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The updated reforms to the NSW compensation scheme tabled yesterday (27 May) by the NSW government featured the scrapping of one of the many controversial proposals.
The NSW government has been mired in controversy since it initially proposed reforms to the NSW workers’ compensation scheme back in March.
The reforms sought to address rising costs, with the main policy proposals being to raise the “whole person impairment” (WPI) from 15 per cent to 31 per cent and to establish that workers must obtain court verification from the IRC that bullying, racial abuse, or sexual harassment occurred and caused psychological injury before getting compensation.
In their updated reforms tabled in Parliament yesterday, the latter of those key policies were seemingly scrapped, replaced with “an expedited eight-week claims assessment process for psychological injuries caused by bullying or harassment”.
“We are creating a modern system that will better protect workers from psychological injury and provide better help when they need it,” said Treasurer Daniel Mookhey, who has spearheaded the reforms.
“I want to ensure that future generations of workers across NSW have a workers compensation system they can rely on.”
The Workers Compensation Legislation Amendment Bill 2025 will still contain gradual increases to the WPI, rising to 25 per cent from October 2025 and greater than 30 per cent from 1 July 2026 for weekly payments for life.
According to the NSW Teachers Federation, just 27 claimants of the current 12,000 would reach the previously proposed 31 per cent impairment threshold.
Both Unions NSW and the NSW Teachers Federation took to the streets on Monday in protest of the reforms.
Speaking to the crowd at Martin Place on Monday, federation deputy president Amber Flohm said: “The fact is that the financial burden is being shifted from the Treasury to the injured worker.
“We know that when you increase the Whole Person Injury [threshold] from 15 per cent to 31 [per cent], you effectively shut down psychological injury claims for workers in this state.
“Instead of focusing on preventing injuries, the Treasury is focusing on preventing claims – and we cannot accept that.”
Shop, Distributive and Allied Employees Association NSW branch secretary-treasurer Bernie Smith alleged that their members who witnessed the Bondi Junction attack back in 2024 would be unable to access claims based on the reforms.
“Our members at Bondi Junction [Westfield] would be left behind by this legislation,” he said.
“They would not be able to successfully make a claim due to additional requirements about close connection to a traumatic event.”
RELATED TERMS
Compensation is a term used to describe a monetary payment made to a person in return for their services. Employees get pay in their places of employment. It includes income or earnings, commision, as well as any bonuses or benefits that are connected to the particular employee's employment.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
