3.4.3.2 Interest payments to an employer
Interest must be paid to an employer if the Agent has failed to reimburse weekly payments within the later of:
- 30 calendar days of receipt of notification or
- 30 calendar days of the last date of the incapacity period
Interest is payable from the day after the reimbursement is due until the date the reimbursement has been paid. Interest is payable at the prescribed interest rate Interest at the prescribed rate means interest at the rate fixed for the time being under section 2 of the Penalty Interest Rates Act 1983 for the relevant period.
Interest should be paid within 14 days from the date the principle amount was reimbursed.
Interest payable by Agent
When the delay to reimburse weekly payments is a result of an Agent’s internal operating procedures interest the employer is entitled to must be paid by the Agent and not by the WorkCover scheme.
Application of six year limitation rule on interest
The Limitations of Actions Act 1958 limits to six years from the date the reimbursement was due to the employer, the right to start proceedings for interest on reimbursements paid late.
The employer is not entitled to interest where:
- the reimbursement was paid late and
- no interest has been paid and
- more than six years has elapsed since the reimbursement was due to be paid.
Any decision to enforce the limitations period should be recorded on the claims file along with reasons.
Inform employer of interest entitlement
Agents must inform employers in writing of an interest entitlement.
An employer may apply for interest
An authorised senior employee of the employer must apply in writing to the Agent for interest the employer believes is due with documentation to prove that the worker was paid for the periods interest is claimed and the Agent reimbursed the employer:
- more than 30 days after the date the request for reimbursement was received by the Agent or
- if the request for reimbursement was received before the employer had paid the worker the weekly payments and more than 30 days after the date on which the weekly payments expired.