The NSW Government plans to repeal workers’ compensation changes made last year that provided essential workers with a presumed COVID-19 right amid concerns a flood of claims could cost hundreds of millions of dollars over the year ahead and drive premiums higher.

The legislative changes added a presumption that workers in areas such as retail, hospitality, transport, healthcare and emergency services who contracted the virus had done so as a result of their employment.

Premier Dominic Perrottet says workers will still be entitled to make a claim if they contract COVID-19 in their workplace once the legislation, introduced in May last year, is repealed.

“When the NSW Government originally made the amendments, we had little information about how COVID-19 was spread and whether it was more likely to be contracted in workplaces and we certainly didn’t have a vaccine rollout,” he said.

“Now that the economy is steadily reopening, we want businesses investing in new staff and higher wages, not inflated insurance bills.”

Digital and Customer Service Minister Victor Dominello says the workers’ compensation scheme could be hit with more than 25,000 extra claims over the coming year and small business average premiums could rise $950 if changes are not made.

“There is nowhere else in the world with automatic workers’ compensation rights due to COVID-19 that are as broad as those in NSW,” he said.

The Government says recent estimates based on Doherty Institute modelling, indicate COVID-19 claims could cost the NSW workers’ compensation system up to $638 million over the coming year.

A bill to repeal the automatic presumption established under section 19B of the Workers Compensation Act 1987 will be introduced this week.

The NSW Nurses and Midwives Association says its members, who have gone “above and beyond” for the past 22 months, will face significant hurdles if the plan goes ahead, and the group is urging upper house members to block the repeal.

“Healthcare workers are at heightened risk of exposure from patients, visitors and other colleagues in their workplaces,” General Secretary Brett Holmes said.

“Yes they can make a workers’ compensation claim, but if they are forced through a disputed claims process it could be months before they get an outcome, or a long time without any income if they’re a casual worker.”

Greens Upper House member David Shoebridge also criticised the proposal on Twitter.

“The Greens will not abandon the people who protected us during the pandemic, nurses, firefighters, supermarket workers and we will oppose these Coalition attacks,” he said.