Assessments And Some Common Mistakes

Collection Time
At the beginning of the year the Compensation Commissioner sets in motion the collection of the revenue (assessments). The income is necessary to pay benefits due to injured employees and medical service providers. (No I am not joking). It is also very much needed to pay the staff salaries, establishing and maintaining the infrastructure of the organisation in order to administer the Compensation Fund. As explained in previous articles the State is not responsible for the finances of the Compensation Fund, the employers are.
I must, therefore, once again discuss the pitfalls awaiting you when fulfilling your statutory duty in this regard. I realise that it is human to err, the problem is when you err when the State is the other party involved, forgiveness is unlikely, if not impossible. I have experienced through my dealings with workers’ compensation that mistakes that employers make which are eventually rectified by the Compensation Commissioner and which result in a credit due to the employer involved, become a nightmare. For reasons unknown to me, or if known not fit for publication, I can vouch for the fact that you will experience maddening frustration when attempting to recover your credit assessment. The unending process and number of control officers involved in the Compensation Commissioner’s office to verify the credit before refunding your money is not something I wish you to be subjected to. I, therefore, urge you to stick to the rules of the game, a few of which I will discuss next.

Return of Earnings Form
For the last 67 years (at least) the Compensation Commissioner has posted blank forms, nowadays called a Return of Earnings, to employers to complete and return to the Compensation Commissioner on or before the end of March each year. This is a perfect setup for a statutory or administrative ambush. Employers became so used to this practice over the years that they have in some cases started to believe that if no form was posted or received it was not necessary to complete it until such time as it eventually arrives. That, dear readers, is the setting of a perfect trap. Nowhere in the COID Act does it place a duty on the Compensation Commissioner to post these forms to you, they are doing you a favour if they in fact do post them. The onus to obtain, complete and the return the form timely is always on the employer. If you do not oblige you will be penalised and the “no-form-received-and-therefore-not-returned” defence will not help you in the least. If you do not receive the form, obtain it from the department and return it in time.

Correct interpretation of term “earnings”
The Return of Earnings (ROE) form must reflect the “earnings” as contemplated by the COID Act. The form has notes to explain this but I seriously suggest that you also familiarise yourself with the section of the COID Act. For example you are only required to declare “overtime of a regular nature”. I hope that you do understand what that means, if you do not know, you are going to pay an assessment based on inflated figures. Should you later discover this mistake and ask for a re-assessment and a credit, start praying. It seems so basic that you might think that I underestimate your intelligence or legal expertise.  I do not; the reason why I say this is that I know how the office of the Compensation Commissioner operates.
A few questions of about what “earnings” are that you might consider before completing the form, or to test your knowledge if nothing else:

  • Which of the directors of your company should be shown on the ROE?;
  • What do I do with the remuneration of casual labourers employed during the past financial year;
  • Do I declare the remuneration of the foreigners (legal or illegal) employed during the twelve months in question; and
  • Have you got the correct printout from your IT and financial staff reflecting the earnings to be declared?  Were these people familiar with the statutory earnings limit for assessments when they programmed it?

Assessment Rate
I cannot go into details to explain how your business is classified for assessment purposes. I can briefly point out that your business was classified by the Compensation Commissioner’s office for assessment purposes according to the risk associated with your operations. If this classification is incorrect and your assessment rate is too high you will be paying incorrect assessments. I have over the years seen many incorrect classifications which resulted in over assessments. There is a list of the Industrial Rating system available for you to verify your rate and thus the correctness of the classification and the resulting assessment.

The above is an overview of a few of the pitfalls connected to the assessment processes.  It cannot be detailed in the available space.  You are however more than welcome to forward queries to me and if I can assist I will gladly do so.

Till next month