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ARTICLE · 04 FEBRUARY 2026

Move to increase psychological injury threshold in NSW workers comp bill defeated

Stacks Law Firm
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NSW government declared its battle to tighten access to workers compensation is over, after a core element of its workers comp bill was defeated in parliament.

AustraliaEmployment and HR
Justin Stack
Justin Stack
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The NSW government has declared its battle to tighten access to workers compensation is over, after a core element of its workers comp bill was defeated in parliament.

Workers comp bill raised bar for psychological injury eligibility

Workers compensation is currently available to people suffering from psychological injury, such as PTSD, anxiety and depression, provided they meet the scheme's definition of worker or deemed worker, and work is a significant contributing factor to the injury. (Please see Workers' compensation for psychological injuries, Safe Work Australia.)

In NSW, psychological injuries are covered under the Workers Compensation Act 1987.

For six months the government tried to get a bill passed that was designed to lower the cost of the scheme by raising the "whole person impairment" threshold. The most contentious aspect was to make it far more difficult for people suffering psychological injuries from work to get lifetime payments.

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