Fix It for Who? The Human Cost of NSW’s Workers Comp Reforms

Fix It for Who?

The Human Cost of NSW’s Workers Comp Reforms

On 9 May 2025, the NSW Government released a set of proposed reforms to overhaul the state's workers compensation scheme. They called it a fix. A long-overdue shake-up. A way to protect small business and save the system from collapse.

But before we rush to call this a solution —
Let’s stop and ask the only question that really matters: Fix it for who?

Because if you're one of the thousands of Australians with a psychological injury —
If your life has been derailed by trauma, addiction, or depression —
If you’ve already lost your career, your family, and your ability to function —

Then this reform doesn’t fix anything.

It finishes you off.

What’s Actually Changing?

The government’s proposed reforms — now before the Standing Committee on Law and Justice — are aimed squarely at tightening access to compensation.

Especially for psychological injury claims, which have surged 65% since 2021–22 and now top 11,000 claims per year.

Here are the key changes:

For Psychological Injuries:

  • Lump sum compensation and damages are only available if you reach 31% Whole Person Impairment (WPI) — up from 15%.

  • Weekly benefits will end after 130 weeks unless you hit that 31% threshold.

  • New “work pressure” injuries get only 8 weeks of treatment.

  • Claims must be lodged within 6 months of a Court or Commission finding.

  • Stricter definitions and new employer defences will make it easier to reject claims.

System-Wide Changes:

  • The right to choose your own medical assessor is gone. A government-appointed medical expert will determine your impairment if there's disagreement.

  • You’ll need mandatory legal advice just to be assessed.

  • The existing test for treatment will shift to a tougher “reasonable and necessary” standard, likely leading to more denials.

On the surface, this looks like fiscal discipline.
But look deeper — and you’ll see it’s something much darker.

What These Changes Really Mean

Let me tell you what 22%–28% WPI looks like in real life.
Because that’s where most of our clients sit.
They will now miss out entirely under the proposed reforms.

These are people who:

  • Take methamphetamines for breakfast just to function

  • Need ketamine to rest at night (they don’t sleep)

  • Spend hours at the pokies because it’s the only time their mind shuts off

  • Are living in the dark, can’t leave the house, and are monitored by WorkCover investigators parked out front

One of our clients goes through four 8-balls of speed (14 grams) a week — on top of prescribed medication, six coffees a day, and a pack of cigarettes.

They are not doing this for fun. They are doing this because their nervous system is fried, their trauma is deep, and no one else is showing up to help them cope.

Another client is divorced, medically retired in their 40s, unable to see their kids due to a combination of medication, psychological instability, and court orders.

They have a $700,000 mortgage, no ability to work or earn an income, tens of thousands in medical and psych bills, and have been declared by several doctors that they are unfit for work, with no prospect of ever working again, without endangering other workers, customers, and/or themselves.

Others were police officers, prison guards, emergency services workers, and healthcare workers, who witnessed — or were forced to make — decisions that ended in trauma, injury, or death.

And now they’re being told:
“You’re not injured enough to qualify.”

A System Under Strain

Let’s be fair. The government is under pressure.

  • The scheme recorded a $3.8 billion deficit, growing by $1.8 billion last year alone.

  • Psychological claims are rising sharply.

  • Insurance premiums are surging, now the number one cost pressure for small businesses.

Business NSW, the peak body for employers, has strongly backed the reforms. Their CEO Daniel Hunter argues the scheme is being misused — that employees are using it to escalate workplace grievances or avoid performance management.

But even if a fraction of claims are questionable — and yes, that happens —
Do we throw out the safety net for the rest?

Because what’s being proposed isn’t balance. It’s brutal.

It’s saying:
“We can’t afford to support the broken, so we’ll just redefine who qualifies as broken.”

What Happens Next?

If passed, these changes will push thousands of injured Australians off a cliff.

  • After 2.5 years of reduced weekly benefits, many will fall back to Centrelink — just $26,000 a year.

  • NDIS eligibility? Maybe. But no guarantee.

  • Lump sum to pay down debt or secure the future? Gone.

  • Compensation for career loss? Gone.

  • Financial breathing room to survive and rebuild? Gone.

Instead, they’ll spiral further.
Into poverty, addiction, isolation.
Some will attempt to end their own lives.

And that’s the price we’re willing to pay… to save money?

If You’re Working Today — You Need to Hear This

If you're reading this and you're still working — especially in high-stress roles — this isn't someone else's problem.

The government just told you:
“We are no longer your safety net.”

So ask yourself — right now — what happens if it’s you next?

You must take control of your own safety net, because the one that was there for the last 100 years is no longer fit for purpose.

How to Protect Yourself:

  • Income Protection Insurance — pays you a monthly benefit if you can’t work.

  • Total & Permanent Disability (TPD) Insurance — gives you a lump sum if you can’t return to work due to injury or illness.

  • Trauma Cover — supports recovery from major medical events.

  • Financial Advice — helps you build resilience before things fall apart.

A System That Protects Some — By Abandoning Others

Let’s be clear:

Yes, NSW’s workers compensation system is under pressure.
Yes, costs are rising.
Yes, claims are increasing.

But before we say:
“It’s time to fix it” — we must ask:

Fix it for who?

For business?
For government?
Or for the vulnerable Australian — with shattered bodies, shattered minds, and shattered lives?

Because this isn’t a fix.
This is an economic decision wrapped in bureaucratic language — that will destroy real people.

And if you’re not one of them yet — you might be one day.

https://www.afr.com/politics/nsw-workers-comp-reform-to-cut-ptsd-claims-hitting-emergency-services-20250415-p5lryf

https://www.afr.com/politics/nsw-plans-workers-compo-cuts-for-psychological-injury-claims-20250305-p5lh5a

https://www.afr.com/policy/health-and-education/health-system-workers-comp-at-risk-in-pre-nsw-budget-warning-20250515-p5lzi4

https://www.nsw.gov.au/ministerial-releases/workers-compensation-reform-to-address-psychological-safety

https://www.news.com.au/national/nsw-act/politics/choice-is-clear-nsw-treasurers-line-in-the-sand-as-workers-reject-compo-reform/news-story/8ffccb927e9bc74b22a6f4a88211b5f7

https://www.theguardian.com/australia-news/2025/may/16/nsw-workers-compensation-overhaul-would-make-it-virtually-impossible-to-lodge-successful-claims-experts-warn

https://www.news.com.au/finance/work/at-work/nsw-government-defends-controversial-workers-compensation-reform/news-story/a94d5f825182c4eb4b421c821fc86ef9

Matthew McCabe