The Federal Government is rumoured to be preparing an assault on the public service's “compo culture”.

Sweeping reforms are planned to overhaul the Commonwealth workers' compensation schemes.

Fairfax Media reports say changes will target payouts for psychological injuries, life-long compensation, and taxpayer-funded access to dubious therapies.

For many, these are the aspects of public sector compensation scheme that are most often rorted or exploited.

Figures show claims of bullying and psychological injury have increased by 30 per cent in the past three years, and are currently four times higher in the federal public service than in the broader Australian workforce.

Legislation for smaller reforms of the $1.2 billion Comcare insurance scheme is before Parliament, but reports say Public Service Minister Eric Abetz is drawing up further reforms to be announced “shortly”.

The bigger changes are being draw-up in an Employment Department which has sworn its lawyers and other professionals to secrecy before briefing them, Fairfax reports.

It has been speculated the next wave of changes will strike at incapacity entitlements and eligibility for compensation for workplace injuries sustained in disputed circumstances, such as in psychological claims.

The Comcare insurance scheme's compensation offers sometimes last until the worker reaches retirement, which has led to some cases lasting decades and costing millions.

As ever, cost is the main driver of change, as figures showed Comcare lost about half-a-billion dollars in the 2011-2012 financial year.

Groundwork for further reform was laid by Mr Abetz in March, when he introduced legislation to reform the legal framework, the Safety Rehabilitation and Compensation Act, by allowing more private sector interests to insure workers under licence from Comcare.

Some expect new rules will exclude claims for injuries sustained on work breaks, after the infamous “sex in a motel” claim earlier this year.