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NSW Government Releases Draft for Workers’ Compensation Overhaul

The proposed reforms aim to address rising psychological injury claims and system costs, sparking union and expert concerns over access and fairness.

Labor has unveiled plans for sweeping reform to workers compensation scheme in NSW. Carpenters. NewsWire / John Appleyard
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Overview

  • The NSW government has unveiled an Exposure Draft outlining sweeping changes to the workers’ compensation scheme, focusing on prevention and early intervention.
  • Psychological injury claims have doubled in six years, with the government citing this as a key factor in the system’s financial strain.
  • Proposed changes include raising the impairment threshold for psychological injuries from 15% to 30%, a move experts warn could block most workers from claiming damages.
  • Unions NSW and legal groups argue the reforms undermine Labor’s pre-election pledges, with unions calling for the abolition of self-insurer markets to reduce pressure on icare.
  • Consultation on the draft remains ongoing, with the government stating all options are still on the table and welcoming further feedback from stakeholders.