Workers' compensation reforms have passed the New South Wales Parliament, with legislators approving changes to premium settings and benefit arrangements for injured workers in the state scheme.
The reform package passed the Legislative Council on Feb. 3 and was endorsed by the Legislative Assembly the following day. It follows a compromise proposal developed with lower house crossbench members in 2025 and alters several scheme parameters affecting employers, workers, and insurers. A key element is a legislated 18‑month restriction on average workers' compensation premium increases. According to government projections, premiums for employers with no claims history were otherwise expected to rise by at least 36% over three years.
The legislation also:
The government has presented the reforms as a response to concerns raised by business groups, unions, and community sector organisations about scheme performance, benefit structures, and premium pressure.
Treasurer Daniel Mookhey said the reforms are intended to address scheme performance and funding settings. “These reforms finally allow us to stabilise the workers' compensation system and return it to a secure footing. The scheme has been failing injured workers, employers, the non-profit sector, and taxpayers for too long. That has now come to an end. I want to acknowledge Business NSW and the state’s major business organisations, as well as NCOSS and charities and not-for-profits for their advocacy. I also thank the Labor caucus and the union movement for its engagement through many difficult but necessary conversations,” Mookhey said.
Minister for Work Health and Safety Sophie Cotsis said the changes are directed at support and RTW arrangements. “These reforms ensure early support to injured workers, a road to recovery, and return to work. It puts the scheme on the path to sustainability so that it can continue to care for injured workers and be affordable for business to fund. The reforms will help small businesses and not-for-profits, especially in regional areas, retain staff and create jobs,” Cotsis said.
Minister for Customer Service and Digital Government Jihad Dib referred to the long‑term operation of the scheme. “These changes are about protecting the workers' compensation scheme for the long term, so it remains strong, fair, and able to support the people who rely on it. Workers now have the certainty they need and the confidence to get on with their recovery and their working lives, knowing the system will be there when they need it,” Dib said.
The State Insurance Regulatory Authority (SIRA), which regulates NSW workers' compensation and other personal injury schemes, noted that it has been preparing for the reform program since the first amendment bill was introduced. “Since the introduction of the first Workers' Compensation Legislation Amendment Bill last year, SIRA has been working to prepare for the impacts of the legislation. SIRA will continue to work with stakeholders to progress implementation of the reform,” the regulator said. For insurers, self‑insurers, and scheme agents, the changes are expected to require adjustments to claims management practices, RTW planning, benefit durations, and pricing assumptions as the new RTW program and impairment settings commence.
In addition to the parliamentary reforms, SIRA is carrying out several related initiatives in the NSW personal injury schemes. An independent Strategic Review of Health Provider Regulation has commenced, covering providers operating in workers' compensation and compulsory third-party (CTP) motor accident schemes. The review is aligned with SIRA’s stated regulatory priorities and is examining the role of health providers in recovery, RTW outcomes, and scheme costs.
Targeted consultation with industry stakeholders began in January 2026, alongside a public consultation process through the NSW government’s Have Your Say platform. A discussion paper sets out current regulatory issues and possible options, with feedback open from Jan. 15 to Feb. 20. SIRA is also reviewing the Certificate of Capacity/Certificate of Fitness used in the workers' compensation and CTP schemes. That review is looking at how certificate content and format can improve the quality of information exchanged between insurers, employers, treating practitioners, and injured people, and how it may support RTW planning and recovery pathways.
SIRA has also initiated a medical practitioner efficacy research project and is in the process of engaging a research partner. The project will examine the role and challenges faced by medical practitioners, particularly general practitioners, in the NSW personal injury schemes, with the aim of producing recommendations to guide future policy settings. Separately, SIRA has released revised draft guidelines for workplace return to work programs and a supporting document, “How to comply with the Guidelines for workplace RTW programs.” All NSW employers are required to have a RTW program that explains how they will support and manage workers with a work‑related injury or illness. The draft guidelines and supporting material outline employer obligations and set out expectations for RTW program design and implementation. Stakeholders, including insurers, brokers, employers, and provider groups, can provide input by completing a survey or making a submission via Have Your Say between Feb. 2 and Feb. 26. Feedback from this process will be considered before the guidelines are finalised and applied across the scheme.
