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NSW tables revised workers’ compensation reforms tightening psychological injury claims

The updated legislation scraps court hurdles for mental injury claims to allow an eight-week assessment window.

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Overview

  • Treasurer Daniel Mookhey confirmed the Exposure Workers Compensation Bill will be introduced in parliament on Tuesday following union opposition to initial proposals.
  • A new “expedited” process will fast-track psychological injury claims related to bullying or harassment, promising decisions within eight weeks and partial payments during assessment.
  • The whole person impairment threshold for mental injuries will be phased from 15% to 25% in October 2025 and above 30% from July 2026, significantly reducing eligibility for long-term benefits.
  • The definition of vicarious trauma is broadened to include repeated exposure to others’ traumatic experiences and “excessive work demands” is added as a compensable cause.
  • The government earmarks A$344 million for workplace mental health measures, including more SafeWork NSW inspectors and expanded psychological support services.