An inquiry has found icare engaged in unreasonable conduct with its delayed handling of wage declaration adjustments used to calculate workers’ compensation premiums.

The NSW Ombudsman investigated after six employers complained between October 2024 and February last year that delays caused financial hardship and icare “was not taking their concerns sufficiently into account”.

The delays resulted in two employers receiving invoices for large premium adjustments for multiple prior years and being given payment plans of just three months to clear the debts.

In some instances, late payment fees were also applied to hindsight adjustments when they were not paid within one month of the invoice being issued.

Delays between employer submission of actual wage statements and the issuing of “hindsight adjustments” ranged from 12 months to more than three years, with invoice totals from $7594 to $579,188.

The Ombudsman report, released last week, recommends icare make a formal apology to complainants, offer flexible payment plans and provide ongoing compliance reporting and audits over the next 12 months.

An icare spokesperson says the state insurer has accepted and is implementing the recommendations.

“The factors that caused the delays to occur between 2017 and 2023 have been rectified,” the spokesperson told insuranceNEWS.com.au. “We remain committed to delivering sustainable and affordable quality insurance and care for the people of NSW.”

Workers’ compensation premium calculations involve employers providing an estimate of policy period wages, with details of actual wages paid submitted within four months of policy expiry. Employers may receive a refund or pay extra based on hindsight adjustments.

Legislative and other changes in 2017 led to icare taking on about 55,000 legacy hindsight adjustments “inherited” from scheme agents, the Ombudsman says.

“At this time, icare’s Guidewire Policy Centre software, which was rolled out based on its capability to do so, was not configured to process hindsight adjustments automatically,” the report says.

“Administrative oversights, including the erroneous closure of files, further worsened delays.”

The Ombudsman says software fixes to enable automatic processing in straightforward cases were not implemented until 2023 and icare did not have measures until then to evaluate progress against the backlog.

“Although icare has now identified and processed all outstanding actual wage declarations made for active policies between 2019 and 2024, it did not systematically address the backlog of unprocessed wage declarations until 2025, when it implemented a remediation plan to identify and process outstanding hindsight adjustments,” it says.

The report is here.