1910–1987

New South Wales introduced the Workmen’s Compensation Act 1910. It applied to personal injury by accident arising in the course of employment, which was limited to defined ‘dangerous occupations’. Compulsory insurance for employers and the first specialised workers’ compensation tribunal in Australia, the Workers’ Compensation Commission, were introduced in the Workers’ Compensation Act 1926. This Act remained essentially unchanged until the mid-1980s.

1987–2012

The Workers Compensation Act 1987 repealed the 1926 Act and introduced a radically different scheme which included public underwriting of the scheme and removing the right of workers to make common law damages claims against their employers. In 1989 the Workers Compensation (Compensation Court Amendment) Act 1989 re-established common law rights and set out the role of the Compensation Court.

From 1987 to 1991 the workers’ compensation scheme performed well and in the early 1990s premium levels were reduced and there were a number of legislative amendments that expanded the range and level of benefits. However, the previous surplus of almost $1 billion quickly eroded and by mid 1996 there was a $454 million deficit. The Grellman Inquiry of 1997 was initiated to address continuing financial problems. The inquiry recommended structural changes including stakeholder management, accountability controls and greater incentives for injury management.

Changes in the period 2000–2005 continued to focus on greater competition and choice for employers, improved outcomes for injured workers and reducing the scheme’s deficit, which was eliminated in mid 2006.

The improved performance of the NSW WorkCover Scheme saw the target premium collection rate for NSW employers reduced by an average 30 per cent between November 2005 and 2008. A 10 per cent increase in lump sum compensation benefits for permanent impairment was also implemented for injuries received on or after 1 January 2007.

The structure of the Scheme also continued to evolve. In 2005 the Scheme transitioned from using insurers on open-ended licences to appointing Scheme Agents on commercial performance contracts for claims management and policy administration services that commenced on 1 January 2006. The contracts made Agents more accountable for delivering good Scheme outcomes and improved service standards.

From 30 June 2008 employers whose annual wages are $7,500 or less receive automatic coverage and are no longer required to hold workers’ compensation insurance, except where an employer engages an apprentice or trainee or is a member of a group of companies for workers’ compensation purposes.

In December 2008 the compensation available to families of workers who die as a result of a workplace injury or illness was increased for deaths occurring on or after 24 October 2007. The lump sum death benefit was increased from $343,550 to $425,000 (indexed). The changes also required payment of the lump sum to be made to a deceased worker’s estate where they leave no financial dependants. Previously only financial dependants were entitled to the lump sum payment.

An optional alternative premium calculation method for large employers based on commercial retro-paid loss premium arrangements was introduced from 30 June 2009. The retro-paid loss premium method derives an employer’s premium almost entirely from their individual claims experience and success in injury prevention and claims management during the period of the insurance policy. This provides a strong financial incentive for these employers to reduce the number and cost of workers’ compensation claims.

2012

In June 2012 the NSW Government introduced significant changes to the NSW workers’ compensation system. The Workers Compensation Legislation Amendment Act 2012 was assented on 27 June 2012 and amended the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998. The changes affected all new and existing workers’ compensation claims, except for claims from:

• police officers, paramedics and fire fighters
• workers injured while working in or around a coal mine
• bush fire fighter and emergency service volunteers (Rural Fire Service, Surf Life Savers, SES volunteers), and
• people with a dust disease claim under the Workers’ Compensation (Dust Diseases) Act 1942.

Claims by these exempt workers will continue to be managed and administered as though the June 2012 changes never occurred. The changes came into effect in stages and included:

• changes to permanent impairment lump sum compensation claims made on or after 19 June 2012
• changes to parameters around journey claims, heart attack and stroke injuries and disease injuries for an injury received on or after 19 June 2012
• reforms for seriously injured workers (injured workers with a permanent impairment of more than 30 per cent) which came into effect on 17 September 2012
• changes to weekly payments (1 October 2012 for new claims, 1 January 2013 for existing claims) including calculation methods, step-downs and caps
• the introduction of work capacity assessments
• the establishment of the WorkCover Independent Review Officer (now Workers’ Compensation Independent Review Officer) from 1 October 2012, and
• changes to medical and related treatment (1 October 2012 for new claims, and 1 January 2013 for existing claims).

2014

The Workers Compensation Amendment (Existing Claims) Regulation 2014 was made on 3 September 2014 and applies some benefit reforms to workers who made a claim for compensation before 1 October 2012.

2015

In August 2015, the NSW Government announced a $1 billion staged reform package with three elements:

• enhanced benefits for injured workers, including changes to lump sum compensation for permanent impairment, increased death benefit lump sum and funeral expenses, extension of weekly payments beyond retiring age, extended medical entitlements, the introduction of work capacity decision ‘stay’, the introduction of new return to work assistance benefits, the regulation of legal costs for work capacity decision reviews and the regulation of pre-injury average weekly earnings.
• premium reductions for employers with good safety and return to work records
• structural reform for better service and regulation

On 1 September 2015 the State Insurance and Care Governance Act 2015 commenced, paving the way for three new organisations - Insurance & Care NSW (icare), the State Insurance Regulatory Authority (SIRA), and SafeWork NSW. icare manages approximately $30 billion in assets and $26 billion in liabilities, making it the largest general insurer service provider in Australia.

SIRA is a statutory body governed by an independent Board and regulates workers' compensation insurance and related activities, motor accidents CTP insurance and home building compensation insurance in NSW. SIRA approves premium, licensing and policy frameworks for insurers, supervises insurers, and monitors the financial solvency and performance of the three compulsory insurance schemes. SIRA also plays a role in funding, promoting and informing injury prevention in relation to the schemes it regulates. SIRA also has specific functions within the Lifetime Care and Support Scheme and the Dust Diseases Scheme. SIRA aims to ensure that people who suffer injury or loss are supported, and insurance is affordable, well managed and sustainable.

2016

From 2016-17, annual Market Practice and Premiums Guidelines replaced the publication of the WorkCover Insurance Premiums Order, and provided a new mechanism for the setting and assessment of workers’ compensation premiums.

The Workers Compensation Amendment (Legal Costs) Regulation 2016 was made on 16 December 2016 and provides for the recovery of legal costs for merit reviews of work capacity decisions. Further transitional arrangements for workers receiving weekly payments of compensation before 1 October 2012 were also made on 16 December 2016 under the Workers Compensation Amendment (Transitional Arrangements for Weekly Payments) Regulation 2016.