NSW employers have seen their workers compensation premiums climb year after year — and without urgent reform, it’s about to get worse.
The Minns Government has put forward a plan to fix the state’s broken workers compensation system and stop further premium hikes. But the Bill is stalled in the NSW Upper House, where the Opposition, Greens and Mark Latham have joined forces to block it. Despite Treasury warnings about the cost of delay, the Opposition has not publicly released a workable alternative.
If the deadlock continues, employers could face another 24% rise in premiums over the next 2–3 years. NSW businesses already pay the highest workers compensation premiums in the country – around a third more than those in Victoria – regardless of whether they’ve ever lodged a claim.
What’s Driving the Cost Blowout
At the heart of the issue is the Whole Person Impairment (WPI) threshold, which is the measure that determines whether an injured worker qualifies for lump-sum compensation. This threshold is the single biggest driver of the scheme’s rising costs, particularly for psychological injury claims, which the system was never designed to handle.
The Government’s proposal would lift the WPI threshold from 15% to 31% to better align with national standards and target compensation to the most severely injured workers. The Opposition argues this change would make it too hard for injured workers to qualify. However, the Government has made clear it is willing to negotiate alternative figures and has already put options on the table.
The Opposition has not publicly released any alternative number. Most other administrative issues in the Bill appear able to be resolved but without agreement on this key cost driver, the Bill will not pass and premiums will continue to soar.
Why the System Is Failing
The system was never designed to manage the explosion in psychological and psychosocial injury claims, which have surged by more than 60% in recent years. It’s now broken for everyone. Injured workers are waiting longer for support, and employers are paying more each year, even when they have not received any claims or claims are unsubstantiated.
And it’s not just the public scheme. Whatever happens in the public system flows directly into private insurance, because the same laws apply to both.
CCF NSW’s Position
CCF NSW supports practical, balanced reform that protects genuinely injured workers while making the scheme financially sustainable.
A critical part of that is setting a higher bar for the assessment of psychological and psychosocial claims, which have become increasingly open to misuse and are now one of the scheme’s biggest cost pressures. The current framework makes it too easy for claims that don’t meet clinical or work-related thresholds to progress through the system driving up premiums for employers without improving outcomes for genuinely injured workers.
We’ve met with NSW Treasurer Daniel Mookhey and Minister for Work Health and Safety Sophie Cotsis to discuss the Government’s plan and ensure the voice of civil contractors is front and centre. We’ve also joined with Business NSW and other employer groups to call on the Opposition and crossbench to negotiate a deal in the Upper House before Parliament rises.
This should not be about politics. The system is broken, the fix is on the table, and business can’t afford more delay.
How You Can Help
We need members’ real-world experiences to strengthen our case. Here’s how you can get involved right now:
- Complete our one-question Workers Comp Survey – tell us how premium increases are affecting your business so we can provide real evidence to Government and the Opposition.
- 🗣️ Contact your local MP – urge them to support a deal before Parliament rises.
- 📞 Call CCF NSW – to discuss your experience and find out how to be part of our advocacy campaign.
- Listen to Kylie’s ABC Radio interview here.