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The NSW government has declared its battle to tighten access to workers compensation is over, after a core element of its workers comp bill was defeated in parliament.
Workers comp bill raised bar for psychological injury eligibility
Workers compensation is currently available to people suffering from psychological injury, such as PTSD, anxiety and depression, provided they meet the scheme's definition of worker or deemed worker, and work is a significant contributing factor to the injury. (Please see Workers' compensation for psychological injuries, Safe Work Australia.)
In NSW, psychological injuries are covered under the Workers Compensation Act 1987.
For six months the government tried to get a bill passed that was designed to lower the cost of the scheme by raising the "whole person impairment" threshold. The most contentious aspect was to make it far more difficult for people suffering psychological injuries from work to get lifetime payments.
The government's bill raised the bar used to determine eligibility for psychological injury, from 15 per cent impairment to 31 per cent. (Please see Calls to improve amendments to NSW Workers Compensation Bill.)
Other changes included cutting off workers from regular compensation payments after two and a half years, unless they could prove a whole-person impairment (WPI) of at least 31 per cent.
Workers comp bill heavily opposed by experts
The workers comp bill met strident opposition from medical experts, psychiatrists, unions and legal experts, including the experienced personal injury lawyers at Stacks Law Firm.
Some predicted more suicides, and that the higher threshold would make it almost impossible to make a claim for workplace psychological injury. (Please see Workers Compensation Legislation Amendment Bill 2025 and Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025 - Report November 2025, Parliament of NSW Legislative Council, 3 November 2025.)
A Legislative Council committee investigated the impact such an increase in the threshold would have and found it was "blatantly unacceptable" and carried a risk of self-harm and suicide. (Please see Media Release - Committee Tables Workers Compensation Report, Parliament of NSW Legislative Council, 3 November 2025.)
Workers comp bill would be devastating for psychologically injured workers
The increased threshold would have been impossible to meet except in the most extreme cases.
Only those who were so psychologically impaired that they were unable to function in society or care for themselves could have qualified under the government's planned changes.
It would have had a devastating impact on workers who suffer psychological injury resulting from workplace bullying, harassment, prejudice, unfair treatment or a traumatic experience.
It is already extremely hard to reach the 15 per cent threshold. Every person's reaction to workplace trauma is different, and damage to mental health can show up in many forms.
After a mammoth all-night debate in the Legislative Council, where the coalition, Greens, minor parties and independents opposed the bill, the government admitted it could not get it passed and premier Chris Minns conceded defeat. (Please see NSW government workers' comp changes defeated as premier declares fight is 'over', ABC News, 14 November 2025.)
Some parts of the legislation did pass and the bill was sent back to the lower house, where the government has to decide what to do with it after the increase to the threshold was defeated.
Seek legal advice because workers comp is always a battle
The government should rethink how to tackle any problems of cost of the workers compensation scheme, without it harming the workers who are suffering from what happened at their workplace.
Personal injury lawyers at Stacks are helping hundreds of people suffering from workplace injury or psychological harm. We see the pain and suffering they go through, the financial hardship and the impact it has on them and their loved ones.
It is always a battle with the workers compensation system to help them. The politicians should come out with us as we meet these badly injured workers to understand what is really going on.
If you need advice or assistance on workers compensation, please get in touch.
Justin Stack
Workers compensation
Stacks Law Firm
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
