Login
iscover
The peak body for psychologists has revealed the NSW government’s approach to workers’ compensation reforms will diminish the psychological experiences of employees.
AAPi urges NSW government to rethink compensation reform
15 May 2025
•
9 minute read
The Australian Association of Psychologists (AAPi) is expressing concern towards the reform of the NSW compensation scheme as it will negatively impact psychologically injured workers and their “real experiences”.
Katrina Norris, AAPi director, said the proposed reforms seemed purely focused on cost-cutting.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
“We know prevention is key to reducing psychological injury claims. But it takes time for preventative measures to be implemented and to take effect, as evidenced in other states that have adopted a strong prevention approach,” she said.
“Prevention, however, will not reduce claims already in progress or resolve injuries from unsafe work practices, it also requires significant cultural change within organisations and rebuilding of trust with employees who have already been affected by unsafe work practices and unhealthy cultures.”
Business bodies such as Business NSW said the compensation scheme was currently being misused, and psychological injury claims had significantly increased.
The body said the scheme was being used to escalate workplace grievances and performance issues; however, Dr Norris said there were valid reasons behind the increase in psychological claims.
“The increase in claims comes from an increased awareness around psychological safety in the workplace and an improved understanding by employees of factors, processes, or behaviours that are unsafe or unhealthy,” Norris said.
“People no longer want to work in environments that cause them to be unwell and are expecting employers to take accountability when the workplace has caused them mental harm.”
Claims that involved mental harm were noted to be higher in costs due to prolonged exposure to causational factors resulting in gradual onset of psychological injury, prolonged experience of symptoms and injury before obtaining support and prolonged delays in treatment.
To combat these costs and satisfy all NSW workers and NSW business bodies, Norris suggested that all governments consider improving how psychological claims are managed, instead of looking to recuse claims through changing injury definitions or denying certain injury types.
Early intervention of psychological injury has been shown in other states to be effective in improving outcomes for injured workers, Norris said.
“The education of claims managers regarding psychological injury and how to utilise trauma-informed care models in their interactions with workers will improve relationships with injured workers and increase engagement in the rehabilitation and recovery process.”
“We hope the NSW government will seek guidance from psychologists who work in the occupational health space to inform its decisions on any proposed changes made to their workers’ compensation model. We urge this in the interests of improved outcomes for everyone involved, not just in the interests of reduced premiums for employers.”
This view towards the psychological impacts on workers was shared by Law Partners, who warned that the changes risked prioritising cost-cutting over care, particularly for those most in need of long-term mental health support.
Chantille Khoury, partner and practice group leader for workers' compensation at Law Partners, said the organisation supported reforms that reduced inefficiencies and better defined psychological injuries through medical expertise.
However, the firm insisted that any systemic changes should not compromise the psychological safety of NSW employees.
“Leading our NSW workers' compensation team, I’ve witnessed firsthand the devastating impact of psychological workplace injuries on our clients' lives. Often, these injuries result in prolonged absences from work, making even the thought and possibility of re-entry into the workforce a traumatic experience,” Khoury said.
“In my view, this issue is about protecting the workers of NSW, their rights, entitlements, and mental health. While rebalancing the system towards prevention is important, we must ensure it doesn't become a superficial, tokenistic or financially motivated exercise.”
“Any future changes to the workers' compensation system in NSW must be fit for purpose. Accounting for a range of psychological injuries alongside the traditional physical injuries the system was initially designed for. This is the only approach that will adequately protect the rights of workers in NSW.”
You need to be a member to post comments. Become a member for free today!
