpinned by a clear, coherent strategy and business change program, and fully engaged and talented people.


Placing the customer at the heart of everything we do WorkCover has developed a customer program of strategic projects to continue to improve our customer experiences. Over the past year, we have started discovery activities, including customer and stakeholder consultation, and will continue to design and implement the following new approaches over the coming 2019–2020 year:

• Working with our website partners, Workplace Health and Safety Queensland, Workers’Compensation Regulator, and Electrical Safety Office, develop a more intuitive website withenhanced self-service capability.

• Review our current customer contact management capability to ensure a more consistentexperience throughout their claim journey.

• Enhance our understanding of our customers’ needs and how they want to interact with us, allowingus to make informed decisions about the specific services we provide.

• Ensure workers know what to expect of the claims process from the outset to allow them to focus ontheir recovery.

• Improve key written communications to injured workers to allow them to feel empowered to makeinformed decisions about their claim.

• Measure the real-time experience customers have through the claims process.• Design a customer experience journey that ensures both workers and employers feel supported and

involved with relevant information, empathy and understanding during common law claims.

Offering tailored care and support to meet individual needs With research partner Monash University, we are piloting a new approach to the way we help workers and employers during their claims by tailoring care and support to their individual needs.

Early analysis shows that more workers are getting the right level of care at the right time. We have particularly noticed that we are able to help workers with more complex claims, or those with longer expected recovery times, earlier in their claim. This is really important in our focus to support workers in their recovery and improve outcomes for them.

Feedback from workers during the pilot has been positive, and we are also gathering feedback from providers, employers and our people on whether they feel this enhanced approach is beneficial.

Through this pilot, we are making sure our highly trained claims team members are partnering with employers, workers and providers to get the best possible outcomes, tailored to each individual.

Connecting with Queensland workplaces Online services During the year, we enhanced WorkCover Connect, employers’ online one-stop resource for insights into their claims and safety. Functionality improvements provide employers more flexibility to make changes to suit their business needs as well as better reports, analytics and tools to help their business.

WorkCover was also proud to receive recognition of our digital services redesign at the national Personal Injury Education Foundation’s Awards in Adelaide in October 2018. Our efforts to improve our services for our customers and stakeholders were acknowledged with our win in the digital innovation category of the PIEF Awards.

LeadingWell Queensland Our LeadingWell Queensland collaboration, with Workplace Health and Safety Queensland and SuperFriend, funded the University of Queensland to pilot the 5R Leading inclusive teams program in Mackay. 5R is a five-step structured workplace intervention designed to build business leadership skills to enhance work group identity, group cohesion and workplace wellbeing. A series of events, including business leaders breakfasts and forums, were held throughout the year in Brisbane, Cairns and Townsville,

OUR CUSTOMERS

https://leadingwellqld.com.au/

https://www.worksafe.qld.gov.au/injury-prevention-safety/mentally-healthy-workplaces/leadingwell-queensland


with a focus on building mentally healthy workplaces through strategic development, positive promotion and workplace culture.

Events for small businesses WorkCover also participated in a series of webinars and events for small businesses with partners Chamber of Commerce and Industry Queensland, Workplace Health and Safety Queensland, and the Office of Small Business. Topics included the health benefits of good work and suitable duties, what to do when a worker is injured, and Safe business for small businesses in Toowoomba.

Reaching out regionally We have continued to host forums with employers and unions throughout the year on return to work, injury management, common law claims, and workplace health and safety. The below map shows some of the places we have been over the past year.

We have hosted webinars on topics such as common law claims and silicosis and support for stonemasonry workers and employers, for over 6,000 registrants.

Our quarterly WorkCover Update e-newsletter, which provides an overview of the latest workers’ compensation news and information, including helpful tools and resources for workplaces, is sent to all policyholders, medical and allied health providers, and other stakeholders.

https://www.worksafe.qld.gov.au/forms-and-resources/newsletter/workcover-queensland-update


ENGAGED PEOPLE WorkCover has continued to grow an organisation of innovative people who are committed to our vision of being the best workers’ compensation insurer and making a positive difference to people’s lives.

We develop their leadership and technical competencies, provide flexible working arrangements, health and wellbeing initiatives, and a safe and comfortable working environment, to ensure our people have the capability to meet the needs of our customers now and into the future.

Workforce overview • 816 full time employees• 65% of workforce is female• 9.8% employee attrition rate

People survey During the year, we continued our confidential employee engagement survey, measuring sustainable engagement of our people. The survey provides insights into our culture by gathering feedback on our values, learning framework, customer orientation, leadership and teamwork.

We achieved an excellent response rate of 84% for our April 2019 survey. Our management team encourage our people to complete the survey and this response rate confirms our people’s commitment to have their say.

WorkCover met or outperformed the Australian benchmark on 11 of the 13 categories within the engagement survey, achieving a sustainable engagement index of 76 out of 100. These results have been used throughout WorkCover to celebrate our strengths, identify opportunities for improvement and develop action plans.

Health and wellbeing Our wellness program, WorkWell, is designed to allow us to maintain a work culture that continuously educates and reinforces the importance of health and safety at WorkCover. The program promotes safety and wellness through education and initiatives including:

• mental health and wellbeing programs• ‘Mindful May’ campaign with free yoga and mindfulness sessions• R U OK? Day• ‘Conscious acts of kindness’ month to encourage true kindness and the act of giving• information and support through our Employee Assistance Program, with free counselling

sessions for our people and their immediate family• nutrition and physical health sessions and cooking demonstrations• free influenza vaccinations• bowel screening kits• free skin checks and sun smart campaign• monthly workplace health and safety toolbox sessions• weekly fresh fruit• walking club and 10,000 Steps challenge.

Financial wellbeing We invited our people to optional financial wellbeing sessions, presented by external specialists, on topics including:

• understanding superannuation and planning for retirement• financial planning and goal-setting• personal insurance and income protection.


Flexible working arrangements We continued our Contemporary Mobile Workforce pilot project, which ran from March – August 2018, and implemented the remote working initiative from November 2018. This initiative continues WorkCover’s journey in providing flexible working opportunities and better work/life balance for our people, while maintaining our commitment to workplace health and safety. So far, 278 of our people have worked remotely, and we will continue to promote to employees to increase this uptake. We will conduct a benefits realisation review in August 2019 to understand the impact of this initiative.

Recruitment During the year, 137 new starters joined WorkCover. We are leveraging digital platform opportunities, combined with engaging advertising and candidate profiling, to attract and select people who will contribute to a better WorkCover Queensland. We have several programs to support the recruitment process and transitions people go through during their time at WorkCover, including onboarding, return from parental leave, new leaders, and emerging leaders.

Endorsed employer for women WorkCover is now an Endorsed Employer for Women with WORK180, a global online jobs network that advocates for working women. WORK180 screens employers against a set of 20 criteria, including pay equity, flexible working, women in leadership and paid parental leave.

We are committed to diversity of thought, experience, perspective and gender. This diversity allows us to stay in tune with our customers and deliver a truly personalised customer experience.

Casual for a Cause Fridays WorkCover’s Casual for a Cause Friday program has raised over $25,000 in donations to selected charities over the past year. Our people have chosen charities to support across health care, medical research, social enterprise and animal protection services.

This charitable program is another way our people live our vision – to make a positive difference to people’s lives.

Industrial and employee relations Our commitment to fairness and transparency flows through to our approach to workplace matters and creating an open, communicative culture at WorkCover. We invest in the relationship with Together Union and engage in a consultative process, including a forum to openly raise and quickly resolve all employment matters including organisational change, benefits, policy, initiatives, wellbeing, and safety. The Workplace Consultative Committee, WorkCover management, Together Union and internal delegates worked together on the renewal of WorkCover’s Certified Agreement, which expired in September 2018. The in-principle agreement was achieved by 31 October 2018, and employee consultation ran from 1–15 April 2019. Employees were then able to vote on the agreement from 16 April – 3 May 2019, with 87 per cent of employees participating, of which 97 per cent voted in favour of the new agreement. The new agreement was certified by the Queensland Industrial Relations Commission on 27 May 2019.

Learning and development WorkCover’s learning framework supports a shared understanding across the organisation of what skills, behaviours and abilities we need for the future and how we can deliver these. It helps attract, recruit and sustain a capable workforce and is designed to inform learning and development initiatives. Following on from its introduction last year, more of our teams have utilised the learning framework to identify opportunities for capability growth and created individual development plans designed to ensure capability for current and future roles.

We also introduced My Place, a new technology platform to support our people with processes such as online learning, performance reviews, and development planning. More than 700 online learning activities aligned to the learning framework have commenced. Online learning supports our growth of a continuous learning culture, allowing people to access learning when they need it.

Leadership and management development Our leaders had the opportunity to work with coaches to enhance their leadership skills and develop areas identified, following the completion of a 360-degree feedback process. We also worked on developing coaching skills across our leadership group.


Management expertise is developed in-house through our monthly Enlightened Bites program. This collaborative leadership learning approach helps our managers stay up-to-date on important and topical management issues such as resilience, workplace harmony, self-reflection, and workplace safety. The program also gives our managers the opportunity to collaborate and leverage knowledge on taking actions and generating new approaches to managing teams.

Emerging Leaders program WorkCover offers the Emerging Leaders Program to our people, a professional development opportunity for those interested in moving into a leadership career. The program develops our emerging leaders in a supportive environment with opportunities to gain experiences in areas across the business, with a focus on collaboration. This year, seven participants joined the program, which involved coaching, workshops, learning modules, and on-the-job experience.

Study Assistance The Study Assistance Program is designed to support and assist our people to achieve their learning and development goals through study for qualifications, certifications or accreditations. Around 60 people are currently studying through the program and 12 people completed their tertiary qualifications during the 2018–2019 financial year.

Personal Injury Education Foundation (PIEF) Our people have continued to study through PIEF for qualifications relevant to our work in personal injury management. We had 8 employees undertaking the Certificate IV in Personal Injury Management, 8 employees studying the new Certificate IV in Customer Engagement, and 10 employees undertaking the Diploma of Personal Injury and Disability Insurance Management.

WorkCover Customer Advisor Sandra Hennessy won a national award for excellence in managing serious injuries, particularly for her involvement in return to work programs for victims of traumatic brain and spinal cord injuries, at the PIEF Awards in Adelaide in October 2018. WorkCover Customer Manager Teegan Jordan earned a finalist status in the emerging leader category for her leadership managing a portfolio of claims.

Mental Health First Aid (MHFA) During the year, another 49 employees completed a MHFA program, which aims to increase awareness of mental health issues and provides guidance for our people on managing conversations with customers, colleagues or friends and family who may have or are at risk of developing a mental health illness and helping them seek appropriate treatment and support. The program also helps to foster a psychologically healthy workplace. Since its original introduction, 674 of our people have completed the program.


CORPORATE GOVERNANCE Strategic planning A four-year corporate plan and one-year statement of corporate intent are prepared annually and approved by the Minister in accordance with the Workers’ Compensation and Rehabilitation Act 2003 (the ‘Act’). The corporate plan summarises our vision, values, goals, strategies and performance indicators. The plan forms the basis for the group operational business plans, which outline how we will achieve our business objectives. Group business plans include the key financial and operational performance indicators, which are used to measure and monitor our performance. Our statement of corporate intent outlines our objectives and major activities, and specifies various financial and non-financial performance targets for the financial year.

Board of Directors Chapter 8 of the Act outlines the functions and powers of WorkCover. Section 424(1) of the Act provides for the establishment of the WorkCover Board (the ‘Board’). The Board’s role is set out in section 427 of the Act. The Board charter specifies the responsibilities of the Board collectively and individually, and has been made available on our website.

The Board consists of a maximum of nine independent non-executive directors appointed by the Governor in Council for a term of not more than five years. The Governor in Council also appoints the Board Chair and Deputy Chair and determines the terms of appointment including remuneration. Directors are appointed on the basis of their experience and knowledge.

Information on directors’ and executives’ benefits is detailed in note E3 of the financial statements.

Directors’ length of service Director First appointed End date

Flavia Gobbo, Chair 1/07/2014 30/06/2020

Roslyn McLennan, Deputy Chair, People Committee Chair 7/07/2016 08/07/2019

John Crittall 1/07/2012 30/06/2020

Kerriann Dear 1/07/2017 30/06/2020

Ian Leavers 1/07/2012 30/06/2020

Michael Roche, Risk and Audit Committee Chair 1/07/2017 30/07/2019*

Lyn Rowland 1/07/2017 30/06/2020

Ben Swan 1/07/2017 30/06/2020

Sarah Morris 16/02/2018 30/06/2020

*Michael Roche sadly passed away in July 2019.


https://www.worksafe.qld.gov.au/about-us/workcover-queensland/board-of-directors/board-charter

http://www.worksafe.qld.gov.au/


Risk and Audit Committee The role of the Risk and Audit Committee is to assist the Board in fulfilling its corporate governance responsibilities. The committee reports directly to the Board on matters pertaining to WorkCover’s risk governance framework, including:

• the reliability and integrity of financial information for inclusion in annual reports• the integrity of internal control framework• compliance with legislative, regulatory, and governance requirements• oversight of the risk management framework, and• safeguarding the independence of the internal and external auditors.

The Risk and Audit Committee Charter guides the committee, its structure and its specific roles and responsibilities under the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2009. The committee monitors its performance against the terms of the charter, with due regard to Queensland Treasury’s Audit Committee Guidelines: Improving Accountability and Performance. In discharging its duties, the committee has considered all audit recommendations as made by the external auditor.

Committee membership The committee consists of a minimum of three and a maximum of six independent non-executive directors, drawn from the Board, that meet quarterly. A summary of committee membership (as at 30 June 2019) is set out below.

Risk and Audit Committee

Committee member Committee role

Michael Roche Committee Chair

Flavia Gobbo Independent non-executive member

Roslyn McLennan Independent non-executive member

Sarah Morris Independent non-executive member

People Committee The role of the People Committee is to assist the Board in fulfilling its corporate governance responsibilities. The committee reports directly to the Board on matters pertaining to WorkCover’s people matters, including:

• the development of terms and conditions of the Executive and senior management contracts andremuneration

• strategies, organisational policies and processes, including but not limited to:— employment terms— staff remuneration and contracts— termination payments— succession planning— industrial relations— talent and capability— attraction and retention— training and development

• ensuring sound processes are developed for performance evaluation and determination of levelsof remuneration for the Executive and senior management

• giving guidance to the Chair regarding the annual evaluation of the performance of the CEO.

The People committee charter guides the committee, its structure and its specific roles and responsibilities.

https://www.worksafe.qld.gov.au/about-us/workcover-queensland/board-of-directors/audit-committee




https://s3.treasury.qld.gov.au/files/improving-performance.pdf


Committee membership The committee consists of a minimum of three and a maximum of five independent non-executive directors, drawn from the Board, that meet quarterly. A summary of committee membership (as at 30 June 2019) is set out below.

People Committee

Committee member Committee role

Roslyn McLennan Committee Chair

Flavia Gobbo Independent non-executive member

Michael Roche Independent non-executive member

Lyn Rowland Independent non-executive member

Directors’ meetings During the year, WorkCover held seven Board meetings, four Risk and Audit Committee meetings and three People Committee meetings. The CEO attends all Board meetings and members of the executive leadership team are invited to present and discuss relevant issues. A register of directors’ interests is updated at each Board meeting to avoid any conflicts of interests and minutes are recorded and maintained in accordance with best practice.

A summary of attendance of directors at meetings is set out below:

Board meetings Risk and Audit Committee meetings

People Committee meetings

Director Eligible to attend

Meetings attended

Eligible to attend

Meetings attended

Eligible to attend

Meetings attended

Flavia Gobbo 7 7 4 4 3 3

Michael Roche 7 7 4 4 3 3

Roslyn McLennan 7 6 4 4 3 3

Sarah Morris 7 6 4 4 - -

John Crittall 7 7 - - - -

Kerriann Dear 7 6 - - - -

Ian Leavers 7 7 - - - -

Lyn Rowland 7 7 - - 3 3

Ben Swan 7 6 - - - -

Senior executives The CEO assesses performance of senior executives on an annual basis as part of the organisation’s performance review process. The Board also assesses the performance of the CEO as part of this process.


Customer and stakeholder feedback WorkCover recognises the importance of complaints management as being inherent to delivering a quality customer experience. We support the rights of our customers and stakeholders to have their complaints heard and actioned appropriately. We are committed to resolving complaints quickly and objectively and believe that all customer and stakeholder feedback, both positive and negative, presents opportunities for continuous improvement.

WorkCover maintains a complaints management framework in accordance with section 219A of the Public Service Act 2008 and the AS/NZS ISO10002–2014: Guidelines for complaints management in organisations. A copy of WorkCover’s Customer Complaints Policy has been made available on the WorkCover website. WorkCover’s management of complaints is monitored to ensure compliance with the statutory, policy and reporting requirements concerning stakeholder feedback.

Mandatory open data reporting WorkCover has reported online information concerning the amount incurred for consultancies, overseas travel and the provision of language services, as per the mandatory open data reporting requirements.

https://www.legislation.qld.gov.au/view/html/asmade/act-2008-038


https://www.worksafe.qld.gov.au/about-us/workcover-queensland/corporate-governance/complaints-policy



Ethics, Compliance and Risk Management Ethics Ethics provide the overarching principles and rules that govern the behaviour of WorkCover’s people and also considers the impact on the community and environment. WorkCover has well established policies, procedures and practices that seek to promote ethical standards of behaviour and a culture of compliance that embraces compliance with organisational, legal and regulatory obligations. The expectation that employees and officers act with integrity, honesty and accountability are reflected in WorkCover’s Code of conduct.

Code of conduct Board members and employees are expected to maintain the highest level of ethical standards whilst performing their duties. WorkCover’s Code of conduct supports our values providing a framework for high ethical standards and has been written to align with the requirements of the Public Sector Ethics Act 1994 (PSEA). The assertions of integrity and accountability are integrated into WorkCover’s strategies, objectives and actions. The Code of conduct is communicated to our people through the corporate induction program and is available on the WorkCover intranet and website. Our people receive annual refresher training on this document and the PSEA in general. All relevant internal policies and practices align with the code and the PSEA, including the ethical principles and values as detailed in the PSEA. All employees are required to comply with the code and any non-compliance may result in disciplinary action, which could include termination of employment.

The Board is bound by ethical standards outlined in the Act, which requires directors to act honestly, disclose interests, exercise diligence and not use information or their position inappropriately. Directors are also bound by the PSEA and WorkCover’s Code of conduct, on which they annually receive the same training as staff. Additionally, the Board follows the guidelines set out in Welcome Aboard: A Guide for Members of Queensland Government Boards, Committees and Statutory Authorities as issued by the Department of the Premier and Cabinet.

Compliance WorkCover maintains a number of policies and procedures detailing our compliance obligations in accordance with relevant legislation, regulations and codes of practice. We continually monitor our systems and processes to ensure we maintain compliance with these obligations via an annual compliance calendar. Progress against the annual compliance calendar is reported to the Risk and Audit Committee on a quarterly basis.

Risk management WorkCover is committed to effectively managing risk in the pursuit of our objectives. Our risk management framework is consistent with the principles set out in AS/NZS ISO 31000:2018 Risk Management –Guidelines and meets the requirements of the Financial and Performance Management Standard 2009.

Our approach to risk management is aimed at embedding a risk aware culture throughout the organisation. This includes establishing an appropriate structure and clear lines of responsibility designed to systematically identify, evaluate and manage key risks associated with our activities.

Our risk management statement/overview is available on our website.

https://www.worksafe.qld.gov.au/about-us/workcover-queensland/corporate-governance/code-of-conduct







https://www.premiers.qld.gov.au/publications/categories/policies-and-codes/handbooks/welcome-aboard.aspx

https://www.premiers.qld.gov.au/publications/categories/policies-and-codes/handbooks/welcome-aboard.aspx


https://www.worksafe.qld.gov.au/about-us/workcover-queensland/corporate-governance/risk-management



Internal audit The internal audit function supports the Risk and Audit Committee by providing independent and objective risk-based assurance advice, with the purpose of evaluating and improving the effectiveness of WorkCover’s risk management, control and governance processes.

The internal audit function operates under an approved Internal audit charter which formalises the role, authority, responsibility, scope and operational framework of WorkCover’s internal audit function, consistent with relevant assurance and professional ethical standards. The internal audit function is currently outsourced to an internal audit contractor, appointed by the Risk and Audit Committee. The internal audit function operates independently from management and WorkCover’s external auditor.

Each year the internal audit contractor prepares a strategic internal audit plan, which outlines the assurance activities to be performed during a financial year. The Risk and Audit Committee approve the internal audit plan and monitor the performance of the internal audit function, with due regard to the Audit Committee Guidelines: Improving Accountability and Performance.

During the 2018–2019 financial year, 11 internal audit engagements were completed as per the annual internal audit plan. At the completion of each engagement, internal audit report their findings and recommendations to the Risk and Audit Committee, including risks that have been identified during fieldwork. All recommendations arising from the completed internal audit engagements have either been implemented or, are on track to be implemented within agreed timeframes. The internal audit plan’s coverage over WorkCover’s key risks is reviewed regularly through the use of an assurance map.

External scrutiny A number of state bodies have been established by legislation to provide independent scrutiny of government (and statutory body) performance, including assurance of WorkCover’s performance. These include the Office of the Auditor-General, the Queensland Ombudsman and the Crime and Corruption Commission (the ‘CCC’).

During the year, the CCC completed an audit on the way WorkCover conducts corruption risk assessments. The objectives of the audit were to determine whether WorkCover is identifying corruption risks (other than or beyond, fraud) and to assess the effectiveness of corruption risk assessment processes, aimed at reducing the potential for corruption within and against WorkCover. All recommendations arising from the CCC findings have been accepted and are either implemented, or are on track to being implemented as agreed.

Section 584 of the Act requires that a review of the workers’ compensation scheme’s operational effectiveness be undertaken at least once every five years. The last review was undertaken in 2017–2018 with WorkCover Queensland committing to implement the recommendations.

Quality assurance reviews Our quality assurance reviews form part of our compliance and risk management frameworks. The quality assurance programs emphasise continuous improvement and align with AS/ISO 19600:2015 Compliance management system. The quality assurance reviews are designed to assess the effectiveness of controls implemented to manage risks and to identify potential areas for improvement to our processes.

Training and development WorkCover is committed to ensuring the ongoing capability and capacity of our people through the continued investment and development of our leadership and technical training competencies delivered throughout the year.

As part of this commitment, all employees complete regular training to keep up to date with compliance and industry requirements and for professional development.

Customer audit and intelligence WorkCover has a dedicated customer audit and intelligence team who work with Queensland employers, to ensure they are aware of their obligations to maintain adequate cover when engaging workers. The team is both responsible for auditing Queensland businesses, as well as managing WorkCover’s uninsured employer compliance.

The team maintains a balanced compliance strategy by providing targeted education and monitoring of employer compliance across the state.




Audit targets and site visit selection occurs using detailed data analysis and data sharing initiatives to best focus the team’s attention on non-compliant businesses throughout Queensland. This includes strong working relationships with the Australian Taxation Office and the Queensland Office of State Revenue to ensure a uniform compliance approach across Queensland.

The following activities were undertaken throughout the year:

Compliance audits

• 864 targeted employer audits• These audits found 596 employers that were non-compliant with the Act representing a 70% non-

compliance rate• Total amount raised from compliance audits was: $12.5M.

Site visits and uninsured employers

• 1096 random site visits were conducted including 581 in regional locations• Industry trend information and data mining on business locations and growth were used to select

these site visits• Total amount raised from uninsured claims was: $4.8M.

Recordkeeping All employees at WorkCover are responsible for keeping and maintaining records which are stored through WorkCover’s Claims and Policy Information System for our claims and policy records and through an integrated electronic records system for all corporate records. Annual compliance training is completed to ensure all employees are aware of their obligations under the Public Records Act 2002. This is essential training given all claims and policy records have been digitised since 2008 and corporate records since 2014.

The approach to recordkeeping was reviewed throughout the year to ensure continuous improvement strategies are implemented to maintain the quality and compliance of all records.

Public records are being retained in line with WorkCover’s recordkeeping policy, the Queensland State Archives’ General Retention and Disposal Schedule for Administrative Records and WorkCover’s Queensland State Archives approved Retention and Disposal Schedule, which was last reviewed in May 2014. No records were transferred to the Queensland State Archives during the 2019 financial year. Additionally, no breaches of the retention and disposal schedules were noted during the year, with no records being reported as missing or lost during this same period.

Privacy WorkCover is committed to protecting the privacy of customers, staff and third parties in accordance with the Information Privacy Act 2009 (‘IP Act’), which governs how information is collected, used, stored and disclosed by Queensland Government agencies. All disclosures of private and personal information by WorkCover are managed under this IP Act, the Right to Information Act 2009 (‘RTI Act’) or the Act. WorkCover has a Privacy Committee responsible for the promotion of privacy principles throughout the organisation. The committee actively encourages privacy awareness through initiatives such as the participation in Privacy Awareness Week, which highlights to our employees, the importance and value of protecting personal information, and how to achieve compliance with the Information Privacy Principles. Additionally, employees undertake annual privacy training in accordance with our compliance program.

Workplace Health and Safety WorkCover is committed to maintaining a safe working environment, preventing workplace injuries and appropriately managing injuries should they occur. The focus on a zero harm at work safety culture and early intervention resulted in all workers’ compensation claimants returning to work.

WorkCover provides and maintains safe equipment for employees and undertakes scheduled safety inspections throughout the year. WorkCover continues to monitor our compliance with the Work Health and Safety Act 2011.

The Workplace Health and Safety Committee maintains its commitment to foster open communication with workers and transparency with executive management. Throughout the year, the committee has continued







to engage employees on the obligations, expectations, and due-diligence required of those who work within the organisation.

Refer to the Engaged people section of our annual report for more information on other initiatives WorkCover delivered in 2018–2019 to promote a safe and healthy working environment for employees.

Business continuity management Business Continuity Management is the proactive approach of managing processes and resources for continued achievement of critical objectives, during a time of crisis and or disruption. WorkCover’s business continuity and disaster recovery plans have been developed to minimise the impact of a crisis on our customers, stakeholders and employees, and are reviewed and tested on a regular basis.


FINANCIAL PERFORMANCE

WorkCover’s operating profit for 2018–2019 was $77 million, after tax.

Premium revenue Our net premium revenue was $1.562 billion for the year, increasing from 2017-2018 due to strong wages growth across Queensland.

The target premium rate for 2018-2019 remained unchanged at $1.20 and continues to be one of the lowest average rates for workers’ compensation insurance for the 2019–2020 financial year.

Net claims incurred Net claims incurred were $1.751 billion for 2018–2019 (2017-2018: $1.322 billion).

Net claims costs increased in 2018-2019 predominantly due to an increase in statutory claims expenses and an increase in the net outstanding claims provision. The increase in statutory claims expenses is linked to increased duration and complexity of claims being managed. The main driver of the cost increase being more claims accessing more services.

The increase in the net outstanding claims provision is mainly due to the allowance for silicosis claims arising from the screening process carried out during the 2018-2019 year, an increase in expected statutory benefits, and changes in economic assumptions made by the Actuary. Common law expenses have remained stable in comparison to the 2017-2018 year.

Financial results 2018–2019 $M

2017−2018 $M

Statement of comprehensive income

Net premium revenue 1,562 1,451

Net claims incurred (1,751) (1,322)

Underwriting expenses (net of claims handling) (39) (37)

Net investment and other income 329 353

Income tax equivalents (24) (121)

Operating result for the year after income tax equivalents 77 324

Statement of financial position

Total assets 6,080 5,469

Total liabilities 3,553 3,026

Net assets 2,527 2,443

Statement of changes in equity

Reserves 1,813 1,835

Contributed equity 3 3

Accumulated surplus 711 605

Total equity 2,527 2,443


Underwriting expenses Underwriting expenses include WorkCover’s management and operational expenses and the levy payable to the Workers’ Compensation Regulator and Workplace Health and Safety Queensland. To meet disclosure requirements under accounting standards, the claims handling expense portion of underwriting expenses is added to gross claims expense to reflect the total cost of administering claims during the year.

Investment portfolio WorkCover’s investment portfolio is managed by QIC. The net market value in funds invested as at 30 June 2019 was $5.264 billion (30 June 2018: $4.898 billion).

The net return on this investment portfolio for the year was 6.44% (2017–2018: 7.56%), positive for the tenth consecutive year. This is a strong result and we will continue to work with our investment fund manager to effectively manage our investment risk to ensure our portfolio achieves its long term objectives.

Capital adequacy The Workers’ Compensation and Rehabilitation Act 2003, outlines specific requirements that WorkCover must meet to be fully funded.

As with other workers’ compensation schemes in Australia, WorkCover is fully funded if total assets are at least equal to its total liabilities. WorkCover is currently achieving both our legislative requirements and management’s aim of maintaining a funding ratio of at least 120%.

Looking to the future WorkCover continues to use prudent financial management to ensure a balanced and financially viable scheme for all customers and stakeholders. Part of this continuing prudent financial management entails a focus by WorkCover in continuing to operate within budget, achieving value for money, and more generally, ensuring WorkCover continues to minimise its costs and risks in relation to its liabilities. Premiums will be set, claims and operational expenses carefully managed in order to deliver this balance and we will continue our long term investment strategy built around a balanced portfolio.


WorkCover Queensland annual report 2018-2019 39

2019 CONSOLIDATED FINANCIAL STATEMENTS

Updated to the period ending 31 March 2016

Contents

40 WorkCover Queensland annual report 2018-2019

Consolidated statement of comprehensive income .........................................................................................................................41

Consolidated statement of financial position ....................................................................................................................................42

Consolidated statement of changes in equity ..................................................................................................................................43

Consolidated statement of cash flows .............................................................................................................................................44

Notes to the consolidated financial statements ................................................................................................................................45

Basis of preparation ....................................................................................................................................................................45

A1 General information ...........................................................................................................................................................45

A2 Compliance with prescribed requirements .........................................................................................................................45

A3 Presentation and measurement .........................................................................................................................................45

A4 The reporting entity ............................................................................................................................................................45

Premium ......................................................................................................................................................................................46

B1 Net premium revenue ........................................................................................................................................................46

B2 Unearned premium liability ................................................................................................................................................46

B3 Liability adequacy test .......................................................................................................................................................46

B4 Insurance risk ....................................................................................................................................................................47

Claims .........................................................................................................................................................................................49

C1 Net claims incurred ............................................................................................................................................................49

C2 Outstanding claims liability and recoveries receivable .......................................................................................................50

Financial instruments ..................................................................................................................................................................54

D1 Investment income ............................................................................................................................................................54

D2 Categories of financial instruments ....................................................................................................................................55

D3 Fair value measurements ..................................................................................................................................................57

D4 Offsetting financial assets and financial liabilities ..............................................................................................................59

D5 Financial risk management ................................................................................................................................................60

Supporting our business .............................................................................................................................................................66E1 Underwriting expenses ......................................................................................................................................................66

E2 Employee benefits .............................................................................................................................................................66

E3 Related parties...................................................................................................................................................................68

E4 Property, plant and equipment ...........................................................................................................................................72

E5 Commitments.....................................................................................................................................................................73

Other ...........................................................................................................................................................................................74

F1 Taxation .............................................................................................................................................................................74

F2 Reconciliation of operating result to net cash provided by operating activities ..................................................................76

F3 Operating leases ................................................................................................................................................................76

F4 Equity and reserves ...........................................................................................................................................................77

F5 Contingent liabilities ...........................................................................................................................................................77

F6 Differences between WorkCover consolidated financial statements and WorkCover Queensland financial statements ...77

F7 Controlled entity .................................................................................................................................................................79

F8 Summary of additional significant accounting policies .......................................................................................................79

F9 Events after reporting date .................................................................................................................................................81

Management Certificate of WorkCover Queensland ........................................................................................................................82

Independent Auditor’s report............................................................................................................................................................83

Actuarial certificate for outstanding claims liability ...........................................................................................................................87

Consolidated statement of comprehensive incomeFor the year ended 30 June 2019


Note 2019 2018$'000 $'000

Net premium revenue B1 1,561,698 1,451,293

Gross claims expense C1 (1,803,126) (1,379,650)Claims recoveries revenue C1 52,631 57,734Net claims incurred C1 (1,750,495) (1,321,916)

Underwriting expenses E1 (39,350) (37,334)Underwriting result (228,147) 92,043

Investment income D1 341,709 365,348Other income 1,500 1,369Other expenses (14,378) (13,748)Operating result for the year before income tax equivalent 100,684 445,012

Income tax equivalent expense F1(a) (23,755) (121,181)Operating result for the year 76,929 323,831

Other comprehensive incomeItems that will not be reclassified subsequently to operating result:Revaluation of land and building F4(b) 9,599 6,808Income tax effect on revaluation of land and building F1(a) (2,880) (2,042)Other comprehensive income for the year, net of income tax equivalent 6,719 4,766

Total comprehensive income for the year 83,648 328,597

This statement is to be read in conjunction with the accompanying notes.Consolidated statement of comprehensive income

Consolidated statement of financial positionFor the year ended 30 June 2019


Note 2019 2018$'000 $'000

Current assetsCash and cash equivalents D2(a) 87,539 200,528Recoveries receivable on outstanding claims C2(b) 52,929 54,901Receivables D2 28,241 17,973Investments - Managed unit trusts D2(d) 1,439,987 993,260Investments - Derivatives D2(d) 70,169 129,812Current tax asset 94,986 -Other assets 3,548 3,371Total current assets 1,777,399 1,399,845

Non-current assetsRecoveries receivable on outstanding claims C2(b) 111,818 116,702Receivables D2 1,782 538Investments - Managed unit trusts D2(d) 3,768,880 3,860,015Investments - Derivatives D2(d) 350,434 29,662Property, plant and equipment E4 67,519 59,412Other assets 2,680 3,471Total non-current assets 4,303,113 4,069,800Total assets 6,080,512 5,469,645

Current liabilitiesPayables D2(c) 16,867 16,392Unearned premium liability B2 10,700 5,517Outstanding claims liability C2(a) 1,209,917 1,069,513Employee benefits liabilities E2(b) 19,542 17,289Investment related liabilities - Derivatives D2(d) 353,168 108,460Current tax liability - 66,439Other liabilities 122 116Total current liabilities 1,610,316 1,283,726

Non-current liabilitiesUnearned premium liability B2 319 -Outstanding claims liability C2(a) 1,813,560 1,650,245Employee benefits liabilities E2(b) 2,397 1,627Investment related liabilities - Derivatives D2(d) 12,336 6,367Deferred tax liabilities F1(a) 114,367 83,970Other liabilities 76 217Total non-current liabilities 1,943,055 1,742,426Total liabilities 3,553,371 3,026,152Net assets 2,527,141 2,443,493

EquityContributed equity F4(a) 2,500 2,500Asset revaluation surplus F4(b) 29,782 23,063Investment fluctuation reserve F4(c) 1,784,184 1,812,699Accumulated surplus 710,675 605,231Total equity 2,527,141 2,443,493

This statement is to be read in conjunction with the accompanying notes.

Consolidated statement of financial position

Consolidated statement of changes in equity For the year ended 30 June 2019


Contributedequity

Assetrevaluation

surplus

Investmentfluctuation

reserve

Accumulatedsurplus

Total

$'000 $'000 $'000 $'000 $'000Balance at 1 July 2017 2,500 18,297 1,499,845 594,254 2,114,896

Operating result for the year - - - 323,831 323,831Other comprehensive income for the year - 4,766 - - 4,766Total comprehensive income for the year - 4,766 - 323,831 328,597

Transfer to investment fluctuation reserve from accumulated surplus - - 312,854 (312,854) -Total transactions with owners, recorded directly in equity - - 312,854 (312,854) -

Balance at 30 June 2018 2,500 23,063 1,812,699 605,231 2,443,493

Balance at 1 July 2018 2,500 23,063 1,812,699 605,231 2,443,493

Operating result for the year - - - 76,929 76,929Other comprehensive income for the year - 6,719 - - 6,719Total comprehensive income for the year - 6,719 - 76,929 83,648

Transfer from investment fluctuation reserve to accumulated surplus - - (28,515) 28,515 -Total transactions with owners, recorded directly in equity - - (28,515) 28,515 -

Balance at 30 June 2019 2,500 29,782 1,784,184 710,675 2,527,141


Consolidated statement of changes in equity

Consolidated statement of cash flowsFor the year ended 30 June 2019


Note 2019 2018$'000 $'000

Cash flows from operating activitiesPremiums received 1,548,905 1,438,974Interest received 12,945 15,966Managed unit trust distributions received 336,526 314,237GST collected on sales 155,493 144,556Claims paid (1,487,996) (1,354,366)Claims recoveries received 60,447 59,004Other operating income received 1,614 1,664Other operating expenses paid (50,024) (48,735)GST paid on purchases (24,971) (22,649)GST remitted to the ATO (130,663) (122,473)Income tax equivalent paid (157,664) (124,034)Net cash provided by operating activities F2 264,612 302,144

Cash flows from investing activitiesAcquisition of investments (387,495) (466,869)Proceeds from sale of investments 13,831 13,223Acquisition of intangible assets (1,256) (88)Acquisition of property, plant and equipment (2,746) (1,198)Proceeds from sale of property, plant and equipment 65 1Net cash (used in) investing activities (377,601) (454,931)

Net (decrease) in cash and cash equivalents (112,989) (152,787)Cash and cash equivalents at 1 July 200,528 353,315Cash and cash equivalents at 30 June D2(a) 87,539 200,528


Consolidated statement of cash flows

Basis of preparation


Notes to the consolidated financial statementsBasis of preparation

A1 General information

WorkCover Queensland is a not-for-profit statutory body established by the Workers' Compensation and Rehabilitation Act 2003 (WCRA). WorkCover Queensland is controlled by the Queensland State Government and is the main provider of workers’ compensation insurance in Queensland.

WorkCover Queensland's principal place of business is 280 Adelaide Street, Brisbane, Queensland, Australia.

WorkCover Queensland’s Chair, Ms Flavia Gobbo, authorised this report for issue on 20 August 2019.

A2 Compliance with prescribed requirements

These general purpose financial statements are prepared on an accrual basis and in accordance with Australian AccountingStandards (AASBs) made by the Australian Accounting Standards Board (AASB), other authoritative pronouncements of the AASB,the Financial Accountability Act 2009, the Financial and Performance Management Standard 2009, the WCRA and the Workers’ Compensation and Rehabilitation Regulation 2014.

The significant accounting policies adopted in the preparation of these financial statements have been included in the relevantnotes. These policies have been consistently applied for all years presented unless otherwise stated.

New accounting standards applied for the first time in these financial statements are outlined in note F8.

The preparation of financial statements also requires the use of accounting estimates and management to exercise its judgementin the process of applying accounting policies. The areas involving a higher degree of judgement or complexity, or whereassumptions and estimates are significant to the consolidated financial statements are: outstanding claims liability and claims recoveries receivable (note C2(d)); and financial instruments (note D3).

A3 Presentation and measurement

The measurement basis is historical cost, unless the application of fair value, present value, or net realisable value is required bythe relevant accounting standard or as nominated in the notes to the consolidated financial statements.

Assets and liabilities are classified as either ‘current’ or ‘non-current’ in the consolidated statement of financial position and theassociated notes. Assets are classified as current where their carrying amount is expected to be realised within 12 months after thereporting date. Liabilities are classified as current when they are due to be settled within 12 months after the reporting date or thereis not an unconditional right to defer settlement to beyond 12 months after the reporting date. All other assets and liabilities areclassified as non-current.

The presentation currency is Australian dollars. Amounts included in these consolidated financial statements have been roundedto the nearest $1,000 or, where the amount is less than $500, to zero, unless disclosure of the full amount is specifically required.

A4 The reporting entity

These financial statements represent the financial statements for the consolidated entity ‘WorkCover’, consisting of the parent entity,WorkCover Queensland, and its controlled entity, the WorkCover Employing Office (WEO). All transactions and balances internalto the consolidated entity have been eliminated in full.

WEO is a statutory body established under the WCRA. WEO is assessed as a structured entity under AASB 12 Disclosure of Interests in Other Entities that is controlled by WorkCover Queensland in accordance with AASB 10 Consolidated Financial Statements based on relevant factors including: WEO’s work performance arrangement with WorkCover Queensland, which requires WEO to provide employees to perform

work for WorkCover Queensland. WEO has only this agreement and is unlikely to make another; and WorkCover Queensland has been deemed to act as WEO’s principal under the delegation of powers, due to the fact that

WorkCover Queensland exercises its own discretion and is not subject to specific direction by the Minister regarding WEO.

These financial statements do not separately disclose the financial statements of the parent entity, WorkCover Queensland, due tothe immaterial differences between the consolidated and parent entity’s financial statements. These differences are disclosed innote F6.

A summary of WEO's financial statements is provided in note F7.

Premium


What this section is aboutPremium received from policyholders is the key source of revenue for WorkCover. This section provides detail on the measurementof premium, its adequacy, and insurance risk.PremiumB1 Net premium revenue

Note 2019 2018$'000 $'000

Gross written premiums 1,614,204 1,492,382Discount on premiums (51,281) (46,415)Premium penalties 4,277 5,000

1,567,200 1,450,967

Movement in unearned premium B2 (5,502) 3261,561,698 1,451,293

Premium revenue is earned from contracts when a policyholder transfers significant insurance risk to WorkCover. Gross writtenpremiums are the amounts charged to the policyholder excluding stamp duty and goods and services tax (GST). A discount isoffered to policyholders for early payment subject to certain conditions.

Premium revenue, including that on unclosed business, is recognised in the consolidated statement of comprehensive income overthe period of the contract from the date of attachment of risk. The pattern of recognition over the policy period is based on time,which is considered to closely approximate the pattern of risks underwritten.

The proportion of premium received but not earned in the consolidated statement of comprehensive income at the reporting date isrecognised as an unearned premium liability in the consolidated statement of financial position. The carrying value reflects its fairvalue.

B2 Unearned premium liability

Note 2019 2018$'000 $'000

Balance at 1 July 5,517 5,843Movement in unearned premium:Deferral of premiums on contracts written during the year 11,019 5,196Earning of premiums written in previous years (5,517) (5,522)

B1 5,502 (326)Balance at 30 June B3 11,019 5,517

Represented by:Current 10,700 5,517Non-current 319 -

B3 11,019 5,517

B3 Liability adequacy test

At the end of each reporting period WorkCover assesses whether the unearned premium liability is adequate to cover all expectedfuture cash flows relating to future claims against current insurance contracts. This test is performed at a portfolio of contracts levelusing contracts that are subject to broadly similar risks and managed together as a single portfolio.

If the present value of the expected future cash flows relating to future claims and the additional risk margin reflecting the inherentuncertainty in the central estimate exceeds the unearned premium liability, the unearned premium liability is deemed to be deficient.If there is a deficiency, the entire deficiency is expensed immediately in the consolidated statement of comprehensive income.


Note 2019 2018$'000 $'000

Unearned premium liability B2 11,019 5,517

Less present value of expected future cash flows for future claims:Discounted central estimate 9,600 3,689Risk margin 1,183 503

10,783 4,192Surplus 236 1,325

Risk margin 12.3% 13.6%Probability of adequacy 75% 75%

As the test has identified a surplus (2018: surplus), no further liability has been recognised.

B4 Insurance risk

(a) Terms and conditions of insurance contracts

WorkCover writes one class of business, workers’ compensation. It provides two types of insurance contracts: accident insurance; and contracts of insurance.

Accident insuranceAll employers in Queensland are required to have accident insurance coverage for all employees that meet the definition of a'worker' under the WCRA.

Contracts of insuranceWorkCover provides optional insurance instruments that provide cover to individuals, employees, or members of associations whodo not meet the definition of a 'worker' and are therefore not covered by the accident insurance policies.

The terms and conditions attaching to accident insurance contracts and contracts of insurance determine the level of insurance riskaccepted by WorkCover. All insurance contracts entered into are in the same standard form and are subject to substantially thesame terms and conditions under the WCRA.

The WCRA provides that all insurance policies issued by or on behalf of WorkCover are guaranteed by the Queensland StateGovernment.

(b) Objectives in managing risks arising from insurance contracts and policies for mitigating those risks

WorkCover has an objective to manage insurance risk to reduce the volatility of insurance premiums and operating results so thatthe required funding ratio can be maintained. In addition to the inherent uncertainty of insurance risk, which can lead to significantvariability in the loss experience, operating results are affected by market factors. Short-term variability is, to some extent, a featureof the insurance business.

Key aspects of processes established to mitigate insurance risks include: the maintenance and use of management information systems, which provide up-to-date, reliable data on the risks to which

WorkCover is exposed to at any point in time; the use of actuarial models, using information from the management information systems, to monitor claims patterns and

calculate premiums. Past experience and statistical methods are used as part of the process; and the mix of assets in which WorkCover invests being driven by the nature and term of insurance liabilities. The management of

assets and liabilities is closely monitored to attempt to match maturity dates of assets with the expected pattern of claimpayments.

(c) Concentration of insurance risk

WorkCover's exposure to concentration of insurance risk relates to injuries caused through an event or disaster that may haveoccurred during the reporting period. This risk is mitigated as WorkCover supplies compulsory workers’ compensation insurance tomost Queensland businesses who employ workers and as such WorkCover’s customers are geographically and occupationally diverse.


(d) Liquidity risk

WorkCover’s exposure to liquidity risk is managed by ensuring that investments held to meet policyholder liabilities are matched tothe expected duration of those liabilities and sufficient cash deposits are available to meet day-to-day operations. The liquidity riskassociated with WorkCover’s investments is disclosed in note D5(b).

The liquidity risk of outstanding claims held by WorkCover, representing the maturity of outstanding claims liabilities calculatedbased on discounted cash flows relating to the liabilities, at reporting date is as follows:

Note 2019 2018$'000 $'000

1 year or less C2(a) 1,209,917 1,069,5131 - 3 years 1,197,689 1,135,7463 - 5 years 354,487 302,665More than 5 years 261,384 211,834

C2(a) 3,023,477 2,719,758

Claims


What this section is aboutWorkCover’s claimants are individuals injured at work who are covered by WorkCover’s accident insurance policies and contracts of insurance. This section provides information on net claims costs incurred and the net outstanding claims provision, including theassumptions and estimates.ClaimsC1 Net claims incurred

Note 2019 2018$'000 $'000

Current Prior Total Current Prior Totalyear years year years

Gross claims expense:Undiscounted claims expense 2,065,071 (334,880) 1,730,191 1,835,508 (417,966) 1,417,542Discount (49,509) 122,444 72,935 (106,480) 68,588 (37,892)

C2(a) 2,015,562 (212,436) 1,803,126 1,729,028 (349,378) 1,379,650Claims recoveries revenue:Undiscounted claims recoveries revenue (56,589) 8,146 (48,443) (59,596) 1,065 (58,531)Discount 1,513 (5,701) (4,188) 3,335 (2,538) 797

C2(b) (55,076) 2,445 (52,631) (56,261) (1,473) (57,734)1,960,486 (209,991) 1,750,495 1,672,767 (350,851) 1,321,916

Current year claims relate to risks borne in the current financial year. Prior years claims relate to a reassessment of the expensefor risks borne in all previous financial years.

There was a reduction in net claims incurred for injury years prior to 2019 before the unwinding of one year discounting on futurepayments. This reduction is largely driven by continued favourable common law claims experience mainly driven by lower thanexpected entitled claims and corresponding changes in valuation assumptions.

Reconciliation of net claims incurred

Note 2019 2018$'000 $'000

Gross claims incurred:Statutory claims paid 951,541 823,297Common law claims paid 360,469 372,585Claims handling expenses E1 183,600 167,930Net self-insurance payments 3,797 (1,665)

C2(a) 1,499,407 1,362,147Claims recoveries:Statutory claims recovered (56,339) (53,810)Common law claims recovered (3,148) (3,700)

C2(b) (59,487) (57,510)Movement in net outstanding claims liability:Gross claims liability 303,719 17,503Recoveries receivable 6,856 (224)

310,575 17,2791,750,495 1,321,916

Claims expenses are recognised in the consolidated statement of comprehensive income as the costs are incurred. Claimsrecoveries are recognised as revenue in the consolidated statement of comprehensive income once the amount to be recoveredcan be estimated and is likely to be recovered.

Self-insurance

Under the WCRA, an employer may provide their own accident insurance for their workers instead of insuring with WorkCover ifthey meet certain requirements. Upon separation or return, WorkCover will make a payment to or receive a payment from the self-insurer for the estimated liability of outstanding claims payments which relate to the period of insurance covered by WorkCover orthe self-insurer.

Bank guarantees, financial guarantees given by an insurance company that is an approved security provider and cash deposits of$447.769 million (2018: $470.078 million) are held by the Workers’ Compensation Regulator on behalf of self-insurers. If a self-insurer fails its obligations under the WCRA, WorkCover may recover from the guarantees for any debts owing from the self-insurer.As the likelihood of having to call on the guarantees has been assessed as low, no financial asset has been recognised in theconsolidated statement of financial position.


C2 Outstanding claims liability and recoveries receivable

(a) Gross outstanding claims liability

Note 2019 2018$'000 $'000

Expected future claims payments 2,681,492 2,465,372Claims handling expenses 212,076 201,786

2,893,568 2,667,158Less discount to present value (119,736) (185,627)Discounted central estimate 2,773,832 2,481,531Risk margin 249,645 238,227

B4(d) 3,023,477 2,719,758Represented by:Current B4(d) 1,209,917 1,069,513Non-current 1,813,560 1,650,245

B4(d) 3,023,477 2,719,758

Balance at 1 July 2,719,758 2,702,255Provisions made C1 2,015,562 1,729,028Payments made C1 (1,499,407) (1,362,147)Effect of changes in assumptions to prior year provisions C1 (212,436) (349,378)Balance at 30 June B4(d) 3,023,477 2,719,758

Reconciliation of movement during the year:

This liability is calculated by an independent actuary, PricewaterhouseCoopers Consulting (Australia) Pty Ltd (the Actuary), inaccordance with the WCRA and AASB 1023 General Insurance Contracts.

The liability for outstanding claims is measured as the central estimate of the present value of expected future payments for claimsincurred at the end of the reporting period plus an additional risk margin to allow for the inherent uncertainty in the central estimate.The expected future payments include those in relation to claims reported but not yet paid, claims incurred but not yet reported(IBNR), claims incurred but not enough reported (IBNER), and anticipated claims handling costs. The expected future paymentsare discounted to present value at the reporting date using a risk-free rate.

In respect of latent onset injuries, the WCRA states that the definition of the date of injury for a latent onset injury, such as thosecaused by asbestos, is the date at which a medical practitioner diagnoses the injury. No liability is held for latent onset injurieswhere a medical practitioner has not yet diagnosed the injury.

(b) Recoveries receivable on outstanding claims

Note 2019 2018$'000 $'000

Expected future recoveries 154,371 163,602Less discount to present value (3,228) (7,030)Discounted central estimate 151,143 156,572Risk margin 13,604 15,031

164,747 171,603Represented by:Current 52,929 54,901Non-current 111,818 116,702

164,747 171,603

Reconciliation of movement during the year:Balance at 1 July 171,603 171,379Recoveries recognised C1 55,076 56,261Recoveries received C1 (59,487) (57,510)Effect of changes in assumptions to prior year provisions C1 (2,445) 1,473Balance at 30 June 164,747 171,603

Claims recoveries receivable is measured as the present value of the expected future receipts and is calculated by the Actuary onthe same basis as the liability for gross outstanding claims in accordance with the WCRA and AASB 1023.


(c) Claims development

The development of net undiscounted outstanding claims for each underwriting year relative to the ultimate expected claims is asfollows:

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Estimate of ultimateclaims cost:At end of injury year 1,207,018 1,287,647 1,270,052 1,217,658 1,081,408 1,046,117 1,325,167 1,375,281 1,414,365 1,405,287

One year later 1,191,502 1,160,950 1,162,090 1,183,786 1,079,142 1,118,999 1,182,964 1,228,145 1,262,758

Two years later 1,075,612 1,042,773 1,158,901 1,144,077 1,036,477 1,024,321 1,060,380 1,144,410

Three years later 1,017,274 1,033,321 1,119,311 1,096,163 992,540 971,839 1,039,935

Four years later 1,006,458 1,032,219 1,087,761 1,092,552 993,015 958,092

Five years later 1,000,282 1,027,669 1,083,720 1,092,476 990,300

Six years later 995,180 1,023,901 1,085,897 1,095,334

Seven years later 991,268 1,031,590 1,088,860

Eight years later 991,707 1,031,488

Nine years later 996,356

Current estimate ofcumulative claimscost 996,356 1,031,488 1,088,860 1,095,334 990,300 958,092 1,039,935 1,144,410 1,262,758 1,405,287 11,012,820

Cumulative payments 988,411 1,020,898 1,074,655 1,075,851 959,411 901,688 889,090 794,961 661,408 402,360 8,768,733

Undiscountedoutstanding claims 7,945 10,590 14,205 19,483 30,889 56,404 150,845 349,449 601,350 1,002,927 2,244,087

Undiscounted outstanding claims for prior injury years 283,034

Claims handling expenses 212,076

Central estimate of outstanding claims 2,739,197

Discount (116,508)

Discounted central estimate 2,622,689

Risk margin 236,041

Net outstanding claims liability 2,858,730

Injury year

The claims development table has been presented on a net of recoveries basis to give the most meaningful insight into the impacton the operating result. The net outstanding claims liability can be reconciled by taking the gross outstanding claims liabil ity pernote C2(a) and offsetting the recoveries receivable on outstanding claims as per note C2(b).

(d) Claims actuarial assumptions and methods

In calculating the gross outstanding claims liability the Actuary uses a variety of estimation techniques based upon statisticalanalyses of historical experience. The projections given by the estimation techniques assist in setting the range of possibleoutcomes. The most appropriate technique is selected taking into account the characteristics of the insurance class and the extentof the development of each injury year. These techniques assume that the development pattern of the current claims will beconsistent with past relevant experience.

In estimating the cost of settling claims already notified to WorkCover, the Actuary gives regard to the claim circumstances asreported and information on the cost of settling claims with similar characteristics in previous periods. These claims tend to displaylower levels of estimation volatility as more information about the claims events is generally available.

The estimation of claims IBNR is generally subject to a greater degree of uncertainty as information is not yet available and theseclaims may often not be apparent until many years after the claim event.

Large claims are generally assessed separately, being projected or measured on a case by case basis in order to allow for thepossible distortive effect of the development and incidence of these large claims.


Allowances are made for changes or uncertainties that may create distortions in the underlying statistics which might cause the costof unsettled claims to increase or reduce when compared with the cost of previously settled claims, including: changes in WorkCover’s processes, which might accelerate or slow down the development and/or recording of paid or incurred

claims, compared with the statistics from previous periods; changes in the legal environment; the effects of inflation and discount rates; movements in industry benchmarks; and medical and technological developments.

Payments experience is analysed to obtain averages paid per claim incurred and averages paid per claim settled, active or finalised.Estimated claims payments are adjusted to allow for general economic inflation and are discounted to allow for the time value ofmoney, being the investment return expected based on risk-free rates in the period to settlement. The resulting average claimspayments together with the ultimate numbers of claims and anticipated claims handling costs are analysed to determine a finalcentral estimate of gross outstanding claims. A risk margin is also added to allow for the inherent uncertainty in the central estimate.

In addition to the calculation of the gross outstanding claims liability, estimates for potential claims recoveries are analysedseparately and derived using the same methods, based on past recovery experience and adjustments to assumptions whereappropriate. In addition, the recoverability of the assets are assessed on a periodic basis to ensure that the balance is reflective ofthe amounts that will ultimately be received, taking into consideration factors such as credit risk. Impairment is recognised wherethere is objective evidence that WorkCover may not receive the amounts due and where these amounts can be reliably measured.Estimated outstanding recoveries are then subtracted from gross outstanding claims to arrive at the net outstanding claims estimate.

The Actuary takes all reasonable steps to ensure that it has appropriate information regarding WorkCover’s claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from theoriginal liability established.

Key actuarial assumption variablesThe assumptions made in determining the net outstanding claims liability and the processes used to determine the assumptionsare as follows:

Variable 2019 2018

Statutory claims 69,679 70,899Common law 2,826 3,425Asbestos related 178 122

Ultimate claims sizeStatutory claims $13,552 $11,593Common law $159,999 $152,297Asbestos related $361,421 $364,164

Gross outstanding claims 2.4 years 2.3 years

2.0 years 2.0 years

Claims handling expense rateStatutory claims 21.5% 23.0%Common law 1.4% 1.4%Asbestos related 1.4% 1.4%

Recoveries receivable onoutstanding claims

Average weighted term tosettlement from claims reportingdate

Ultimate claim numbers perannum

Variable 2019 2018

Gross outstanding claims:Not later than one year 2.3% 2.8%Later than one year 2.6% 3.0%

Not later than one year 2.3% 2.8%Later than one year 2.6% 3.0%

Discount ratesGross outstanding claims:Not later than one year 1.0% 1.9%Later than one year 1.6% 2.7%

Not later than one year 1.0% 1.9%Later than one year 1.0% 2.0%

Risk margin 9.0% 9.6%

Inflation rates1 (average weekly earnings)

Recoveries receivable onoutstanding claims:

Recoveries receivable onoutstanding claims:

1 The inflation rate for later than one year is based on aweighted average of the uninflated and undiscounted grossoutstanding cash flow.

Ultimate claim numbers per annumNumbers of claims incurred are used in determining the estimates in respect of claims IBNR for statutory and common law claimsand in respect of claims diagnosed but not reported (DBNR) for asbestos related claims. The incurred claims total for the currentunderwriting year has been estimated based on past reporting patterns for statutory and common law claims separately, taking intoaccount trends or changes in reporting patterns. The ratio of numbers of common law to statutory claims is also examined forreasonableness. The incurred claims total for asbestos related claims for the current underwriting year is an estimate of all claimsdiagnosed in the current year. This is estimated using past reporting patterns and delays from diagnosis to report for asbestosrelated claims.


Ultimate claims size The average ultimate claims size for the current underwriting year has been estimated based on past payment patterns for statutory,common law, and asbestos related claims separately, taking into account trends or changes in payment patterns.

Average weighted term to settlement from claims reporting date The average weighted term to settlement is calculated separately based on historic settlement patterns. A decrease in the averageterm to settlement rates would lead to more claims being paid sooner than anticipated.

Claims handling expense rate Claims handling expenses are calculated by reference to past experience of claims handling costs as a percentage of pastpayments.

Inflation rates (average weekly earnings) Expected future payments are inflated to take into account inflationary increases. Economic inflation assumptions are set byreference to current economic indicators.

Discount rates The outstanding claims liability is calculated by reference to expected future payments. These payments are discounted to adjustfor the time value of money. Discount rates derived from market yields on Commonwealth Government securities at reporting datehave been adopted.

Risk margin The risk margin is determined having regard to the inherent uncertainties in the actuarial models and economic assumptions, thequality of the underlying data used in the models, and industry and market conditions. The analysis of these inherent uncertaintiesis performed considering the statutory, common law, and asbestos related gross outstanding claims estimates separately. Theassumptions regarding uncertainty are applied to the net central estimates in order to arrive at an overall provision which is intendedto have a 75% (2018: 75%) probability of adequacy.

Sensitivity analysisWorkCover conducts sensitivity analysis to quantify the exposure to risk of changes in the key underlying variables as disclosedabove. The movement in any key variable will impact the operating result and equity of WorkCover as follows:

Variable Movement

2019 2018$'000 $'000

+10% -100,594 -84,682-10% +100,594 +84,682

+10% -100,594 -84,682-10% +100,594 +84,682

+0.5 -16,661 -9,842-0.5 +16,430 +9,695

+1% -18,497 -16,485-1% +18,497 +16,485

Claims handlingexpense rate

Average weightedterm to settlement- years

Ultimate claimnumbers per annum- latest year

Ultimate claims size- latest year

Impact on operatingresult and equity

Variable Movement

2019 2018$'000 $'000

Inflation rates - net claims cost:Not later than one year +1% -13,452 -12,214

-1% +13,466 +12,226Later than one year +1% -33,059 -27,016

-1% +29,711 +24,510

Discount rates - net claims cost:Not later than one year +1% +15,659 +13,902

-1% -15,953 -14,160Later than one year +1% +31,417 +25,780

-1% -35,549 -28,880

Risk margin +1% -18,356 -16,312-1% +18,356 +16,312

Impact on operatingresult and equity

Financial instruments


What this section is aboutFinancial instruments are held by WorkCover to fund future claims payments. Financial instruments include cash, contractual rightsto deliver or receive cash or another type of financial instrument, or an equity instrument of another entity. This section providesinformation about the financial instruments held, the associated risks arising from holding these financial instruments, incomederived, and fair value measurement methodology.Financial instrumentsD1 Investment income

2019 2018$'000 $'000

Financial assets at amortised cost:Interest income 11,497 12,906

11,497 12,906

Financial assets or liabilities at fair value through profit or loss (FVPL):Designated upon initial recognition:

Interest income 5 27Managed unit trust distributions 293,476 315,847Gain on managed unit trusts 17,464 41,827Loss on fair value hedge - (41,722)

310,945 315,979

Mandatorily measured:Interest income 1,200 2,740Gain on derivatives 18,067 33,723

19,267 36,463341,709 365,348

Interest income and managed unit trust distributions are recognised in the consolidated statement of comprehensive income whenearned. Changes in the fair value of investments are recognised as gains or losses in the consolidated statement of comprehensiveincome as they occur.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except forfinancial assets that subsequently become credit-impaired. Refer to note D5(a) for credit risk disclosure.

The rate of return net of fees for the QIC Limited (QIC) portfolio (comprising investments in managed unit trusts and derivativefinancial instruments) is 6.44% (2018: 7.56%). Refer to note D5(c) for the cash and cash equivalents interest rates.

Investment management fees are recognised in other expenses in the consolidated statement of comprehensive income whenincurred.


D2 Categories of financial instruments

Note 2019 2018$'000 $'000

Current Non-current Total Current Non-current TotalFinancial assetsFinancial assets at amortised cost:

Cash and cash equivalents D2(a) 87,539 - 87,539 200,528 - 200,528Receivables D2(b) 28,241 1,782 30,023 17,973 538 18,511

Financial assets at FVPL:Designated upon initial recognition:

Investments - Managed unit trusts D2(d) 1,439,987 3,768,880 5,208,867 993,260 3,860,015 4,853,275Investments - Derivatives D2(d) - - - 14,714 29 14,743

Mandatorily measured:Investments - Derivatives D2(d) 70,169 350,434 420,603 115,098 29,633 144,731

1,510,156 4,119,314 5,629,470 1,123,072 3,889,677 5,012,7491,625,936 4,121,096 5,747,032 1,341,573 3,890,215 5,231,788

Financial liabilitiesFinancial liabilities at amortised cost:

Payables D2(c) 16,867 - 16,867 16,392 - 16,392

Financial liabilities at FVPL:Designated upon initial recognition:

Investment related liabilities - Derivatives D2(d) - - - 37,668 5,354 43,022Mandatorily measured:

Investment related liabilities - Derivatives D2(d) 353,168 12,336 365,504 70,792 1,013 71,805353,168 12,336 365,504 108,460 6,367 114,827370,035 12,336 382,371 124,852 6,367 131,219

(a) Cash and cash equivalents

2019 2018$'000 $'000

Cash at bank 84,313 101,177QTC Capital Guaranteed Cash Fund 3,226 99,351

87,539 200,528

Cash and cash equivalents are measured at amortised cost and include cash deposits held with a financial institution, and a capitalguaranteed investment held with Queensland Treasury Corporation (QTC) that is subject to a low risk of change in value and isreadily convertible to cash on hand at WorkCover's option.

(b) Receivables

Note 2019 2018$'000 $'000

Premiums and related penalties 20,686 15,875Claims and related penalties 14,144 13,678Unclosed business 2,240 14Other debtors 1,453 1,644

38,523 31,211

D5(a) (8,500) (12,700)30,023 18,511

Less allowance for impairment

Receivables are recognised initially at fair value and subsequently measured at amortised cost. Receivables are not discounted asthe effect of discounting is immaterial. Due to the short-term nature of the current receivables, their carrying amount is consideredto be the same as their fair value. For the non-current receivables, the fair values are also not significantly different to their carryingamounts.


The allowance for impairment is the difference between the carrying amount of the receivables and the present value of estimatedfuture cash flows. The amount of the allowance raised, used or derecognised is recognised in the consolidated statement ofcomprehensive income. For further information refer to note D5(a).

(c) Payables

2019 2018$'000 $'000

Trade creditors 7,530 9,140Premiums in credit 694 999Claims creditors 3,654 1,812

11,878 11,951

GST receivable (1,600) (1,562)GST payable 6,589 6,003Net GST payable 4,989 4,441

16,867 16,392

Payables are carried at amortised cost and due to their short-term nature are not discounted. Trade creditors are recognised forunpaid goods or services for which WorkCover has a present obligation to make payment. Premiums in credit are recognised uponreceipt for premiums received in advance and upon adjustment for policies in credit. Claims creditors are recognised for amountsrelated to claims payments or claims made. All amounts are unsecured and are paid as they fall due.

The carrying amounts of payables are considered to be the same as their fair values due to their short-term nature.

(d) Investments

2019 2018$'000 $'000

Current Non-current Total Current Non-current TotalFinancial assets at FVPLManaged unit trusts 1,439,987 3,768,880 5,208,867 993,260 3,860,015 4,853,275Derivatives designated as a fair value hedge - - - 14,714 29 14,743Derivatives held for trading 70,169 350,434 420,603 115,098 29,633 144,731

1,510,156 4,119,314 5,629,470 1,123,072 3,889,677 5,012,749

Financial liabilities at FVPLDerivatives designated as a fair value hedge - - - 37,668 5,354 43,022Derivatives held for trading 353,168 12,336 365,504 70,792 1,013 71,805

353,168 12,336 365,504 108,460 6,367 114,827

As part of its investment strategy, WorkCover engages QIC to actively manage its investment portfolio to ensure that sufficient cashand liquid assets are on hand to meet the expected future cash flows arising from insurance contract liabilities. This is achievedthrough the use of financial assets and financial liabilities in the form of unlisted managed unit trusts and derivative financialinstruments. WorkCover classifies all investments at FVPL.

Managed unit trusts (designated at fair value upon initial recognition)Fair value for managed unit trusts is based on the unit price of the relevant trust at the reporting date. Attributable transaction costsare recognised in the consolidated statement of comprehensive income when incurred. Purchases and sales of financial assets arerecognised on the settlement date.

Investments that are required to meet current insurance contract liabilities and current investment related liabilities are classified ascurrent investments in the consolidated statement of financial position. While this classification policy may result in a reportedworking capital deficit, included in non-current investments are liquid investments which QIC uses to ensure it is able to meetWorkCover’s operating requirements.

Derivative financial instruments and hedge accountingQIC utilises derivative financial instruments as part of WorkCover’s approved investment strategy. Derivative instrument types usedinclude equities, bond futures, forward currency contracts and swaps. Derivatives are categorised as mandatorily measured at fairvalue (eg. held for trading) unless they are designated as hedges.

Derivative financial instruments (mandatorily measured at fair value) WorkCover’s derivative financial instruments held for trading are initially recorded at fair value. Subsequent to initial recognition,these instruments are remeasured to fair value. Fair value for these instruments is based on settlement price. Gains and losses onfair value are recognised in the consolidated statement of comprehensive income.


The purpose of these derivatives is to ensure liquidity as well as offset movements in the managed unit trusts in identified risk areasand to help achieve particular exposures by taking advantage of, and protecting against, market conditions. Such derivatives areentered into with the intention to settle in the near future.

Hedging derivative financial instruments (designated at fair value upon initial recognition) WorkCover’s derivatives that meet the definition of a hedge have been classified as fair value hedges on the basis that they hedgeexposure to changes in the fair value of a recognised asset or liability or a component of any such item that is attributable to aparticular risk.

With respect to hedge contracting, the relationship between hedging instruments and hedged items, as well as the risk managementobjective, strategy, and purpose for undertaking the hedge, is formally documented in the Investment Management Agreementbetween QIC and WorkCover. Such hedges are expected to be highly effective in offsetting changes in fair value and are assessedon an ongoing basis to determine that they have been highly effective throughout the financial reporting period for which they aredesignated.

Hedges are initially recognised at fair value on the date at which the derivative contract is entered into. The carrying amount of thehedged item includes gains and losses attributable to the risk being hedged. The derivative is remeasured at fair value and gainsand losses are recognised in the consolidated statement of comprehensive income.

The impact of the hedged item on the consolidated statement of financial position is the same as if hedge accounting had notbeen applied.

WorkCover uses the foreign currency overlay to hedge the foreign exchange risks of the investments in managed unit trusts andother non-hedge derivatives held by WorkCover. This activity is facilitated by holding a portfolio of mainly forward exchangecontracts within the overlay. The fair value is based on various independent price sources.

Currency hedging activities are undertaken to hedge the investment portfolio to a target foreign currency exposure of 10 percent,taking into account market movements as well as changes to underlying asset class exposures where applicable. QIC determinesthe extent to which individual foreign currencies are hedged to take advantage of, or protect against, market movements, whilemaintaining the overall target exposure. Exposure to currency risk is disclosed in note D5(c).

The ineffectiveness recognised in the consolidated statement of comprehensive income was immaterial.

The foreign currency overlay ceased to qualify for hedge accounting as a fair value hedge from 1 July 2018 and WorkCover doesnot have any other hedging relationship subject to hedge accounting. The foreign currency overlay is categorised as mandatorilymeasured at fair value (eg. held for trading) from 1 July 2018.

D3 Fair value measurements

There are three levels of fair value: level 1: represents fair value measurements that reflect unadjusted quoted market prices in active markets for identical assets

and liabilities; level 2: represents fair value measurements that are substantially derived from inputs (other than quoted prices included within

level 1) that are observable, either directly or indirectly; or level 3: represents fair value measurements that are substantially derived from unobservable inputs.

The fair value levels of WorkCover’s financial assets and liabilities are as follows:


Fair value hierarchy Note Level 1 Level 2 Level 3 Total$'000 $'000 $'000 $'000

2019Financial assets

D2(a) - 3,226 - 3,226D2(d) - 3,752,884 1,455,983 5,208,867

Mandatorily measured at FVPL D2(d) 70,324 350,279 - 420,60370,324 4,106,389 1,455,983 5,632,696

Financial liabilitiesInvestment related liabilities - Derivatives:

Mandatorily measured at FVPL D2(d) 24,064 341,440 - 365,504D2(d) 24,064 341,440 - 365,504

2018Financial assets

D2(a) - 99,351 - 99,351D2(d) - 4,853,275 - 4,853,275

Designated as a fair value hedge D2(d) 243 14,500 - 14,743Mandatorily measured at FVPL D2(d) 127,011 17,720 - 144,731

127,254 4,984,846 - 5,112,100Financial liabilitiesInvestment related liabilities - Derivatives:

Designated as a fair value hedge D2(d) - 43,022 - 43,022Mandatorily measured at FVPL D2(d) 64,235 7,570 - 71,805

D2(d) 64,235 50,592 - 114,827

Investments - Derivatives:

Investments - Managed unit trustsInvestments - Derivatives:

Investments - Managed unit trusts

QTC Capital Guaranteed Cash Fund

QTC Capital Guaranteed Cash Fund

There have been no significant transfers in either direction between level 1 and level 2 during the year ended 30 June 2019 (2018:no significant transfers in either direction between level 1, level 2 and level 3).

The QTC Capital Guaranteed Cash Fund is assessed as level 2 as it is valued at the current redemption value of the fund.

Under the direction of QIC, WorkCover’s custodian actively trades and holds derivative financial assets and liabilities on behalf ofWorkCover. For those instruments that fall into level 2, the valuation technique used is a market comparison technique primarilybased on exchange data for similar derivative instruments.

Managed unit trusts are unlisted managed unit trusts held with QIC. While the units in the trusts have quoted prices and are able tobe traded, the market would not be considered active for level 1 and therefore they are considered to be level 2. Some of the unlistedmanaged unit trusts are considered to be level 3 where the underlying assets held by the unit trusts are measured at fair valueusing significant unobservable inputs and the units held by WorkCover are not actively traded.

Reconciliation of level 3 fair value measurementA reconciliation of the movement in the fair value of financial instruments categorised in level 3 between the beginning and end ofthis financial year is as follows.

2019 2018$'000 $'000

Balance at 1 July - -Transfers into level 3 from level 2 1,363,368 -Acquisitions 218,703 -Losses recognised in operating result1 (126,088) -Balance at 30 June 1,455,983 -

1Includes unrealised losses recognised in operating resultattributable to balances held at the end of the reporting period (126,088) -

There have been transfers from level 2 to level 3 during the period as a result of a change in WorkCover’s approach in classifying the investments held with QIC.


Significant inputs and assumptions and estimation uncertaintyThe valuation of WorkCover’s investments, including derivatives, is in accordance with QIC’s Investment Valuations Policy. Thesignificant unobservable valuation inputs and their potential impact on the valuation outcome for assets other than property, plantand equipment measured at fair value and classified as level 3 under the fair value hierarchy are as follows:

Fair value at Valuation Key unobservable30 June 2019 approach inputs

Description $'000Managed unit trusts 1,455,983 Independent Valuation of

valuation underlyingby investment investments of the

manager unit trusts

An increase in the value of theunderlying investments of the unit

trusts would result in higher fair values.Reductions would result in

lower fair values.

Impact of alternative amountsfor significant level 3 inputs

The valuations of these unlisted managed unit trusts are inherently subject to estimation uncertainty as the units are not traded inan active market and their fair value at reporting date is based on the price advised by external fund managers or valuationsdetermined by appropriately skilled independent third parties. The underlying inputs and assumptions are reviewed on an on-goingbasis to ensure the valuations reflect the best estimates of the economic conditions at financial year end.

D4 Offsetting financial assets and financial liabilities

WorkCover’s agreements with derivative counterparties are consistent with the International Swaps and Derivatives Association(ISDA) Master Agreements. As such, financial assets and financial liabilities are offset and the net amount is reported in theconsolidated statement of financial position when there is a legally enforceable right to offset the recognised amounts and there isan intention to settle on a net basis or realise the asset and settle the liability simultaneously.

As well as this, under the terms of ISDA Master Agreements, when certain credit events occur the net position owing or receivableto a single counterparty in the same currency will be taken as outstanding and all the relevant arrangements terminated. AsWorkCover does not presently have a legally enforceable right of set-off of these amounts, they have not been offset in theconsolidated statement of financial position.


The gross and net positions of financial assets and financial liabilities that have been offset in the consolidated statement of financialposition and the amounts subject to master netting arrangements are as follows:

Note

Gross Gross Net amounts Amounts Net

amounts amounts of financial subject to amounts

set-off instruments master

netting

arrangements

$'000 $'000 $'000 $'000 $'0002019Financial assetsInvestments - Derivatives:

Mandatorily measured at FVPL D2(d) 5,269,327 (4,848,724) 420,603 (8,274) 412,3295,269,327 (4,848,724) 420,603 (8,274) 412,329

Financial liabilitiesInvestment related liabilities - Derivatives:

Mandatorily measured at FVPL D2(d) 5,214,228 (4,848,724) 365,504 (8,274) 357,230D2(d) 5,214,228 (4,848,724) 365,504 (8,274) 357,230

2018Financial assetsInvestments - Derivatives:

D2(d) 2,754,957 (2,740,214) 14,743 (8,795) 5,948Mandatorily measured at FVPL D2(d) 3,023,993 (2,879,262) 144,731 (2,293) 142,438

D2(d) 5,778,950 (5,619,476) 159,474 (11,088) 148,386Financial liabilitiesInvestment related liabilities - Derivatives:

D2(d) 2,783,236 (2,740,214) 43,022 (8,795) 34,227Mandatorily measured at FVPL D2(d) 2,951,067 (2,879,262) 71,805 (2,293) 69,512

D2(d) 5,734,303 (5,619,476) 114,827 (11,088) 103,739

Designated as a fair value hedge

Designated as a fair value hedge

Effects of offsetting on the consolidated

statement of

financial position

Related amounts

not offset

D5 Financial risk management

(a) Credit risk

Credit risk represents the extent of credit related losses that WorkCover may be subject to on amounts to be exchanged underfinancial instrument contracts or on amounts receivable from trade and other debtors.

The maximum exposure to credit risk at reporting date for each financial asset is measured as the carrying amount less anyallowance for impairment. Credit risk exposure, including the identification of any significant concentrations of risk, is monitored ona regular basis.

InvestmentsWhile the managed unit trusts are unrated funds, the exposure to credit risk is minimal and is mitigated by holding a diverse portfolioof investment funds of which the composition is monitored regularly by the Board.

The utilisation of derivative financial instruments creates counterparty credit risk for WorkCover due to the risk that fulfilment of thecontract may not occur in the future. QIC closely monitors and manages counterparty risk by ensuring that: the credit ratings of all counterparties are monitored very closely; the transactions are undertaken with a large number of counterparties; and the majority of transactions are undertaken on recognised derivative trading exchanges where practical.

Cash and cash equivalentsCash and cash equivalents are held with bank and financial institution counterparties. Impairment on cash and cash equivalents ismeasured on a 12-month expected loss basis and reflects the short maturities of the exposures. The QTC Capital Guaranteed CashFund invests with a wide variety of high credit rated counterparties and all deposits made by WorkCover are capital guaranteed.WorkCover considers the credit risk in both the QTC Capital Guaranteed Cash Fund and cash at bank are low based on the creditratings of the counterparties.

No impairment allowances were recognised for cash and cash equivalents as at 30 June 2019.


ReceivablesWorkCover’s main exposure to receivable credit risk throughout this financial year is through its premium and claims relatedreceivables. A large proportion of receivables at the end of the reporting period relates to compliance/enforcement activity.Receivables derived from this activity provides the most significant concentration of credit risk, however the amount is immaterialthroughout the year. As WorkCover provides insurance to the majority of Queensland businesses who employ workers, the creditquality of policyholders is considered to be the average credit quality of Queensland businesses.

Receivables are closely monitored for collectability. WorkCover considers the probability of default upon initial recognition and onan ongoing basis throughout each reporting period. A debt is considered to be in default when the debtor fails to make contractualpayments when they fall due. Policyholder accounts that fall overdue render an employer uninsured and liable for any claims costsshould they incur a claim against their policy. Various actions including subsequent legal recovery may occur as debts begin to age.

WorkCover does not require collateral in respect of trade and other debtors. If collateral is held as part of a legal recovery, it isinfrequent and the amounts immaterial. When appropriate, WorkCover renegotiates debt terms on outstanding debts. Receivablesthat have been renegotiated are accounted for based on the renegotiated terms and the credit risk is reassessed as required.

To assess whether there is a significant increase in credit risk, WorkCover compares the risk of a default occurring on the receivableas at the reporting date with the risk of default as at the date of initial recognition. A significant increase in credit risk occurs when adebtor is more than 30 days past due in making a contractual payment.

Receivables are considered for write-off throughout the reporting period based on their impairment. Receivables are consideredimpaired where there is objective evidence that WorkCover will not be able to collect all amounts due according to the original termsof the receivables. Evidence that a debt should be written-off includes the following observable data: significant financial difficulty of the debtor; it is probable that the debtor will enter bankruptcy, insolvency or other financial reorganisation; all other reasonable action, including legal action and renegotiated debt terms where appropriate, to collect the outstanding

amount has been undertaken and it is deemed unlikely that the amount will be recovered.

Amounts written off during this financial year that were outstanding at the beginning of this financial year are written off against theallowance. However if the amount exceeds the loss allowance, the excess is recognised as an impairment loss in the consolidatedstatement of comprehensive income, along with amounts written off that were raised during the reporting period. For the totalimpairment loss, refer to bad debts expense in note E1.

Allowance for impairment WorkCover measures the expected credit losses using the lifetime expected loss model for all receivables except other debtors,which is determined as 12 months expected credit losses. Throughout and at the end of the reporting period, WorkCover assessedwhether there was objective evidence that a receivable (individual) or group of receivables (collective basis depending on sharedcredit risk characteristics) was impaired or likely to be impaired. Factors considered during these reviews include historical lossexperience, current economic conditions, performance trends within specific portfolio segments, and any other pertinent information.

WorkCover then uses provision matrices to evaluate and measure the expected credit losses on receivables. Loss rates arecalculated separately for groupings of debt (debt types, stage of debt cycle and debt aging) and reflect historical observed defaultrates experienced during the last 6 years preceding 30 June 2019 for each group. The historical default rates are then adjusted byreasonable and supportable forward-looking information for expected changes in macroeconomic indicators that affect the futurerecovery of those receivables. For WorkCover, a change in the economic growth, Queensland employment landscape andcompliance/enforcement activity are determined to be the most relevant forward-looking indicators for receivables.

Impairment and provisioning for impairment of receivables is a continuous process that is regularly updated based on WorkCover’s internal framework. However, no significant changes to estimate techniques or assumptions were made during this financial year.


WorkCover’s exposure to credit risk and expected credit losses of receivables are as follows:

2019 2018Gross Expected Gross Impairment Carrying

Note receivables1 Loss rate credit losses receivables1 allowance amountAgeing $'000 % $'000 $'000 $'000 $'000Current 22,885 6.42% 1,469 10,346 535 9,8111-30 days overdue 5,783 7.46% 431 5,323 502 4,82131-60 days overdue 712 23.77% 169 1,680 804 87661-90 days overdue 484 55.32% 268 338 177 16190+ days overdue 8,659 71.17% 6,163 13,524 10,682 2,842Total D2(b) 38,523 8,500 31,211 18,511

1Includes receivables of $15.795 million (2018: $8.494 million) with no loss allowance recorded (eg. claims recoveries, premiumsand other receivables deemed to have immaterial credit risk).

The movement in the allowance for impairment in respect of receivables during the financial year is as follows:

Note 2019 2018$'000 $'000

Allowance for impairment of receivables during the year:Balance at 1 July 12,700 9,300Net debts written off (10,176) (5,566)Unused allowance reversed - (473)Allowance made 5,976 9,439Balance at 30 June D2(b) 8,500 12,700

Individual impairment assessment 5,980 10,942Collective impairment assessment 2,520 1,758

D2(b) 8,500 12,700

Other debtors are subject to the impairment requirements and the identified impairment loss was immaterial.

(b) Liquidity risk

Liquidity risk is the risk that WorkCover will encounter difficulty in meeting obligations associated with financial liabilities that aresettled by delivering cash or another financial asset. WorkCover manages liquidity risk through its diversified investment portfoliothat provides for the sale of investments to meet both short-term and long-term cash flow requirements. WorkCover regularly reviewsits investment strategy having regard to the expected future obligations.

WorkCover’s liquidity risk is grouped by the contractual maturity of the financial liabilities. Liabilities with maturity dates exceeding12 months are calculated based on discounted cash flows. Commitments that are payable on demand are included in the 0 to 3months category. WorkCover’s liquidity risk is as follows:

Note 0 - 3 3 - 12 1 - 3 More than Totalmonths months years 3 years

$'000 $'000 $'000 $'000 $'0002019Financial liabilitiesPayables D2(c) 16,867 - - - 16,867Investment related liabilities - Derivatives D2(d) 353,168 - - 12,336 365,504

370,035 - - 12,336 382,371

2018Financial liabilitiesPayables D2(c) 16,392 - - - 16,392Investment related liabilities - Derivatives D2(d) 107,852 608 - 6,367 114,827

124,244 608 - 6,367 131,219

(c) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in marketprices. Market risk comprises three types of risk, being currency risk, interest rate risk and other price risk.


Due to the diverse nature of WorkCover’s investments, the portfolio is subject to all of the risks and sensitivities outlined below. Theinvestments are managed on a total portfolio basis.Market risk is minimised by: regular review of investment strategy; set investment asset allocation ranges; and strict control over the use of derivatives and hedging instruments, which are only used to facilitate portfolio management or to

reduce investment risk.

The methodology adopted for the purposes of sensitivity analysis involves forecasting a reasonably possible change in each of therisk variables and, where applicable, applying this change to the reporting date value of each investment to determine the impactcaused by this change on the operating result after tax and equity for the financial year. This approach assumes that all variablesremain constant and was performed on the same basis for 2018.

Currency riskCurrency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreignexchange rates. The currency hedging policy is updated as required. The current target risk exposure to foreign currency is 10percent. WorkCover’s exposure to foreign currency risk is as follows:

2019

International equities 653,811 107,874 59,936 82,658 240,129 1,144,408Infrastructure 94,687 - 12,647 - 14,393 121,727Alternatives 346,769 3,974 5,242 - 1,232 357,217Private equity 129,718 59,076 7,177 - - 195,971Fixed interest 10,663 11,966 - - - 22,629Cash 1,849 3,044 6,181 4,803 997 16,874Foreign currency derivatives (944,101) (143,548) (61,741) (48,122) (128,136) (1,325,648)

293,396 42,386 29,442 39,339 128,615 533,178

Currency (AUD $'000)

Total exposure

US dollar Euro Britishpound

Japaneseyen

Other Total

2018

International equities 608,313 117,786 62,846 84,707 221,722 1,095,374Infrastructure 71,628 - 6,043 - 5,968 83,639Alternatives 300,177 3,812 6,763 - 964 311,716Private equity 103,958 62,796 - - - 166,754Fixed interest 8,945 8,869 - - - 17,814Cash 5,241 3,927 3,465 1,714 1,159 15,506Foreign currency derivatives (838,324) (149,312) (51,501) (51,772) (125,461) (1,216,370)

259,938 47,878 27,616 34,649 104,352 474,433

Other Total

Total exposure

US dollar Euro Britishpound

Japaneseyen

Currency (AUD $'000)

Sensitivity analysis This sensitivity analysis has been determined based on the exposure to foreign exchange rates at the reporting date and thestipulated change taking place at the beginning of the financial year and held constant throughout the financial year. All othervariables remaining constant, a 10 percent strengthening or weakening of the Australian dollar against these currencies would haveincreased or decreased the operating result after tax and equity for the year as follows:

Variable Movementin variable

2019 2018$'000 $'000

+10% +84,359 +77,405-10% -92,795 -85,146

+10% -118,289 -107,596-10% +130,118 +118,356

Total +10% -33,930 -30,191-10% +37,323 +33,210

Impact on operating resultafter tax and equity

Foreign currency derivatives

Investments (excluding foreign currency derivatives)


Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes ininterest rates.

WorkCover’s exposure to interest rate risk and the effective weighted average interest rates on financial instruments are as follows:

Note Interest Floating Fixed interest maturing in Non- Totalrate interest 1 year 1 - 5 More than interest

rate or less years 5 years bearing% $'000 $'000 $'000 $'000 $'000 $'000

2019Financial assetsCash and cash equivalents D2(a) Note 1 87,539 - - - - 87,539Receivables D2(b) 11.25 2 - - - - 30,023 30,023Investments D2(d) Note 3 48,984 7,412 - 337,541 5,235,533 5,629,470

D2 136,523 7,412 - 337,541 5,265,556 5,747,032Financial liabilitiesPayables D2(c) - - - - 16,867 16,867Investment related liabilities D2(d) Note 3 5,779 4,564 - 10,790 344,371 365,504

D2 5,779 4,564 - 10,790 361,238 382,371

2018Financial assetsCash and cash equivalents D2(a) Note 1 200,528 - - - - 200,528Receivables D2(b) 11.25 2 - - - - 18,511 18,511Investments D2(d) Note 3 87,280 14,043 - 21,510 4,889,916 5,012,749

D2 287,808 14,043 - 21,510 4,908,427 5,231,788Financial liabilitiesPayables D2(c) - - - - 16,392 16,392Investment related liabilities D2(d) Note 3 58,476 2,043 - - 54,308 114,827

D2 58,476 2,043 - - 70,700 131,219

1 WorkCover has three transaction banking accounts and one capital guaranteed cash fund account. The weighted average interestrate of the transaction banking accounts and cash fund account are 2.01% (2018: 2.00%) and 1.97% (2018: 2.51%) respectively.

2 WorkCover is entitled to charge interest on instalment plans at the rate published in the Queensland Government Gazette.

3 The majority of securities in the derivative instruments are futures and although they are subject to interest rate risk they do notearn interest, except for a number of Australian cash accounts that earn minimal interest. Due to the number of buy and selltransactions it is impractical to obtain a weighted average interest rate for these investments.

Sensitivity analysisAll other variables remaining constant, a change of one percent in interest rates at the reporting date would have increased ordecreased the operating result after tax and equity for the year as follows:


2019 2018$'000 $'000

QTC Capital Guaranteed Cash Fund +100 +23 +695-100 -23 -695

Investments +100 +10,150 +9,533-100 -10,150 -9,312



Other price riskOther price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in marketprices (other than those arising from interest rates or currencies), whether those changes are caused by factors specific to theindividual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.

As a portfolio, WorkCover holds investments in managed unit trusts and derivative financial instruments. The managed unit trustsin turn hold investments in various instruments including equity, cash, property, infrastructure, private equity and alternative funds.The fair values of such financial instruments are affected by changes in the market price of the underlying instruments.

The market value exposure to other price risks for WorkCover is as follows:

Sector allocation 2019 2018$'000 $'000

Australian equities 647,468 617,138International equities 1,215,976 1,087,339Direct property 368,478 391,834Direct infrastructure 236,879 171,427Global listed infrastructure 94,751 73,469Private capital 273,726 249,794Insurance 278,990 254,692Liquid alternatives 489,549 460,405Global fixed interest 900,138 974,686Cash 758,011 617,138

5,263,966 4,897,922

Sensitivity analysisAll other variables remaining constant, based on gross return received from the portfolio, a one percent strengthening or weakeningof the equities prices would have increased or decreased the operating result after tax and equity for the year as follows:


2019 2018$'000 $'000

Equities prices +1% +29,446 +23,109-1% -26,890 -22,369


Supporting our business


What this section is aboutBeing the main provider of workers’ compensation in Queensland requires the support of our people and infrastructure. Thissection provides information about the operating expenses and assets of WorkCover.Supporting our businessE1 Underwriting expenses

Note 2019 2018$'000 $'000

Employee expenses E2(a) 86,032 78,214Contractors 4,582 3,454Consultancy fees 141 392Other administration expenses 14,747 15,212Depreciation and amortisation 3,977 3,709Net loss on disposal of property, plant and equipment and intangible assets F2 42 5Transfer to allowance for impairment of receivables 5,976 8,966Bad debts expense 8,967 5,318Workers' Compensation Regulator expenses 37,717 37,811Workplace Health and Safety Queensland grant 60,769 52,183

222,950 205,264

Claims handling expenses allocated to gross claims expense C1 (183,600) (167,930)39,350 37,334

Total external audit fees quoted in relation to the 2019 financial statements are $236,000 (2018: $261,400). The Auditor-General ofQueensland is the auditor for both WorkCover and WEO. No non-audit services were provided during 2019 (2018: no non-auditservices).

The Workers’ Compensation Regulator levy and the Workplace Health and Safety Queensland (WHSQ) grant are payments madein accordance with the Minister's instruction as approved by the Governor-in-Council by gazette notice for the prevention, recognitionand alleviation of injury to workers, making employers and workers aware of their rights and obligations, and scheme-widerehabilitation and return to work programs for workers. The 2018-19 Workers’ Compensation Regulator expenses represent thegazetted amount of $37.717 million (2018: $34.817 gazetted million and an additional funding contribution of $2.994 million).

Special payments are payments that WorkCover is not contractually or legally obligated to make to other parties. There were nospecial payments made during this financial year (2018: no special payments made).

E2 Employee benefits

(a) Employee expenses

Note 2019 2018$'000 $'000

Salaries 70,448 65,929Employer superannuation contributions 7,522 6,941Other employee benefits 2,906 662Payroll tax expense 3,760 3,520Workers' compensation premium 524 433Other employee related expenses 872 729

E1 86,032 78,214

Post-employment benefitsSuperannuation

Post-employment benefits for superannuation are provided through defined contribution (accumulation) plans or the QueenslandGovernment’s QSuper defined benefit plan as determined by the employee’s conditions of employment.

Defined contribution plans

Contributions are made to eligible complying superannuation funds (including QSuper). Contributions are expensed when they arepaid or become payable following completion of the employee’s service each pay period.


Defined benefit plan The liability for defined benefits is held on a whole-of-government basis and reported in the Queensland General Government and Whole of Government Consolidated Financial Statements in accordance with AASB 1049 Whole of Government and General Government Sector Financial Reporting. The required contributions for defined benefit plan obligations are based upon the ratesdetermined by the Treasurer on the advice of the State Actuary. Contributions are paid by WorkCover at the specified rate followingcompletion of the employee’s service each pay period. WorkCover’s obligation is limited to its contribution to QSuper.

(b) Employee benefits liabilities

2019 2018$'000 $'000

CurrentAccrued salaries and other benefits 1,963 1,534Provision for annual leave 5,886 4,948Provision for long service leave 11,693 10,657Provision for termination benefits - 150

19,542 17,289Non-currentProvision for long service leave 2,397 1,627

21,939 18,916

Reconciliation of provision for employee benefits during the year:Balance at 1 July 18,916 18,093

10,553 8,006(8,198) (7,056)

(150) (6)Discount rate adjustments 818 (121)Balance at 30 June 21,939 18,916

Amounts allocated to provisionReductions in provision as a result of paymentsUnused provision reversed

Short-term employee benefitsAccrued salaries and other benefits

Salaries due but unpaid at reporting date are recognised in the consolidated statement of financial position at current salary rates.As WorkCover expects such liabilities to be wholly settled within 12 months of reporting date, the liabilities are recognised atundiscounted amounts. Related on-costs of superannuation and payroll tax have been included in the liability.

Sick leave Sick leave entitlements are non-vesting and are only paid upon valid claims for sick leave by employees. Sick leave expense isbrought to account in the reporting period in which it occurs. No liability for unused sick leave has been recognised as experienceindicates on average, sick leave taken each financial year is less than the entitlement accruing in that year. Accordingly, it is unlikelythat existing accumulated entitlements will be used by employees.

Other long-term employee benefits Long service leave and annual leave

The liabilities for long service leave and annual leave which are not expected to be settled wholly within 12 months after the end ofthe reporting period in which the employees render the related service are recognised and measured at the present value ofexpected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is givento expected future salary rates, experience of employee departures, and periods of service. Expected future payments arediscounted using interest rates on Commonwealth Government securities with terms to maturity that match, as closely as possible,the estimated future cash outflows. Related on-costs of workers’ compensation premiums, superannuation and payroll tax havebeen included in the liabilities.

Termination benefitsTermination benefits are recognised as an expense at the earlier of when WorkCover can no longer withdraw the offer of thosebenefits or when WorkCover recognises costs for a restructuring that is within the scope of AASB 137 Provisions, Contingent Liabilities and Contingent Assets and involves the payment of termination benefits. Benefits not expected to be settled wholly within12 months after the end of the reporting period are discounted to present value.


(c) Expected settlement of employee benefits liabilities

Based on past experience WorkCover does not expect all employees to take the full amount of accrued leave or require paymentwithin the next 12 months. Settlement expectations for annual leave and long service leave are as follows:

2019 2018$'000 $'000

No more than 12 months from reporting date:Annual leave 5,071 4,326Long service leave 1,966 1,725

7,037 6,051More than 12 months from reporting date:Annual leave 815 622Long service leave 12,124 10,559

12,939 11,181

When WorkCover does not have an unconditional right to defer settlement of the obligation beyond 12 months, the entire amountis presented as current.

(d) Actuarial assumptions of employee benefits liabilities

The assumptions adopted to measure the present value of annual leave and long service leave are as follows:

2019 20183.0% 3.0%4.0% 4.0%

Discount rate 1.4% 2.5%6.56 years 6.3 years

20 days 20 days

Rate of increase for non-contract salaries

Assumed annual leave days taken per yearSettlement term for long service leave

Rate of increase for contract salaries

The number of employees including both full-time employees and part-time employees measured on a full-time equivalent basis is819 (2018: 755).

E3 Related parties

(a) Details of key management personnel and remuneration

WorkCover’s responsible Minister is identified as part of WorkCover’s key management personnel, consistent with Australianimplementation guidance included in AASB 124 Related Party Disclosures. WorkCover’s Minister is the Minister for Education andthe Minister for Industrial Relations.

Ministerial remuneration entitlements are outlined in the Legislative Assembly of Queensland’s Members’ Remuneration Handbook.WorkCover does not bear any cost of remuneration of the Minister. The majority of Ministerial entitlements are paid by the LegislativeAssembly, with the remaining entitlements being provided by the Ministerial Services Branch within the Department of the Premierand Cabinet. As all Ministers are reported as key management personnel of the Queensland Government, aggregate remunerationexpenses for all Ministers is disclosed in the Queensland General Government and Whole of Government Consolidated Financial Statements, which are published as part of Queensland Treasury’s Report on State Finances.

Details of the remuneration of the non-Ministerial key management personnel, being the Directors, the Chief Executive Officer(CEO), and the Senior Executives of WorkCover are as follows:


Directors Post Total

(Non-executive) employment

Fees1 Superannuation

$’000 $’000 $’000

F Gobbo2 2019 81 8 89Chair 2018 75 7 82

R McLennan2, 3 2019 54 5 59Deputy Chair 2018 48 5 53

J Crittall 2019 40 4 44Director 2018 40 4 44

K Dear 2019 40 4 44Director 2018 40 4 44

I Leavers 2019 40 4 44Director 2018 40 4 44

S Morris 2019 43 4 47Director 2018 16 2 18

M Roche2, 4 2019 48 5 53Director 2018 40 4 44

L Rowland 2019 40 4 44Director 2018 40 4 44

B Swan 2019 40 4 44Director 2018 40 4 44

A Quinn5 2018 - - -Director

Total remuneration: 2019 426 42 468Directors 2018 379 38 417

Short-term

1 Fees represent amounts paid in cash during the financial year and associated accrual adjustments.

2 Remuneration includes a back pay of audit committee fees relating to the 2017-18 financial year.3 Ceased on 8 July 2019.4 Ceased on 30 July 2019.5 Ceased on 12 July 2017.

Responsibilities of Directors (Non-executive)Chair

The Chair’s principal responsibility is to lead and direct the activities of the Board and ensure the Board fulfils all its legal andstatutory obligations in accordance with the Board charter.

Deputy Chair

The Deputy Chair, in addition to Director’s responsibilities, assists the Chair in meeting their obligations as required. In the absence of the Chair at a meeting, the Deputy Chair will preside.

Director

The Directors are responsible for the strategic guidance, the monitoring of management, ensuring good governance and thesuccessful operation of WorkCover Queensland.


Post

employment

Salary1

Non- Superannuation Annual leave Long service

monetary2

accruals leave accruals

$’000 $’000 $’000 $’000 $’000 $’000

B Watson 2019 379 18 25 31 5 458CEO 2018 377 17 24 32 8 458

T Barrenger 2019 228 3 25 10 5 271Chief Information Officer 2018 208 2 25 26 14 275

C Carras 2019 274 9 25 29 20 357Chief Customer Officer 2018 249 9 25 37 52 372

D Heley 2019 250 18 25 27 19 339Chief People and Finance Officer 2018 244 14 25 23 19 325

J Reid 2019 166 5 22 19 17 229Legal Counsel 2018 165 5 22 13 1 206

N Wenck 2019 239 10 21 23 8 301Chief Strategic Development Officer 2018 224 10 20 15 4 273

Total remuneration: 2019 1,536 63 143 139 74 1,955

CEO and Senior Executives 2018 1,467 57 141 146 98 1,909

Short-term Other long-term benefits TotalCEO and SeniorExecutives

1 Salary represents amounts paid in cash during the financial year and associated accrual adjustments.2 Short-term non-monetary benefits relate to packaged amounts and fringe benefits provided to the CEO and Senior Executives.

Responsibilities of the CEO and Senior ExecutivesCEO The CEO is responsible to the Board for the overall performance and strategic management of WorkCover Queensland. The CEOis also the Executive Officer (EO) of WEO and is responsible for the management and direction of WEO. No remuneration is paidfor the role of EO of WEO.

Chief Information Officer

The Chief Information Officer is responsible for the delivery of technology solutions to maximise the efficiency and effectiveness ofthe business operations to meet WorkCover’s business needs.

Chief Customer Officer

The Chief Customer Officer is responsible for the strategic leadership of the Customer Group, ensuring that all statutory andcommon law claims are outcome managed balancing the interests of both injured workers and employers. They also ensureimplementation of all key strategies to provide an exceptional customer experience and manage stakeholder relationships businesswide.

Chief People and Finance Officer The Chief People and Finance Officer, acts as Company Secretary, and is responsible for strategically leading the People andFinance Group to ensure all necessary people, corporate, and financial management processes, systems and disciplines are inplace to support the achievement of the organisation’s commercially-focused financial and people objectives.

Legal Counsel The Legal Counsel oversees common law claims management, provides legal advice and strategy, and ensures effectivemanagement of legal and contractual risks.

Chief Strategic Development Officer The Chief Strategic Development Officer is responsible for facilitating a collaborative process on the design, development andimplementation of strategic initiatives to continue to deliver an outstanding customer experience.

Remuneration and appointment authority of key management personnelRemuneration policy Remuneration levels for key management personnel are competitively set to attract and retain appropriately qualified andexperienced Directors, Senior Executives and the CEO. Remuneration is reviewed annually. No remuneration packages for keymanagement personnel provide for any performance or bonus payments.

Payments to the CEO and the Directors are made by WorkCover Queensland. All other key management personnel areremunerated by WEO.


Directors The remuneration of Directors is approved by the Governor-in-Council as part of the terms of appointment. The Director contractsare entered into in accordance with the WCRA. Each Director of WorkCover Queensland is entitled to receive a fee with theexception of appointed public service employees whose fees are subject to government approval.

CEO and Senior Executives The CEO’s contract is entered into in accordance with the WCRA, with the conditions of the contract decided by the Board andsigned by the Chair. The remuneration arrangements for the Senior Executives are determined by the CEO in consultation with theChair of the Board. The Senior Executive contracts are entered into in accordance with the WCRA.

Remuneration and other terms of employment for the CEO and each Senior Executive are formalised in executive employmentcontracts. The notice period for termination is between 4 and 6 months for the CEO and Senior Executives.

The CEO and Senior Executives are given the opportunity to receive their fixed remuneration in a variety of forms, including cashand fringe benefits.

(b) Transactions with key management personnel

No transactions, other than remuneration payments or the reimbursement of approved expenses, were entered into by WorkCoverwith key management personnel or related parties of such key management personnel during this financial year (2018: notransactions with key management personnel).

(c) Transactions with other related parties

WorkCover is required to pay contributions to WHSQ and the Workers’ Compensation Regulator. See note E1 for details.

In 2017, WorkCover received a non-reciprocal cash transfer of $2.500 million from the Workers’ Compensation Regulator. See noteF4(a).

Queensland Health public hospitals are utilised by WorkCover in the treatment of injured workers. The total payments in this financialyear are $43.621 million (2018: $39.687 million).

As the provider of compulsory workers’ compensation insurance in Queensland, WorkCover provides insurance to all QueenslandState Government controlled entities other than those who self-insure. Policies are issued on the same terms and conditions as toother policyholders. The total premium income received from Queensland State Government controlled entities in this financial yearis $252.588 million (2018: $226.547 million).

WorkCover utilises the services of QIC and QTC to invest excess cash not immediately required to cover expenses. The use of QICand QTC is approved by Queensland Treasury and the relationships/transactions are conducted under normal terms and conditions.The total management fees paid or payable in this financial year to QIC and QTC are $12.939 million and $0.513 million respectively(2018: $12.259 million and $0.599 million respectively).

From 1 July 2016, the Workers’ Compensation and Rehabilitation Amendment Act 2016 implemented the National Injury InsuranceScheme (NIIS) for workplace accidents connected with Queensland. The scheme provides eligible seriously injured workers with alifetime statutory entitlement to treatment, care and support payments such as rehabilitation, medical services and hospitalexpenses. In accordance with the scheme, payments are made by WorkCover to reimburse NIIS Queensland (the external casemanagers for the seriously injured workers) for costs in relation to these claims. The total NIIS Queensland amounts paid or payablefor this financial year are $1.146 million (2018: $0.678 million).

A related party to a Minister is a partner in the Brisbane office of a law firm that provides legal services to WorkCover as part of thelegal panel. The firm was one of 10 appointed to the panel through an open tender process. An amount of $5.625 million was paidor payable in this financial year (2018: $6.388 million). Terms and conditions are consistent across all panel members.


E4 Property, plant and equipment

Note Land Building Plant and Work in Totalequipment progress

$'000 $'000 $'000 $'000 $'000Balance at 1 July 2017 19,000 29,000 4,370 21 52,391Acquisitions - 4 623 2,004 2,631Disposals - - (1) - (1)Depreciation - (1,312) (1,105) - (2,417)Revaluation increments - 6,808 - - 6,808Balance at 30 June 2018 19,000 34,500 3,887 2,025 59,412

At 30 June 2018Cost or fair value 19,000 40,425 7,325 2,025 68,775Accumulated depreciation - (5,925) (3,438) - (9,363)Net carrying amount 19,000 34,500 3,887 2,025 59,412

Balance at 1 July 2018 19,000 34,500 3,887 2,025 59,412Acquisitions - 961 377 6 1,344Disposals - (27) (80) - (107)Transfers between asset classes - 2,025 - (2,025) -Depreciation - (1,558) (1,171) - (2,729)Revaluation increments 3,000 6,599 - - 9,599Balance at 30 June 2019 22,000 42,500 3,013 6 67,519

At 30 June 2019Cost or fair value 22,000 48,981 7,426 6 78,413Accumulated depreciation - (6,481) (4,413) - (10,894)Net carrying amount 22,000 42,500 3,013 6 67,519

(a) Recognition and measurement

All items of property, plant and equipment are recognised at their cost of acquisition, being the fair value of the considerationprovided and any incidental costs directly attributable to the acquisition.

With respect to plant and equipment, an asset recognition threshold of $5,000 exists. With respect to property, an asset recognitionthreshold of $10,000 exists for buildings and $1 for land. Property, plant and equipment with a lesser cost are expensed.

Costs incurred subsequent to initial acquisition are added to an asset’s carrying amount if they increase the service potential oruseful life of that asset. Subsequent costs that do not meet this criteria are expensed as incurred.

Plant and equipment is measured at cost less accumulated depreciation and any accumulated impairment losses.

Plant and equipment with an original cost of $0.684 million (2018: $0.502 million) and a written down value of zero is still being usedin the provision of services. There is currently 1 asset (2018: 9 assets) with a written down value equal to their residual value abovezero still being used in the provision of services.

(b) Valuation

Land and buildings are shown at fair value, based on annual valuations by State Valuation Service. On revaluation, accumulateddepreciation of revalued assets in the class is eliminated against the gross carrying amount of those assets and the net amountrestated to the revalued amount of the asset.

Any revaluation increase is credited, net of tax equivalents, to the asset revaluation surplus of the appropriate class, except to theextent that it reverses a revaluation decrease for the same asset class previously recognised as an expense, in which case theincrease is recognised as income. A decrease in the carrying amount on the revaluation is charged as an expense, to the extent itexceeds the balance, if any, in the revaluation surplus relating to that asset class.

The land and building is valued having regard to the highest and best use of the asset. An independent valuation of land and buildingwas performed as at 30 June 2019 and fair value was determined by reference to market based evidence, being active marketprices adjusted for any differences in the nature, location or condition of the specific property. State Valuation Service used thediscounted cash flow, capitalisation and direct comparison approaches to determine the fair value. The land and building has beencategorised as level 3 based on sensitivity of fair value to change in the unobservable inputs.


(c) Depreciation

Land is not depreciated.

Property, plant and equipment is depreciated on a straight-line basis so as to allocate the cost or revalued amount of each asset,less its estimated residual value, over the estimated useful life of the assets as follows: Building 3 to 60 years Plant and equipment: Computer equipment 2 to 10 years Office equipment and furniture 6 to 23 years Fixtures and fittings 10 to 19 years Motor vehicles 5 years

The assets’ residual values, useful lives and depreciation methods are reviewed and adjusted if appropriate on an annual basis.

(d) Impairment

All non-current assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists,WorkCover determines the asset’s recoverable amount. An impairment loss is recognised whenever the carrying amount of anasset exceeds its recoverable amount. Impairment losses are recognised as an expense, unless the asset is carried at a revaluedamount, in which case the impairment loss is treated as a revaluation decrease. The asset’s recoverable amount is determined asthe greater of the asset’s fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flowsare discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value ofmoney and the risks specific to the asset.

When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of itsrecoverable amount to the extent that the increased carrying amount does not exceed the carrying amount that would have beendetermined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised asincome, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluationincrease.

(e) Derecognition

Property, plant and equipment assets are derecognised upon disposal or when no future economic benefits are expected from theiruse or disposal. Derecognition of property, plant and equipment assets includes writing back accumulated depreciation and anyaccumulated impairment losses against the cost of acquisition. Any resulting gain or loss is represented by the difference betweenthe proceeds, if any, and the carrying amount of the asset and is recognised in the consolidated statement of comprehensiveincome.

E5 Commitments

WorkCover has contractual commitments including the acquisition of property, plant and equipment and intangible assets,expenditure on support and maintenance and other expenditure as follows:

Acquisition of Acquisition of Support and Other Totalintangible property, plant maintenance expenditure

assets and equipment expenditure2019 $'000 $'000 $'000 $'000 $'000Not later than 1 year - - 2,065 736 2,8011 - 5 years - - 1,280 519 1,799

- - 3,345 1,255 4,600

Acquisition of Acquisition of Support and Other Totalintangible property, plant maintenance expenditure

assets and equipment expenditure2018 $'000 $'000 $'000 $'000 $'000Not later than 1 year - 433 2,146 461 3,0401 - 5 years - - 2,755 - 2,755

- 433 4,901 461 5,795

Other


What this section is aboutThis section includes other information that must be disclosed to comply with AASBs and other requirements.OtherF1 Taxation

WorkCover Queensland and its controlled entity are State/Territory bodies as defined under the Income Tax Assessment Act 1936

and are exempt from Commonwealth Government taxation with the exception of fringe benefits tax (FBT) and GST. As such, FBTand GST receivable from and payable to the Australian Taxation Office (ATO) are recognised and accrued.

WorkCover Queensland is the only entity in the consolidated group subject to the National Tax Equivalents Regime (NTER). Underthe NTER, payments are made to the State Treasurer equivalent to the amount of Commonwealth Government income tax. TheTaxation of Financial Arrangements (TOFA) legislation is applicable to WorkCover Queensland and the default realisation andaccrual methods are used. In addition, QIC adopt the attribution managed investment trust (AMIT) regime in respect of eligible QICmanaged investment trusts in which WorkCover invests in.

WorkCover Queensland and its controlled entity are also required to comply with pay as you go (PAYG) withholding requirementsand Queensland State Government taxes including payroll tax, stamp duty and land tax.

Tax Risk ManagementThe Tax Risk Management Policy sets out WorkCover’s approach to satisfying its obligations under the Risk Management Policy with respect to tax. WorkCover’s tax strategy is focused on integrity in compliance and reporting. The strategy is implementedthrough WorkCover’s Tax Risk Management Framework. This Framework is supported by governance processes which ensure it is implemented with continued effectiveness. WorkCover has effective policies and processes in place to manage tax risk.

(a) Income tax equivalent

Income tax equivalent expense2019 2018$'000 $'000

Current tax (benefit)/expenseCurrent income tax expense - 96,022Adjustments for current income tax equivalent of prior periods (3,762) (1,513)Total current tax (benefit)/expense (3,762) 94,509

Deferred tax expenseOrigination and reversal of temporary differences 27,517 26,672Total deferred tax expense 27,517 26,672Income tax equivalent expense 23,755 121,181

Reconciliation of income tax equivalent expenseOperating result for the year before income tax equivalent 100,684 445,012

Income tax equivalent expense at the standard tax rate of 30% (2018: 30%) 30,205 133,504Tax effect of adjustments to income tax equivalent expense:Gross up of foreign income tax offset received 1,256 1,302Gross up of franking tax offset received 3,270 2,677Current year capital losses - (2,133)Non-deductible expenses 1 1Conversion of franking credit to tax loss (10,899) -Tax offset for franked dividends - (8,922)Tax offset for foreign income - (4,341)Other deductible expenses (78) (78)Adjustments for income tax equivalent of prior years - (829)Income tax equivalent expense attributable to operating result 23,755 121,181

Income tax equivalent expense comprises current and deferred tax. Current and deferred tax is recognised as an expense in theconsolidated statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensiveincome or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax assets and liabilities are measured at the amount expected to be receivable or payable on the taxable income or lossfor the current year. The amount is calculated using tax rates and tax laws that are enacted or substantively enacted at the reportingdate.


Income tax equivalent expense recognised in other comprehensive income

2019 2018$'000 $'000

Revaluation of land and building 2,880 2,042

Recognised deferred tax assets and liabilitiesWorkCover is able to offset its deferred tax assets and liabilities and has disclosed the net balance in the consolidated statement offinancial position. Deferred tax assets and liabilities are as follows:

2019 2018 2019 2018 2019 2018$'000 $'000 $'000 $'000 $'000 $'000

Income tax equivalent loss 12,903 - - - 12,903 -

- - (189,032) (144,134) (189,032) (144,134)Indirect claims handling expense 64,746 59,380 - - 64,746 59,380Employee expenses 9 8 - - 9 8Other provisions 2,550 3,810 - - 2,550 3,810Other items 648 674 (411) (204) 237 470Property, plant and equipment - - (6,144) (3,505) (6,144) (3,505)Intangibles 364 1 - - 364 1Tax assets/(liabilities) 81,220 63,873 (195,587) (147,843) (114,367) (83,970)

Liabilities NetAssetsRecognised deferred tax assets andliabilities

Investment tax adjustments includingunrealised gain

Balance Recognised Recognised Balance Recognised Recognised Balance

1 July in operating in other 30 June in operating in other 30 June

2017 result comprehensive 2018 result comprehensive 2019

income income

$'000 $'000 $'000 $'000 $'000 $'000 $'000Income tax equivalent loss - - - - 12,903 - 12,903

(113,842) (30,292) - (144,134) (44,898) - (189,032)

Indirect claims handling expense 58,864 516 - 59,380 5,366 - 64,746Employee expenses 4 4 - 8 1 - 9Other provisions 2,790 1,020 - 3,810 (1,260) - 2,550Other items (1,095) 1,565 - 470 (233) - 237Property, plant and equipment (1,557) 94 (2,042) (3,505) 241 (2,880) (6,144)Intangibles (420) 421 - 1 363 - 364

(55,256) (26,672) (2,042) (83,970) (27,517) (2,880) (114,367)

Investment tax adjustments includingunrealised gain

Movement in deferred taxbalances during the year

Deferred tax is accounted for using the comprehensive balance sheet liability method and is provided on all temporary differencesbetween the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax base ofthose items at the reporting date.

Deferred tax liabilities are recognised for taxable temporary differences. Deferred tax assets are recognised for deductible temporarydifferences. However, deferred tax liabilities and assets are not recognised if the temporary differences arise from the initialrecognition of assets or liabilities which affects neither the accounting profit nor taxable profit or loss. Unused tax credits and unusedtax losses are carried forward to the extent it is probable that future taxable profit will be available against which they can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply for the year when the asset is realisedor the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

The carrying amounts of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longerprobable that the related tax benefit will be utilised and such reductions are reversed when it becomes probable that sufficienttaxable profit will be available.

(b) Goods and services tax

Income, expenses, assets, and liabilities are recognised net of the amount of associated GST, unless the GST is not recoverablefrom or remittable to the ATO. In this case, the GST is recognised as part of the cost of acquisition of the asset or in the amount ofthe expense.

Receivables and payables are stated with the amount of GST included, where applicable. The net amount of GST recoverable from,or payable to, the ATO is included as part of receivables or payables, respectively, in the consolidated statement of financial position.


Cash flows are included in the consolidated statement of cash flows net of the amount of GST. The GST component of cash flowsarising from investing activities which is recoverable from or payable to the ATO is classified as part of operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST, unless the GST incurred is not recoverable from the ATO.

F2 Reconciliation of operating result to net cash provided by operating activities

Note 2019 2018$'000 $'000

Operating result for the year 76,929 323,831

Non-cash items included in operating resultNet loss/(gain) on change in fair value of financial instruments 7,620 (35,395)Net loss on disposal of property, plant and equipment and intangible assets E1 42 5Reclassification of work in progress - 14Depreciation and amortisation expense 3,977 3,709Income tax effect on revaluation of land and building (2,880) (2,042)

Change in operating assets and liabilitiesIncrease in receivables (4,656) (3,954)Increase in current tax (161,425) (29,526)Decrease in other assets 622 6,221Decrease in net deferred tax 30,397 28,714(Decrease)/increase in other liabilities (135) 198Increase/(decrease) in payables and unearned premium liability 7,379 (7,957)Increase in outstanding claims liability and employee benefits liabilities 306,742 18,326Net cash provided by operating activities 264,612 302,144

F3 Operating leases

WorkCover has 8 lease agreements (2018: 8) with respect of the 280 Adelaide Street building. These non-cancellable leases haveremaining terms of between 1 and 5 years and include clauses to enable upward revision of the rental charge on an annual basisaccording to a fixed percentage where applicable.

2019 2018$'000 $'000

Not later than 1 year 1,246 1,1871 - 5 years 2,156 2,848Later than 5 years - 131

3,402 4,166

WorkCover does not lease any property, plant or equipment.


F4 Equity and reserves

(a) Contributed equity

Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities specifies the principles for recognisingcontributed equity. In 2017, WorkCover recognised a non-reciprocal cash transfer of $2.500 million from the Workers’ Compensation Regulator arising from the funding arrangement for the Workers’ Compensation Regulator.

(b) Asset revaluation surplus by asset class

Note Land Building Total$'000 $'000 $'000

Balance at 1 July 2017 10,220 8,077 18,297Revaluation increments E4 - 6,808 6,808Income tax effect on revaluation - (2,042) (2,042)Balance at 30 June 2018 10,220 12,843 23,063

Balance at 1 July 2018 10,220 12,843 23,063Revaluation increments E4 3,000 6,599 9,599Income tax effect on revaluation (900) (1,980) (2,880)Balance at 30 June 2019 12,320 17,462 29,782

The asset revaluation surplus represents the net effect of upwards and downwards revaluations of assets to fair value.

(c) Investment fluctuation reserve

The investment fluctuation reserve is held to mitigate the effects of financial volatility in the investment markets. It represents theexcess capital held by WorkCover over the required funding ratio.

F5 Contingent liabilities

In the normal course of business, WorkCover is exposed to legal issues, including litigation arising out of insurance policies. Thereare no known potential material litigation exposures at reporting date that may give rise to a contingent liability.

F6 Differences between WorkCover consolidated financial statements and WorkCover Queensland financialstatements

(a) Reconciliation of differences between consolidated and parent entity statements of comprehensive income

Note 2019 2018$'000 $'000

WorkCover WorkCoverQueensland

WorkCoverEmploying

Office


WorkCoverEmploying

Office

Underwriting expenses i (39,350) (39,249) (86,129) (37,334) (37,198) (77,267)Investment income ii 341,709 341,610 99 365,348 365,229 119Other income i 1,500 1,499 86,030 1,369 1,351 77,148

i. The difference in underwriting expenses represents expenses incurred by WEO excluding GST. The difference in otherincome represents the service fees raised by WEO for services provided to WorkCover Queensland. The service fee incomein WEO and the service fee expense in WorkCover Queensland are eliminated on consolidation.

ii. The difference represents the bank interest income of WEO.


(b) Reconciliation of differences between consolidated and parent entity statements of financial position

Note 2019 2018$'000 $'000


WorkCoverEmploying

Office


WorkCoverEmploying

OfficeCurrent assetsCash and cash equivalents 87,539 65,183 22,356 200,528 181,341 19,187Receivables i 28,241 28,227 14 17,973 17,945 28

Current liabilitiesPayables ii 16,867 16,383 484 16,392 16,053 339Employee benefits iii 19,542 33 19,509 17,289 27 17,262

Non-current liabilitiesEmployee benefits iii 2,397 16 2,381 1,627 10 1,617

i. The difference represents the WEO other debtors balance.ii. The difference represents the WEO salary related payables of $0.440 million (2018: $0.331 million) and other WEO payables

of $0.044 million (2018: $0.008 million).iii. The liabilities for employee benefits in WorkCover Queensland is the CEO's employee benefits. All other employee benefit

liabilities are part of WEO.

(c) Reconciliation of differences between consolidated and parent entity statements of changes in equity

There are no differences between the figures disclosed on the face of the WorkCover consolidated statement of changes in equityand WorkCover Queensland's statement of changes in equity.

(d) Reconciliation of differences between consolidated and parent entity statements of cash flows

Note 2019 2018$'000 $'000


WorkCoverEmploying

Office


WorkCoverEmploying

OfficeCash flows from operating activitiesInterest received 12,945 12,846 99 15,966 15,850 116GST received 155,497 155,455 42 144,560 144,534 26GST paid (155,638) (155,474) (164) (145,126) (144,978) (148)Employee benefits expense paid i - - (82,118) - - (76,357)Employment services revenue received i - - 85,340 - - 77,185Other operating income received ii 1,614 1,614 1 1,664 1,664 1Other operating expenses paid iii (50,024) (53,216) (31) (48,735) (49,543) (21)

i. The employee benefits expense paid by WEO and the employment services revenue received by WEO are categorisedwithin other operating expenses paid for WorkCover. The employment services revenue is the amount paid by WorkCoverQueensland to WEO for employment services provided.

ii. Other operating income received by WEO is amounts received from salary packaging providers. These are categorisedwithin other operating expenses paid for WorkCover.

iii. The difference between the consolidated financial statements and WorkCover Queensland represents the net of WEO’semployee benefits expenses paid, employment services revenue received, other operating income received and otheroperating expenses paid. The other operating expenses paid in WEO are sundry administration payments.


F7 Controlled entity

Summary of WEO financial statements

2019 2018$'000 $'000

Statement of comprehensive incomeRevenue 86,129 77,267Expenses 86,129 77,267Operating result for the year - -

Statement of financial positionTotal assets 22,374 19,218Total liabilities 22,374 19,218Net assets - -

F8 Summary of additional significant accounting policies

(a) Changes in accounting policies and disclosures

Financial instrumentsAASB 9 Financial Instruments and AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) have been applied for the first time in the presentation of these consolidated financial statements from 1 July 2018 (the dateof initial application of AASB 9).

AASB 9 replaces the provisions of AASB 139 Financial Instruments: Recognition and Measurement that relate to the recognition,classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment offinancial assets and hedge accounting. From 1 July 2018, the financial assets and financial liabilities of WorkCover are classified inthe measurement categories as follows: those to be measured subsequently at fair value through profit or loss, and those to be measured at amortised cost.

Impact of adoption The adoption of AASB 9 from 1 July 2018 has not resulted in any significant changes in accounting policies and adjustments to theamounts recognised in the consolidated financial statements of WorkCover.

On instruction from Queensland Treasury, AASB 9 was adopted without restating any comparative figures.

Classification and measurement WorkCover has assessed and classified the financial instruments as at 1 July 2018 into the appropriate AASB 9 categories. Therehas been no change to the classification and measurement of WorkCover’s financial assets and financial liabilities. On the date ofinitial application, 1 July 2018, the financial instruments of WorkCover were as follows:

AASB 139 AASB 9 AASB 139 AASB 9 Difference$'000 $'000 $'000

Current financial assetsCash and cash equivalents Amortised cost Amortised cost 200,528 200,528 -Receivables Amortised cost Amortised cost 17,973 17,973 -Investments - Managed unit trusts FVPL FVPL 993,260 993,260 -Investments - Derivatives FVPL FVPL 129,812 129,812 -

Non-current financial assetsReceivables Amortised cost Amortised cost 538 538 -Investments - Managed unit trusts FVPL FVPL 3,860,015 3,860,015 -Investments - Derivatives FVPL FVPL 29,662 29,662 -

Current financial liabilitiesPayables Amortised cost Amortised cost 16,392 16,392 -Investment related liabilities - Derivatives FVPL FVPL 108,460 108,460 -

Non-current financial liabilitiesInvestment related liabilities - Derivatives FVPL FVPL 6,367 6,367 -

Measurement category Carrying amount


Derivatives and hedging activities The foreign currency overlay in place as at 30 June 2018 ceased to qualify as a fair value hedge under AASB 9 as WorkCover doesnot satisfy all of the qualifying criteria for hedge accounting under AASB 9.

Impairment of financial assets AASB 9 requires the loss allowance to be measured using a forward-looking expected credit loss approach, replacing AASB 139’s incurred loss approach. AASB 9 also requires a loss allowance to be recognised for all debt instruments other than those held atfair value through profit or loss.

The following financial assets are subject to these requirements: receivables relating to premiums and claims other debtors cash and cash equivalents

On instruction from Queensland Treasury, WorkCover has adopted the simplified approach to measure lifetime expected creditlosses on all receivables relating to premiums and claims using a provision matrix approach as a practical expedient to measurethe impairment provision. The loss allowance in relation to other debtors (such as lease receivables) is determined as 12 monthsexpected credit losses.

The impairment provision as at 30 June 2018 was determined over the life of the debt, accordingly, there is no impact on the openingprovision for impairment balance as at 1 July 2018.

Refer to note D5(a) for the impairment provision balance movement for the current financial year.

(b) New and revised Australian Accounting Standards issued but not yet effective

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July2018 and have not been early adopted in preparing these consolidated financial statements. None of the upcoming standardsrelevant to WorkCover are expected to have a material impact on the consolidated financial statements and WorkCover does notplan to adopt any standard early.

The nature and effects of the standards applicable to WorkCover that are not yet effective are as follows:

RevenueAASB 15 Revenue from Contracts with Customers and AASB 1058 Income of Not-for-Profit Entities apply from reporting periodsbeginning on or after 1 January 2019.

AASB 15 establishes the principles that an entity shall apply to report useful information to users of financial statements about thenature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. AASB 1058 clarifies andsimplifies the income recognition requirements that apply to not-for-profit entities in conjunction with AASB 15.

WorkCover does not currently have any revenue contracts for which AASB 15 or AASB 1058 will have a material impact for theperiod after 1 July 2019, and will monitor the impact of any such contracts subsequently entered into before the new standards takeeffect.

LeasesAASB 16 Leases applies from reporting periods beginning on or after 1 January 2019.

This standard introduces new requirements for lessees by requiring an asset and liability to be recognised for the majority of leasecontracts. Lessor accounting under AASB 16 remains largely unchanged from AASB 117 Leases, with lease receipts from operatingleases continuing to be recognised as income either on a straight-line basis or another systematic basis where appropriate.WorkCover owns and occupies the building it conducts its main business activities from (disclosed in note E4) and does not leaseany property, plant or equipment. As such, AASB 16 is not expected to have a significant impact unless WorkCover’s currentcircumstances change.

Definition of materialAASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material applies from reporting periods beginning onor after 1 January 2020. AASB 2018-7 principally amends AASB 101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors to refine the definition of material in AASB 101.

This revision states that information is material if omitting, misstating, or obscuring it could be reasonably expected to influence thedecisions that the primary users of general purpose financial statements make on the basis of those financial statements, whichprovide financial information about a specific reporting entity. WorkCover will apply this new definition to the preparation of itsconsolidated financial statements from the applicable date.


F9 Events after reporting date

There has not arisen in the interval between the end of the financial year and the date of this report, any item, transactions or eventof a material and unusual nature likely to affect significantly the operations of WorkCover, the results on those operations, or thestate of affairs of WorkCover in future financial years.

Management Certificate of WorkCover Queensland


Management Certificate of WorkCover QueenslandThese general purpose financial statements have been prepared pursuant to the provisions of the Workers’ Compensation and Rehabilitation Act 2003, section 62(1) of the Financial Accountability Act 2009, section 42 of theFinancial and Performance Management Standard 2009 and other prescribed requirements. In accordance withsection 62(1)(b) of the Financial Accountability Act 2009 we certify that in our opinion:

the prescribed requirements for establishing and keeping of accounts have been complied with in all materialrespects; and

the financial statements have been drawn up to present a true and fair view, in accordance with the prescribedaccounting standards, of the transactions of WorkCover Queensland for the financial year ended 30 June 2019and of the financial position at the end of that year; and

We acknowledge responsibility under section 8 and section 15 of the Financial and Performance Management Standard 2009 for the establishment and maintenance, in all material respects, of an appropriate and effective systemof internal controls and risk management processes with respect to financial reporting throughout the reporting period.

20 August 2019

F GobboBA/LLB, GAICDCHAIR

B WatsonMOL, Dip Financial Services, FAICD, FASFACHIEF EXECUTIVE OFFICER


Summary of requirement Annual report reference

Letter of compliance

A letter of compliance from the accountable officer or statutory body to the relevant Minister/s

Welcome

Accessibility Table of contents Glossary

Contents Glossary

Public availability Welcome

Interpreter service statement Welcome

Copyright notice Welcome

Information Licensing Welcome

General information

Introductory Information About WorkCover

Agency role and main functions About WorkCover

Operating environment About WorkCover

Non-financial performance

Government’s objectives for the community Chair and CEO report

Agency objectives and performance indicators Highlights

Agency service areas and service standards Highlights

Financial performance

Summary of financial performance Financial performance

Governance – management and structure

Organisational structure About WorkCover

Executive management Leadership

Government bodies (statutory bodies and other entities)

Financial Performance

Public Sector Ethics Act 1994 Ethics, Compliance and Risk Management

Governance – risk management and accountability

Risk management Ethics, Compliance and Risk Management

Audit committee Corporate Governance

Internal audit Ethics, Compliance and Risk Management

External scrutiny Ethics, Compliance and Risk Management

Information systems and recordkeeping Ethics, Compliance and Risk Management

Governance – human resources

Strategic workforce planning and performance Engaged People

Open data Statement advising publication of information Corporate Governance

Consultancies Corporate Governance

Overseas travel Corporate Governance

Queensland Language Services Policy Corporate Governance

Financial statements

Certification of financial statements Actuarial certificate on net outstanding claim liabilities

Certificate of WorkCover Queensland

Independent Auditor’s Report Independent Auditor’s Report

COMPLIANCE CHECKLIST



Term Definition

A

Accepted claim When the first decision about the application for compensation is to accept the claim. This excludes claim decisions where the first decision is rejected, cancelled, withdrawn, report only or common law only.

Accident insurance policy

An accident insurance policy is a workers’ compensation insurance policy, compulsory for employers engaging workers. The policy covers the employer’s liability for workers’ compensation and damages arising out of a work-related injury sustained by their worker, no matter who or what caused it.

Asbestos-related diseases

Asbestos-related diseases are caused by the inhalation of asbestos fibres over a period of time. Asbestos-related diseases typically have long latency periods, that is, 10 to 40 years from exposure to onset of the disease.

AS/ISO Australian Standard/International Organisation for Standardisation

AS/NZS Australian/New Zealand Standard Average premium rate The average premium rate is a rate per $100 of wages, expressed as a

percentage, calculated by averaging net premium assessed for the year as a proportion of total wages declared by all employers for that year.

C

CEO Chief Executive Officer

Claims experience An employer’s claims experience is used when calculating premium and is comprised of the statutory claims amounts paid under an employer’s accident insurance policy for the preceding three years and the damages claims amounts paid under the policy for the two years preceding that.

Common law claim A common law claim is the claim made by an injured worker who commences common law action through the courts against their employer for negligence (they are ’suing’ their employer). The courts award common law damages payments for economic loss, pain and suffering, legal costs, and medical and hospital costs. WorkCover may pay all damages awarded to the injured worker, including legal and investigative costs as part of the employer’s accident insurance policy.

Customer experience measure / metric

Measures customers’ overall perception of WorkCover and performance against the five customer strategy principles.

Customer strategy principles

These principles are the benchmark for the experience WorkCover wants customers to have across all interactions. There are five principles: easy, fair and transparent, empowered, consistent and valued, and they are based on customer research that identified what customers expect from WorkCover.

CX Customer experience

D

Damages Damages are payments made under a common law claim that are classified as ‘heads of damage’. These are different types of damage that may be suffered by an injured worker. Examples are: • general damages (compensation for pain and suffering)• economic loss (compensation for loss of past earnings or future earning

capacity).

DTA Debt to asset

GLOSSARY


E Experience based rating (EBR)

Experience based rating is applicable to those employers with more than $1.5 million in wages. It is a formula which uses an employer’s wages, industry rate, and performance to calculate their premium and determine the likely cost of claims for the next year.

G

Gig economy A gig economy connects sellers and buyers via a facilitator who operates an app or website. Temporary positions are common and organisations contract with independent workers for short-term engagements.

Goods and services tax (GST)

GST is payable by employers on their accident insurance policy premium. Most Queensland employers are likely to be eligible to claim an input tax credit from the Australian Taxation Office. To enable WorkCover to meet its GST requirements, WorkCover requires employers to provide their ABN and their percentage entitlement to input tax credits (see input tax credit for further information about this). Payments of weekly compensation do not attract GST.

H

Health provider Health provider refers to any medical or allied health provider (for example a doctor, medical specialist, physiotherapist, chiropractor or occupational therapist) who is registered with the relevant professional board (eg. Physiotherapist Board of Queensland).

Household worker A person employed solely in and about, or in connection with, a private dwelling, or the grounds of the private dwelling.

Household workers’ insurance policy

A household workers’ insurance policy covers the owner of a private dwelling, against the costs of compensating a household worker who is injured while working for the private dwelling owner.

I

Injury An injury, as defined by the Workers’ Compensation and Rehabilitation Act 2003 is, ’A personal injury arising out of, or in the course of, employment if the employment is a significant contributing factor to the injury’. Some examples of injuries include: • a cut or fracture• a disease (example asbestos or Qfever)• industrial deafness• psychiatric or psychological disorders such as stress or depression• aggravation of a pre-existing condition• death from an injury, disease or aggravation of a disease.

Injury Prevention and Management program

WorkCover’s program in partnership with Workplace Health and Safety Queensland which helps employers who have a high frequency of claims bring about a workplace culture change and achieve a better standard of workplace health and safety and injury management.

L Large employer alternative pricing (LEAP)

Large employer alternative pricing is a premium calculation method introduced as a choice for the largest employers in Queensland from 1 July 2019.

O OIR Office of Industrial Relations

P

PIEF Personal Injury Education Foundation

Policyholder Is an individual or entity that holds an insurance policy with WorkCover.

Premium rate The rate per $100 of wages for an individual employer.

https://www.worksafe.qld.gov.au/insurance/which-insurance-product-is-right-for-you/accident-insurance/calculating-premium/ebr



https://www.worksafe.qld.gov.au/insurance/which-insurance-product-is-right-for-you/accident-insurance/calculating-premium/large-employer-alternative-pricing


Q

QIC Queensland Investment Corporation

R

Rehabilitation Under workers’ compensation legislation, the purpose of rehabilitation is to ensure the injured worker’s safest and earliest possible return to work or to maximise the worker’s independent functioning. Rehabilitation for return to work (sometimes called occupational, vocational or workplace rehabilitation) can include treatment from a range of health providers, assessments of work capacity and suitable duties programs. Under legislation, workers and employers must take every reasonable step to participate in rehabilitation and return to work programs.

Return to work The worker’s timely, safe and medically structured return to preinjury duties, or other employment, following a workplace injury.

S

Self-insurer An employer who meets certain criteria to manage their own workers’ compensation issues. Contact the Workers’ Compensation Regulator for more information.

Stamp duty Stamp duty is payable to the Queensland Government on many property and business transactions, including workers’ compensation insurance premiums. Stamp duty has been included in premiums since 1916. WorkCover clearly lists the stamp duty payable as a separate item on premium notices.

Statutory (no-fault) claims

A statutory or no-fault claim is when a worker is compensated for a work-related injury with payments and benefits prescribed in the Workers’ Compensation and Rehabilitation Act 2003. These payments and benefits are referred to as statutory compensation and may include weekly payments as income replacement, lump sums to compensate for permanent impairment, and hospital and medical expenses. Statutory claims are administered on a ‘no fault’ basis. That is, it doesn’t matter if it is the worker’s or the employer’s fault that the injury occurred, compensation is still paid.

W

Wages Wages are the total amount an employer pays to a worker as defined by Schedule 6 of the Workers’ Compensation and Rehabilitation Act 2003.

WHSQ Workplace Health and Safety Queensland

Work-related injury An injury where employment was a significant contributing factor.

Worker A ‘worker’ for the purposes of the Workers’ Compensation and Rehabilitation Act 2003 is an individual employed under a Contract of Service (sect 11) or specifically included under Schedule 2 Part 1, unless specifically excluded under Schedule 2 Part 2.






280 Adelaide Street (GPO Box 2459)

Brisbane Qld 4001

p: 1300 362 128

f: 1300 651 387

[email protected]

worksafe.qld.gov.au

ABN: 40 577 162 756

ISSN: 1329 - 6539