New South Wales is moving into the implementation phase of a multi‑year set of workers’ compensation reforms, with key provisions now in force and further measures scheduled to affect premium settings and impairment assessment across the scheme. On March 27, a group of amendments under the Workers' Compensation Legislation Amendment Act 2025 and the Workers' Compensation Legislation Amendment (Reform and Modernisation) Act 2026 commenced, affecting dispute resolution processes, information management, premium regulation, and psychiatric impairment assessment. The commencement follows passage of a broader reform package through the NSW Parliament in February 2026.
One set of reforms changes the Personal Injury Commission Act 2020 to allow the Personal Injury Commission to appoint a tutor to represent and support a person under legal incapacity where Commission proceedings directly or significantly affect that person. The term “person under legal incapacity” is aligned with the Civil Procedure Act 2005 and includes people under 18, involuntary or forensic patients under the Mental Health Act 2007, individuals under guardianship, and those who are unable to receive or communicate their wishes because of disability. The change is likely to affect how workers’ compensation disputes involving such parties are conducted and managed.
Additional amendments give the President of the Commission discretion to make orders restricting or prohibiting disclosure of certain information. These orders may cover all or part of a decision, the name or other identifying details of a person, and information in transcripts, filed documents, or recordings, and may apply to any party or witness. This introduces further parameters around access to, and use of, commission materials in claims handling and portfolio analysis.
The same proclamation activates amendments to the Workers' Compensation Act 1987 that constrain scheme‑level premium settings by the Nominal Insurer, operated by icare. From June 30, 2026, to June 30, 2028, icare must not lodge premium filings with the State Insurance Regulatory Authority (SIRA) that would increase the scheme’s target collection rate above the 2025-26 level. In effect, the legislation holds the average target collection rate steady for a two‑year period. The measure does not fix individual employer premiums. Employer charges may still change during the period in response to wage growth, changes in business activities or industry classifications, and claims experience. It will be necessary to distinguish between the regulated scheme target and employer‑specific rating factors when explaining premium movements to clients and internal stakeholders.
Another component of the March commencement establishes a review by the NSW Chief Psychiatrist into the Psychiatric Impairment Rating Scale (PIRS), the tool currently used to assess permanent psychiatric impairment in workers’ compensation claims. The review will consider whether PIRS is an appropriate tool for determining the degree of permanent impairment and will examine possible alternative approaches. The final report must be tabled in Parliament within 18 months of assent of the Reform and Modernisation Act. Depending on the findings, insurers may need to adjust claim assessment processes, benefit projections, and reserving practices for psychological injury claims.
The March commencement sits alongside reforms passed by the NSW Parliament in early February 2026, which followed a compromise proposal developed with crossbench MPs in the lower house in 2025. Those earlier measures include a legislated 18‑month restriction on average premium increases, retention of Whole Person Impairment thresholds agreed with crossbenchers, and a new “Return to Work” intensive program providing an additional year of medical benefits and income replacement for eligible workers. The legislation also gives the Treasurer power to lower WPI thresholds where considered to be in the public interest, replaces the Business Connect program, and revises terminology related to the “reasonable management action” defence. According to government modelling, without reform, premiums for employers with no claims history were projected to increase by at least 36% over three years.
NSW Treasurer Daniel Mookhey has characterised the package as a measure to put the workers’ compensation system on a more secure footing. “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,” Mookhey said.
Work Health and Safety Minister Sophie Cotsis linked the measures to early support and scheme viability. “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,” she said.
Minister for Customer Service and Digital Government Jihad Dib highlighted continuity of coverage. “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.
