As an employer, you are often required to purchase Work Injury Compensation Insurance (a.k.a. Workmen Compensation Insurance). Do you know what benefits are covered under this insurance policy?
Most workmen compensation insurance will pay claim according to the Work Injury Compensation Act.
The Work Injury Compensation Act lets employees claim for 3 things:
- Medical leave wages
- Medical expenses
- Lump sum compensation for permanent incapacity or death.
But there are limits to each type of compensation.
What you can claim
Under the Work Injury Compensation Act (WICA), you can claim for the following types of compensation benefits:
- Medical leave wages – for days which your workers were issued with medical leave due to the work injury or disease.
- Medical expenses – including your workers’ hospital bills, medication and other charges, due to the work injury.
- Lump sum compensation – for permanent incapacity or death.
Medical leave wages
Medical leave wages are payable only for working days covered by doctor-granted MC or hospitalisation leave. It is not payable for non-working days (e.g. rest days and public holidays).
WICA entitles your worker to medical leave wages according to the following rates and limits:
| For this amount of outpatient medical leave (MC) | Or this amount of hospitalisation leave | Your medical leave wages are calculated based on |
| Up to 14 days | Up to 60 days | Your full average monthly earnings |
| 15th day onwards, up to 1 year from the accident | 61st day onwards, up to 1 year from the accident | 2/3 of your average monthly earnings |
Medical leave wages:
- Are calculated based on the worker’s average monthly earnings (AME). AME is computed based on the earnings over the past 12 months before the accident date. Generally, it includes overtime pay but excludes transport allowances and reimbursement.
- Must be paid by you as an employer no later than the worker’s usual payday.
If an injured worker has taken 10 days of outpatient medical leave and 71 days of hospitalisation leave, his medical leave wages will be calculated as follows:
- For the 10 days of outpatient medical leave and the first 60 days of hospitalisation leave, it is calculated based on his full AME.
- For the remaining 11 days of hospitalisation leave, it is calculated based on two-thirds of his AME.
Medical expenses
You as an employer is required to pay for medical expenses related to a work accident up to the maximum limit, which is $36,000 or 1 year from the date of the accident, whichever comes first.
Examples of eligible medical expenses include:
- Medical consultation fees
- Ward charges
- Treatment fees
- Medical report fees
- Emergency medical transport charges (e.g. ambulance)
- Physiotherapy
- Occupational and speech therapy
- Cost of medicine
- Artificial limbs
- Surgical appliances
Note:
- In general, expenses for Traditional Chinese Medicine (TCM) are not eligible.
- If the medical bills exceed the maximum limit claimable under WICA, the worker can consider filing a civil suit instead.
Lump sum compensation
Under WICA, the worker or the family can claim a lump sum in the event of permanent incapacity or death.
Permanent incapacity
| When a claim is payable | When an injury or illness has a permanent effect on an employee’s ability to work |
| Who receives the compensation | Injured employee |
| How compensation is calculated | Amount payable = Employee’s average monthly earnings x age multiplying factor x % permanent incapacity |
| Minimum compensation | $88,000 x (% permanent incapacity) |
| Maximum compensation | $262,000 x (% permanent incapacity) |
Note:
- Permanent incapacity (% PI) is based on a doctor’s assessment after the medical condition stabilises. It is based on this assessment guide.
- If the doctor awards 100% PI, an additional 25% will be added on top of the compensation amount.
- A notice of assessment (NOA) will be issued to notify all parties involved of the lump sum compensation.
Death
| When a claim is payable | When an injury causes death |
| Who receives the compensation | Family or dependants of employee |
| How compensation is calculated | Amount payable = Employee’s average monthly earnings x age multiplying factor |
| Minimum compensation | $69,000 |
| Maximum compensation | $204,000 |
WICA versus common law
The employees injured at work can either claim under the Work Injury Compensation Act or common law, but not both. There are key differences between the two approaches as well as deadlines for making and withdrawing claims.
Differences between WICA and common law
The main differences between making a WICA claim and filing a civil suit under common law are as follows:
| Question | WICA | Common law |
| Who does the worker make the claim with? | Make the claim with MOM.
The claim will be decided by Assistant Commissioners (Work Injury) from MOM. |
Make the claim with either the States Court or the High Court.
The claim will be decided by the judges from the court. |
| Does the worker need a lawyer? | No.
It is optional to engage a lawyer as it is not required to complete the claim process. MOM will guide you through the process. However, such guidance and information are not intended as legal advice. |
Yes.
The worker needs a lawyer and have to pay his or her legal fees. |
| How much compensation will the worker get? | Amount of compensation is based on a formula and has set limits. | No limits on compensation amount, but you need to prove damages before the court.
The insurer will typically impose a $10,000,000 limit in the insurance policy |
| Does the worker need proof to support my claims? | The worker needs to prove that the injury or disease was due to work. But they don’t need to prove fault or negligence on anyone’s part. | The worker needs to prove that the employer or a third party was at fault. |
| Can the worker claim under both WICA and Common Law? | No. | No. |
Deadlines for withdrawing a claim or suit
The worker has up to 1 year from the accident to decide whether he or she wants to make a claim under WICA or under common law.
Withdrawing a civil suit to file a WICA claim
If the worker is pursuing a civil suit against the employer and wants to withdraw it to file a WICA claim, he or she needs to make the claim within 1 year from the date of the accident or diagnosis of illness.
Withdrawing a WICA claim to file a civil suit
If the worker wants to withdraw the WICA claim, he or she can do so at any time before MOM issues the notice of assessment (NOA).
Only the worker, or the legal representative, can notify MOM of the decision to withdraw a claim.
Once the notice of assessment has been issued, the claim can be withdrawn:
- Within 14 days from the date of service on the NOA, if there are no disputes.
- Within 28 days from the date of service on the NOA, if there are disputes.
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When accidents happen at work, it is just right that the employee is provided with compensation. This is very helpful especially in paying for their medical needs. There are certain things to follow and it’s a great help too to be guided by legal experts in processing it.