Published on May 15, 2018
If you have a workers compensation claim in Victoria you may have come across at some stage the very unfamiliar term “impairment benefit”. To most of my clients this is a completely unknown phenomenon to them and explaining it clearly and adequately is often a challenging experience for people who have never been involved in the Victorian Workers’ Compensation scheme before.
You may find yourself in the situation where your lawyer has encouraged you to lodge an impairment claim and a decision has come back and you have to elect to either accept the insurer’s decision or challenge it. In these circumstances most injured workers are at a complete loss to know what to do.
A brief history of workers’ compensation in Victoria would start with the days prior to there being any legislated compulsory insurance scheme. During those dark times if you were unfortunately injured at work then your only way of recovering your lost wages and medical expenses would be to sue your employer personally. That was a very difficult task for an injured worker to undertake for many reasons, not least of which that they had limited funds to bring a legal claim against their employer and even if they were successful, then their employer would either have no assets to pay them their compensation or would be structured in such a way that it would be very difficult to extract any money out of them.
Thankfully over time, compulsory workers compensation insurance schemes were introduced throughout Australia including Victoria. The current Compulsory Workers’ Compensation scheme removes injured workers’ rights to sue their employer directly but in place of that right they provide three main benefits which are referred to as “no fault benefits”. This means you don’t have to prove that your employer did something wrong for you to be entitled to receive those benefits.
The main two benefits are the payment of your wages for when you are incapacitated for work for a period of time and the payment of your reasonable medical and like expenses. This ensures that you are not out of pocket if you have to be absent from work due to a work related injury and require medical treatment.
The third benefit is the curiously named “impairment benefit”.
This benefit also does not require you to establish that your employer caused your injuries for you to be entitled to it. It is an entitlement to a lump sum amount of money if you are left with a permanent impairment or in other words, any ongoing restrictions, as a result of your work injuries after those injuries have stabilised that will continue into the future. If you suffer an injury and you recover completely from those injuries or substantially and are only left with minor impairments and restrictions, then you most likely won’t be entitled to any lump sum compensation for your injuries.
The reasoning behind this entitlement to a lump sum amount of money is that as the law effectively removes your right to sue your employer for your common law damages of economic loss and pain and suffering compensation, then to compensate for the loss of that right, then those injured and left with permanent impairments should be entitled to a lump sum amount of money to compensate them for their injuries.
There is though in Victoria still the right to pursue your common law damages of economic loss and pain and suffering damages as long as you are able to establish that you have what is known as a serious injury. That is an article for another time but for now it is worth knowing that the great majority of those injured at work will never establish that they have a serious injury and therefore not be entitled to pursue any common law damages even if their employer was grossly negligent.
The legislation which sets out an injured workers’ entitlement to an impairment benefit states that your injuries must be stabilised before you can lodge your claim for an impairment benefit. This is a significant factor to be considered when lodging an impairment benefit. Say you were to lodge your impairment claim and then settle it. You do not get a second chance to come back and have another go if your injury gets worse. It is therefore very important that you wait for your injuries to be stabilised before you lodge an impairment claim. The other side to this situation is that the insurer is only liable for your permanent impairment and if they form the view that your injuries haven’t stabilised, then they will reject the application on that basis
If your injuries are stabilised and you are left with a permanent impairment, then your lawyer should lodge an impairment claim on your behalf. They must first have all of the relevant medical reports which list all of your injuries that you are claiming that relate to your work and then lodge the claim on your employer’s insurer.
Your employer’s insurer then has 120 days to accept the claim and determine if you are entitled to a lump sum of money. The insurer should arrange for you to be assessed by an independent medical examiner who will assess your level of impairment using the relevant American Medical Association Guides to the Evaluation of Permanent Impairment 4th Edition. These Guides are most often referred to as the AMA Guides or simply the Guides. They contain several chapters for various parts of the body and different injuries and illnesses and set out how a doctor is to examine you and determine what level of impairment you have. For various physical or orthopaedic injuries, the level of assessment is based on the range of movement you have lost as a result of your injury. Other chapters contain more complicated assessments. As a general rule for physical injuries, you must have at least a 5% whole person impairment under the Guides to be entitled to any money. For psychiatric injuries you must have at least a 30% whole person impairment to be entitled to any compensation.
The reference to “whole person impairment” is often a confusing description of the assessment of your impairment. It is usually referred to as WPI and is used as a way of coming up with an overall level of impairment for your entire person. 100% WPI means that your body is entirely impaired. Say you have an injury of your right shoulder as a result of your employment. The independent doctor will assess the level of impairment to your right shoulder and then come up with a figure for that usually by using tools to measure the loss of the range of motion of your shoulder function. This will give the independent doctor a figure for the impairment for your right shoulder. That figure will then have to be converted to the relevant level of impairment for your entire person. Injuries to the spine can be very complicated and result in differing ways of assessment.
In any event, once your claim is lodged and you have been assessed by the doctor, the insurer will then have to make a determination as to what your level of impairment is. If you have an impairment of at least or more than the thresholds being 5% generally for physical injuries and 30% for psychiatric injuries, then the insurer will write to you notifying you of your entitlement. You will then receive a form which prompts you to notify the insurer that you either accept their assessment of your level of impairment or that you reject their assessment.
Your lawyer will then have to advise you as to whether the insurer’s assessment is a reasonable assessment of your level of impairment or if it is wrong. If your lawyer is of the opinion that the insurer’s assessment is wrong in say they have not considered all of your injuries or have assessed your impairment incorrectly, then you are entitled to advise the insurer that you do not accept their assessment. You are then required to lodge a request for conciliation in an attempt to have it resolved.
If you have been to conciliation before for any other disputes with the insurer, then you will be familiar with the process. Lawyers are entitled to attend these impairment conciliation disputes which will focus on arguments about the medical opinions in relation to your level of impairment. If an agreement can’t be reached at conciliation then the matter has to be referred off to the medical panel for a further independent assessment of your level of impairment.
The medical panel will then make their own findings about your level of impairment. This medical panel finding known as an opinion is binding on all the parties. There are limited ways of challenging or reviewing the medical panel opinion but this can be very difficult.
If you have made your way through the whole process and you accept the insurer’s decision about your level of impairment and it is greater than the thresholds, then you will be entitled to receive a lump sum amount of money. The amount of money is determined under complicated schedules in the legislation and the sums can vary from approximately $10,000 up to in excess of $100,000’s depending on your level of impairment.
If you receive this lump sum compensation for your impairment, then it will have no effect on your other entitlements namely your wages and entitlement to receive your reasonable medical and like expenses. If you go on to pursue a common law claim down the track, then your impairment money is generally taken into account at that stage but is generally not a factor that would prevent you from pursuing that further common law claim.
If you have any queries in relation to a current impairment claim or your rights to pursue one for an ongoing work injury, then I recommend you contact my office as soon as possible so I can advise you about the best approach to pursuing your maximum entitlement as soon as possible.