As the 2025–2026 financial year begins, Australia’s workers’ compensation landscape reflects a complex mix of stability, reform and fiscal recalibration. While several jurisdictions have opted to hold premium rates steady, others are adjusting to growing cost pressures or advancing structural reforms. Our national snapshot below outlines the key developments and what employers should be alert to in the year ahead.
NSW
The scheme remains under significant financial pressure due to rising psychological claims. From 2025–26, businesses will face an average premium increase of 8 per cent, aligned with the statutory cap introduced in 2023, though individual impacts will vary. For Loss Prevention Recovery (LPR) clients, a revised premium formula will reward high performers, and Safe Employer Reward (SER) eligibility will be linked to timely wage declarations from 2026–27. Due to continued financial pressure on the scheme, on May 27 2025, the NSW Government introduced a bill designed to reform the workers’ compensation system in relation to psychological injuries. Whilst it is currently still under review, this initiative emphasises prevention, improving recovery rates, and addressing the escalating costs of premiums that are impacting the scheme.
Victoria
The average WorkCover premium rate of 1.8 per cent for 2025–26 has been maintained, extending the current freeze. Alongside this, the government has introduced the Workplace Injury Rehabilitation and Compensation Amendment Bill 2025, which proposes new requirements for Return-to-Work Coordinator training, enhanced entitlements for families of deceased workers, and a formal Code of Claimants’ Rights to improve service standards across the scheme. The government is also continuing to implement and monitor major changes from the 2023–24 overhaul—particularly around mental health injury claim eligibility, extended weekly payments, and the operations of Return to Work Victoria.
Queensland
Queensland continues to lead with one of the lowest premium rates in the country, maintaining its average at $1.34 per $100 of wages. Alongside this, WorkCover Queensland is rolling out a new Medical and Allied Health Advisory Services (MAHS) panel from 1 July 2025, replacing the existing medical panels and streamlining injury-related support for workers.
South Australia
For a third consecutive year South Australia is maintaining its average premium rate at 1.85 per cent for the 2025–26 financial year. This decision by the ReturnToWorkSA Board is based on continued strong return-to-work rates and the health benefits associated with work, contributing to the affordability of premiums. From 1 October 2025, it will implement the third edition of its Impairment Assessment Guidelines, introducing updated methodologies, such as those for Complex Regional Pain Syndrome, that will influence how permanent injuries are assessed and compensated, particularly for lump sum entitlements and occupational diseases.
Western Australia
The recommended average premium rate has been set at 1.823 per cent of total wages for 2025–26, up from 1.732 per cent the previous year, a 5.3% increase across the Scheme overall. The rise reflects higher claim costs, increased claim volumes, and projected wage growth. It also includes a one-off retrospective adjustment linked to benefit changes introduced under the Workers Compensation and Injury Management Act 2023 for policies written prior to 1 July 2024. The state is also continuing its implementation of major legislative reforms introduced in 2024, including modernised compensation formulas and extended income support provisions.
Australian Capital Territory
ACT’s suggested average premium rate has increased slightly to 2.04 per cent of wages for the 2025–26 financial year, up from 2.00 per cent the year prior. While this adjustment is relatively minor, it comes amid a shifting policy landscape. In terms of legislative change, the ACT passed the Workplace Legislation Amendment Bill 2025, which extends statutory permanent impairment payments to workers diagnosed with work-related silicosis, reflecting a targeted response to occupational disease risks. Separately, the government continues to consider broader reforms to the workers’ compensation scheme, including potential limits on compensation for serious and catastrophic injuries. These proposals are still under review and have yet to be finalised, but they signal a growing focus on scheme sustainability, early rehabilitation, and return-to-work outcomes.
Tasmania
The state has increased its suggested average premium rate to 2.06 per cent of wages for the 2025–26 financial year, up from 1.89 per cent. The rise reflects updated actuarial assessments and growing claim costs. Alongside the premium adjustment, the state has introduced targeted legislative reforms, including amendments to allow nurse practitioners in emergency departments to issue workers’ compensation certificates, streamlining access to benefits. Additionally, the government has committed to introducing presumptive PTSD provisions for first responders and public sector workers, marking a significant step toward better mental health support within high-risk occupations.
National outlook
Across Australia, the 2025–26 workers’ compensation landscape reflects a measured blend of premium stability and targeted reform. Whilst few jurisdictions have retained existing rates, New South Wales and Western Australia have cited rising claims costs and financial strain as the reason for their most recent increases. Legislative updates in Victoria, Tasmania and the ACT signal a broader policy shift, with greater emphasis on mental health, occupational illness and more structured return to work frameworks. Taken together, these developments point to a national trajectory focused on long-term scheme sustainability, improved claimant support and earlier intervention in injury management.
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