Injured workers who haven't had their entitlements properly reviewed since the reforms may be missing out.
The NSW workers compensation changes introduced under the Workers Compensation Amendment Act 2023 (NSW) represent the most significant overhaul of the system in decades. They were phased in through 2024 and 2025 — meaning many workers injured before the reforms were fully in place may be unaware of how their entitlements have changed.
What Prompted the Reforms
Pressure had been building for years.
NSW workers compensation is governed primarily by the Workers Compensation Act 1987 (NSW) — a framework that attracted sustained criticism for creating cliff-edge entitlement cut-offs that left seriously injured workers without income support after a fixed period, regardless of their ongoing incapacity.
That 260-week limit was the sharpest edge of that cliff.
Long-running advocacy from injured worker groups, parliamentary scrutiny, and a statutory review process combined to produce the Workers Compensation Amendment Act 2023 — a package of reforms addressing the most contentious elements of the system.
SIRA — the State Insurance Regulatory Authority — oversees the NSW workers compensation scheme and publishes current information on entitlements and reform implementation.
Biggest Change — the 260-Week Cliff
Under the old system, most injured workers lost their entitlement to weekly compensation after 260 weeks — roughly five years from injury. The only way to continue receiving weekly benefits beyond that point was to have a whole person impairment (WPI) of 20% or more.
That threshold was brutal in practice.
Workers with significant but sub-20% impairments — people genuinely unable to return to their pre-injury work — had their income support simply cut off. No transition, no taper, no safety net. Just an end date.
The 2023 reforms substantially modified this cliff. Workers with ongoing incapacity now have improved access to extended entitlements beyond the old 260-week mark — with the changes intended to ensure that genuine incapacity, not an arbitrary calendar threshold, determines entitlement.
Exactly how the extended entitlements apply in individual cases depends on the nature and degree of incapacity, the worker's circumstances, and insurer assessments. Getting specialist advice is essential where a worker is approaching or has passed the historical 260-week mark.
How Weekly Benefits Are Calculated
Benefits aren't paid at a flat rate. They reduce over time.
For the first 13 weeks after injury, a totally incapacitated worker receives 95% of their pre-injury average weekly earnings (PIAWE). That drops to 80% of PIAWE between weeks 14 and 130, with further reductions after that based on incapacity level and return-to-work engagement.
Pre-injury average weekly earnings — PIAWE — is the foundation of the calculation.
Calculated as the average weekly earnings in the 52 weeks before injury (or 13 weeks if that's higher), PIAWE captures base salary, regular overtime, penalties, and allowances that formed part of ordinary earnings. Not every payment counts — disputes about the correct PIAWE figure are common.
Weekly benefits are also capped at a maximum weekly compensation amount, which SIRA indexes and updates. Workers should check current SIRA rates, as the maximum changes regularly.
Medical and Rehabilitation Entitlements
Treatment costs don't stop being necessary just because weekly benefits change.
Entitlement periods were extended under the reforms — where previously medical, hospital, and rehabilitation expenses were time-limited for many categories of worker, the amendments improved long-term access to treatment for workers with ongoing conditions.
Entitlements cover reasonable and necessary expenses for treatment by approved providers, hospital treatment, surgery, physiotherapy, occupational therapy, and workplace rehabilitation services. Psychological treatment entitlements are also part of the picture for workers with work-related psychological conditions.
Return to Work — Stronger Obligations on Both Sides
Return to work is not optional.
Employers have long had RTW obligations — the reforms strengthened what those look like in practice. Employers must make suitable work available where it exists, develop return-to-work plans, and engage with the worker and the insurer through the rehabilitation process.
Workers also have participation obligations.
Unreasonable failure to engage with return-to-work planning, attend medical assessments, or cooperate with rehabilitation can affect a worker's entitlements. The system is designed around rehabilitation and re-engagement with work, not passive income support.
SIRA's oversight of employer return-to-work compliance was also strengthened as part of the reforms — employers who consistently fail to meet their obligations face regulatory scrutiny.
Psychological Injury — a Separate Set of Rules
Physical and psychological injuries are treated differently under NSW workers compensation.
Workers with primary psychological injuries face distinct provisions — particularly around WPI assessment, the role of pre-existing conditions, and how incapacity is established — that differ significantly from the physical injury pathway. Specific measures addressing psychological injury claims were included in the 2023 reforms, though this remains one of the more technically complex areas of the system.
The distinction matters practically.
A worker whose injury is primarily psychological — stress, bullying, anxiety arising from workplace conditions — follows a different pathway for assessment and entitlement than a worker with a physical injury. The pre-existing condition rules can be particularly significant. Getting the characterisation right from the beginning affects everything downstream.
Disputing Decisions — the Personal Injury Commission
Insurers make decisions. Those decisions aren't always right.
Established under the Personal Injury Commission Act 2020, the Personal Injury Commission (PIC) replaced the Workers Compensation Commission as the primary dispute resolution body for NSW workers compensation.
Disputes about liability, medical assessments, weekly benefit amounts, work capacity decisions, and whole person impairment can all go to the PIC.
Before escalating to the PIC, a worker can request an internal review of an insurer's decision. Many disputes are resolved at that point. Where they're not, the PIC provides a structured pathway to independent resolution.
Work capacity decisions deserve particular attention.
Insurers are required to periodically reassess a worker's current work capacity and adjust benefits accordingly. Workers who disagree with a work capacity decision have a right to dispute it — and many decisions are successfully challenged where the insurer hasn't adequately considered medical evidence or the worker's actual employment options.
What Workers Should Do After a Workplace Injury
Timing matters from the first day.
Notify the employer of the injury as soon as possible — delay in notification can complicate the claim. Get a certificate of capacity from a treating doctor before lodging a claim. Lodge the claim with the employer's insurer — in NSW this is usually icare, though some employers self-insure or use specialist insurers.
Engage genuinely with return-to-work planning from the outset. Keep records of all medical appointments, treatment costs, prescriptions, and time away from work. If the insurer disputes any part of the claim or makes a decision that seems wrong, seek legal or independent advice early.
Engagement is rewarded.
What Employers Need to Know
Workplace injuries aren't just a worker's problem.
Employers must notify their insurer — usually icare — of any workplace injury within the required timeframes. Failure to report promptly creates complications and potential penalties. Suitable work must be available where it genuinely exists.
Developing a return-to-work plan with the worker and the nominated treating doctor — and actually following through on it — is a legal obligation, not a box-ticking exercise. Plans must be realistic, documented, and revisited as the worker's capacity changes. Employers who resist providing suitable work, or who create barriers to a worker's return, risk regulatory action from SIRA and potential liability exposure.
Premium impacts are also real. Claims that result in significant payments affect future insurance premiums. Early engagement, genuine return-to-work support, and prompt claim management reduce both the human cost and the financial one.
Getting Legal Advice on Workers Compensation
NSW workers compensation law is technically complex, and the 2025 reforms have changed what many workers and employers thought they knew about the system. Checking current entitlements with a workers compensation lawyer — particularly for workers approaching the 260-week mark or with ongoing significant incapacity — is time well spent.
Frequently Asked Questions
Significant Changes — What Did the NSW Workers Compensation Reforms Introduce?
Significant reforms under the Workers Compensation Amendment Act 2023 (NSW) were phased in through 2024 and 2025. Key changes included modifications to the 260-week entitlement limit, extended access to medical expenses, improved death benefits, and strengthened return-to-work obligations. Workers with ongoing incapacity gained improved access to long-term benefits.
Under the Old System — What Was the 260-Week Cliff?
Under the old system, most injured workers lost their entitlement to weekly benefits after 260 weeks — approximately five years — unless they had a whole person impairment of 20% or more. The 2023 reforms significantly modified this cut-off, improving access to ongoing benefits for workers with continuing incapacity.
Weekly Benefits — How Are They Calculated Under NSW Workers Compensation?
Weekly benefits are calculated as a percentage of pre-injury average weekly earnings (PIAWE) — 95% for the first 13 weeks, reducing to 80% from weeks 14 to 130. After that, further reductions apply depending on incapacity and return-to-work progress. PIAWE is based on average weekly earnings in the 52 weeks before injury.
Disputes — Who Handles Workers Compensation Decisions in NSW?
Disputes about workers compensation decisions in NSW are handled by the Personal Injury Commission (PIC), established under the Personal Injury Commission Act 2020. The PIC deals with disputes about liability, medical assessments, weekly benefits, and work capacity decisions. Workers can request an internal review of insurer decisions before proceeding to the PIC.
Notify — What Should a Worker Do After a Workplace Injury in NSW?
Notify the employer as soon as possible. Obtain a certificate of capacity from a treating doctor. Lodge a workers compensation claim with the employer's insurer — usually icare in NSW. Engage with return-to-work planning, as failure to cooperate can affect entitlements. Keep records of medical costs and wages lost.
Disclaimer
This article is for general informational purposes only and does not constitute legal advice. NSW workers compensation law is subject to ongoing change. The information provided reflects the general position as at the date of writing — readers should check current SIRA guidance and seek independent legal advice for their specific situation.
