NSW Return to Work Is Under Pressure: What the 2026–28 Roadmap Means for Employers
In this article
Return to work outcomes across NSW are changing – and not in the right direction.
Recent insights from the State Insurance Regulatory Authority (SIRA) highlight a clear downward trend: more workers are staying off work longer and claims are becoming more complex and costly.
While musculoskeletal injuries still make up the majority of claims, psychological injuries – although fewer in number – are driving a disproportionate share of costs and delivering significantly poorer return to work outcomes.
For employers, SIRA’s insights provide a clearer picture of where challenges exist, and where focus is needed to improve outcomes.
Return to work performance has steadily weakened over time. RTW rates at 13 weeks have dropped from 88% in 2016–17 to 79% in 2024–25 – equating to more than 45,000 additional workers not back at work at this point compared to expected levels. This reflects a sustained decline in return-to-work performance across the system.
While psychological injuries make up around 10% of total claims, they account for approximately 26% of total costs. These claims are more complex, longer in duration, and have significantly lower return to work rates – sitting at around 40% at 13 weeks. Their growing impact is placing increased pressure on the scheme.
Despite clear evidence on the importance of early intervention, fewer than one in four claims receive effective early risk assessment. This gap is contributing to delayed recovery, with many claims escalating well before the right support is in place.
SIRA’s data shows that the longer a worker remains off work, the less likely they are to return. At around 20 days, the probability of returning to work sits at approximately 70%, with this dropping to around 50% by 45 days.
Recovery and return-to-work is not just about the physical or psychological condition. Recovery and RTW outcomes are shaped by a combination of personal, workplace, insurer, and healthcare factors – many of which are modifiable if addressed early (within 4 weeks).
The Return-to-Work Roadmap 2026–28 is focused on improving return to work outcomes by strengthening early intervention and addressing the broader range of factors that influence recovery across the system.
SIRA is prioritising earlier identification of at-risk claims, improved coordination across the system, and a stronger focus on recovery at work – supporting workers to remain connected to the workplace where appropriate.
There is also a targeted focus on improving outcomes for psychological injury claims and strengthening employer capability, supported by a risk-based approach to identifying and responding to risk earlier.
The roadmap reinforces what high-performing organisations are already doing, but also highlights where many are falling short.
Key actions for employers:
SIRA’s roadmap doesn’t introduce new concepts – it reinforces a critical reality: Return to work outcomes are won or lost early.
For employers, this is a clear opportunity. Those who invest in early intervention, proactive support, and coordinated management will see better outcomes – not just in claims performance, but in workforce health, productivity, and cost control.
You can read the full roadmap here: State Insurance Regulatory Authority – Return to Work Roadmap 2026–2028
Contact us today to discuss how we can help you strengthen early intervention, reduce claim duration, and improve return to work outcomes across your workforce.
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