The NSW Government has launched the first comprehensive review of the state's workers' compensation premium model in more than a decade. For the approximately 340,000 employers covered by the NSW Nominal Insurer Scheme, the review presents a rare and important opportunity to reshape how workers' compensation premiums are calculated from 2028 onwards.
The review seeks to improve premium transparency, affordability, predictability, return to work outcomes, and incentives for injury prevention. These are welcome objectives. However, many employers continue to question whether the current system fairly reflects workplace safety performance, effective injury management, and the factors businesses can realistically control.
At ABILITY GROUP, we are actively advocating on behalf of NSW employers to ensure that business concerns and real-world experiences are considered in this critical reform process.
Why This Review Matters
Workers' compensation premiums represent a high cost for businesses across every industry. While employers fully support providing injured workers with appropriate care and assistance, many believe the current premium framework can produce outcomes that do not accurately reflect an employer's safety record or commitment to injury management.
Businesses that invest heavily in workplace health and safety, staff training, early intervention strategies, and return to work programs often find themselves facing premium increases driven by circumstances outside their direct influence.
This review offers a valuable opportunity to address several long-standing concerns and create a fairer, more balanced system.
1. The Impact of Provisional Liability Claims
One of the most significant issues raised by employers relates to claims managed under provisional liability arrangements.
Under the current framework, claims costs can influence premium calculations while liability is still being assessed. In some cases, employers may experience premium impacts even when a claim is ultimately declined.
From a business perspective, this can create an unfair outcome where costs are effectively incurred despite the claim never being formally accepted.
For small and medium-sized employers, even temporary claims costs can affect future premium calculations, business planning, and budgeting decisions.
ABILITY GROUP believes premium calculations should be based on final claim outcomes. Employers should only be financially impacted by claims that have been formally accepted and substantiated under the scheme.
Such a change would improve confidence, transparency, and fairness across the workers compensation system.
2. Accountability Around Medical Certification
Effective claims management relies on timely and accurate medical information.
However, employers frequently encounter situations where injured workers fail to provide the medical certificates required to support ongoing claim management and rehabilitation planning.
Without current medical evidence, employers are significantly limited in their ability to:
- Develop meaningful return to work plans
- Identify and offer suitable duties
- Monitor recovery progress
- Facilitate rehabilitation and workplace support
Despite these challenges, claim-related costs can continue to accumulate and contribute to future premium increases.
A sustainable workers' compensation scheme requires accountability from all participants. Employers should not continue to bear premium consequences where essential medical documentation is not being provided.
3. Encouraging Stronger Return to Work Participation
Successful return to work outcomes depend on collaboration between employers, workers, insurers, rehabilitation providers, and treating practitioners.
Many employers, however, report ongoing challenges where workers:
- Fail to engage in return to work discussions
- Do not respond to communications
- Decline suitable duties without reasonable justification
- Delay participation in rehabilitation activities
When engagement breaks down, claims often remain open longer, recovery may be delayed, and costs continue to rise.
While the NSW review highlights the importance of improving return to work outcomes, employers argue that incentives alone may not deliver meaningful change.
A balanced system should encourage active participation from all stakeholders and ensure that employers who have suitable duties available are not unfairly disadvantaged when other parties fail to engage.
4. Improving Consistency in Work Capacity Assessments
Medical practitioners play a vital role in supporting recovery and determining a worker's capacity to safely participate in the workplace.
However, employers frequently express concerns about work capacity certifications that may be unnecessarily restrictive or inconsistent, particularly where meaningful suitable duties are available.
Extended periods away from work can:
- Increase claim duration
- Escalate compensation costs
- Delay recovery and rehabilitation outcomes
- Contribute to higher future premiums
Research consistently demonstrates that safe and appropriate workplace participation is often beneficial to recovery.
ABILITY GROUP supports greater consistency, transparency, and accountability in work capacity assessments to help ensure decisions remain evidence-based, recovery-focused, and aligned with best-practice injury management principles.
5. When One Claim Overshadows Years of Strong Performance
Perhaps the most common concern raised by employers is the disproportionate impact a single significant claim can have on future premium costs.
Many businesses operate for years without a workers compensation claim while investing heavily in:
- Work health and safety programs
- Staff education and training
- Injury prevention initiatives
- Early intervention strategies
- Effective return to work management
Yet one serious claim can result in substantial premium increases that continue across multiple policy periods.
This raises an important question: does a single claim truly reflect an employer's overall risk profile and long-term commitment to workplace safety?
A modern premium model should consider both recent claims experience and an employer's broader safety performance. Rewarding organisations that consistently demonstrate strong safety outcomes would create stronger incentives for ongoing investment in workplace health and wellbeing.
What Employers Should Be Watching
As the review progresses, employers should monitor proposed changes relating to:
- Premium calculation methodologies
- Experience rating models
- Claims cost allocation
- Return to work incentives
- Employer accountability and fairness measures
- Long-term scheme sustainability
The decisions made through this review will help shape workers compensation premiums and claims management practices for years to come.
Employers should take the opportunity to understand the proposed reforms and assess how any changes may affect their future workers compensation costs and obligations.
A More Balanced Future for NSW Employers
The workers compensation system must remain financially sustainable while continuing to provide appropriate support and protection for injured workers.
Equally important, however, is ensuring employers operate within a premium framework that is transparent, predictable, and reflective of factors they can genuinely influence.
The NSW Workers Compensation Premium Review represents a once-in-a-decade opportunity to modernise the system, strengthen confidence in the scheme, and create a fairer balance between supporting injured workers and recognising employer performance.
ABILITY GROUP remains committed to advocating for practical reforms that reward strong workplace safety outcomes, encourage accountability from all stakeholders, and deliver better return to work results for everyone involved.
How ABILITY GROUP Can Help
If your organisation is experiencing workers compensation challenges, rising premiums, complex claims management issues, or return to work concerns, ABILITY GROUP can help.
Our experienced consultants work with employers across Australia to strengthen compliance, improve injury management outcomes, reduce claim costs, and achieve more sustainable workers' compensation results.
Contact ABILITY GROUP today to discuss how we can support your organisation and help you navigate the changing workers' compensation landscape.
Further Information
Source: Insurance Business Australia
Title: NSW workers compensation premium model faces first review in a decade
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