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Controversial reforms aiming to "stabilise" the NSW workers' compensation scheme will instead "radically reduce" employees' psychological injury rights, according to critics of the proposals.

In March this year, NSW Treasurer Daniel Mookhey flagged a need to amend the State Workers Compensation Act, and he reiterated his position last week, during an inquiry into the Government's proposed changes to liability and entitlements for psychological injury.

Mookhey told the inquiry that psychological injury claims had doubled in six years. The average cost of such claims has "massively" increased, from $146k in 2019 to nearly $289k in 2024.

"These facts demand reform," he said, noting the Workers Compensation Legislation Amendment Bill 2025 aimed to "stabilise" the scheme and shift the focus towards "fostering a culture of prevention"...