By Tim Concannon -
Snapshot
- Recent reforms, most of which commenced on 1 July 2026, dramatically impact the way workers compensation operates in New South Wales.
- The reforms include major changes to psychological injury claims, permanent impairment assessments, legal funding and dispute pathways.
- This article outlines and explains the key aspects of the reforms, and highlights the areas that remain uncertain and are likely to be contentious.
It is critical for practitioners who advise clients on workers compensation to quickly familiarise themselves with recent reforms, the majority of which commenced on 1 July 2026. The key parts of these reforms are the Workers Compensation Legislation Amendment Act 2025, the Workers Compensation Legislation Amendment (Reform And Modernisation) Act 2026 and the Workers Compensation Legislation Amendment Regulation 2026 (‘Amendment Regulation’). Together, they significantly change the complexion of the Workers Compensation Act 1987 (NSW) (‘1987 Act’), Workplace Injury Management and Workers Compensation Act 1998 (NSW) and the Workers Compensation Regulation 2016 (NSW) (‘Regulation’) and associated legislation.
Whilst the focus has been on the reforms addressing the alleged upsurge in psychological injury claims, there are many other provisions of the reforms which fundamentally alter existing procedures in workers compensation. These, notably, include a single method of ‘principal’ assessment of whole person impairment and a new gateway for legal funding through the Independent Review Office (‘IRO’). Regrettably, most of the legislative package has been passed without consultation with the legal profession. Consequently, there are considerable uncertainties associated with many aspects of the reforms, particularly in relation to the assessment of whole person impairment during the ‘interim period’ envisioned under new provisions of the 1987 Act inserted by the Amendment Regulation over the next 12 to 18 months.
