Call for ‘unsustainable’ workers’ compensation to be reformed

The RACGP has backed the need for workers’ compensation system reform, as proposed new laws are weighed up by politicians in New South Wales.
 
The number of psychological claims has doubled in NSW since 2018, with only around half of workers with psychological claims back at work within a year, compared to 95% for those with physical injuries.
 
In response, two bills to reform the state’s Work Health and Safety Act and workers’ compensation system are being discussed, with the State Government describing the current system as ‘unsustainable … and failing injured workers’.
 
The legislation proposes changes to liability and entitlements for psychological injuries, as well as improvements to the operation of the workers’ compensation scheme.
 
Workers’ compensation claims have increasingly featured in GP consultations, with a newsGP poll last year showing WorkCover at the top of a list of the greatest administration burdens in general practice.
 
RACGP NSW&ACT Chair Dr Rebekah Hoffman backed the move for systemic reform.

‘Too often, the workers’ compensation system can itself contribute to increased psychosocial distress due to delays and dispute,’ she said.
 
‘Patients struggling to navigate complex or frustrating claims processes may experience anxiety, stress, and hopelessness.
 
‘This often results in patients needing longer consults with their GP as they become frustrated or disheartened by their experiences with the system. That’s down to the psychological cost of dealing with the compensation process itself.’
 
Guidelines endorsed by the RACGP on diagnosing and managing work-related mental health conditions suggest an earlier return to work can aid recovery in some circumstances.
 
‘Where a patient has a serious psychological illness that prevents them from working, it may be appropriate for them to stop working and focus on recovery,’ Dr Hoffman said.
 
‘But even where symptoms have a significant impact on a patient, early employer-supported return to work can be something that helps them feel more capable, independent, and empowered.
 
‘Returning to work can be vital for a patient’s recovery and ongoing good health. The longer someone is off work, the less chance they have of ever returning, and too often waiting for “recovery” actually delays a patient’s recovery.’
 
Dr Hoffman also said that longer consults for complex conditions and mental health care do not have enough Medicare funding to give patients access to bulk billing, and reiterated RACGP calls for increasing funding for longer consultations by 40% and mental health consults by 25%.
 
‘A clearer, more navigable system will benefit patients, GPs, and workplaces,’ she said.
 
‘The proposed changes in NSW should make navigating our workers’ compensation system easier for patients and their GPs.’
 
The Workers Compensation Legislation Amendment Bill 2025 passed the state’s Lower House earlier this month before it was referred by the Upper House to the Public Accountability and Works Committee for another inquiry.
 
The Government has also pledged a $344 million Workplace Mental Health package, including funding for injury prevention, more than 50 new inspector positions, as well as extra support for workplace safety compliance and for people navigating claims.

The committee commenced its hearings on the reforms on Tuesday.
 
It follows legislation overhauls in other states such as Victoria, South Australia and Queensland.
 
Log in below to join the conversation.

mental health NSW Government psychosocial injuries WorkCover workers compensation