In July 2024, ABILITY GROUP Owners met with the Honorable Minister Sohie Cotsis. In advocating for clients, we identified the key workers compensation issues faced by NSW businesses & urgent need for NSW workers compensation reforms. During our meeting, we stressed the necessity of making changes to address the escalating frequency & severity (cost) of psychological claims. We are therefore pleased the NSW government has unveiled its intention to make groundbreaking reforms to address the escalating prevalence of workplace psychological injuries, marking a pivotal shift in how mental health challenges in the workplace are to be tackled.
A Paradigm Shift in Mental Health Safety
With workers’ compensation premiums set to surge without intervention, these reforms underscore the need for preventive measures and a modern approach tailored to today’s diverse and evolving work environments. The NSW government is advocating for a proactive approach by integrating workplace health and safety laws as a cornerstone of prevention. This transition represents a significant evolution in workplace mental health policies, ensuring that mental injuries are mitigated before they escalate.
Collaborative Model Development
To build a robust framework, the NSW government plans to collaborate with key stakeholders, including Business NSW and Unions NSW. The goal is to establish a new model under which bullying and harassment claims are first handled by the Industrial Relations Commission. This step is envisioned as an accessible initial recourse before compensation claims are considered.
Additionally, the model aims to:
Addressing Economic Challenges
The urgency of these reforms is underscored by the financial strain on the workers’ compensation system. Currently, the scheme holds only 85 cents in assets for every dollar needed to care for injured individuals. If trends continue, the next five years may witness as many as 80,000 psychological injury claims, intensifying economic pressures. Businesses without claims may face a 36% increase in premiums between 2024 and 2028, highlighting the importance of these preventive measures.
Modernising Workplace Safety Systems
As NSW Treasurer Daniel Mookhey aptly remarked, the existing workers’ compensation system was designed during an era of predominantly physical labor. To address contemporary workplace hazards, a holistic and adaptable system must be developed—one capable of managing psychological risks alongside traditional physical ones.
Partnering for Progress
ABILITY GROUP stands as a strong advocate for equitable workers compensation schemes, workplace mental health and psychological safety. These reforms align with our commitment to fostering healthy and productive workplaces. We look forward to contributing to these efforts and supporting businesses in navigating these changes successfully.
By championing preventive measures and modernised systems, NSW Government is planning reforms that we hope will result in an enhanced framework to society managing psychological injuries outside of workers compensation.
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Further information
Source: NSW Government
Title: Workers Compensation Ministerial Statement
Read Time: 5+ minutes
Source: insurancenews.com.au
Title: State flags workers’ comp overhaul amid surge in mental injuries
Read Time: 5 minutes