The State Insurance Regulatory Authority (SIRA) has proposed actions to improve the performance of the NSW public sector workers’ compensation scheme, after a review found extensive failings. 

The Treasury Managed Fund review, the largest of its type undertaken by SIRA, examined 951 claim files starting in 2022. Psychological injury claims comprised 54% of the sample. 

“Through the course of the review, SIRA has used its powers to take regulatory action where a lack of compliance has been identified,” Acting CEO Petrina Casey said. 

“This has resulted in liability decisions being made, ongoing monitoring, employer improvement notices and penalty notices.” 

The Treasury Managed Fund provides workers’ compensation insurance for more than 330,000 people across about 200 government agencies, including police officers, teachers, nurses, and employees in transport, customer service and other public sector roles. 

SIRA found the fund, which represents about 8% of people covered by workers’ compensation insurance in NSW, was responsible for 20% of all claims in fiscal 2022. 

Eight out of 10 psychological injury claims arose from preventable workplace behaviours such as work stress, bullying and harassment, and other mental stress factors. Psychological claims growth was mainly driven by the “Stronger Communities” cluster, which includes police, fire and rescue, corrective services and other agencies. 

Key areas of concern identified for the Treasury Managed Fund were structural complexity, financial performance, government employer compliance, return-to-work challenges and claims management. 

The fund is administered by NSW Self Insurance Corporation, which delegates operations to icare, which appoints claims managers. 

“The structural complexity of the [fund] results in lack of clarity and functional ownership in relation to obligations under workers’ compensation legislation, and greater accountability is required to enable more effective regulation by SIRA,” the regulator’s report says. 

icare has told SIRA it is developing a Treasury Managed Fund transformation plan that consolidates the claims management system, providing an opportunity for efficiency and holistic improvements. 

SIRA says it has suggested courses of action for each key area of concern in the review and stakeholders are broadly supportive.

“As a result, we have confidence that the government agencies appreciate their importance and will work to implement them,” Dr Casey said.

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