A bi-partisan agreement has ushered in the anticipated changes to workers’ compensation in NSW, bringing a freeze on premiums and improved support for injured staff.
The NSW Government and Opposition worked together to pass the Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025, set to come into effect 30 June 2026.
Industry bodies say it will create a “fairer system for clubs and their workers” while easing rising cost pressures.
Escalating workers compensation premiums have been placing increasing strain on the financial sustainability of community clubs, which faced major increases in premiums over the next three years estimated to hit more than 30 per cent.
Stakeholders argued a sustainable scheme could facilitate predictable premiums that give businesses the confidence to invest and employ, while being fair for workers.
The reforms will provide managers greater protections from illegitimate compensation claims, and see the return of a revised Business Connect system.
“Business Connect was an important government-funded program which helped thousands of SMEs thrive,” says Business NSW CEO Daniel Hunter.
The AHA NSW commends the Amendment and the assurance it provides operators.
“The NSW Government’s workers compensation reforms are a welcome and necessary step toward restoring sustainability and affordability to the scheme,” CEO John Whelan told PubTIC.
“After years of escalating premiums and mounting pressure on employers, these changes provide much‑needed certainty for hospitality venues across the state, while also supporting improved return to work outcomes for employees.”
ClubsNSW similarly welcomed the progress for the hospitality industry.
“These reforms are an important step towards stabilising the system and ensuring clubs can continue to employ local staff, deliver community programs and reinvest back into the communities that they serve,” says ClubsNSW CEO Rebecca Riant.
“These changes strike a more appropriate balance between supporting injured workers and maintaining a workers compensation system that remains affordable for community clubs.”
The Amendment, outlined in December, passed in NSW Parliament this month. It was largely a result of continued lobbying and discussion on the need for improvement in the system.
Key changes affecting workers
An additional return to work intensive 52 weeks of weekly payments will be provided for workers.
The work injury damages (WID) threshold of 15 per cent will be preserved for workers who have notified an injury prior to the start date.
An increase to the whole person impairment (WPI) threshold, for workers to receive payments beyond 130 weeks to 25 per cent – commencing 1 July – and 28 per cent from 1 July 2029.
Changes affecting employers
Nominal Insurer’s premium target collection rates are legislated to be frozen for FY27 and FY28.
The employer defence of ‘reasonable management action’ can be used where it’s the significant cause of a psychological injury.
The Amendment has specified that workers cannot make applications to the Personal Injury Commission before the Industrial Relations Commission has determined whether the claim is based in ‘relevant conduct’.
Employers should note that a new excess will apply in claims made against a policy issued or renewed with their Nominal Insurer.
