🟥 When You Can’t Prove Recovery, You Rewrite the Rules

Oct 30

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The truth behind NSW’s push to raise the psychological-injury threshold

2025: They admit the harm. They just can’t prove recovery.

For years, NSW governments have claimed the workers’ compensation system is “improving.” Due to their improvement programs....But when asked the only question that matters — Are people with psychological injuries getting better? — the data goes missing.

National evidence says otherwise: psychological-injury claims take the longest to resolve, have the lowest return-to-work outcomes, and the highest rates of secondary harm. Still, NSW has no transparent, independent proof that recovery is improving at all.(Safe Work Australia, 2024)

The “Reform” That Isn’t

Instead of fixing what’s broken, the NSW Government is rewriting who qualifies for help.

The plan: raise the Whole-Person Impairment threshold for psychological injury from 15 % to 31 %.(ABC News, May 2025) It’s a bureaucratic sleight of hand a way to shrink the problem on paper, not in people’s lives. When you can’t prove recovery, you just move the goalposts.

The Treasury Connection: “One Fund to Rule Them All”

Employers are being warned that premiums may rise, but what’s not said loudly is this:the financial pressure sits mostly within the public-sector fund.

The Treasury Managed Fund (TMF) — covering government employees such as nurses, teachers, and first responders has required repeated Treasury top-ups, more than $6 billion since 2018. Now, under the Treasurer’s emerging “One Fund” initiative, Treasury is consolidating oversight of icare’s finances into a single, state-controlled pool. It’s essentially one giant government insurance account funded by employer premiums — where the line between public liability and workers’ compensation keeps blurring.

And still, the government cannot prove recovery outcomes for the very workforce it insures. So while private employers are told to brace for “rising costs,” the real strain comes from the State’s own claims experience. Those who serve the public, the paramedics, the teachers, the correctional officers are now the data points exposing the system’s failure.

The No-Exit Reality

Workers’ compensation isn’t optional when injured. You can’t opt out. You can’t shop around. And while many believe they can still “sue,” it isn’t what they think.

Once you’re inside the statutory system, your right to sue for negligence is severely restricted. A separate common-law claim is possible only in narrow circumstances — usually when a worker meets a high impairment threshold and proves fault. Most never reach that point.

Yet there’s an entire industry built on the illusion that they can. Bus ads, billboards, and online campaigns promise “big payouts for workplace injuries.” But those slogans rarely mention the reality: most workers have already traded their full right to sue for a limited, bureaucratic path to recovery.

And for psychological injuries, that path doesn’t lead to recovery at all. The longer you stay in the system, the worse you get. Leaving means losing your income and treatment; staying means enduring endless reviews, surveillance, and suspicion. And often becoming very, very ill in the process, if it is a psychological injury.

That’s the quiet coercion built into the design a compulsory process that traps people in trauma, then measures its success by how long they can endure it.

The Seven Critical Questions Still Unanswered

Until the government can answer these seven questions with regard to psychological injuries, there is no legitimacy to these reforms or the 'modernisation' of the scheme :

1️⃣ How many injured workers actually recover?

2️⃣ How many die by suicide during or after a claim?

3️⃣ How many treatment delays exceed clinical safety limits?

4️⃣ How many claims worsen because of insurer behaviour?

5️⃣ How accurate are the algorithms deciding who gets care?

6️⃣ Why are psychological claims so brutal?

7️⃣ Who represents injured people with binding authority?

Until these are answered with transparent data, every “reform” is just a rearrangement of excuses.

The Real Test

Workers gave up their right to sue in exchange for a State-guaranteed path to recovery. The government took the money, the control, and the data so it must prove one thing: that it heals injured people. If it can't prove this, the system is not fit for purpose.

And until it can prove it heals, every policy change. modernisation or reform agenda is not progress, it’s self-protection disguised as reform.