31% WPI threshold would ‘exclude’ majority of workers from psych injury claims

The Law Society of NSW has labelled the newly proposed reforms to the NSW workers’ compensation scheme as both “rushed” and “unbalanced” – urging a pause for a broader consultation at today’s (16 May) inquiry.

Jennifer Ball, president of the Law Society of NSW, will push for a pause on the proposed reforms into the NSW workers’ compensation scheme at today’s inquiry.

The inquiry comes on the back of proposed reforms presented back in March, aiming to address rising costs, particularly related to psychological claims, by establishing a new bullying and harassment jurisdiction and potentially raising the “whole person impairment” (WPI) from 15 per cent to 31 per cent, according to Ball.

WPI is the used to establish the degree to which a worker has been psychologically affected or impaired from incidents or situations that have occurred in the workplace. These assessments can at times be difficult for workers, as it is based on a doctor’s opinion.

“It is not uncommon for there to be differences in medical opinions regarding a worker’s personal impairment,” said Sach Fernando, principal lawyer at Maxiom Injury Lawyers.

“This is particularly evident in psychological injury claims where assessments can be subjective and dependent on the injured worker’s presentation on the day of the assessment.”

This assessment, according to Fernando, can sometimes lead to an exacerbation of the psychological injuries sustained during their employment.

“From the moment their work cover claims are lodged, injured workers are subjected to scrutiny, and they have to prove the authenticity, the legitimacy, of their injuries in circumstances where they’ve injured themselves through no fault of their own,” said Fernando.

“That then becomes the predominant consideration when dealing with their psychologist. It’s no longer the pain from their injuries, it’s more the bureaucracy and being put through the wringer to prove themselves, essentially, in circumstances where they’ve done nothing wrong.”

Ball believes that increasing this impairment metric from 15 per cent to 31 per cent would consequently rule out a majority of workers from accessing claims for workplace psychological injuries.

“There’s no doubt the sustainability of the current scheme needs addressing, but that should not be at the cost of those people who have sustained serious and debilitating psychological injuries on the job,” said Ball.

“The proposed increase of the ‘whole person impairment’ (WPI) threshold to 31 per cent will conceivably exclude nearly all workers with psychological injury from making a claim. To reach 31 per cent WPI, a person would need to demonstrate they’re unable to live alone, care for dependants, or to function in society.”

According to Ball, a 21 per cent impairment is a compromise for both businesses and employees that would prevent “the effective shuttering of the scheme to workers with serious psychological injuries”.

“We believe that changing the WPI threshold to 21 per cent would ensure that many workers generally recognised by community standards as being severely impacted by mental ill-health would be able to make a claim, while easing upward pressure on workers’ compensation insurance premiums,” said Ball

“Following the present truncated and inadequate consultation process, the Law Society urges the NSW government to pause the progression of the Workers Compensation Legislation Amendment Bill 2025 at the conclusion of today’s hearing to permit broader consultation. This will help minimise unintended consequences and ensure the proposed changes are based on strong evidence.

“Many injured workers could face unacceptable delays and even an insurmountable barrier to compensation if, before being allowed to claim compensation, they are required to prove before a court, tribunal or commission that they have sustained psychological injury through sexual harassment, racial harassment or bullying. This will also create more resourcing pressure on the justice system.”