IRO-funded workers compensation legal advice in NSW

The current ILARS funding criteria

For funding decisions made on or after 1 July 2026, the IRO must be satisfied that the statutory criteria in Schedule 5 of the Personal Injury Commission Act 2020 are met. In practical terms, the application must address all three of the following questions:

1. Likely benefit: is the proposed funding justified by the likely benefit to the person or to workers generally, taking account of scheme sustainability?
2. Reasonable prospects: does the matter have reasonable prospects when the necessary investigation, correctness of insurer decisions and possible dispute resolution are considered?
3. Prudent self-funding test: would a prudent person with adequate financial resources use their own money for the proposed work?

The current amendments say these statutory criteria replace older references to an arguable case, merit or reasonable necessity as the test for deciding funding. The lawyer applying must provide evidence showing why the criteria are met.

What an approved grant may cover

Subject to the grant and current criteria, ILARS funding may cover professional legal fees, counsel fees, medical report fees, and other disbursements or incidental expenses reasonably necessary to investigate a claim or pursue a dispute. The funding decision may be staged or confined to specified work.

• initial investigation, advice and early dispute-resolution work where the criteria are satisfied;
• work responding to an insurer decision or pursuing a workers compensation dispute;
• approved medical records, medical reports and other evidence;
• representation in the Personal Injury Commission where required and approved;
• relevant-conduct proceedings in the Industrial Relations Commission where the amended guidelines apply; and
• approved appeal or reconsideration work in appropriate matters.

All disbursements require pre-approval under the 1 July 2026 amendments. Additional work can require another funding decision even where an earlier stage was funded.

What is not automatic

• A claim check or first conversation is not an ILARS grant.
• Having a work injury does not by itself satisfy the funding criteria.
• The current amendments state that generic advice is not funded merely to explain general rights and entitlements.
• Urgency does not remove the need for the IRO to assess the criteria.
• Legal costs incurred before a grant decision are not paid by IRO under the current guidelines.
• Medical reports, counsel and other disbursements are not automatically covered without the required approval.
• A grant for one stage does not guarantee funding for every later step or appeal.

Approved Lawyer requirements

Only a lawyer approved by the IRO can apply for an ILARS grant. The IRO states that an applicant for Approved Lawyer status must have been admitted and certified to practise as a solicitor for at least 12 months, demonstrate competence and diligence, and have knowledge, skill and familiarity with NSW workers compensation law and practice. Additional experience criteria, the IRO agreement, practice standards and administrative requirements also apply.

Approval belongs to the individual lawyer, not automatically to every lawyer at a firm. The lawyer dealing with the matter must confirm their status and make the funding application. The IRO maintains a Find an Approved Lawyer directory.

How the funding process usually works

1. Identify the legal issue. Keep the insurer notice, review decision, claim details and evidence showing what has changed.
2. Speak with an Approved Lawyer. The lawyer takes instructions and assesses the legal work, eligibility and current funding criteria.
3. Prepare the grant application. The lawyer explains the work proposed, likely benefit, prospects and why the expenditure is justified.
4. Wait for the IRO decision. The IRO may approve, decline, request more information, refer a complaint for early resolution or limit the grant.
5. Work within the grant. The lawyer must comply with the approved scope and seek approval before incurring disbursements or additional funded work.

Do not start PIC or IRC proceedings on the assumption that a later application will cover earlier costs. The 2026 amendments expressly address work done before approval.

Workers compensation issues where funding may need to be assessed

Workers who may fall outside ILARS

The ILARS Guidelines exclude certain worker categories, including police officers, firefighters, paramedics, coal miners, workers with a dust disease and workers covered by the Bush Fire, Emergency and Rescue Services legislation. Different legal-cost rules may apply to those workers. Their position should be checked rather than assuming ILARS is the correct funding path.

What to send for a funding assessment

• the insurer decision and any internal review outcome;
• the claim number, injury date and accepted or disputed conditions;
• Certificates of Capacity and the medical reports relevant to the decision;
• wage or roster records where weekly payments are disputed;
• the treatment request and refusal reasons where medical expenses are disputed;
• any PIC, IRC or appeal documents already received; and
• the date of the next deadline, conference or examination.

Sources and review date

Last reviewed: 18 July 2026.

This page reflects the ILARS Funding Guidelines as amended from 1 July 2026 and current IRO material available on the review date. The Amending Instrument is an interim measure and the IRO states that it intends to replace the guidelines after consultation, so the source should be checked again before advice is given.

• IRO: ILARS Funding Guidelines information
• IRO: Amending Instrument from 1 July 2026
• IRO: apply for a grant of funding
• IRO: Approved Lawyer requirements
• IRO: ILARS Funding Guidelines
• IRO: Practice Standards for Approved Lawyers

Frequently asked questions