Both Woolworths and Aldi have been censured by the NSW State Regulatory Authority after concerns were raised about their workers’ compensation self-insurer performance, with both organisations claiming their breaches occurred during the transition of claims management services to a new third-party provider.
In both NSW and Victoria, employers, typically large employers, are able to apply for approval to manage workers’ compensation claims in-house rather than use one of the default insurance agents. In Victoria there are 33 employers approved as self-insurers by WorkSafe representing approximately 5% of the Victorian WorkCover scheme, based on remuneration. Woolworths is a self-insurer whereas Aldi is not. Concerns about the self-insurer model were the subject of an Ombudsman’s investigation in 2023 which looked at claims management and oversight by WorkSafe.
Aldi censure letter
The NSW State Insurance Regulatory Authority (SIRA) issued a letter of censure to Aldi Stores Ltd in August 2026 for breaching a condition of its self-insurance licence.
The letter stated that Aldi had been "subject to enhanced regulatory oversight since February 2023 due to recurring claims management and compliance concerns", and a May 2026 audit found its remediation activities had not been effective.
"The audit identified deficiencies across compliance, case management and data quality and resulted in an overall high-risk outcome," the letter said.
SIRA acknowledged Aldi's submission that a significant proportion of the non-conformances arose prior to, or during, the transition to a new third-party administrator, citing operational challenges in onboarding new case management teams. But SIRA did not accept that, stating that “the use of a claims management provider does not absolve Aldi of its obligations as a self-insurer,” and that it was “incumbent upon Aldi to identify, manage and mitigate the risks associated with the transition to ensure continuity of compliant claims management practices.”
Aldi’s breach was a sustained, years long pattern of non-compliance across claims management, case management, and data quality – the same categories assessed in a high-risk audit – that persisted through a three-year remediation window and remained unresolved at independent audit. The censure now forms part of Aldi’s regulatory history, and failure to demonstrate substantial and sustained compliance at the September 2026 self-audit may result in further action.
Woolworths fine
In September 2026 SIRA handed Woolworths a $50,000 civil penalty for underpaying injured workers, including by failing to increase their benefits in line with changes to the consumer price index. This civil penalty will form part of Woolworths’ regulatory history.
The action against Woolworths was triggered by audit findings that identified multiple instances where weekly payments and the calculation of pre-injury average weekly earnings were incorrect, benefits weren't paid, and indexation was not applied at an indexation point.
According to SIRA's penalty letter, indexation was not applied across all applicable claims when Woolworths transitioned to a new claims management system, producing underpayments across the company's entire self-insurance portfolio rather than in isolated files. Woolworths did not identify these issues independently and only became aware of them in responding to a notice issued by SIRA.
The SIRA penalty letter noted that Woolworths retained statutory responsibility for the management of its claims and the accuracy of payments made to workers, despite any third-party administrator in place and transition of claims between administrators.
SIRA will continue to monitor Woolworths’ performance and compliance through its ongoing supervisory activities. Failure to demonstrate substantial and sustained compliance may result in further regulatory action.
This is a timely reminder that self-insurers cannot move compliance liability to a third-party administrator (TPA). The licence holder retains the legal exposure regardless of who handles claims day to day, and that responsibility does not pause during a handover.
SIRA's FY2025-26 regulatory priorities, published in July 2025, name intelligence-led, risk-based regulatory action as one of three overarching themes for the year. Its three-year SIRA 2028 strategy, launched in February 2025, lists holding regulated entities to account as a core goal.
Read more: SIRA issues Letter of Censure to Aldi Stores Ltd - SIRA
SIRA issues $50,000 civil penalty to Woolworths Group Limited - SIRA