The NSW government has been forced to spend another $1.9 billion on bailing out the scandal-plagued state insurance scheme icare.
Treasurer Matt Kean revealed in budget estimates on Monday that the government has again had to top up the fund icare uses to pay compensation to injured workers.
Mr Kean said he authorised the transfer in June as icare was having challenges keeping up with fluctuations in the marketplace and the types of injuries workers were reporting.
"There are a range of factors why there was an increase in the amount paid to injured workers," he said.
"We need to make sure there's money available for those injured workers."
Shadow Treasurer Daniel Mookhey said it was clear icare was being mismanaged and the funds used to prop it up could have otherwise gone towards schools or hospitals.
He went on to ask Mr Kean if he anticipated any more bailouts for icare to which he responded: "I anticipate that we will always stand by injured workers."
Mr Kean would not answer whether he still had confidence in icare.
"We should always be looking to do what we can to make sure all our government agencies are working in the best interests of their stakeholders and that's what I'll continue to do," he said.
The government has now given $3.9 million in bailouts to icare over the last three years.
In a statement, icare revealed $300 million was used to cover disasters including this year's Northern Rivers floods.
It also said there has been an increase in psychological claims and wage inflation which contributed to the extra funds being needed.
"Transfers ... are a normal part of the annual budget process, based on actual outgoings each year," an icare spokesman said.
The icare spokesman said one in four new workers compensation claims in the NSW public sector now relate to psychological injury.
Last year icare was forced to apologise for underpaying tens of thousands of injured workers to the tune of millions of dollars.
A review revealed that 53,000 injured workers were owed $38 million after they were underpaid between 2012-2019 due to calculation errors.
At the time Mr Mookhey accused icare of the "biggest act of wage theft committed by any Australian government".
"Injured police officers and nurses have been waiting for years to get their money back," he said in estimates.
A report by the law and justice committee last year found the scheme was battling a deteriorating financial position due to an increase in claim costs and falling return to work rates.
