Victorian WorkCover and Owner Drivers

Dated: December 2007

A ruling issued by the Victorian WorkCover Authority ('VWA') in March 2007, which would have significantly changed the treatment of owner drivers for WorkCover premium purposes, has been deferred, pending further industry consultation. The VWA has advised that in the interim, businesses should declare payments to owner drivers for 2007/08 on the same basis as in previous years.

The deferred ruling would have meant that payments to owner drivers who provide a vehicle with a gross vehicle mass of less than 4.5 tonnes would have been subject to WorkCover unless a specific exemption applied. This would have been the case irrespective of whether the owner driver was incorporated or unincorporated and was a significant departure from the VWA's previous position.

Under the interim guidelines, which are now to be used for the 2007/08 year, Victorian WorkCover premium is to be paid only for unincorporated owner drivers (i.e. sole proprietorships and partnerships) who work solely or mainly for the same principal. This is the case irrespective of the gross vehicle mass of the vehicle provided. In addition, there is no liability for WorkCover on incorporated owner drivers (i.e. those who work through companies and trusts).

Where payments to an owner driver are subject to Victorian WorkCover, the following formula is to be used to determine the rateable remuneration:

Rateable Remuneration = (daily/weekly rate) + (20% or 30%) x the number of days or weeks worked.

The daily/weekly rates vary according to the carrying capacity of the vehicle. For further details go to Victorian WorkCover Authority's website at www.worksafe.vic.gov.au and search under 'Owner Drivers Notice'.