The NSW government has launched a review of the icare workers’ compensation premium model, which applies to more than 340,000 employers.

The three-stage review begins today with a consultation period, followed by a spell of model testing, validation and recommendations.  

The introduction of a new model will be subject to final recommendations and approvals. 

“We have heard the calls from small businesses and not-for-profits that the workers’ compensation premium model needs to be reviewed, and the NSW government has listened,” Work Health and Safety Minister Sophie Cotsis said today. 

“We are committed to ensuring the workers’ compensation scheme that supports millions of workers is sustainable.” 

The review aims to assess whether the current model remains fit for purpose; check the balance between premium responsiveness and stability; improve transparency and predictability; enhance incentives for injury prevention and return to work outcomes; and support long-term scheme sustainability. 

The first two phases are expected to take about 18 months. 

Business NSW says the cost and complexity of the workers’ compensation system is a challenge for many members. 

“We need to avoid high premiums that are forcing more businesses to scale back operations just to stay afloat,” a spokesperson said.

“Reforming the way workers’ compensation premiums are calculated is a crucial step in not only restoring fairness to the system, but also ensuring our economy grows.”

NSW Council of Social Service CEO Cara Varian says the current model assumes employers can absorb or recover premium increases.

“Most community organisations cannot do this, as they deliver services under government contracts at a fixed price – nine in 10 organisations report that their costs rise faster than their funding,” she said.

A consultation survey can be completed here until October 25.