5 February 2026
Further reforms to the NSW workers compensation system passed in the NSW Parliament on 4 February.
Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025
The latest set of NSW Government reforms builds on changes already passed in 2025 and prioritises prevention and improving return to work rates, including:
- the agreed phased implementation of increases in Whole Person Impairment (WPI) thresholds for psychological injury
- a legislated restriction on average premium increases for the Nominal Insurer
- a new Return to Work intensive program for workers with a psychological injury, including an additional year of medical benefits and income replacement
- legislating the Chief Psychiatrist’s review to devise a new system for assessment of permanent impairment in psychological injury claims
- new powers enabling the Treasurer to lower the WPI threshold (if in the public interest)
- changes to terminology surrounding the reasonable management action defence.
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.
Updated 17 February 2026