The Abbott government is planning a fresh assault on its public service’s compo culture with more sweeping reforms planned for the Commonwealth workers’ compensation schemes.

Employment Department officials are working on changes that will attack the most controversial aspects of the Commonwealth’s schemes – payouts for psychological injuries, compensation for life, and taxpayer-funded access to dubious therapies.

Public Service Minister Eric Abetz said the new reforms would be announced “shortly”, while bureaucrats from his department draft the changes in secrecy.

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Legislation for limited reform of the $1.2 billion Comcare insurance scheme is already before Parliament but Senator Abetz this month foreshadowed a fresh wave.

The Employment Department has been swearing lawyers and other professionals to secrecy before briefing them about its plans.

But The Canberra Times understands the next wave of changes will go to the heart of the scheme and reduce incapacity entitlements and eligibility for compensation for workplace injuries sustained in disputed circumstances, particularly for psychological claims.

The insurance scheme’s “long tail”, which offers public servants compensation until they reach retirement and has resulted in cases lasting decades and costing more than $2 million, is also expected to be targeted in the new shake-up.

Comcare has been under intense scrutiny since a review in early 2013 urged sweeping reforms to reduce the number of dubious claims for psychological injuries, payouts for dodgy therapies and doctor shopping.

The cost of the scheme has been the main driver for change, with Comcare losing half-a-billion dollars in the 2011-2012 financial year.

In 2012-2013 the financial performance was much improved to a $98 million loss. A further improvement is expected when the agency unveils its 2013-2014 result.

But the improved financial performance will be partially due to a sharp increase in the premiums paid by government departments.

In March Mr Abetz introduced legislation to Parliament designed to improve the scheme by reforming its legal framework, the Safety Rehabilitation and Compensation Act, and allowing more private sector players to insure their workers under licence from Comcare.

There are also changes to the laws that will exclude claims for injuries sustained on work breaks, designed to ensure there are no repeats of the infamous “sex in a motel” claim, where a legal battle over a payout for injuries sustained while a bureaucrat had sex while away on a work trip went all the way to the High Court.

The new reforms are expected to target psychological injuries in the public sector – many related to accusations of bullying and harassment – which have increased by 30 per cent in the past three years and are four times higher in the federal public service than for other employers.

Senator Abetz warned the sector at Comcare’s national conference in Melbourne this month that a fresh wave of changes was in development and to expect an announcement “shortly”.

But the minister’s office said they were not yet ready to confirm details about what was planned.

“We do not have a comment to make at this time,” the spokeswoman said.