What it does
The Workers Compensation Act 1987 (the "1987 Act") establishes a statutory no-fault compensation scheme for workers injured in the course of their employment in New South Wales. Its core purpose is to provide medical treatment, income replacement, lump-sum payments for permanent impairment, and death benefits without the need to prove employer negligence, while imposing compulsory insurance obligations on employers and limiting common-law damages claims (Part 5).
At its heart, s 9 imposes liability on employers for "injury" (defined in s 4 as personal injury arising out of or in the course of employment, including certain diseases where employment is the main contributing factor). This liability extends to "journey claims" (s 10), "recess claims" (s 11), and claims by union representatives (s 12), subject to exclusions for serious and wilful misconduct (s 14) or self-inflicted injury. The Act distinguishes between "total" and "partial" incapacity, with weekly benefits calculated under a stepped system: 95% of pre-injury average weekly earnings (PIAWE) for the first 13 weeks (s 36), reducing to 80% thereafter (ss 37-38), with a 5-year aggregate cap (s 39) unless the worker has more than 20% whole-person impairment (WPI).
Medical and related expenses are payable under s 60 if "reasonably necessary," with a 2- or 5-year sunset from claim or cessation of weekly payments (s 59A), subject to exceptions for high-needs workers and secondary surgery. Permanent impairment benefits under s 66 are payable for WPI exceeding 10%, calculated on a sliding scale (e.g. up to $577,050 for 74%+ WPI, with a 5% uplift for back injuries). Death benefits (s 25) provide a lump sum of $750,000 (indexed) plus weekly amounts for dependent children.
The 1987 Act interacts heavily with the Workplace Injury Management and Workers Compensation Act 1998 (the "1998 Act"), which it incorporates by reference (s 2A). It establishes the Nominal Insurer (s 154A) as the default insurer for uninsured liabilities (Part 4), mandates employer insurance (s 155), and creates the Insurers' Guarantee Fund (s 227) and Insurance Fund (s 154D). Common-law rights are modified: damages require >15% WPI (s 151H), exclude non-economic loss unless >10% WPI (s 151G, post-2012 reforms), and are subject to a 3-year limitation (s 151D) with a 6-month pre-commencement notice (s 151C).
