Workers Compensation
Understanding work-related psychological injury, and what recent changes mean
If work has affected your mental health, you may be trying to make sense of what you're experiencing, whether it's connected to your work, and what the recent changes in New South Wales mean for you. This page works through some of the common questions. It's general information rather than advice about your particular situation, but it may help you understand things before you decide what to do.
What is a work-related psychological injury?
A psychological injury is a diagnosed mental health condition, such as an anxiety or depressive condition or post-traumatic stress, that has been caused or significantly contributed to by work. It's different from the ordinary stress or difficulty that many people feel at work. An injury involves a recognised condition and a real connection to what happened in the workplace.
What changed in New South Wales?
For psychological injuries first notified on or after 1 July 2026, the rules for what can be compensated changed significantly. Compensation for a primary psychological injury is now payable only where the injury was caused by a defined "relevant event," where there is a real and direct connection between that event and the person's employment, and where employment is the main contributing factor to the injury. This is a narrower test than before. Previously, a wider range of work stressors could support a claim.
What is a "relevant event"?
The law now defines specific categories of event that can give rise to a compensable psychological injury. These include things such as being subjected to violence or a threat of violence, witnessing a traumatic incident, experiencing vicarious trauma, and being subjected to bullying, sexual harassment, racial harassment, or excessive work demands.
Claims based on bullying, harassment, or excessive work demands follow their own claims process and require detailed information about what happened.
Does general work stress qualify?
Generally, no. Ordinary work pressure, interpersonal conflict, and general workplace stress that don't fall within a defined relevant event are no longer compensable on their own. This is one of the biggest practical effects of the changes, and it's why understanding what actually happened, in detail, now matters more than before.
What is "reasonable management action"?
If the significant cause of a psychological injury was reasonable management action taken by the employer, the injury is not compensable. This covers legitimate management decisions, such as performance management, disciplinary processes, feedback, or restructuring, provided they are reasonable and carried out in a reasonable way. The reforms have strengthened and clarified this defence.
Is this connected to psychosocial hazards at work?
Yes. Psychosocial hazards, the workplace factors that can affect mental health, are the "prevention" side of the same picture. Many of the relevant events above (bullying, harassment, excessive demands, exposure to trauma) are also recognised psychosocial hazards that employers have a duty to manage. You can read more about them on our Mental Health at Work page.
Do the same rules apply in Queensland?
No. Each state runs its own workers compensation scheme, and the recent changes described here are specific to New South Wales. Queensland (WorkCover Queensland) has its own rules and processes. We work with clients under both the New South Wales and Queensland schemes.
Do I need a diagnosis to make a claim?
A workers compensation claim for psychological injury generally involves a diagnosed condition and medical evidence connecting it to your work. Your GP is usually the starting point, and psychological assessment can help clarify what you're experiencing and provide information your GP can use.
How do I know if I might have a claim?
It's rarely a simple yes or no, because people are complex and psychological injury is too. It can build gradually, show up in unexpected ways, and a diagnosis can take time to become clear, sometimes developing and changing as things unfold. Understanding what you're actually experiencing, and how it relates to your work, is what gives you a clear place to start with your GP.
Where to start
If you're trying to understand whether work has affected your mental health, the clearest first step is usually a conversation, or a psychological assessment.
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