Link to Changes

On Friday, 9 May 2025 the NSW Government released a Draft Workers Compensation Legislation Amendment Bill.

Key takeaways of the Draft Bill in its current form include:

• A worker cannot make a workers compensation claim for sexual harassment, racial harassment or bullying unless a tribunal, court or commission determines there was actual sexual harassment, racial harassment or bullying. It is only once that determination is made that a workers compensation claim can then be lodged.
• The threshold to claim permanent impairment and work injury damages for psychological injuries increased from 15% WPI to 31% WPI.
• Section 11A amended, with clearer definitions around ‘reasonable management action’.
• New ‘work pressure disorder’ provisions, applicable to workers who have suffered a ‘mental or psychiatric disorder’ where employment was the main contributing factor. In such instances, workers can make a claim for their employer to pay for reasonably necessary medical or related treatment for up to 8 weeks. Only one such claim can be made by a worker to the same employer.
• Section 39A amended so that the maximum duration of weekly payments for primary psychological injuries is 130 weeks unless the worker is assessed at 31% WPI or more.
• Section 59A amended so medical expenses for psychological injury can only be paid for a maximum of 182 weeks (3.5 years) unless the worker is assessed at 31% WPI or more.
• There will be one 'principal assessment' of WPI made by an approved 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 20% WPI or more.
• The lump sum amount payable in respect of a death benefit can be negotiated where there is a legitimate basis for a liability dispute.

Importantly, this is an Exposure Draft only. The Government has stated that it 'will not be adopting a final position on workers compensation reform until the community has had a chance to have its say. This Exposure Draft is intended to provide a starting point for the next phase of conversations...' To this end, the Standing Committee on Law and Justice has been instructed to undertake an Inquiry into the proposed changes, with a hearing set for 16 May 2025.

The Explanatory Note further indicates that final reforms will include an accompanying ‘IR Amendment Bill’ to 'establish a bullying and sexual harassment jurisdiction in the IRC with new powers to address bullying and harassment in the workplace before injuries occur'. The Bill is yet to be released.

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