Being made a WorkCover direct payee
In certain instances when you have an accepted WorkCover claim and you are receiving weekly payments, you can be made a direct payee by the WorkCover insurer.
What this means is that the WorkCover insurer will pay you your weekly payments directly, as opposed to paying the employer who then pays you.
Here’s what you need to know about becoming a direct payee or WorkCover.
Table of Contents
Direct payee or payment to the employer
When it comes to the payment of weekly payments, typically, what happens in most matters is that the WorkCover insurer will pay your weekly payments to the employer (if you are still employed by the employer with which you suffered injury).
It is then up to the employer to pay you your weekly payments to you. They’re responsible for taking out tax and then they’ll usually pay you during their regular pay runs.
This is the arrangement that is in place for most people that have WorkCover claims who are in receipt of weekly payments.
Being a direct payee means that the employer is taken out of the equation and the insurer pays you your weekly payments directly.
In what instances can you be made a direct payee?
The WorkCover insurer will usually only make someone a direct payee in limited circumstances.
Typically, if you’ve had some issues with receiving weekly payments in that there’s a delay, or incorrect amounts being paid to you – then in these circumstances the insurer may consider making you a direct payee.
If you are experiencing issues with your weekly payments like this, in order to be made a direct payee usually the issues will need to occur more than once.
If, for example, there is a delay once with getting paid your payments one week, but the rest of the time everything is fine and you’re paid on time, then the insurer is unlikely to make you a direct payee.
However, if the delay is something that happens repeatedly, then the insurer may consider making you a direct payee in this instance.
Another instance in which you may be made a direct payee is when you are no longer employed by the employer with which you suffered injury.
Additionally, if the employer no longer exists you may also be made a direct pay.
Other instances where you may be considered to be a direct payee are;
- If you’ve moved overseas and have no current work capacity which is likely to continue.
- There has been a breakdown in the relationship between you and your employer.
- It’s not practical for the employer to make weekly payments to you – say for example you only worked with the employer for a very brief period of time.
How does a person become a direct payee?
You’ll need to ask the insurer to become a direct payee. You can do so by calling them up or emailing them and letting them know that you would like to become a direct payee.
Sometimes an employer may submit a request to the insurer that an employee be made a direct payee.
In this instance, the employer should, generally speaking, seek the agreement of the employee to become a direct payee before submitting the request to the insurer.
The insurer may also choose to make an injured worker a direct payee without a request from the injured worker or the employer.
Before doing so, they should speak to the injured worker and the employer.
The reality is that this is not very common in terms of the insurer making someone a direct payee without a request from either the worker or the employer.
When the insurer is making a decision as to whether to make someone a direct payee, they should consider any preferences of both the injured worker and the employer, but ultimately the decision to make someone a direct payee is up to them.
What happens when the insurer makes a person a direct payee?
The insurer will send you a form on which you’ll need to confirm your bank account details.
The insurer then essentially assumes the role of the employer and deducts tax from any gross payments before paying you the net payment amount.
Once you’re made a direct payee, you’ll see that the Victorian WorkCover Authority will be listed as your payee on your tax returns, rather than your employer.
One issue that often arises when someone becomes a direct payee is the accrual of leave entitlements.
When you are employed by an employer on a permanent basis you will accrue leave.
It is important that you are aware that if you are made a direct payee, the insurer may take the position that you are no longer entitled to accrue leave.
If you have an accepted WorkCover claim and you are in receipt of weekly payments, in certain instances a person can be made a direct payee.
This means that, instead of the normal way weekly payments are made with the insurer paying your employer who then pays you, that the employer is taken out of the equation and you’re paid directly by the insurer.
Insurers will consider making a person a direct pay in certain instances whether that be at the request of the injured worker, or at the request of the employer or initiated by the WorkCover insurer themselves.
While there are some benefits to being made a direct payee, the insurer pay take the position that you’re no longer entitled to accrue your leave entitlements.