SIRA publishes review of under insurance in Workers Compensation Scheme

21 July 2025

SIRA has published the findings of its Review of Under Insurance in the NSW Workers Compensation Scheme, revealing significant non-compliance and insurer shortcomings that threaten the financial sustainability and fairness of the scheme.

The Review covered the Nominal Insurer (NI) and relevant specialised insurers, prompted by SIRA identifying rising under-estimated wages in NI policies and declining employer compliance with wage declarations. It found widespread under insurance within the Nominal Insurer's (NI) portfolio, including:

• An estimated $60 million in unpaid premiums due to missing wage declarations.
• A 75% non-compliance rate among employers audited, resulting in $24.5 million in additional premiums.
• Weaknesses in underwriting practices, including outdated wage estimates, poor follow-up, and insufficient quality controls.

In contrast, specialised insurers demonstrated stronger compliance controls and reduced risk exposure-highlighting the importance of robust systems and active oversight.

Following the Review, which commenced in March 2024, SIRA and icare have taken coordinated action to drive improved compliance. Since December 2024, these efforts have delivered:

• A reduction of 294,000+ outstanding wage declarations.
• $353 million in recovered premiums.
• A strengthened renewal process that bases premiums on actual wages to reduce hindsight adjustments.
• Implementation of a streamlined self-service portal with over 90% of wage submissions processed immediately.

SIRA has also launched twice-yearly employer education campaigns, with complementary communications provided by icare, SafeWork NSW, Service NSW and employer networks.

The NSW Government is currently considering amendments to the Workers Compensation Act 1987 that would introduce financial penalties for under insurance-a key gap identified in the Review. These penalties would go beyond simple back payment of avoided premiums to include fines and potential prosecution for deliberate non-compliance.

SIRA will pilot an enforcement initiative from Q3 2025/26 targeting employers with premiums over $250,000 who have failed to submit actual wage declarations.

Chief Executive of SIRA, Mandy Young said: "The Review's findings underscore the need for stronger regulatory tools and clear consequences for non-compliance. Ensuring all employers contribute fairly is essential to maintaining the integrity of the scheme to ensure workers that are injured receive the care and support they need."

Further Information

• Workers Compensation Under Insurance Review

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