NSW Government Warns of Financial Impact from Stall in Workers' Compensation Reform

The New South Wales government has issued a stark warning regarding potential financial consequences if proposed reforms to workplace mental injury laws are delayed further.

As an upper house committee gathers to discuss these changes, Treasurer Daniel Mookhey highlights the urgency, stating that setbacks will result in increased premiums.

Mookhey emphasised the strain on service providers within the current system, which is struggling to support vulnerable citizens. He underscored the importance of enacting reforms promptly to prevent workplace psychological injuries rather than merely addressing them post-occurrence.

The government's position is that every day reforms are delayed costs the private sector’s workers’ compensation scheme $6 million. Inaction could also lead to 340,000 businesses experiencing a 36% rise in premiums over the next three years, regardless of their claims history.

An upcoming public hearing by the Public Accountability and Works Committee will host representatives from the insurance sector, NSW state insurer icare, and the State Insurance Regulatory Authority's CEO, Mandy Young. This forum aims to delve deeper into the contested reforms.

However, critics argue against changes to mental injury benefit assessments, fearing they would disqualify most workers with psychological impairments from receiving support. While the reform bill passed in the lower house, it has encountered barriers in the upper chamber, triggering a referral for a comprehensive committee inquiry.

The State Insurance Regulatory Authority (SIRA) notes the vital role of the nominal insurer scheme in the NSW workers’ compensation program, which mainly serves private sector employees. This scheme constituted about 65% of reported claims in the year ending June 2024, according to SIRA’s submission to the committee.

Published:Tuesday, 29th Jul 2025
Source: Paige Estritori

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