The NSW Government will open up the workers’ compensation market to new insurers and reduce benefits earlier under legislation passed through the State Parliament last week.

The dramatic changes to the state’s WorkCover regulations will re-open the market to specialised insurers who target particular groups of employers.

A WorkCover “independent review officer” will be appointed to deal with complaints about insurers and to review their decisions on work capacity.

The NSW Government has amended the Workers’ Compensation Act after accepting most of the recommendations of a joint parliamentary select committee earlier this month.

But to get the legislation through Parliament last week it had to abandon a plan to stop covering claims for all journeys to and from work.

The Government says the reforms will address WorkCover’s $4 billion deficit while improving care for the most disabled workers.

WorkCover lawyers and opposition parties have condemned the changes, and unionists protested outside Parliament last week when the amendment bill was being debated.

Benefits will start reducing at week 13, rather than week 26, under the amendments. Payments after 130 weeks will only be made to people who are totally incapacitated or who are partially incapacitated and have returned to work for at least 15 hours a week. Previously there was no time limit.

Payments will stop after five years for people with less than 20% “whole person impairment”, and lump sum criteria have been tightened.

Assessment of work capacity has been increased and there will be a time limit on medical payments, which will stop 12 months after a claim is made or weekly payments cease, except for people with 30% whole person impairment.

Weekly payments will be based on pre-injury average weekly earnings rather than the current weekly wage at the time of injury. Weekly compensation will be based on the same rule, but with an upper cap and reduced by any current earnings.

NSW Finance and Services Minister Greg Pearce says the reforms will ensure injured workers get the treatment they need to return to work while those who cannot return are cared for into the future.

“The workers’ compensation scheme has been costing the state up to $9 million a day and it’s time to put the plan for recovery into action,” he says.

The Government has restricted access for compensation following heart attacks and strokes and for diseases unless work was the main contributing factor.

Relatives will no longer get compensation for nervous shock.

There will also be new compliance measures on return to work, with a new offence for employers who fail to provide suitable duties.