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Learn more →A work injury damages (WID) claim may be available where an employer’s negligence caused your workplace injury and the legal eligibility requirements are met. Stephen Young Lawyers advises injured workers in Sydney and across NSW on evidence, lost earnings and settlement decisions.
This is different from an ordinary workers compensation claim. Damages generally concern past loss of earnings and future loss of earning capacity. Settlement can end your further workers compensation entitlements for the injury, so the effect on future treatment and income support needs careful consideration.
Book a free consultation. Bring insurer correspondence, medical assessments, earnings records and any information about how the injury occurred. We can identify what further evidence is needed.
Related guidance: Workers compensation benefits · TPD insurance claims · Income protection claims. Each claim type has its own requirements.
Personal Injury & Compensation · Sydney
If your employer’s negligence caused your injury, we can assess your options for work injury damages and explain the evidence, thresholds and settlement process.
Free first consultation · No Win No Fee for eligible matters
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Learn more →A Work Injury Damages (WID) claim is a negligence based claim made against your employer under the NSW workers compensation scheme. SIRA describes it as modified common law damages. Unlike standard workers compensation, which operates on a no fault basis, a WID claim requires you to prove that your employer’s negligence directly caused your injury.
The claim compensates you for economic loss only, including your past loss of earnings from the date of injury and your future loss of earning capacity. It is not an ongoing benefit, and settling a WID claim has important consequences for your existing entitlements.
Key facts at a glance:
Important: Settlement is final. Once a Work Injury Damages claim is settled or determined by a court, your entitlement to further workers compensation benefits for that injury, including weekly payments, medical expenses and rehabilitation, comes to an end. A settlement is legally binding and should not be entered into on the assumption it can later be undone. Obtain advice about its full effect before agreeing.
In late 2025 and early 2026 the NSW Parliament passed two significant pieces of reform legislation that change how psychological injuries are assessed and compensated. These are the Workers Compensation Legislation Amendment Act 2025 and the Workers Compensation Legislation Amendment (Reform and Modernisation) Act 2026. The reforms represent one of the most substantial shifts to the scheme in many years, and they have particular consequences for anyone considering a Work Injury Damages claim based on a psychological injury.
How the threshold has changed
For a Work Injury Damages claim, the long standing requirement was a minimum 15% whole person impairment for all injuries. Following the reforms, that position now differs depending on whether your injury is physical or a primary psychological injury.
For physical injuries, the 15% WPI threshold under section 151H continues to apply.
For primary psychological injuries covered by the reforms, the applicable threshold depends on notification timing. Section 151H of the Workers Compensation Act 1987 sets the current threshold; the 2026 amendment legislation specifies the later stages. Earlier notifications are protected by Schedule 6, Part 19Q, clause 2(2).
For primary psychological injuries covered by the reforms, the applicable threshold depends on notification timing. Section 151H of the Workers Compensation Act 1987 sets the current threshold; the 2026 amendment legislation specifies the later stages. Earlier notifications are protected by Schedule 6, Part 19Q, clause 2(2).
| Notification period | WPI threshold |
|---|---|
| Before 1 July 2026 | Generally at least 15% under the previous arrangements |
| 1 July 2026–30 June 2027 | At least 25% |
| 1 July 2027–30 June 2029 | More than 26% |
| From 1 July 2029 | At least 28% |
For the stage commencing 1 July 2027, “more than 26%” means WPI must exceed 26%; exactly 26% does not meet this threshold. This is not the same as “at least 26%”. This stage is not yet in force on 20 October 2026. Earlier notifications retain the threshold protected by Schedule 6, Part 19Q, clause 2(2); a later settlement does not, by itself, move an injury into a higher-threshold stage.
The later stages are enacted future changes, not today’s threshold for every claim. Earlier notifications retain the threshold protected by the transitional provisions; settlement date alone does not determine it. Physical injuries generally retain the 15% threshold. Exempt workers, coal miners and claims under the dust-disease or volunteer schemes require separate consideration. Secondary psychological impairment is disregarded when assessing the psychological threshold under section 151H(3)(b).
Workers Compensation Act 1987 · 2026 final-passed text · Assent record
Legislative text rechecked 20 October 2026: current Act s 151H(2)–(3), Schedule 6 Part 19Q cl 2(2) and exceptions in cls 3–6; current-version status notes confirm pending amendments. The 2026 amendment, s 2(b)–(d) and Schedule 2.1[12]–[14], supplies the staged wording and dates. Parliament’s final-passed text and assent record were cross-checked. This source check is not a lawyer-review endorsement.
Workers Compensation Act 1987 · 2026 amendment — final-passed text · Parliament assent record ·
The psychological injury changes commenced on 1 July 2026. Check the notification date and the transitional protection in Schedule 6 Part 19Q clause 2(2), together with the exceptions explained below.
A narrower definition of compensable psychological injury
The reforms also change what counts as a compensable primary psychological injury. Where the new psychological injury provisions apply, a primary psychological injury is compensable only where it results from a defined relevant event, there is a real and substantial connection between that event and your employment, and employment is the main contributing factor to the injury.
Relevant events include acts or threats of violence, indictable criminal conduct, witnessing a traumatic incident, vicarious trauma within a defined meaning, sexual or racial harassment, bullying, and excessive work demands. The reforms also broaden the reasonable management action defence available to employers, which means injuries arising from genuine and reasonable performance management, counselling, discipline or investigation may not be compensable.
Primary and secondary psychological injuries
The higher thresholds apply to primary psychological injuries. A secondary psychological injury, meaning a psychological condition that develops as a consequence of a physical workplace injury, is assessed differently and continues to be treated under separate rules.
Related changes worth knowing
Weekly payments, treatment expenses and return-to-work support have their own eligibility, commencement and transitional rules. The work injury damages timetable above does not determine how long those benefits continue. The reform package also includes return-to-work measures and a review of the Psychiatric Impairment Rating Scale (PIRS); check which provisions apply to the particular worker and claim. These changes do not remove the need to prove employer negligence in a work injury damages claim.
Four key requirements must be satisfied before a Work Injury Damages claim can proceed in NSW:
Your WPI assessment must be completed by an appropriately qualified permanent impairment assessor and accepted by the insurer. If the assessment is disputed, the matter may be determined by the Personal Injury Commission. A dispute about your WPI rating does not necessarily prevent you from making a claim. Our team can guide you through the dispute process and help protect your rights at every stage.
Both relate to workplace injuries, but they operate under different legal frameworks with very different outcomes.
| Feature | Workers Compensation | Work Injury Damages |
|---|---|---|
| Basis of claim | No fault statutory entitlement | Employer negligence must be proven |
| Type of benefit | Ongoing weekly payments + medical/rehab | Lump sum focused on economic loss |
| What it covers | Income replacement, treatment, rehabilitation | Past lost earnings + future loss of earning capacity + super |
| Impairment threshold | Weekly and treatment benefits have their own eligibility rules; permanent impairment lump sums and some extended benefits have WPI thresholds. | Physical injury: at least 15% WPI. Primary psychological injury: applicable notification-based threshold and exceptions above. |
| Fault required? | No | Yes — employer negligence must be established |
| Effect of settlement | Benefits continue while eligible | Settlement extinguishes further workers comp entitlements |
Establishing negligence is the foundation of a Work Injury Damages claim. To succeed, you must prove all four of the following elements:
Duty of care: Your employer owed you a duty of care. In NSW, employers are required to take reasonable steps to protect the health and safety of their employees. This element is rarely disputed.
Breach of duty: Your employer failed to take reasonable precautions that a prudent employer would have taken, such as providing a safe system of work, appropriate training, suitable equipment or addressing a known workplace hazard.
Causation: Your employer’s breach of duty must have directly caused your injury. It is not enough to show that the employer was generally negligent.
Foreseeable risk: A reasonable employer would have recognised the risk of injury and taken appropriate steps to prevent it.
Evidence that can support a negligence claim includes incident reports, near miss reports, workplace safety complaints, training and induction records, safe work method statements, supervision records, witness statements, photographs, equipment maintenance records and independent expert opinions. For psychological injury claims, evidence about the workplace conduct, complaints made, how they were handled, and the connection to your employment is especially important. Our team will help you identify, obtain and preserve this evidence from the earliest stages of your claim.
Work Injury Damages in NSW are limited to economic loss. The main components are:
Work Injury Damages does not cover pain and suffering, future treatment costs or ongoing workers compensation benefits. These must be addressed separately before any settlement.
The Work Injury Damages process requires all evidence to be gathered and disclosed before any hearing takes place. Our team manages the entire process on your behalf.
Most claims resolve before reaching court. We advise you on the best strategy at each stage, and every matter depends on its individual circumstances.
Can I still make a Work Injury Damages claim for a psychological injury? Yes, where the applicable eligibility requirements are satisfied. Employer negligence and the relevant impairment threshold must be established. Refer to the timetable and exceptions above; a psychological diagnosis by itself does not establish entitlement.
What is the WPI threshold for a work injury damages claim now? Physical injuries generally require at least 15% WPI. For primary psychological injuries covered by the reforms, use the sourced timetable above. The notification date, injury classification and any exclusion or transitional rule must be checked; the date of settlement alone does not select the threshold.
Do the reforms affect injuries that happened before they commenced? The injury date and notification date are not interchangeable. Primary psychological injuries notified before 1 July 2026 generally retain the previous 15% WPI access threshold. Check the actual notification and claim history and any transitional provisions for your circumstances.
How long do I have to make a claim?
Court proceedings generally must be commenced within three years of the injury, unless the court gives leave. Pre-court claim steps also apply, so seek advice early.
Will my weekly payments stop if I settle?
Yes. Settling a WID claim cancels all further workers compensation entitlements for that injury, including weekly payments, medical and rehabilitation expenses. Before settlement, confirm receipt of any statutory permanent impairment lump sum to which you are entitled, and obtain advice on outstanding payments and repayments.
What if the insurer disputes liability?
A disputed claim needs careful assessment. Work injury damages generally involve negotiation and Personal Injury Commission mediation before court proceedings, subject to procedural requirements and exceptions. The court determines an unresolved damages claim.
Is Work Injury Damages available under No Win No Fee?
Yes. We handle WID claims on a No Win No Fee basis for eligible matters. We explain the costs arrangement fully at our first consultation.
The sections above explain eligibility, employer negligence and the claim process. To make your first discussion more useful, organise the information around three questions: what happened, what evidence supports it, and how has your ability to earn changed?
Do not delay seeking advice because records are missing. Explain the gaps so the next steps can be planned. Keep documents lawfully available to you; discuss how other evidence can be obtained.
No. A statutory permanent impairment lump sum and a negligence-based work injury damages claim are different entitlements. Receiving an impairment payment does not itself prove employer negligence or establish the amount of economic loss. Ask how your existing claim, impairment assessment and any previous payments affect the damages pathway.
A work injury damages settlement ends further workers compensation entitlements for the same injury. Ask for a clear explanation of the proposed net amount, legal costs, any repayments, and how you would meet future treatment and living expenses. The headline offer alone does not show the effect on your finances.
See SIRA’s work injury damages guidance and the Personal Injury Commission’s damages dispute pathway.
Bring the dates the injury was first notified and claimed, the relevant workplace events, insurer correspondence and any impairment assessment or agreement. Ask which commencement, transitional and worker-category rules apply to you. The notification date and applicable rules need to be checked before relying on a general threshold summary.
Current official information is available in SIRA’s reform FAQs and its psychological injury guide.
If an illness or injury has affected your ability to work, ask whether your insurance warrants a separate review. A TPD claim has different policy requirements from a work injury damages claim; one assessment does not decide the other.
If you have suffered a serious workplace injury caused by your employer’s negligence, early legal advice can make a significant difference to your claim. This is more true than ever for psychological injury matters, where the recent reforms have changed the threshold and the way claims are assessed. Getting the right advice early helps ensure your injury is properly classified, assessed and pursued under the correct rules.
Stephen Young Lawyers assist injured workers across Sydney and throughout NSW on a No Win No Fee basis for eligible matters. Contact our team today to discuss your Work Injury Damages claim and understand your options.
Contact our team today to discuss your Work Injury Damages claim and understand your options.