The Queensland Government has increased the average WorkCover premium by 2% to 1.45% and announced it will also review the scheme.

Attorney-General Jarrod Bleijie says a parliamentary committee will conduct the five-year review a year before it was scheduled “in an open and transparent manner” so the community can have input.

The committee will report by February 28, 2013.

Queensland is the latest state to announce its workers’ compensation cover rate for 2012/13, after WA settled on a rate of 1.691% and SA on 2.75%.

Rates for other states for 2011/12 are NSW 1.68% and Victoria 1.338%.

The Queensland Commission of Audit’s interim report says WorkCover Queensland’s capital adequacy has been under pressure due to increased claims and volatile investment performance.

Although the WorkCover rate has risen from 1.15% of wages in 2009/10, the scheme’s break-even rate is 1.49%.

The commission says WorkCover’s profitability may be impacted by a 2010 court case that permits claims for future paid services provided by family members. It says this may increase the cost of future claims unless legislative change is made.

WorkCover meets its capital adequacy requirements if it includes a deferred tax asset in its books, but the commission notes the scheme will need to make an operating profit to use the tax benefit.

“The state may be required to commit additional funding and/or request WorkCover Queensland to increase contribution rates to restore its target level of solvency, especially if the operating position and investment returns deteriorate, and consequently the recoverability of the deferred tax asset is in doubt,” the report says.