‘Blatantly unacceptable’: Committee rejects NSW plan to cut off psychologically injured workers

The Committee tabled its report into the Workers Compensation Legislation Amendment Bill 2025 and the provisions of the Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025. The committee’s findings acknowledge the need for reform but reject the government’s method of achieving financial sustainability.

Committee Chair, Abigail Boyd MLC, stated that while “Stakeholders furiously agree that we must reform the workers compensation scheme,” the government’s decision to address financial issues by “cutting off compensation payments to psychologically injured workers with a degree of permanent impairment between 21 to 30 per cent” was indefensible.

“[L]eaving injured workers with serious mental health issues without supports carries a risk of self-harm and death by suicide. This is blatantly unacceptable,” Boyd commented.

The committee has unanimously recommended that the NSW Government withdraw the proposal to lift the degree of permanent impairment thresholds to 31 per cent, which would effectively terminate payments for this vulnerable group of workers.

The report puts forward a suite of recommendations aimed at improving the scheme without harming injured workers. A crucial, unanimous recommendation calls for the establishment of a formalised injured workers advisory committee. This committee would mandate consultation between the advisory body, icare (Insurance & Care NSW), and SIRA (State Insurance Regulatory Authority) regarding the operation and reform of the workers compensation system.

Boyd stated that the report’s measures “acknowledge the harmful impacts of the bills on injured workers, while recommending a range of measures to improve the workers compensation system without cutting off vulnerable injured workers.”

She concluded by expressing deep gratitude to the injured workers who contributed their experiences and perspectives to the inquiry, noting their evidence “has profoundly shaped the findings and recommendations we have made.”

Unions NSW Secretary Mark Morey argued that the report’s findings support the body’s long-held position. “[P]eople with impairment levels between 21 and 31 per cent need the full support of the scheme,” Morey stated.

“Raising the threshold would undermine the scheme by disqualifying the very people it was set up to support. This approach cannot be justified and the Government must take a different path forward,” Morey asserted.

Instead of cutting support for injured workers, the unions are calling for the government to find savings by clamping down on the “adversarial approach” taken by insurance companies.

Morey also called for the government to drop proposals by the Opposition and others that would make it harder for workers injured through sexual harassment or bullying to access the scheme. “We need a system that recognises injury and gets workers back to work as soon as it is safe to do so,” he concluded.

The Workers Compensation Legislation Amendment Bill 2025 is set to proceed to debate in the Upper House, where the committee’s findings are expected to heavily influence the proceedings.