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In June 2012 the Government introduced changes to the Workers Compensation Scheme in NSW.

The changes deliver significant new benefits for workers and improvements for employers by making benefit calculations fairer for all workers. The reforms are focused on encouraging and assisting early return to work and providing better financial support for seriously injured workers.

The Workers Compensation Legislation Amendment Bill 2012 amends the workers Compensation Act 1987 and other Acts with respect to the reform of the NSW Workers Compensation Scheme.

The reforms were passed by Parliament on June 22, 2012 and assented on June 27, 2012 making it law.

Principles behind the reforms include:

  • Enhance NSW workplace safety by preventing and reducing incidents and fatalities
  • Contribute to economic and jobs growth by ensuring that premiums are comparable
  • with other States and there are optimal insurance arrangements
  • Promote recovery and the health benefits of returning to work
  • Guarantee long-term medical and financial support for seriously injured workers
  • Support less seriously injured workers to recover and regain financial independence
  • Reduce the high regulatory burden and make it simple for injured workers, employers
  • and service providers to navigate the system
  • Strongly discourage payments, treatments and services that do not contribute to
  • recovery and return to work

Research has shown that getting injured workers back to work early is an important part of their recovery. Early return to work can reduce the impact on a worker and their family. In most cases, workers do not need to be 100% recovered to return to work. Assisting early, safe and durable return to work is a key intent of the reforms.

The new laws change the way workers compensation benefit claims are assessed and paid and the changes affect all new and existing workers compensation claims.

Amendments which have already commenced include:

  • New threshold for payment of lump sum compensation for physical injuries of greater than 10% whole person impairment.
  • Introduction of S.322A – specifying one assessment only of degree of permanent impairment
  • Compensation for Pain and suffering (section 67) has been abolished
  • Journey claims will only be accepted if a “real and substantial connection between the employment and the accident” is established – i.e. worker is deemed to be “on duty” at time of accident.
  • No compensation for heart attack or stroke injury unless the nature of employment gave rise to a significantly greater risk of the worker suffering the injury than had the worker not been in employment of that nature.
  • The definition of injury relating to ‘Disease’ claims has been revised to “a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor”.
  • Psychological injury resulting from ‘Nervous Shock’ claims can now only be made by a worker and eliminates any claims from spouses, children close relatives or witnesses (unless they are an employee) i.e. damages for nervous shock injury to non-workers has been abolished.


Benefits for new claims are now based more closely on real earning prior to the injury incorporating overtime and shift allowances in the initial 52 weeks of weekly payments.

  • Benefits cover medical and related expenses for up to 12 months after the injured worker ceases to be entitled to weekly payments (or 12 months after the injured worker made the claim if weekly benefits are not received).
  • For most injured workers, weekly payments are limited to five years from the date of the claim (or when retirement age is reached, if that is sooner – at which stage the injured worker may receive Commonwealth benefits.
  • Injured workers will receive up to 95% of pre-injury earnings for the first 13 weeks of a claim.
  • Benefits in weeks 14 – 130 will be made up of 95% of pre-injury average earning if the injured worker returns to work for at least 15 hours per week, otherwise the injured worker will receive up to 80%.
  • After 130 weeks, if the injured worker has the capacity to work but in not working at least 15 hours a week and earning at least $155 per week, then the benefits will cease. If the injured worker is working at least 15 hours per week and earning at least $155, or has no capacity to work, the benefits will continue.

Seriously Injured Workers

The Act defines a seriously injured worker as having greater than 30% whole person impairment. A seriously injured worker is exempt from the five year limit on weekly payments and from the 12 month limit on medical and related expenses.


Changes to weekly benefits payments as prescribed under the Amendment Bill will occur in three stages:

  • New claims lodged from October 1, 2012 will be calculated using the new weekly benefits
  • Existing claims prior to October 1, 2012 will continue to receive the current rates of benefits until they transition to the new rates effective from January 1, 2013.
  • Existing claims which have been assessed as having a 30% Whole Person
  • Impairment, or greater, will be paid at the transitional rate effective September 17, 2012.

If you are making a claim on or after 1 October 2012, new arrangements to Workers Compensation may apply.

Please note: Workers Compensation changes do not apply to all workers – excluded groups are police officers, paramedics, fire-fighters, coal miners and workers who make dust disease claims.

The information contained herein is to give a general overview. Visit the WorkCover NSW website to access Workers Compensation Issues Papers, Parliamentary Inquiry, Final Bills, Fact sheets and brochures.

For more information contact your insurer or call WorkCover NSW on 13 10 50.

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