The Australian government is considering reforms to the federal workers compensation scheme, Comcare, aimed at providing earlier, more tailored support to injured employees and streamlining claims management processes. The move responds to a significant rise in claims linked to work-related psychological stress, which have nearly tripled in recent years.

Employment and Workplace Relations Minister Amanda Rishworth outlined the proposed changes during a speech on Wednesday, highlighting concerns that Comcare’s current framework is outdated and often results in injured workers remaining off the job longer than necessary. She questioned whether the scheme’s governance structure adequately supports early intervention, noting that this approach is more common in state-based workers compensation systems and tends to facilitate faster return-to-work outcomes.

“The longer someone is out of the workplace because of injury, the less likely they are to return to work,” Ms. Rishworth said. She cited research indicating that workers absent for 20 days have about a 70 percent chance of returning, but that probability drops sharply to 35 percent after 70 days away.

Comcare covers more than 470,000 workers employed across federal and Australian Capital Territory government agencies and several large national employers, including Australia Post, Telstra, Commonwealth Bank, National Australia Bank, and John Holland. Data from the scheme shows a steady increase in psychological injury claims, largely driven by work pressure, which generally result in longer absences and lower return-to-work rates compared to physical injuries. By 2029, psychological claims are expected to represent approximately two-thirds of Comcare’s total compensation payments. Currently, within the Australian Public Service, the return-to-work rate for psychological injury claims stands at 54 percent, significantly lower than the 91 percent rate for physical injury claims.

The Australian Council of Trade Unions (ACTU) has criticized Comcare as “broken, slow and almost 40 years out of date,” arguing that workers covered by the scheme have fewer rights and protections than those under state or territory systems. The union cited ongoing issues, including lengthy delays, income disruptions, restricted access to medical treatment, and limited support to maintain workplace connections. The ACTU is urging the government to adopt the 124 recommendations from an independent review of the Safety Rehabilitation and Compensation Act, which governs Comcare. These recommendations include mandating employer-led safe and supportive return-to-work plans, expediting dispute resolution, limiting employers’ role in managing their own claims, and reinstating legal rights for seriously injured workers to pursue action against negligent employers.

Ms. Rishworth emphasized that many workers compensation schemes have evolved from a process-focused model to a person-centered approach prioritizing the safe and sustainable return of workers to employment and good health. She acknowledged that Comcare’s legislative framework has not kept pace with these developments, with early intervention and customized support inconsistently applied across the scheme.

“Because of this piecemeal approach, injured workers often remain out of work longer than necessary,” the minister said. She indicated that the government is examining targeted reforms designed to improve Comcare’s effectiveness and ensure its long-term sustainability.