Interest on Claim – related Benefits and Employer Accounts Policy 21-040 | Effective Date: December 16, 2016

Purpose

The purpose of this policy is to communicate:

• WorkSafeNB’s authority for determining when to pay or charge interest on claim-related benefits and employer accounts; and
• The rate of interest that is applied in each situation.

Scope

This policy applies to:

• Employers;
• Workers or survivors;
• Service providers; and
• WorkSafeNB staff.

Statements

1.0 General

The WC Act provides WorkSafeNB with the legislated authority to charge and pay interest in specific situations related to:

• Employer accounts (section 2.0);
• Workers’ benefits (section 3.0); and
• Service provider accounts (section 4.0).

2.0 Employer Accounts

WorkSafeNB charges interest when an employer`s account is overdue. There are specific situations where:

• Interest will not be charged; or
• The interest charged may be canceled.

In cases of fraud or abuse WorkSafeNB seeks interest in judgments pursued in court.

WorkSafeNB applies an annual rate of return on employer accounts under the Safety Achievement Financial Incentive System (SAFIS).

2.1 Overdue Accounts

WorkSafeNB charges interest on overdue employer accounts. The regular rate of interest is applied and is billed monthly from the date the balance became due for payment. Overdue accounts can be from:

• Assessments paid annually;
• Adjusted assessments and surcharges due to underestimating payroll; or
• SAFIS surcharges.

WorkSafeNB does not charge interest on overdue employer accounts when:

• MAAP employers’ accounts are overdue. Instead the employers are charged one percent of their overdue balance as a late payment penalty;
• An employer account is in judgment, judgment papers are completed but have not yet been signed, or the account has been transferred to long-term receivables;
• The interest in question is less than $1;
• The employer is in receivership or bankruptcy; or
• Other exceptional situations occur subject to the approval of the appropriate Vice-President.

WorkSafeNB may cancel interest charges on overdue employer accounts when:

• The payment date of a received cheque falls on a weekend or public holiday;
• WorkSafeNB staff receives payment prior to the date the account becomes overdue;
• Transfer of credits from associated accounts were made following the overdue date;
• Delays occur in processing judgments or write-offs at month-end;
• WorkSafeNB errors occur;
• Out-of-business accounts have an interest balance only;
• The employer is in financial hardship. This situation requires a WorkSafeNB review of the employer’s financial situation; or
• Other exceptional situations occur requiring consideration and approval of the appropriate Vice-President.

2.2 Underestimated or Underreported Assessments

In cases where assessments are underestimated or underreported, WorkSafeNB collects the additional portion of the assessment. While no interest is charged, surcharges may apply. For more information, see Policy 23-200 Assessable Earnings.

In cases where employers commit fraud or abuse, WorkSafeNB seeks interest in judgments pursued in court. For more information, see Policy 46-300 Protecting the Integrity of the System.

2.3 Accounts with Surplus Balance

WorkSafeNB does not pay interest on employers’ accounts with a surplus balance.

2.4 SAFIS

WorkSafeNB applies a rate of return on funds held in the refund stabilization account for employers participating in the SAFIS program. This rate of return is the annual rate of return on WorkSafeNB’s investment portfolio, whether positive or negative. For more information, see Policy 23-610 Safety Achievement Financial Incentive System (SAFIS).

3.0 Benefits

When a worker or survivor is entitled to an annuity benefit, a rate of return is applied.

There is no interest:

• Paid on outstanding benefits; or
• Charged on overpayments, unless there is a case of fraud or abuse.

3.1 Annuities

When a worker or survivor is entitled to an annuity, WorkSafeNB applies a rate of return on the amount set aside for the purchase of an annuity.

The rate of return is the quarterly rate of return, whether positive or negative, of the investment portfolio of the Pension Fund. For more information see Policy 34-200 Investment Goals and Objectives.

For more information on Annuity Benefits, see Policy 21-206 Funding the Purchase of an  Annuity.

3.2 Outstanding Benefits

WorkSafeNB does not pay interest on a worker’s outstanding benefits, including medical aid.

3.3 Overpayments

WorkSafeNB does not charge interest on the amounts due as a result of overpayments, except in cases of fraud and abuse. For more information, see Policy 21-290 Recovery of Claim-related Overpayments.

In cases where workers or survivors commit fraud or abuse resulting in overpayments, including overpayments relating to medical aid benefits, WorkSafeNB seeks interest in judgments pursued in court. For more information, see Policy 46-300 Protecting the Integrity of the System.

4.0 Service Provider Account

WorkSafeNB does not pay interest on service providers’ accounts with an outstanding balance.

In cases where service providers commit fraud or abuse resulting in overpayments, including overpayments relating to medical aid benefits, WorkSafeNB seeks interest in judgments pursued in court. For more information, see Policy 46-300 Protecting the Integrity of the System.