09/02/2026
Time to read
2 Mins
The NSW Parliament has passed the Government’s Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025 (“Bill 2”). This follows the passing of a modified version of the Workers Compensation Legislation Amendment Bill 2025 in November last year. 

Key changes in the new Bill for workers who have a primary psychological injury are:

  • Preserving the work injury damages (WID) threshold (15%) for workers who have notified an injury prior to the start date.
  • Providing an additional return to work intensive 52 weeks of weekly payments for workers.
  • Increasing the whole person impairment (WPI) threshold for workers to receive weekly payments beyond 130 weeks to 25% commencing from 1 July 2026, and 28% from 1 July 2029.
  • Clarifying that a worker is prohibited from making an application to the Personal Injury Commission before the Industrial Relations Commission has determined whether conduct the subject of the claim is ‘relevant conduct’.

Other key changes in the Bill are:

  • A legislated freeze on the Nominal Insurer’s insurance premium target collection rate for the 2026-27 and 2027-28 premium years.
  • The employer reasonable management action defence may be relied on where it’s the significant cause of the psychological injury.
  • Clarifying that the new employer excess will apply to all claims made against a policy issued or renewed with the Nominal Insurer on or after 4pm on 30 June 2026.

The NSW Government will advise the start dates for both Bills. In the meantime, MBA will continue to monitor developments and communicate next steps as further detail becomes available.