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Work Capacity Decisions in NSW Workers Compensation

Work Capacity Decisions in NSW Workers Compensation

Published on November 19, 2020 by Thomas FelizziThomas Felizzi


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.

Lets look at the relevant legislation.

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 workers 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 WCDs (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.

What is a work capacity assessment then?

It is simply, an assessment of the workers work capacity. It reviews the workers functional, vocational and medical restrictions and can  occur once every 2 years or at any stage of the claim. As you will see below, a WCD considers more than just’ capacity, but considers employment at large, age, skills and work experience. Importantly, if a worker is as assessed having a whole person impairment of greater than 30% then a worker is unlikely to have their work capacity assessed, unless the worker requests it, or it is appropriate to do so

44A Work capacity assessment

(1) An insurer is to conduct a work capacity assessment of an injured worker when required to do so by this Act or the Workers Compensation Guidelines and may conduct a work capacity assessment at any other time.

(2) A “work capacity assessment” is an assessment of an injured worker’s current work capacity, conducted in accordance with the Workers Compensation Guidelines.

(3) A work capacity assessment is not necessary for the making of a work capacity decision by an insurer.

(4) An insurer is not to conduct a work capacity assessment of a worker with highest needs unless the insurer thinks it appropriate to do so and the worker requests it.

(5) An insurer may in accordance with the Workers Compensation Guidelines require a worker to attend for and participate in any assessment that is reasonably necessary for the purposes of the conduct of a work capacity assessment. Such an assessment can include an examination by a medical practitioner or other health care professional.

(6) If a worker refuses to attend an assessment under this section or the assessment does not take place because of the worker’s failure to properly participate in it, the worker’s right to weekly payments is suspended until the assessment has taken place.

Suitable Employment

So once a workers work capacity is assessed, a work capacity decision usually follows. The focus of a WCD and the evidence it relies on, such as vocational assessments, will largely concern whether a worker is suited to suitable employment(section 32A of the 1987 Act).

When considering section 32, a practical exercise must be performed. This includes an assessment of the worker’s incapacity, age, education, skills and work experience. This does not include a consideration of work capacity which is, does not consider what is  capable of being obtained on the open labour market. The consideration should be whether suitable employment is employment that is real, is potentially available and that considers the criteria of section 32A(a)(i) -(v) below.

32A Definitions:

“suitable employment” , in relation to a worker, means employment in work for which the worker is currently suited–

(a) having regard to–

(i) the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and

(ii) the worker’s age, education, skills and work experience, and

(iii) any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and

(iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and

(v) such other matters as the Workers Compensation Guidelines may specify, and

(b) regardless of–

(i) whether the work or the employment is available, and

(ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and

(iii) the nature of the worker’s pre-injury employment, and

(iv) the worker’s place of residence.

Was the WCD done correctly?

It is always important to consider whether an insurer has correctly performed a work capacity assessment or a WCD and if the worker has properly engaged in the same.

If the worker does not engage in the process properly then weekly payments may cease.

An insurer must also give the worker 2 weeks notice that a review of work capacity is taking place, explain that they may need attend a medico-legal or that they may contact the nominated treating doctor and explain to the worker when they can expect when to receive the decision and their rights of review.

How to review a WCD

Internal review with insurer

To perform an internal review, workers need to complete a review form, and the insurer must consider any further material provided and come to a decision with 14 days. (287A of the Workplace Injury Management Workers Compensation Act 1998 [the 1998 Act]).

It should be noted that asking for an internal review pursuant to section 287A of the 1998 Act does not stay the decision of the insurer regarding WCD. When seeking a review, the appropriate evidence that needs to be provided to the insurer includes but is not limited to a vocational assessment, medico-legal evidence and anything that contests the assertion of the insurer that the worker cannot earn or can work in the employment that is considered suitable.

Workers Compensation Commission

The matter is dealt with by a delegate of the Registrar of the WCC and usually on an expedited basis by filing a Form 1B.

The operation of Section 298B of the 1998 Act means that when an application is lodged with the WCC to review the WCD, the WCD is stayed if the worker has received weekly payments for a continuous period of at least 12 weeks, the decision relates to the discontinuance or reduction of the amount of weekly payments and the dispute is referred to the WCC before the expiry of the notice period under the new section 80 of the 1998 Act, which is three months (plus postal notice allowance) (section 80 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 & ODea Lawyers.

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