Feb 13, 2025 • 9 min read

How Does Workers Compensation Work in NSW?

Struggling to understand workers compensation? Learn all there is to know about the NSW workers comp system with this ultimate guide.

Written by: Eisabess Chee

Workers compensation is a safety net designed to protect you when things go wrong at work. In this guide, we explain how the New South Wales (NSW) workers comp system works, helping both workers and employers understand their rights, obligations, and available benefits.

Imagine you’re at work and you accidentally slip on a wet floor, injuring your back. Or perhaps you develop carpal tunnel syndrome from years of typing at your desk. These situations can be scary and overwhelming, but this is exactly why workers compensation exists.

Understanding Workers Compensation in NSW

What Is Workers Compensation?

Think of workers comp as a type of insurance that automatically covers you when you’re at work. If you get injured or become ill because of your job, this insurance steps in to help you recover without having to worry about medical bills or lost wages.

It’s a legal requirement for all employers in NSW to have this insurance, ensuring that you’re protected from your very first day on the job.

The system works through insurance companies, with your employer paying for the insurance policy. In NSW, most employers get their insurance through icare (Insurance & Care NSW), while some larger companies manage their own insurance arrangements.

Key Regulators and Stakeholders:

SIRA (State Insurance Regulatory Authority): Regulates the workers compensation system and sets guidelines for insurers
icare (Insurance & Care NSW): The state’s primary workers compensation insurance provider
SafeWork NSW: Oversees workplace safety and investigates serious incidents
Personal Injury Commission: Resolves disputes between workers and insurers

Eligibility and Coverage

Who Is Covered?

One of the most common questions people ask is, “Am I covered?”

The simple answer is that if you’re employed in NSW, you’re almost certainly covered. Even if you’re a contractor, you might be protected under certain circumstances.

Types of workers the NSW workers compensation scheme covers:

Full-time employees
Part-time employees
Casual workers
Contractors (in some circumstances)
Working directors
Apprentices and trainees

What Injuries and Illnesses Are Covered?

Workers compensation covers more than just accidents. If you develop a condition over time from doing your job (like back pain from heavy lifting), that’s covered too. Even mental health conditions caused by work stress or bullying can be eligible for compensation. The key is that there needs to be a clear connection between your work and your injury or illness.

Coverage includes:

Injuries sustained at work
Injuries occurring during work-related travel
Diseases caused by work
Pre-existing conditions aggravated by work
Psychological injuries related to work

Coverage extends to injuries that occur:

During normal work hours
During authorised breaks
While travelling for work purposes
While working from home (if authorised)
During work-sponsored events

Always confirm the full scope of your coverage with your employer. Some jobs might receive more coverage than others.

What to Do After Getting Injured at Work

The process of claiming compensation is designed to be straightforward. Simply follow the right steps from the beginning.

Making a Workers Comp Claim

Think of the claims process like following a recipe. First, you tell your supervisor about your injury as soon as possible. You also might want to submit an injury notification. This step is like gathering your ingredients.

Then, visit a doctor to get medical attention and obtain a Certificate of Capacity. This document is your proof of injury, like measuring your ingredients.

Finally, you or your employer will fill out a claim form with all the details. This step is like following the cooking instructions.

Your employer’s insurer will review your claim and decide whether to accept it. They usually make this decision within a few weeks. During this time, it’s important to stay in touch with your employer and follow your doctor’s advice.

To summarise:

Step 1: Notify your employer

Step 2: Notify relevant parties

Step 3: Seek medical attention

Step 4: Submit the claim form and Certificate of Capacity

Step 5: Await insurer’s response

For a guided step-by-step breakdown of the process, visit our blog article.

Time Limits for Claims

Report injuries within 30 days to protect your rights
Lodge claims within six months of the injury
Special circumstances may allow claims up to three years after the injury

Benefits and Entitlements

One of the most important aspects of workers compensation is ensuring you can still pay your bills while you’re unable to work. The system is designed to provide you with regular payments that replace your normal wages, though the amount changes over time to encourage return to work when you’re able.

Weekly Payments

First 13 Weeks

95% of pre-injury average weekly earnings (PIAWE), minus any current earnings

Weeks 14 to 130

80% of PIAWE if unable to work
95% of PIAWE minus current earnings if working at least 15 hours

After 130 Weeks

Payments continue only if:

You have more than 20% permanent impairment
You’re working at least 15 hours per week
You’re assessed as seeking work

Medical and Related Expenses

Covered expenses include:

Doctor and hospital visits
Physiotherapy and rehabilitation
Psychological counselling
Prescribed medication
Travel expenses for medical appointments
Medical aids and equipment

Permanent Impairment Compensation

Available for workers with permanent impairment of 11% or more
Additional compensation for pain and suffering if impairment exceeds 10%
Must be assessed by an approved medical specialist

Returning to Work

More than just healing physically or psychologically, recovery is also about getting back to your pre-injury life, including at work. Your employer has a legal responsibility to help you return to work safely, and this usually involves creating a Return to Work Plan tailored to your situation.

Recovering at work is also part and parcel of the rehabilitation process. This might mean starting with shorter hours, different duties, or modified tasks until you’re ready to resume your pre-injury duties.

Employer Obligations

Employers must:

Have a return to work program
Appoint a Return to Work Coordinator (for larger businesses)
Provide suitable work when able to
Consult with the worker about return to work planning

Worker Responsibilities

Workers must:

Participate in rehabilitation programs
Attend medical appointments
Cooperate with return to work efforts
Communicate regularly about their recovery

Suitable Work Options

Modified duties
Reduced hours
Alternative tasks
Gradual return to normal duties
Workplace modifications if needed

Legal Protection and Job Security

Protection from Dismissal

Employers cannot dismiss workers because of a work-related injury within six months of the injury
Unfair dismissal protections may apply beyond six months
Discrimination based on workplace injury is prohibited

Workers Rights During Claims

Right to choose your own doctor
Right to choose your own work rehab provider
Right to workers compensation if eligible
Right to return to work
Right to confidentiality of medical information
Right to appeal insurer decisions

Getting Help and Support

Available Resources

Here are some places you can seek help from, should you feel unsure about your workers comp rights and entitlements:

Workers Compensation Assist
Unions and employee representatives
Legal professionals specialising in workers compensation, such as lawyers
Injury management consultants
Workplace rehabilitation providers

Important Contact Information

SIRA Customer Service Centre: 13SIRA (137472). 8:30am–5pm, Monday to Friday (except public holidays)
SafeWork NSW: 13 14 50
icare: For claims enquiries, 13 77 22. 8:30am–5pm, Monday to Friday. For policy enquiries, 13 44 22 – 8am-6pm, Monday to Friday.
Personal Injury Commission: 1800 PIC NSW (1800 742 679) – 8:30am–5pm, Monday to Friday (except public holidays)

Get Expert Guidance for Your Workers Comp Journey

While the NSW workers compensation system exists to protect you, navigating its complexities can be challenging when you’re focusing on your recovery.

At AusRehab, our experienced workplace rehabilitation consultants guide you through every step of your RTW journey, ensuring you understand your rights and access the support you deserve.

Don’t face the system alone—contact AusRehab today to learn how we can help you achieve the best possible recovery outcome.

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Eisabess Chee

Eisabess Chee is a seasoned writer with over 8 years of diverse experience in education, journalism and marketing. At AusRehab, she oversees content creation through research, writing, editing, and the crafting of resources that tackle workers compensation and workplace injury. Eisabess also curates the AusRehab newsletter, ensuring it’s packed with valuable and well-researched insights.

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