Proposed changes to NSW’s workplace injury laws will drastically reduce workers’ rights to medical and financial support, lawyers have told a state upper house committee hearing.

The workers’ compensation scheme needs reform, but the government’s plans do not address the challenges facing the system, they say.

“What everyone can agree on is that the system is failing injured workers and, in particular, those that have psychological injuries,” the Australian Lawyers Alliance’s Shane Butcher said.

“It is our view that poor case management is at the heart of many of these failings. 

“The insurers have not yet come forth with a sound explanation or identifying barriers preventing them from being able to reduce claim expenses or return people to work.

“The solution has been put forth to cut benefits to workers, who many would consider vulnerable to long-term incapacity to work without early support and treatment [from] the scheme.

“There is evidence before this inquiry that would support the conclusion that insurers and scheme agents are failing on both fronts. We must come to an understanding of why this is to provide appropriate solutions.”

The Law Society of NSW also says claims management needs addressing.

Its injury compensation committee chair Tim Concannon said: “We suggest that … a more nuanced approach is required, including a focus on improving claims management processes for persons who have sustained a psychological injury at work.

“Our preference is for the government not to proceed with the [reform] bill and return to a genuine consultation and design phase – one that enables a wholesale revision of the scheme, simplifies the statutory framework and better reflects the needs of injured workers in modern workplaces, including through appropriate claims management processes.”

The Public Accountability and Works Committee is examining the government’s overhaul of workplace injury laws, which passed the lower house but was blocked in the upper chamber.