Background

In May 2025 the Labor Government released its Workers Compensation Legislation Amendment Bill 2025, in which sweeping changes to the NSW workers compensation scheme were proposed - click here to read our article from that time.

The Bill, together with a second Bill called the Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025, was referred to a Parliamentary Committee who over the following months conducted three separate days of public hearings.

On 3 November 2025 the Committee released its 162-page report, which contained 14 recommendations – click here to read our article on that report.

The original Bill then returned for debate in the Legislative Council on 13 November 2025. The Council debated the Bill throughout the night, with the Bill eventually being passed, with amendments, at 5:30am on 14 November 2025.

What Amendments Have Been Agreed?

The Bill as passed by the Legislative Council on 14 November 2025 contains a number of significant amendments to the NSW workers compensation legislation, including:

• Updated definitions of compensable psychological injuries, with objective tests applicable for bullying, excessive work demands, racial harassment and sexual harassment.
• If an insurer disputes a claim for any of the above (which is described in the Bill as ‘relevant conduct’), the worker must apply to the Industrial Relations Commission for a determination.
• Clearer definitions around ‘reasonable management action’ and amendments to Section 11A.
• There is to be only one ‘principal assessment’ of WPI made by an approved medical assessor, rather than workers and insurers obtaining their own individual assessments.
• A worker can obtain another principal assessment only if their level of WPI is likely to have increased by 10% WPI or more.
• Section 39A amended so that the maximum duration of weekly payments for psychological injuries is 130 weeks (2.5 years) unless the worker is assessed at 21% WPI or more.
• The test for medical and treatment expenses changed from ‘reasonably necessary’ to a higher threshold of ‘reasonable and necessary’.
• Section 59A amended to change the period of time that medical expenses for psychological injuries are paid for.
• A lump sum amount payable in respect of a death benefit can be negotiated where there is a legitimate basis for a liability dispute.
• The much-publicised proposed amendments to increase the threshold for permanent impairment and work injury damages for psychological injuries from 15% WPI to 31% WPI were not passed. This means that those thresholds remain at 15% WPI.

What’s Next?

The Bill is not yet law. The amended Bill has been returned to the Legislative Assembly and needs to be passed there.

The Legislative Assembly next sits on Tuesday, 18 November 2025.

If the Bill passes the Legislative Assembly, it then requires assent before it becomes law.

Should that occur, we anticipate that many of the changes will have a delayed implementation date, and new Regulations and Guidelines will be required.

We will continue to keep you updated as the Bill progresses through the legislative process.

In the meantime, should you have any questions regarding the proposed legislative changes, and what they may mean for you, please reach out to one of our workers compensation specialist Partners.