By Wendy Yang -
An inquiry was formed on 9 May 2025 to inquire into and report on proposed amendments to liability and entitlements for psychological injury in New South Wales.
Reform proposals identified that workplace health and safety and workers compensation laws are neither preventing psychological injuries nor treating those with psychological injuries swiftly.
According to the NSW Government, at present, only 50 per cent of workers with a psychological injury are returning to work within a year compared to 95 per cent of workers with a physical injury.
President of the Law Society of NSW Jennifer Ball acknowledged the workers compensation system is “under pressure” and there is a need for change. However, she says that some of the “proposed changes risk stripping the rights of some of the community’s most vulnerable people, while imposing extra costs on business.”
“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,” she says.
One of the proposed amendments is to raise the ‘whole person impairment’ threshold. “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,” says Ball.
The Law Society will recommend a “compromise” at today’s hearing to help address concerns over sustainability of the scheme while preventing the exclusion of workers with serious psychological injuries from accessing the scheme.
“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,” says Ball.
The Law Society has urged the NSW Government to “pause” the progression of the Workers Compensation Legislation Amendment Bill 2025 to allow extensive consultation. “This will help minimise unintended consequences and ensure the proposed changes are based on strong evidence,” she says.
The Law Society’s Injury Compensation and Employment Law Committees contributed to the Law Society’s submission to the Inquiry.
“The Law Society is nevertheless grateful for the opportunity to appear at the Inquiry to reinforce our concerns with the several flaws in the Bill and to help identity how the Government can pursue a more sustainable system,” says Ball.
