Workers compensation reforms finally passed the NSW Parliament earlier this month, after a prolonged deadlock period.
At the centre of the reforms is an 18-month restriction on average premium increases, designed to shield employers from sharp cost spikes whilehile broader structural changes take effect.
The most contentious element, tighter settings for long-tail psychological injury claims, was softened from the government’s earlier proposal. Under the final model, the Whole Person Impairment (WPI) threshold for workers with primary psychological injuries to receive weekly payments beyond 130 weeks will rise to 25% from 1 July 2026, lift again overtime, and reach 28% from 1 July 2029.
Last year, ahead of the Bill’s consideration in the Legislative Council, NIBA met with a number of crossbench members, including the Hon. Rod Roberts MLC. These discussions focused on the need to protect injured workers, provide certainty for businesses, and secure the future of workers’ compensation in NSW.
NIBA also appeared before the NSW Legislative Council’s Public Accountability and Works Committee to provide evidence as part of the Committee’s inquiry into the Workers Compensation Legislation Amendment Bill 2025. NIBA noted the scheme’s deteriorating financial position, raising concerns about the long-term stability of the scheme and its ability to meet future claims obligations.
While acknowledging the need for reform within the scheme, NIBA told the Committee that the proposed legislative changes were unlikely to resolve the underlying financial and structural pressures facing the system. Instead, NIBA encouraged the government to consider reforms to strengthen the governance and oversight of the scheme.