Urgent action is needed to reform the NSW workers’ compensation system because the current scheme is placing immense strain on both employers and employees.

That’s the view of the state’s peak business body, Business NSW, which is looking forward to ensuring psychological workers’ compensation claims don’t lead to an unsustainable workers compensation system where business carries the cost.

The NSW Government announcement on proposed reforms to the way psychological claims are dealt with in the workers’ compensation scheme is a welcome one and Business NSW looks forward to working with the government on these reforms.

Business NSW members say workers’ compensation is one of the top policy areas that require attention from government.

“Many employers with perfect safety records have been seeing huge increases in their workers compensation premiums,” Business NSW CEO Daniel Hunter said.

“Without significant changes the weight of the scheme will crush businesses and leave workers needlessly suffering.

“We look forward to formal consultation with the NSW Government to ensure that the scheme is sustainable.”

While details are limited, NSW Treasurer Daniel Mookhey has talked about: changing the definition of psychological injury; aligning whole-person-impairment thresholds to interstate standards; and giving the NSW Industrial Relation Commission a bullying and harassment jurisdiction to triage matters before a compensation claim can be pursued.

The NSW Government also says that without reform, premiums for businesses facing no claims against them are forecast to rise by 36 per cent over the three years to 2027-28 which is simply not sustainable for any business.

“Many employers have shared stories of immense frustration, with injured workers left waiting for months without resolution and businesses facing skyrocketing premiums as a result of systemic inefficiencies.

“These real-world stories not only illustrate the deep flaws within the scheme but also highlight the urgent need for reform to protect both businesses and their employees.”

Claims involving a psychological component generally result in 20 weeks off work compared to six weeks off for non-psychological claims.

“Member businesses have told us more than half of all workers with psychological injuries never return to their employer.”

While the total number of workers compensation claims have remained steady, psychological injury claims have blown out by 65% between 2021-22 and 2023-24, according to the State Insurance Regulatory Authority (SIRA).

There were 11,464 psychological injury claims in 2023-24, with those claims taking longer to process and being more complex and costly than other types of workplace injury.

About Business NSW

Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826. We represent almost 50,000 businesses.

MEDIA CONTACT: BEN PIKE – 0429 993 822