WorkCover Excess Buy-Out For Family Businesses: A strategic Guide For Stability And Protection
- Future Accounting
- Nov 20
- 5 min read
Written by: Chris Mulcahy
Strengthen your business resilience through the WorkCover Excess Buy-Out
Running a family business, whether a farm, workshop, vineyard, café, transport operation or professional practice means balancing people, pressure, and planning.
When someone in your team is injured, the financial and administrative impact can be immediate. That’s why many business owners are now exploring the WorkCover Excess Buy-Out for Family Businesses as a practical way to stabilise costs, reduce stress and build long-term resilience.
While this guide focuses on Victoria, other states have similar employer-excess arrangements, and the principles apply broadly across Australia.
Below, we break down what the buy-out option is, why it matters, and why it’s particularly valuable for family enterprises - especially farming and seasonal industries.
Understanding WorkCover excess for family businesses
Under standard Victorian WorkCover rules, when a worker suffers an injury and their claim is accepted, the business is responsible for the employer excess, which includes:
The first 10 working days of weekly compensation
The first portion of medical and related expenses
$824 for 2023–24
$876 for 2025–26 (indexed annually)
It makes no difference whether the worker is:
A long-term employee
A short-term casual
A shearer, picker, or seasonal worker
A new apprentice
A teenage family member helping with jobs
If the claim is accepted, the employer must pay the excess.
This is where the WorkCover Excess Buy-Out for Family Businesses becomes a powerful and strategic alternative.
How the WorkCover excess buy-out option works
The buy-out option allows family businesses to remove the excess entirely by paying an additional ~10% premium at renewal.
In simple terms:
Pay a small extra premium → avoid all excess payments on accepted claims.
With the buy-out in place, your business:
Does not pay the first 10 days of weekly compensation
Does not pay the medical excess
Experiences fewer delays in claims
Reduces administrative burden
Provides faster support to injured workers
Gains predictable annual costs
This is one of the simplest and most effective ways to reduce risk in a family business.
If you want clarity around whether the buy-out is right for your business, book a meeting with our team and we’ll step you through your options.
Why the WorkCover Excess Buy-Out for Family Businesses is a smart choice
1. Predictable costs support confident planning
Family businesses must plan around cash flow, family commitments, seasonal cycles and long-term strategy. Removing unpredictable excess payments improves financial stability.
2. Reduces pressure on the family members running the business
Owners often wear many hats. When an injury occurs, the admin burden can be significant. The buy-out simplifies this.
3. Protects intergenerational wealth
Unexpected claim costs can affect succession planning, reinvestment, asset purchases and growth strategies. The buy-out adds a layer of protection.
4. Creates confidence during busy periods
When cost exposure is predictable, decision-making is clearer and stress is reduced.
If you want help analysing whether the buy-out would protect your future plans, reach out — we can model your numbers.
Why seasonal industries and farming benefit most
While the buy-out option benefits all employers, it’s especially valuable for:
Farms and stations
Orchards and vineyards
Contracting businesses
Trades and workshops
Hospitality and tourism
Transport companies
Manufacturing and fabrication
Any business using seasonal or casual labour
1. Short-term workers still trigger full WorkCover obligations
Even one or two days of work can trigger a claim that requires the employer to pay the excess.
The buy-out eliminates this immediate financial hit.
2. Seasonal work increases injury risk
Peak periods bring pressure, long days, physical demands and inexperienced staff — a mix that raises the risk of injuries.
3. Seasonal cash flow needs stability
Excess payments can hit during the tightest months. The buy-out turns this into a fixed annual cost.
4. Admin is hardest during busy seasons
Removing the excess obligation during shearing, harvest or peak trade periods reduces stress and ensures claims move quickly.
5. Bad luck years happen
Weather, labour shortages, machinery breakdowns and fatigue can lead to multiple claims in a single season. The buy-out shields the business financially when this happens.
If your business depends on seasonal labour, this option is worth a serious look. Book an appointment with us and we’ll help you weigh the benefits.
Practical examples of the buy-out option in action
Family farm using shearers
Premium: $28,000
Buy-out cost: $2,800
Injury excess: $1,000–$1,500
One injury almost covers the buy-out. Two exceed it.
Orchard using seasonal pickers
Premium: $20,000
Buy-out: $2,000
Multiple minor claims → $3,000 excess without buy-out
Clear evidence the buy-out saves money.
Family office or service business with low injury risk
Premium: $12,000
Buy-out: $1,200
Zero claims in five years
May not be necessary — but worth reviewing annually.
Want help determining whether the buy-out option is cost-effective for your business? Let’s talk.
How WorkCover excess applies in other states
While this guidance is based on Victoria:
NSW applies an employer excess (commonly the first week of weekly compensation), though not through a 10% buy-out model
SA has employer-excess obligations but uses a different structure, with waiver provisions for early reporting
Most states have some form of early employer responsibility
Victoria’s buy-out option is one of the clearest and most flexible.
If you operate across multiple states, ask us for a tailored breakdown.
Helping your family business preserve, protect and prosper
Every family business wants to safeguard its people, its cash flow, and its future.
The WorkCover Excess Buy-Out for Family Businesses is a simple but powerful tool that can:
Preserve stability
Protect cash reserves
Reduce admin stress
Help your business prosper with confidence
If you'd like personalised advice, contact us and we’ll walk you through how the buy-out option fits into your broader business strategy.
Special considerations for apprentices and under-18 family members
Many family businesses — especially farms, trades, hospitality and retail — involve apprentices and young workers, including teenage family members helping during busy periods. It’s important to know how WorkCover applies in these situations.
Under-18s and apprentices have full WorkCover protection
If they’re injured, the employer must pay the full excess unless the buy-out option is in place.
Young workers face higher injury risk
Fatigue, inexperience and unfamiliar tasks make injury more likely.
Family members are not exempt
If they do work that contributes to the business, they are considered workers under WorkCover.
Apprenticeships bring added responsibility
Early career years carry higher injury risk. The buy-out protects the business financially during this learning period.
Businesses with young workers benefit strongly from the buy-out
It eliminates excess payments, speeds claims and reduces admin during peak periods.
If you employ apprentices or young family members, speak with us about how to protect your business and your workforce.
Ready to take control of your WorkCover costs?
Book an appointment with our team and let us help you determine whether the WorkCover Excess Buy-Out for Family Businesses is the right choice for your situation.
We’ll review your numbers, explain your options and support you in building a stronger, safer and more resilient family business.
Disclaimer
This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.
Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder
Liability limited by a scheme approved under professional standards legislation.
