Mind The Gap: Inside NSW's Escalating Impairment Thresholds For Workplace Psychological Injury Claims

The NSW Parliament on Wednesday, 4 February 2026 passed additional amendments to the NSW Workers Compensation legislative scheme.

These changes introduce additional changes and clarifications to the already sweeping reforms introduced by the Workers Compensation Legislation Amendment Bill 2025.

Key takeaways from the amendments

• Increasing the impairment threshold to access common law damages for primary psychological injuries.
• Establishing impairment and return-to-work requirements for workers claiming weekly compensation for primary psychological injuries beyond 130 weeks.
• Limiting compensation payable if reasonable management action was the significant cause of the primary psychological injury.