What the NSW Workers Compensation Reforms Mean for You
The final NSW workers compensation Regulation and Guidelines took effect on 1 July 2026, and more changes follow in October 2026 and into 2027. If you see clients with a work-related psychological injury, the way they claim has changed, and PACFA pressed the profession's case throughout the consultation.
What has changed
For most workers, a claim for a primary psychological injury now succeeds only when a defined relevant event caused it and work was the main contributing factor. Relevant events include violence or threats, witnessing a traumatic incident, and vicarious trauma from repeated exposure to others' trauma at work. A separate relevant conduct pathway covers bullying, sexual harassment, racial harassment and excessive work demands. General workplace pressure or interpersonal conflict, on its own, will rarely meet the test.
The new rules cover claims notified from 1 July 2026. They do not reach injuries notified before that date, secondary psychological injuries, or exempt workers such as police, paramedics, firefighters, coal miners and volunteers.
The reforms also split the review pathway. If a worker disputes whether the conduct counts as relevant conduct, the Industrial Relations Commission hears it. The Personal Injury Commission handles everything else, such as work connection or worker status. From 1 October 2026, a further change tightens the treatment test from reasonably necessary to reasonable and necessary.
Where PACFA stood
We put the profession's case directly to SIRA. In our submission on the draft reforms, we argued that the scheme should recognise qualified counsellors as essential providers in treating psychological injury, keep funding evidence-based counselling where it is reasonable and necessary for a worker's recovery and return to work, and exclude career counselling by registered counsellors from any restriction on career coaching. These were our recommendations during consultation, made before the final instruments were settled. We are confirming how the final Regulation and Guidelines responded to each, and will update members as that becomes clear.
For your practice, the shift is practical. Clients pursuing these claims now move through a more structured process, and your role stays therapeutic, not legal. Recognise the framework they are in, and point them to the right help: SIRA Workers Compensation Assist on 13 74 72, or the Independent Review Office on 13 94 76, which keeps a list of approved lawyers who can advise, often at no cost.
Read the full advice here