Understanding ‘excess’ changes in NSW Workers Compensation reforms

With the introduction of the NSW Workers Compensation reforms in February 2026, there are important changes coming to the way ‘excess’ is managed within workers compensation claims.

What is ‘excess’ in Workers Compensation?

In the context of Workers Compensation, ‘excess’ refers to the initial period or cost that an employer is responsible for when a worker lodges a claim for a work-related injury or illness. Understanding when excess applies can help, as it determines the starting point for the insurer’s involvement in managing and assessing the claim.

Overview of announced changes

The NSW Government has announced changes to the way excess is applied within Workers Compensation – the reforms will introduce a fixed excess that employers must pay at the start of a claim along with new rules about when the excess applies. According to the official icare NSW Workers Compensation Reform FAQs:

“What does this mean for Nominal Insurer employers?

The reforms introduce a fixed excess that employers must pay at the start of a claim – up to two weeks of income support – along with new rules about when the excess applies:

• The exact excess amount will be set by regulation, and more information will be provided once available
• The fixed excess is intended to encourage injury prevention and support early recovery at work, including providing suitable duties as soon as possible
• The new rules will apply to all claims made under a policy issued or renewed on or after 4pm, 30 June 2026, regardless of when the broader amendments commence

All existing policies will switch from the old rules to the new rules once they are renewed.”

Potential impacts for employers and brokers

These changes to the excess period are designed to clarify the duration and scope of employer contributions at the outset of a claim. It is important to note that the practical application of these changes, including their operational details, are still being finalised.

Supporting employers, businesses and brokers through change

At QBE, we’re at the heart of helping employers, businesses, and brokers stay informed and understand what’s changing as the NSW Workers Compensation reforms progress.

As further details are released regarding the practical application of the excess changes, we’ll continue to provide updates to help support a smooth transition.

Learn about QBE Workers Compensation insurance.