Workers compensation provides protection to workers and their employers in the event of a work related injury or disease. Through the workers compensation system injured workers may have an entitlement to weekly payments, lump sums for permanent impairment (and pain and suffering where applicable), payment of medical bills, provision of legal assistance to pursue a claim and intensive rehabilitation assistance.

All NSW employers must have a workers compensation policy to insure themselves against compensation claims for workplace injuries if they pay more than $7,500 in wages, employ an apprentice or trainee, or are part of a group for premium purposes.

The New South Wales Workers Compensation System

The New South Wales workers compensation system comprises four elements:

1. New South Wales WorkCover Scheme – which provides workers compensation insurance through contracted Scheme Agents to employers operating in New South Wales.
    
2. SICorp (through the Treasury Managed Fund) – manages workers compensation, administration and financial liability for most public sector employers except those who are self-insurers.
    
3. Self-insurers – organisations with enough capital to underwrite, pay and manage their own claims. There are strict criteria that employers must meet prior to WorkCover granting a self-insurers licence.
    
4. Specialised insurers –new applications for specialised insurance are no longer available for entry into the NSW workers compensation system. However existing specialised workers compensation insurers may continue to hold restricted licences to underwrite workers compensation insurance risk for a specific industry or class of business or employers.

The workers compensation system operates under the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998.

The aim is to produce a financially viable workers compensation system that is fair and affordable for employers and improves outcomes for injured workers.

The Role of WorkCover

WorkCover has dual roles within the workers compensation system.

WorkCover acts on behalf of the Nominal Insurer, which is the legal entity responsible for the performance of the WorkCover Scheme. The Nominal Insurer contracts Scheme Agents to deliver case management and policy services within the WorkCover Scheme.
 
WorkCover also regulates and manages the workers compensation system, including the licensing of self and specialised insurers and oversight of service providers.

WorkCover Scheme Valuations

The WorkCover Scheme Valuations estimate the outstanding claims liability for the WorkCover Scheme and are prepared by the independent actuaries PricewaterhouseCoopers. The valuations are conducted twice a year for the periods ending 30 June and 31 December.