3.4.3 Interest on late weekly payments

3.4.3.1 Interest payments to a worker | 3.4.3.2 Interest payments to an employer | 3.4.3.3 Penalty interest rates

Interest can be paid to:

a worker, if there are late or outstanding weekly payments
an employer, if the Agent does not reimburse the employer for the weekly payments the employer has paid to the worker within the prescribed timeframe.

3.4.3.1 Interest payments to a worker

AC s114D

WIRC s179

AC s114EA

AC s114E

WIRC s179

AC s114D

Interest payments are payable to workers where legislative requirements for payment timeframes are not met. Legislative timeframes for payments can be found in 3.4.1.2 - Payment frequency. Interest can also accrue where timeframes for payment specified in a court order are not adhered to.

Interest payments are a WorkCover scheme cost (payment type 80) where the Agent has taken all reasonable steps to ensure that the worker is paid within legislative timeframes. Agents are liable for the portion of the interest that accrues for the period where the Agent has not taken all reasonable steps to ensure that the worker is paid within legislative timeframes (use payment type 111).

Interest on weekly payments and superannuation contributions is payable in the circumstances outlined in the table. Note that more than one circumstance may apply at the same time, meaning that more than one category of interest may be payable – see interest calculation example underneath the table.

Circumstance (more than one can apply)	Interest calculation	Interest payment type
Conciliation directions for weekly payments: a conciliation officer directs that weekly payments are to be paid or increased for a retrospective period WIRC s193(1)(a)	Period where interest applies: Interest at the prescribed rate is calculated on the amount of each outstanding weekly payment from the day on which: the incapacity commenced or weekly payments were terminated or altered or the worker’s application to increase the amount of weekly payments was received by the Agent. until the day on which payments are commenced, continued, increased OR until the direction is revoked; whichever is earlier.	Scheme or Agent interest: This interest is payable from Scheme funds if paid within legislative timeframes or if there are documented reasons as to why these timeframes could not be met. If paid late, additional penalty interest is payable which may be Scheme or Agent interest – see Outstanding/late Weekly Payments row below.
Court orders for weekly payments: the Agent rejects or terminates a claim for weekly payments, reduces entitlement or rejects an application for an increase in weekly payments, and a Court subsequently sets aside the decision WIRC s194(3) WIRC s193(2) WIRC s193 (1)(b)-(d)	Period where interest applies: Interest at the prescribed rate is calculated on the amount of each outstanding weekly payment and any superannuation contributions on those payments, as follows. For rejections of weekly compensation payments - from the day on which incapacity commenced until the day the decision is set aside by the Court For reductions or terminations of weekly payments - from the day on which the decision took effect until the day the decision is set aside by the Court For rejections of increases of weekly compensation payments - from a day determined by a Court (see court order) until the day the decision is set aside by the Court. Interest does not apply where: If a worker has not issued Magistrates’ Court or County Court proceedings within one year of being notified by a Conciliation Officer that there is a genuine dispute with respect to the liability to make or continue to make weekly payments, no interest is payable for the period beginning on the expiry of one year after being notified of a genuine dispute and ending on the date the proceedings were issued.	Scheme or Agent interest: This interest is payable from Scheme funds if paid within legislative timeframes or if there are documented reasons as to why these timeframes could not be met. If paid late additional penalty interest is payable which may be Scheme or Agent interest – see Outstanding/late Weekly Payments row below.
Court orders for superannuation only: the Agent terminates superannuation contributions, and the Court subsequently sets aside that decision WIRC s194(2) WIRC s194(1)	Period where interest applies: Interest at the prescribed rate is calculated on the amount of each outstanding superannuation payment from the last date on which the contribution should have been paid until the date on which the payment is paid to the worker’s nominated fund. Interest does not apply where: If a worker has not instigated Magistrates’ Court or County Court proceedings within one year of being notified by a Conciliation Officer that (a) there is a genuine dispute with respect to the liability to make or continue to make superannuation payments and (b) that an application may be made to the court to determine the matter, - no interest is payable for the period beginning after the expiry of one year after being notified of a genuine dispute and ending on the date the proceedings were issued.	Scheme or Agent interest: This interest is payable from Scheme funds if paid within legislative timeframes. If paid late additional penalty interest is payable which may be Scheme or Agent interest, depending on whether the Agent took all reasonable steps to ensure that the worker was paid on time.
Outstanding/late weekly payments: Late payment penalty interest is payable for each day of late payment where the Agent or employer fails to make weekly payments as and when required. For example: Interest is payable if payments are not made within 7 days of the later of: receiving a valid Certificate of Capacity receiving a statutory declaration (where relevant) a decision resulting in weekly payments being payable: a termination, reduction or rejection notice is withdrawn or reversed by the Agent at or before conciliation the Agent withdraws the notice as a result of a Medical Panel decision the Agent accepts a Conciliation Officer recommendation to make weekly payments an Agent by way of an agreement or Court settlement agrees to pay weekly payments Note: A worker is not required to provide Certificates of Capacity for any period between the date the rejection or termination decision takes effect and the date the decision is set aside. WIRC s193(1)(e) WIRC s167	Period where the interest applies: Interest at the prescribed rate is calculated on the amount of each outstanding weekly payment from the day after the payment was required to be made until the day before the payment is made.	Scheme or Agent interest: Interest payments are a WorkCover scheme cost when the Agent has taken all reasonable steps to ensure that the worker is paid on the day payment is required to be made. Agents are liable for the interest that accrues as a result of the Agent not having taken all reasonable steps to ensure that the worker was paid when payment was require to be made. In determining reasonable steps, consider: Where Centrelink clearance extends time beyond 7 days: Did the Agent follow the process outlined in 3.6.4 When a Preliminary Notice has not been received? Did the Agent query whether the worker received Centrelink benefits within 2 working days of Conciliation outcomes, and request Centrelink clearance immediately after worker provides that information? Did the Agent pay within 1 business day of receiving clearance? Did the Agent follow escalation protocols to WorkSafe? Where worker not providing information required e.g. TFN, BSB extends total time beyond 7 days: Did the Agent request the information from the worker in advance? Is there documented evidence of further follow-up? Where employer is not making or passing on payment to the worker: Has the Agent provided the employer with the weekly compensation payment amounts and dates to be paid? Can the Agent demonstrate that follow up with the employer and worker has occurred as soon as reasonably practicable? Where appropriate, has the Agent made the worker a direct payee as soon as practicable?

Circumstance (more than one can apply)

Interest calculation

Interest payment type

Conciliation directions for weekly payments:

a conciliation officer directs that weekly payments are to be paid or increased for a retrospective period

WIRC s193(1)(a)

Period where interest applies:

Interest at the prescribed rate is calculated on the amount of each outstanding weekly payment from the day on which:

the incapacity commenced or
weekly payments were terminated or altered or
the worker’s application to increase the amount of weekly payments was received by the Agent.

until the day on which payments are commenced, continued, increased OR until the direction is revoked; whichever is earlier.

Scheme or Agent interest:

This interest is payable from Scheme funds if paid within legislative timeframes or if there are documented reasons as to why these timeframes could not be met.
If paid late, additional penalty interest is payable which may be Scheme or Agent interest – see Outstanding/late Weekly Payments row below.

Court orders for weekly payments:

the Agent rejects or terminates a claim for weekly payments, reduces entitlement or rejects an application for an increase in weekly payments, and a Court subsequently sets aside the decision

WIRC s194(3)

WIRC s193(2)

WIRC s193 (1)(b)-(d)

Period where interest applies:

Interest at the prescribed rate is calculated on the amount of each outstanding weekly payment and any superannuation contributions on those payments, as follows.

For rejections of weekly compensation payments - from the day on which incapacity commenced until the day the decision is set aside by the Court
For reductions or terminations of weekly payments - from the day on which the decision took effect until the day the decision is set aside by the Court
For rejections of increases of weekly compensation payments - from a day determined by a Court (see court order) until the day the decision is set aside by the Court.

Interest does not apply where:

If a worker has not issued Magistrates’ Court or County Court proceedings within one year of being notified by a Conciliation Officer that there is a genuine dispute with respect to the liability to make or continue to make weekly payments, no interest is payable for the period beginning on the expiry of one year after being notified of a genuine dispute and ending on the date the proceedings were issued.

Scheme or Agent interest:

This interest is payable from Scheme funds if paid within legislative timeframes or if there are documented reasons as to why these timeframes could not be met.
If paid late additional penalty interest is payable which may be Scheme or Agent interest – see Outstanding/late Weekly Payments row below.

Court orders for superannuation only:

the Agent terminates superannuation contributions, and the Court subsequently sets aside that decision

WIRC s194(2)

WIRC s194(1)

Period where interest applies:

Interest at the prescribed rate is calculated on the amount of each outstanding superannuation payment from the last date on which the contribution should have been paid until the date on which the payment is paid to the worker’s nominated fund.

Interest does not apply where:

If a worker has not instigated Magistrates’ Court or County Court proceedings within one year of being notified by a Conciliation Officer that (a) there is a genuine dispute with respect to the liability to make or continue to make superannuation payments and (b) that an application may be made to the court to determine the matter, - no interest is payable for the period beginning after the expiry of one year after being notified of a genuine dispute and ending on the date the proceedings were issued.

Scheme or Agent interest:

This interest is payable from Scheme funds if paid within legislative timeframes.
If paid late additional penalty interest is payable which may be Scheme or Agent interest, depending on whether the Agent took all reasonable steps to ensure that the worker was paid on time.

Outstanding/late weekly payments:

Late payment penalty interest is payable for each day of late payment where the Agent or employer fails to make weekly payments as and when required.

For example: Interest is payable if payments are not made within 7 days of the later of:

receiving a valid Certificate of Capacity
receiving a statutory declaration (where relevant)
a decision resulting in weekly payments being payable:
a termination, reduction or rejection notice is withdrawn or reversed by the Agent at or before conciliation
the Agent withdraws the notice as a result of a Medical Panel decision
the Agent accepts a Conciliation Officer recommendation to make weekly payments
an Agent by way of an agreement or Court settlement agrees to pay weekly payments

Note: A worker is not required to provide Certificates of Capacity for any period between the date the rejection or termination decision takes effect and the date the decision is set aside.

WIRC s193(1)(e)

WIRC s167

Period where the interest applies:

Interest at the prescribed rate is calculated on the amount of each outstanding weekly payment from the day after the payment was required to be made until the day before the payment is made.

Scheme or Agent interest:

Interest payments are a WorkCover scheme cost when the Agent has taken all reasonable steps to ensure that the worker is paid on the day payment is required to be made.
Agents are liable for the interest that accrues as a result of the Agent not having taken all reasonable steps to ensure that the worker was paid when payment was require to be made.

In determining reasonable steps, consider:

Where Centrelink clearance extends time beyond 7 days:

Did the Agent follow the process outlined in 3.6.4 When a Preliminary Notice has not been received?
Did the Agent query whether the worker received Centrelink benefits within 2 working days of Conciliation outcomes, and request Centrelink clearance immediately after worker provides that information?
Did the Agent pay within 1 business day of receiving clearance?
Did the Agent follow escalation protocols to WorkSafe?

Where worker not providing information required e.g. TFN, BSB extends total time beyond 7 days:

Did the Agent request the information from the worker in advance?
Is there documented evidence of further follow-up?

Where employer is not making or passing on payment to the worker:

Has the Agent provided the employer with the weekly compensation payment amounts and dates to be paid?
Can the Agent demonstrate that follow up with the employer and worker has occurred as soon as reasonably practicable? Where appropriate, has the Agent made the worker a direct payee as soon as practicable?

Interest following proceedings in the Victorian Supreme Court

As a result of Supreme Court proceedings, the Court may issue an amount payable in favour of the worker (“judgment debt”). When a judgment debt is issued by the Supreme Court, interest pursuant to s101 Supreme Court Act 1986 (rather than the WIRC Act Workplace Injury Rehabilitation & Compensation Act 2013) applies to the judgement debt amount. Section 101 of the Supreme Court Act 1986 provides that interest accrues from the date of the judgment.

For the purposes of the interest calculator, the due date that should be used is the day that the order/judgment is handed down.

Timely payment of interest amounts

Interest on weekly payments should be paid at the same time that the back payment of weekly payments takes place, pursuant to s178 WIRC Act, or in the case of waiting for an employer to pass on payments to a worker, as soon as the employer passes on that payment.

Other circumstances

Interest amount under $3.00: Cheques for interest payments under $3.00 should not be made. Agents must keep a record of interest payments that fall into this category in ACCtion/Novus.
Centrelink payments: If outstanding weekly payments are paid for a period in which Centrelink payments were also made, interest is payable on the whole amount of the weekly payment entitlement. The Centrelink recovery amount should not be deducted from the weekly payment entitlement before calculating interest.
Leave payments: If a worker receives paid leave, such as annual leave, long service leave or sick leave, which is subsequently re-credited to the worker once their weekly payments claim has been accepted, interest is not payable for the period that leave was paid.
Tax on interest payments: Interest amounts that result from late payment of weekly payments do not attract PAYG withholding. However, these amounts may be considered assessable income of the worker in certain circumstances.

Circular 2022/21

Interest payments to direct payees who are Non-Residents of Australia for tax purposes

Where a direct payee has indicated on their TFN Declaration that they are a non-resident for tax purposes, interest payments will be subject to Non-Resident Withholding Tax (NRWT).

Example of Scheme vs Agent interest calculation

Facts: Worker lodges a claim. Agent rejects claim. Worker applies to WIC Workplace Injury Commission. Conciliation Officer directs that weekly payments are to be paid retrospectively from when the worker’s incapacity commenced to present (e.g. 20/09/2018 to present). The date of the conciliation conference is 28/01/2019 and the Agent receives the Conciliation Outcome Certificate on the same day.

Analysis: The Agent must commence weekly payments within 7 days of the conciliation conference (i.e. by 04/02/2019), assuming they have valid CoC’s for the periods off work. Certificates are not required for the period between the rejection and the WIC outcome. The Agent must also pay interest on every weekly payment that would have been made between 20/09/2018 and the date that the Agent makes the payment. The Agent uses the Worker Interest Calculator to calculate the interest payment:

Scenario 1 Where paid on time:

If the worker is paid by 04/02/019 then the interest payment is coded as payment type 80 scheme interest, because the worker has been paid within 7 days as required.
Scenario 2 Where paid late and reasonable Agent actions:

If the Agent was not under Preliminary Notice A preliminary notice is issued by Centrelink indicating that they have an interest in the worker referred to in the notice and may wish to recover an amount equal to all or part of the amount payable. This notice places an obligation on WorkSafe/Agent to notify Centrelink prior to releasing any weekly payments to the worker. WorkSafe/Agent is to advise Centrelink within seven calendar days of accepting liability for weekly compensation or receiving the notice if liability has been already been accepted, whichever is the later. from Centrelink, however the worker told the Agent that they were in receipt of Centrelink benefits recently or for the period to be paid, the Agent may seek Centrelink clearance. If the Agent then sought clearance from Centrelink within 2 days of the conciliation outcome (i.e. by 30/01/2019), and paid the worker within 1 business day of receiving Centrelink Clearance (e.g. on 15/02/2019), then the Agent’s actions have been reasonable. Interest is payable on all weekly payments between 20/09/2018 and 15/02/2019 and the interest is treated as scheme interest (payment type 80).
Scenario 3 Where paid late and unreasonable Agent actions:

As per the above scenario the Agent receives Centrelink clearance on 14/02/2019, however the worker does not get paid until 21/02/2019. Scheme interest would be incurred for the weekly payments between 20/09/2018 and 15/02/2019. For the remaining 6 days, Agent interest is payable (payment code 111).

Please note:

See Penalty interest rates for the relevant rates.
The amount of interest payable on outstanding weekly payments is based on the penalty interest rate in force at that date.
Where an Agent has reviewed a claim for an interest entitlement, they must keep a record of the outcome of the review, regardless of whether there is an entitlement to interest.
Agents must inform workers and employers in writing of an interest entitlement, including informing workers of the entitlement where the interest payment is made to the worker via the employer (non direct-payee scenario).
Interest calculations are to be saved in Novus and recorded in GE02 in ACCtion.

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