Psychologically injured workers, who are close to catatonic, will have their support payments cut after two-and-half-years, in new laws proposed by NSW Labor, which the Liberal-National Coalition now agrees with.
Labor had been pushing the contentious Workers Compensation Legislation Amendment Bill 2025 for at least seven months, despite the widespread opposition from unions and the NSW Greens.
Unions NSW condemned the amended workers compensation bill, saying on December 11 that the new laws mean parliament is planning to start next year with “a major cut to support payments for workplace psychological injuries such as PTSD [Post-traumatic stress disorder]”. It looks set to proceed through parliament early next year.
“Despite repeated evidence that a WPI [Whole Person Impairment] of more than 21% means a worker has no capacity to work, the parliament looks set to raise the threshold for income support to 25%, before ratcheting up to 28 per cent by 2029,” Unions NSW said.
Unions NSW acting secretary Thomas Costa said the amendments have “taken a sledgehammer to the entitlements of traumatised and vulnerable workers”.
The proposed changes mean it will be harder for seriously injured essential workers to access the long-term mental healthcare and support they need.
The NSW chief psychiatrist will now be asked to develop a tool to measure the severity of psychological injuries.
“It is counter-intuitive to cut support while, at the same time, developing a new tool to diagnose the severity of injuries,” Costa said. “Why wouldn’t you introduce the new diagnostic tool and then reassess? We are thoroughly disappointed by this deal between the government and opposition, which forces traumatised workers to pay for the problems in the scheme.”
NSW Greens spokesperson Abigail Boyd also criticised the bipartisan bill: “This is not a compromise, it’s a capitulation. The Liberal Party’s failure to stand against the government’s morally vacuous plan to strip away the rights of the most seriously psychologically injured workers marks an end to one of the most shameful chapters in NSW legislative history.
“[New state Liberal Party leader Kellie] Sloane, alongside lower house independents, led by Alex Greenwich, have astonishingly worked with the government to take a sledgehammer to the rights of some of the most vulnerable people in our state, and people whom they claim to represent and care for.”
Boyd said the debate over the new bill was “laden with misinformation and political spin”. She added that Labor “has turned its back on” the organised labour movement.
The likely passage of the NSW workers compensation changes early next year follows months of debate due to the Greens opposition and the Liberals.
Labor had originally planned to cut regular compensation payments to workers after two-and-a-half years, unless they could prove a 31% “whole of person impairment”.
However, a parliamentary inquiry found that the WPI threshold would be impossible for many workers to meet, even those suffering serious psychological injuries.
Labor Treasurer Daniel Mookhey, aiming his remarks at employers, said on December 11 that businesses and community sector providers “will be spared significant increases to workers compensation premiums”.
“Without these reforms, premiums for employers facing no claims against them were expected to rise by at least 36 per cent over three years,” Mookhey said.