Premium Rate Update (2025-2026)

icare has confirmed the final 8% average increase in industry classification rates, completing a three-year uplift cycle. Key points:

• Only 5 WICs will receive a reduction; most will increase by an average of 8%.
• Transport and storage, education, health, and community services will see above-average increases.
• The minimum premium rises from $225 to $240.
• LPR policies will see a lower minimum premium due to a revised calculation model.
• No maximum premium cap will be introduced in the LPR Plus model for 2025-2026. This is a potential for 2026-2027.
• Wage Price Index up 3.7%, influencing base premiums.
• Full rate guide: https://www.icare.nsw.gov.au/-/media/icare/unique-media/employers/premiums/workers-compensation-premium-rates-2025-2026.pdf

Legislative Reform - Workers Compensation Amendment Bill 2025

Key proposals under consultation during the ongoing parliamentary hearing includes:

• Tighter access to psychological injury claims, requiring evidence of bullying, harassment, or a defined workplace event.
• A finding by a tribunal, commission, or court to confirm the occurrence of bullying, harassment, or misconduct.
• Claims arising from reasonable management action (e.g. performance reviews, disciplinary procedures) will be excluded by tightening up this existing defence.
• Increased thresholds for permanent impairment (31% for psych), shorter benefit durations, and stricter medical cost limits.
• Narrower treatment definitions (“reasonable and necessary”) and more scope for insurers to deduct for pre-existing conditions.
• Commutation settlements will now need Commission approval and mandatory legal/financial advice.
• Death benefit increased to $955,950, with stricter dispute requirements.

What This Means for Employers:

The environment is shifting towards stricter eligibility, more rigorous documentation, and potentially fewer long-duration psychological claims. We recommend:

• Reviewing claims handling and injury management practices.
• Strengthening HR processes and documentation, especially around performance and complaints.
• Preparing for more disputes around impairment and psychological injury thresholds.

If you would like to discuss how these proposed changes may impact your business, please reach out to our team. We’re here to support you through the transition.