The lower house of the NSW Government has passed a Bill repealing an amendment to the Workers Compensation Act 1987 made last year in response to the COVID-19 pandemic, potentially saving businesses more than half a billion dollars in insurance premiums increases.

In July 2020, the Government passed Section 19B to the Act, which included a presumption that workers in certain industries who contracted COVID-19 had done so at work, meaning they could automatically receive workers compensation.

The amendment covered workers in industries such as healthcare, education, retail, transport, emergency services, construction, disability and aged care, dining and entertainment.

The NSW Government says that there is nowhere else in the world with automatic workers compensation rights due to COVID-19 that are as broad as those in NSW.

Similar legislation is in place in WA, where healthcare workers don’t have to prove they caught the virus while in the workplace, while the onus is on employees to prove they caught COVID-19 at work to be eligible to receive workers compensation in all other Australian states and territories.

On average, workers compensation entitlements pay employees around 80% of their earnings if they’re unable to work, while the family of employees who contract COVID-19 in the workplace and subsequently die from the disease generally receive around $1 million in compensation.

Repealing the amendment means that NSW workers will now be required to prove they contracted COVID-19 at work to gain access to workers compensation.

“Now we know more about COVID-19 and its transmission, amendments under Section 19B of the Act must be repealed so the workers compensation system is both fair to employees and ensuring businesses aren’t hit with an unexpected spike in their insurance bills,” NSW Premier Dominic Perrottet said. “Now that the economy is steadily reopening, we want businesses investing in new staff and higher wages, not inflated insurance bills.”

Recent estimates based on Doherty Institute modelling indicated that COVID-19 claims could have cost the NSW workers compensation system up to $638 million over the coming year, with more than 25,000 extra claims.

The Government says small businesses could have seen an average increase in their workers compensation insurance premiums of $950, had the legislation not been repealed.

However, there are concerns around how the change could affect workers who don’t contract the disease at work, or are unable to prove they did catch it at work, and end up suffering from long COVID, as questions have been raised over whether sick leave provisions would cover an extended period off work.

The Bill is yet to be heard by the NSW upper house.