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Work Capacity Decisions in NSW Workers Compensation – Part One

Work Capacity Decisions in NSW Workers Compensation – Part One

Published on December 7, 2020 by Maithri Panagoda AM and Thomas FelizziMaithri Panagoda AM and Thomas Felizzi


In this series of three articles, we look at Work Capacity Decisions and Work Capacity Assessments under NSW workers compensation law.

A work capacity assessment is one conducted by the insurer of a workers current work capacity in accordance with section 44A of the NSW Workers Compensation Act 1987 (‘the 1987 Act’).

A work capacity assessment (s44A of the 1987 Act) is not necessary for making a work capacity decision (WCD) i.e. a WCD can address more than just the work capacity of a worker.

What is a Work Capacity Decision (WCD)?

Section 43(1) of the 1998 Act defines what a WCD can be whereas section 43(2) of the 1987 Act explains what they are not. A WCD, which is usually made at the time worker has received or is about to receive 130 weeks of weekly compensation, will ordinarily determine whether a worker:

  1. Can go back to work
  2. Or earn some income which in turn, will either cut the workers weekly compensation or completely stop payments all together.

It is also important to note that a decision on a worker’s pre-injury average weekly earnings (PIAWE) also constitutes a WCD (section 43(1)(d) of the 1998 Act). A letter explaining the PIAWE of the worker cannot be referred to the Workers Compensation Commission (WCC).

For example, an insurer may decide to perform a WCD once reviewing a WorkCover Certificate completed by the nominated treating doctor which determined that a worker can perform 4 hours per day 3 times per week, with certain restrictions. Following, an insurer could obtain a vocational assessment which determines that the worker could do some type of clerical or administrative work and earn some form of income, which reduces or stop weekly payments all together.

Whether this decision can be successfully challenged depends on what evidence the WCD is based on and what is obtained by the worker in reply.

A denial of injury is not considered as a WCD’s (section 43(2)(a) of the 1987 Act). Also, the decision of an insurer needing a referral to an Approved Medical Specialist, which for example, relates to entitlements determined by section 39 of the 1987 Act, is not a WCD (section 43(2)(b) of the 1987 Act).

43 Work capacity decisions by insurers

(1) The following decisions of an insurer are

“work capacity decisions” —

(a) a decision about a worker’s current work capacity,

(b) a decision about what constitutes suitable employment for a worker,

(c) a decision about the amount an injured worker is able to earn in suitable employment,

(d) a decision about the amount of an injured worker’s pre-injury average weekly earnings or current weekly earnings,

(e) a decision about whether a worker is, as a result of injury, unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment,

(f) any other decision of an insurer that affects a worker’s entitlement to weekly payments of compensation, including a decision to suspend, discontinue or reduce the amount of the weekly payments of compensation payable to a worker on the basis of any decision referred to in paragraphs (a)-(e).

(2) The following decisions are not work capacity decisions–

(a) a decision to dispute liability for weekly payments of compensation,

(b) a decision that can be the subject of a medical dispute under Part 7 of Chapter 7 of the 1998 Act.

We can help

If you are a worker and receive a WCD then you will need respond promptly and efficiently with expert legal advice. The prospect of losing weekly benefits is undoubtedly stressful and we would recommend that you contact Carroll & O’Dea Lawyers.

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