WC Benchmarking and Funding
The deposit-contribution funding process for principal departments and grant agencies is designed to provide agencies with a financial incentive to improve their claims outcomes. Agency’s whose claims outcomes for the previous fund year are better than expected are rewarded with a funding surplus, and agency’s whose claims outcomes for the previous fund year are worse than expected are penalised with a funding deficit.
Deposit-contribution funding for workers compensation is calculated by multiplying the Funding Rate by an agency’s total wage costs. The Funding Rate is a weighted average of an agency’s:
Intra-icare TMF Benchmark Rate:
The share of the icare tmf target contribution based on the agency’s deposit contribution rates for the previous three years
Industry Benchmark Rate:
The share of the icare tmf target contribution based oncontribution rates expected for the agency’s industry.
The relative weightings of the Intra-icare tmf Benchmark Rate and the Industry Benchmark depend on the size of the agency. The larger the agency, the more heavily weighted the Intra-TMF Benchmark Rate (up to a maximum of 50 per cent for the largest agencies). This means that the relative weighting of the Industry Benchmark Rate for smaller agencies is greater than that for larger agencies.
The aggregate level of icare tmf deposit-contribution funding (which includes the notional estimates for non-budget-dependent agencies) is designed to equal the aggregate level of icare tmf deposit contributions (which in turn equals TMF's Target Contribution).
Total TMF deposit-contribution funding = Total TMF deposit contributions = TMF target contribution