Federal workplace insurer Comcare's get-tough policies on compo claims by Commonwealth employees, and on their bosses, have borne fruit dramatically this year and departments will save an estimated $87 million in premiums.

The insurers says the bills to taxpayers are being dramatically reduced as fewer compensation claims are made, fewer are being approved and more long-term claimants are being returned to work.

Comcare says its financial turnaround "is the most significant of any large workers' compensation scheme in Australia".

The insurance scheme, once described by a senior government minister as a "soft touch" has become a much tougher nut to crack in recent years, with only about two-thirds of claims now being approved, down from more than four-fifths in 2013.

The insurer has also cracked down on government departments, making them financially liable for their performance in keeping their workers off compensation and getting them back to their desks, in a process that has been bitterly resented by some agency bosses.

But now Canberra mandarins will see an end an end to the hated 13.5 per cent "penalty rate" their cash-strapped departments were forced to pay for each of the past several years.

Comcare's boss told Fairfax on Tuesday that her agency had succeeded in changing perceptions of public service workers comp from a scheme that sent employees home on full pay, to one that gets them back to work.

The scheme, which covers 210,000 workers 165 Australian Government agencies and departments, is now fully-funded for the first time since 2010.

Chief Executive Jennifer Taylor says Comcare finished the 2016-2017 financial year $540 million in the black, a massive turnaround from its financial nadir of 2012 when it recorded a deficit of more than half-a-billion dollars, later revised upward to a book loss of $670 million.

Future claims liability has been written down by $450 million to $2.3 billion and Ms Taylor said she wants to see it go lower.

She said she "makes no bones" about the fact that it has become much more difficult to have a Comcare claim approved.

"The number of claims coming in has dropped and the number of claims being accepted has dropped too," Ms Taylor said.

"We've been putting some effort into...improving our claims management practices, delivering an efficient and fair decision making process, one that is robust."

The chief executive said an early intervention approach to emerging had also proved successful in preventing workers simply going home on compensation payments.

"That early intervention means that somebody might only need a couple of visits to the physio," Ms Taylor said.