How NSW Paid for Automation and Got System Failure. Part 2
Nov 2
3 min read
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The human cost of a “modernisation” project that turned injured people into test data.
The reform no one audited
When WorkCover NSW was abolished in 2015, the government promised a modern, unified, efficient workers’ compensation system powered by a “single claims platform.”
That platform now used by icare has consumed hundreds of millions of dollars, failed multiple audit tests, and still cannot reliably calculate premiums, process payments, or track outcomes.
It was supposed to fix the system. Instead, it industrialised the errors.
A legacy problem they already knew about
Before icare even existed, WorkCover was running on 1990s-era systems held together by manual workarounds and broken data. Internal reviews warned of:
corrupted records
unstable performance
no capacity to scale
Rather than stabilise the foundations, the State attempted a full-scale tech replacement at speed — with no system-wide contingency if it failed.
The “single platform” that became a multi-hundred-million-dollar sinkhole
Original pitch: one platform to manage all claims
Procurement period: 17 days (iTnews investigation)
Vendor: Guidewire + Capgemini
Result: costs ballooned into the hundreds of millions with ongoing remediation still required in 2025
iTnews: NSW state insurer slammed for sloppy Capgemini deal https://www.itnews.com.au/news/nsw-state-insurer-slammed-for-sloppy-capgemini-deal-564138
NSW Parliament Report 75 (2021) – procurement irregularities https://www.parliament.nsw.gov.au/lcdocs/inquiries/2589/Report%2075%20-%202020%20Review%20of%20the%20Workers%20Compensation%20Scheme%20-%2030%20April%202021.pdf
RSM Australia Probity Review (2021) – weak controls https://www.nsw.gov.au/sites/default/files/2021-04/RSM-Australia-Review-of-icare%27s-procurement-practices.pdf
“The platform didn’t modernise the system. It industrialised the errors.”
What failed and who paid for it
Failure | Evidence | Human / financial impact |
Wrong premium invoices | PwC review, ABC | Employers under- or over-charged by up to $80m per year |
Underpayment of injured workers | ABC Four Corners, “The Price of Care” (2020) | 52,000 workers underpaid $38m due to “system errors” |
Ongoing instability | NSW Audit Office (2024) | Remediation still active 10 years later |
No verified recovery data | NSW Audit Office + SIRA reporting | NSW cannot prove injured workers recover |
In 2019, SIRA’s own review found the automation was malfunctioning at scale — miscalculating weekly payments, duplicating medical costs, and failing basic controls. The Guardian reported the system was incorrectly classifying up to 50% of claims, meaning the failures were not marginal — they were built into the architecture itself. (The Guardian, 1 Nov 2020)
The damage didn’t stop in 2020 it scaled
Since the scandal broke, more than 300,000 additional claims have passed through the same unstable platform — and still no independent audit has confirmed whether its automated decisions are accurate.
Once the failures were exposed, there was no rapid fix — and the State knew it. The platform couldn’t be repaired overnight, yet thousands of injured workers were forced to stay inside a system already proven to be unsafe. That is not a glitch. That is abandonment.
That means hundreds of thousands of medical, income and liability decisions may have been made by a system no one has ever certified as fit for purpose.
Why it failed
Rushed rollout
Legacy data lifted into a new system without cleansing
Procurement flagged as “predetermined outcome”
No whole-of-system audit before launch
KPIs tied to rollout speed, not safety or accuracy
The result?
The platform didn’t absorb the instability it automated it.
The lived evidence matches the code
Injured workers consistently report:
identical rejection letters generated within minutes
unexplained stoppages in medical approvals
conflicting correspondence
unexplained payment gaps
That is not human inconsistency. It is workflow logic running a public insurance system.
Parliament’s real question is not “31% vs 15%”
It is this:
How can the government legislate stricter access to support when it cannot prove the software deciding that access is safe, accurate, or audited?
What must happen next
Full forensic audit of every platform involved in payment, triage, decision-making
Public release of automation rules that affect entitlements
Independent verification of recovery data, especially for psychological injury
Full costing of Guidewire + remediation + third-party contracts
Freeze legislative reform until system safety is proven
Anything less is policy built on sand.
The truth beneath the spin
“You can’t blame one government. You can blame a culture that built a welfare system on workflow software and called it compassion.”
This is not a story about technology. It is a story about public duty of care in a system no one fully understands — including the people running it.
Sources
NSW Audit Office, Performance Audit: SafeWork NSW (27 Feb 2024) https://www.audit.nsw.gov.au/our-work/reports/safework-nsw
ABC Four Corners, The Price of Care (2020) https://www.abc.net.au/4corners/the-price-of-care/12471370
iTnews, NSW insurer slammed for sloppy Capgemini deal https://www.itnews.com.au/news/nsw-state-insurer-slammed-for-sloppy-capgemini-deal-564138
NSW Parliament, Report 75 (2021) https://www.parliament.nsw.gov.au/lcdocs/inquiries/2589/Report%2075.pdf
RSM Probity Review (2021) https://www.nsw.gov.au/sites/default/files/2021-04/RSM-Australia-Review-of-icare%27s-procurement-practices.pdf
