Published: 07 February 2017
Author: Ross Inglis
If I am paid cash in hand, am I covered by WorkCover if injured?
Many people who are paid cash in hand while working and are then injured ask me if they are still covered by WorkCover.
The short answer is, yes. And that’s unequivocal.
WorkCover Victoria will accept your claim for income replacement and assistance with medical bills, regardless of the manner in which you have been paid for your work.
The mode of payment for work or remuneration is irrelevant to the Victorian Workplace Safety Act. If you are working under the direction of someone else, or are expected to turn up to work at a certain time, you are deemed to be employed. This is regardless of whether the work is full-time, part-time, or casual.
This type of cash in hand payment is widespread in certain industries, particularly in hospitality and food processing. From the employer’s perspective, it is often an illegal practice because it is in breach of the Superannuation Guarantee Act, and it enables employers to short change the WorkCover Authority on their premium payments. (An employer’s WorkCover insurance bill is partly calculated on the number of declared staff.)
However, even if this is true and your employer has no official record of your employment, you are still covered by WorkCover for any injuries you might sustain.
Undeclared income may be an issue
The only issue is this: many people who work for cash in hand do not then declare that income in their tax assessment. This sometimes makes them reluctant to formally submit an injury claim, because once the claim is made via a third party, it is possible it will be discovered by the tax office.
I have also encountered a reluctance to make a claim among some overseas students who are in Australia on a working visa, and I suspect it is because they may also be receiving other government benefits which they think may then be at risk should they declare their full income.
Whatever your circumstances may be, in order to claim your entitlement from WorkCover, you will need to calculate your average weekly per-injury earnings and make a declaration to that effect. WorkCover requires this calculation in order to determine the value of your weekly income replacement payments.
To claim or not to claim?
I have counselled clients who feel conflicted about whether to continue with a WorkCover claim because they are concerned about the possible implications of an official disclosure of their income.
If you are concerned about any knock on effects from making a claim, I would strongly counsel you proceed with your WorkCover claim, for the following reasons:
- Weekly benefits of compensation well exceed Centrelink benefits.
- Hospital ,medical and other expenses should be paid. Why should you pay and be out of pocket? (Note that Medicare or a private health insurer may object or seek to recover costs if the treatment claimed should be covered under the Workplace Injury Rehabilitation and Compensation Act 2013.)
- One cannot assume that your injury is minor. There may be long-term ramifications in relation to treatment (possible surgery) and employment.
- If you have a permanent injury you may be entitle to a lump sum, separate to your other statutory rights.
- And finally, if your injury was caused through employer negligence, you many have potentially very large common law claim.
So, regardless of whether you are paid in cash, or work as a sub-contractor, rest assured that in the unfortunate event of being injured while employed, you are eligible for benefits under WorkCover.