NSW Workers’ Comp Reforms: A Fair Go or a Raw Deal?
The NSW government's proposed overhaul of the workers' compensation scheme has sparked controversy, with critics arguing it could severely limit claims for psychological injuries.
Mental Health Claims: The New Battleground
The NSW government’s proposed reforms to the workers’ compensation scheme have ignited a firestorm of criticism. Unions, legal experts, and mental health professionals argue that the changes would make it nearly impossible for workers to claim compensation for psychological injuries. Under the proposed legislation, injuries caused solely by work pressure would no longer be eligible, and victims of bullying or harassment would need to present their cases in court or a tribunal .The Guardian
Shane Butcher of the Australian Lawyers Alliance warns that the legislation would “drastically strip away” workers’ rights, particularly for those suffering psychological injuries. He emphasizes the lack of consultation and the potential for workers to be left without support .
The Numbers Game: Financial Pressures and Rising Claims
The government argues that reforms are necessary to prevent unsustainable costs. Psychological injury claims have doubled over six years, now constituting 12% of all claims but accounting for 38% of total costs. The average cost per psychological injury claim has soared to $288,542 in 2024-25.
Treasurer Daniel Mookhey highlights that the state’s main workers’ compensation scheme holds only 85 cents for every dollar needed to care for injured workers. Without reform, premiums for businesses are forecast to rise by 36% over the next three years .
Frontline Workers: Bearing the Brunt
Unions NSW Secretary Mark Morey criticizes the legislation as a regression in mental health protections, stating it would ensure “the vast majority of workers will never get the support they need.” He emphasizes that essential workers like nurses, teachers, and child protection workers would be disproportionately affected .
Amber Flohm of the NSW Teachers Federation points out that teachers often experience vicarious trauma and burnout, and the proposed changes would leave them without necessary support .
Visualizing the Impact
| Metric | 2019-20 | 2024-25 |
|---|---|---|
| Average Psychological Injury Claim Cost | $146,000 | $288,542 |
| Psychological Claims as % of Total Claims | 6% | 12% |
| Psychological Claims as % of Total Cost | 19% | 38% |
Source: NSW Government Ministerial Statement
The Debate Continues
While the government emphasizes financial sustainability, critics argue that the reforms prioritize budget concerns over workers’ mental health. The proposed changes have sparked a broader conversation about how to balance fiscal responsibility with adequate support for psychological injuries in the workplace.
As the inquiry into the proposed legislation continues, stakeholders from various sectors are voicing their concerns, urging the government to consider the human impact of these reforms.
