Reforms to repair the NSW workers compensation system have passed state parliament. 

Businesses and community sector providers will be spared significant increases to their workers compensation premiums as a result, and workers will have a much stronger pathway to recovery.

The resolution was based on a breakthrough compromise put forward by crossbench members in the lower house last year.

It won endorsement in the Legislative Assembly on Wednesday after passing the Legislative Council on Tuesday night. It includes:

• A legislated 18-month restriction on average premium increases.
• Retaining the Whole Person Impairment (WPI) thresholds moved by Lower House crossbenchers.
• A new “Return to Work” intensive program that provides an additional year of medical benefits and income replacement.
• New powers enabling the Treasurer to lower the WPI threshold, if in the public interest.
• A replacement program to Business Connect.
• Changes to terminology surrounding the reasonable management action defence.

It is the most significant reform to workers compensation in a generation. It stabilises the system and puts it on a path to financial stability. It prioritises prevention and improves return to work rates.

Without the reform, premiums for employers facing no claims against them were expected to rise by at least 36 per cent over three years.

The result follows extensive consultation over the past year with business and unions, as well as the community and not-for-profit sector.

Treasurer Daniel Mookhey said, “These reforms finally allow us to stabilise the workers compensation system and return it to a secure footing.

“The scheme has been failing injured workers, employers, the non-profit sector and taxpayers for too long. That has now come to an end.

“I want to acknowledge Business NSW and the state’s major business organisations, as well as NCOSS and charities and not-for-profits for their advocacy. I also thank the Labor caucus and the union movement for its engagement through many difficult but necessary conversations.”

Minister for Work Health and Safety Sophie Cotsis said, “These reforms ensure early support to injured workers, a road to recovery and return to work.

“It puts the scheme on the path to sustainability so that it can continue to care for injured workers and be affordable for business to fund. 

“The reforms will help small businesses and not-for-profits, especially in regional areas, retain staff and create jobs."

Minister for Customer Service and Digital Government, Jihad Dib said, “These changes are about protecting the workers compensation scheme for the long term, so it remains strong, fair and able to support the people who rely on it.

“Workers now have the certainty they need and the confidence to get on with their recovery and their working lives, knowing the system will be there when they need it.”