Key changes to the Workers Compensation Legislation Amendment Bill
Workers who experience injury or illness in the workplace – including those requiring support with recovery and return to work – will receive additional assistance under new reforms passed by the NSW Parliament.
Earlier this month, the NSW Government’s Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025 (“Bill 2”) was passed, introducing further changes, particularly for workers with primary psychological injuries.
Bill 2 follows amendments passed in November last year and builds on the Government’s broader reform agenda. Key changes include:
- Preserving the 15% work injury damages (WID) threshold.
- Introduction of a new “Return to Work” intensive program.
- Increase to the Whole Person Impairment (WPI) threshold.
- Clarification of claim pathways.
What this means for insurers
The passing of Bill 2 also has significant impacts on insurers, including:
A legislated freeze on the Nominal Insurer’s insurance premium target collection rate for the 2026-27 and 2027-28 premium years.
Confirmation that the employer reasonable management action defence may be relied upon where it is the significant cause of a psychological injury.
Clarification that the new employer excess will apply to all claims made against policies issued or renewed with the Nominal Insurer from 4pm on 30 June 2026.
While the NSW Parliament is yet to confirm formal commencement dates for both reform bills, full implementation is expected by July this year.
JMD Ross will continue to monitor developments closely and provide updates as further detail becomes available. If you would like to discuss how these reforms may impact your organisation, please contact our team.
- John Duncan 0418 976 772 jgduncan@jmdross.com.au
- John Davaine 0413 610 523 jdavaine@jmdross.com.au
- Bhavesh Radiya 0414 247 055 bradiya@jmdross.com.au