Review of the Comcare Compensation System – What Injured Workers and Employers Need to Know

In September 2025, the Federal Government released the final report of the independent review of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act), which underpins the Comcare workers’ compensation scheme. The review focuses on improving outcomes for injured workers while ensuring the long‑term sustainability and fairness of the scheme.

The report makes a number of significant recommendations that, if implemented, would represent the most substantial reform to Comcare in decades. Below is a plain‑English summary of the most important proposals.

Common Law Damages – Removal of the Cap (Non‑Economic Loss)

One of the most notable recommendations is the proposal to remove the existing cap on common law damages, but only for non‑economic loss (pain and suffering). The current cap under the Comcare scheme is $110,000 as compared to workers covered by WorkCover where the current cap for pain and suffering damages is $703,460.

This would:

·         Allow courts greater discretion to assess damages based on the individual circumstances of the injured worker

·         Bring Comcare more closely into line with modern compensation principles

·         Retain limits on economic loss, preserving scheme sustainability

If adopted, this change would significantly improve access to meaningful compensation for workers with serious injuries. It would also create an incentive for licensees to maintain safer workplaces.

Expanded Use of Redemptions and Settlement Flexibility

The review recommends:

·         Improved availability of redemptions (lump sum global settlements)

·         Giving Comcare greater ability to negotiate settlements guided by:

o   Good management of the Comcare scheme

o   Overall fairness to the claimant

o   Efficient use of Comcare resources

This is a practical reform aimed at reducing prolonged disputes and allowing appropriate matters to be resolved earlier, with certainty for both parties. Greater redemptions also mean that workers can escape the Comcare system by being paid out their entitlements.

Increased and More Flexible Permanent Impairment Benefits

The review proposes:

·         Increased impairment benefits overall

·         Allowing multiple impairments to be combined for assessment purposes

·         Retaining the existing thresholds:

o   10% whole person impairment for most injuries

o   5% for hearing loss

This addresses a long‑standing criticism of Comcare, where injured workers with multiple moderate impairments have struggled to reach the 10% threshold despite significant overall disability.

Legal Costs at the Reconsideration Stage

Currently, workers often bear their own legal costs at the internal reconsideration stage. The review recommends that:

·         Reasonable legal costs be payable at reconsideration

This change would improve access to justice, reduce power imbalances, and encourage higher‑quality initial decision‑making.

Stronger Protections Against Revocation of Liability

The review recommends important safeguards where Comcare seeks to revoke an accepted liability:

·         Liability should only be revoked where there is significant or genuinely new evidence

·         Workers should remain on benefits until:

o   The reconsideration period expires, or

o   Any application to the Administrative Review Tribunal (ART) is finalised

·         Workers’ fair and reasonable legal costs should be covered regardless of outcome, subject to prescribed maximum hourly rates

Currently Comcare can at any time revoke liability which means that not only do injured workers lose their benefits but they can also be required to repay all benefits received, sometimes after years in the system. These reforms are aimed at preventing financial hardship and uncertainty for injured workers during disputes.

Why This Review Matters

Collectively, these recommendations signal a shift toward:

·         Greater fairness for injured workers

·         Earlier and more efficient dispute resolution

·         Improved confidence in the Comcare system

While these are recommendations only, they provide a clear roadmap for reform. Whether and how they are implemented will be critical for federal employees, employers, unions, and practitioners alike.

Government Response to the Comcare Review

Following the release of the independent review of the Safety, Rehabilitation and Compensation Act 1988, the Australian Government has formally acknowledged the report and its findings. The Minister for Employment and Workplace Relations, Amanda Rishworth, confirmed that the Government recognises the need to modernise the Comcare system to better support injured and ill workers in their recovery, return to work, and long-term wellbeing. The Government has stated it will carefully consider the review’s recommendations with a view to progressing necessary reforms, and consult with stakeholders as it develops its response and potential legislative changes.

We will continue to monitor developments closely and provide updates as the Government responds to the review.

If you have questions about Comcare entitlements, impairment claims, redemptions, or common law damages, seek advice early – the proposed changes may materially affect your rights and options.

Jonathan De Biase