Work Capacity Decisions NSW: Everything you need to know

Work capacity decisions are an important aspect of the workers’ compensation system. These decisions determine an injured worker’s ability to return to work and the level of compensation they are entitled to receive. Key factors taken into consideration include the worker’s pre-injury employment, medical evidence, and the availability of suitable employment.

Key takeaways from this article:

  • Work Capacity Decisions determine a worker’s current work capacity, suitable employments, pre-injury wages & current weekly earnings, an any changes to weekly entitlements
  • Insurers must provide at least 3 weeks notice about a work capacity decision if the worker has been receiving continuous weekly payments for more than 12 weeks. 
  • You can dispute work capacity decisions by asking insurers to review decision, seeking advice from a Workers Compensation Lawyer, or through the personal injury commission.

What is a Work Capacity Decision in NSW?

A work capacity decision in NSW, as defined under Section 43 of the Workers Compensation Act 1987, is a decision made by the insurer about various aspects of a worker’s ability to work following a work injury. It encompasses various decisions related to an injured worker’s ability to perform suitable employment and their entitlement to weekly compensation payments.

They may also assess if the worker, due to their injury, risks further harm by engaging in certain types of employment. Such decisions are critical as they influence a worker’s entitlements under workers compensation benefits.

Section 43 of the Workers Compensation Act 1987, allows Insurers to make a determination on the following: 

  1. a decision about a worker’s current work capacity,
  2. a decision about what constitutes suitable employment for a worker,
  3. a decision about the amount an injured worker is able to earn in suitable employment,
  4. a decision about the amount of an injured worker’s pre-injury average weekly earnings or current weekly earnings,
  5. 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,
  6. 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).

However, it’s important to note that under Section 43 of the Workers Compensation Act 1987, work capacity decisions are not a decision to dispute liability for weekly payments of compensation. Nor is it a decision that can be the subject of a medical dispute. 

When can a Work Capacity Decisions be made?

Work capacity decisions in NSW can be made at specific points during the workers’ compensation claim.  The following are the key times when work capacity decisions may be made:

1. Within the first seven days after the injury is reported: The insurer assesses the worker’s capacity to work based on medical evidence provided by the worker and their treating health practitioner.

2. Between 78 and 130 weeks of payments: The insurer re-evaluates the worker’s capacity to work and determines if they are still eligible for weekly compensation payments based on updated medical evidence and assessments.

3. As circumstances change or new information is received: If there are changes in the worker’s condition or new medical evidence is presented, the insurer can review the work capacity decision and adjust the worker’s entitlement to weekly compensation payments accordingly.

What is the notice period of a work capacity decision?

The duration of the notice period depends on the duration of continuous payments the worker has received. The notice period for a work capacity decision is 2 weeks if the worker has received weekly payments for less than 12 weeks. As for workers who received weekly payments for more than 12 weeks then 3 months notice period will take effect.

Therefore, when work capacity decisions impact your weekly payments, these notice periods provide you with the opportunity to dispute the decision and have it reviewed if you don’t agree with the decision. However, if the work capacity decision has no effect to the injured worker’s weekly payments, then there will be no notice period provided. 

How do Pre-Injury Average Weekly Earnings affect Work Capacity Decisions?

Determining the amount of pre-injury average weekly earnings (PIAWE) is also considered a Work Capacity Decision under Section 43(d) of the Workers Compensation Act 1987. In order to determine a workers PIAWE, insurers will request information like:

  • Payslips
  • Tax returns
  • Statement of income
  • Aware rate 
  • Group certificates

Once insurers are able to calculate your PIAWE, another work capacity decision will be made to determine the amount of weekly payments you are entitled to.

Given the potential impact on the amount of compensation you may receive, it’s crucial that you seek legal advice to help ensure that your PIAWE is calculated fairly.

Impact of Work Capacity Decision on Weekly payments

Depending on the outcome of the Work Capacity Decision, the worker may experience a reduction or complete discontinuation of their weekly payments. This can occur if it is determined that the worker has a current work capacity, meaning they are capable of some form of employment.

When this decision has been made the injured worker is typically given a notice period before any changes to their weekly payments take effect. This notice period allows the worker to plan and prepare for potential changes to their income or dispute the decision.

If you have had your weekly compensation reduced or discontinued without notice following a work capacity decision, it is crucial that you reach out to a qualified Workers Compensation Lawyer to assist you navigate this space to ensure you are compensated fairly and correctly. 

To learn more about Weekly payments, make sure you visit our article Need to Know: Weekly Payments for Workers Compensation NSW

Impact of Work Capacity Decision on Medical & Rehabilitation expenses

A Work Capacity Decision can have a significant impact on the entitlement to medical and rehabilitation expenses for an injured worker. According to section 59A of the Workers Compensation Act 1987, when weekly payments cease due to a Work Capacity Decision, the injured worker is generally entitled to two years of medical or related treatment expenses.

However, it is important to note that the entitlement to section 60 expenses may be affected by a Work Capacity Decision. If the worker’s weekly payments are discontinued due to a determination that they have a current work capacity, their entitlement to medical and related treatment expenses may also cease.

On the other hand, if the worker’s capacity to work changes and they are once again eligible for weekly payments, their entitlement to medical and related treatment expenses may be renewed.

For more information on Workers Comp Payouts, visit our Workers Compensation Payout Guide NSW.

Legislation and Regulations Governing Work Capacity Decisions in NSW

In New South Wales (NSW), Work Capacity Decisions are governed by various legislation and regulations. These laws play a crucial role in ensuring fair and consistent decision-making processes for injured workers. Here are the key provisions and requirements that insurers must comply with when making Work Capacity Decisions:

1. The Workers Compensation Act 1987: This legislation outlines the rights and entitlements of injured workers, including their right to claim compensation and receive suitable employment.

2. The Workplace Injury Management and Workers Compensation Act 1998: This act sets out the framework for injury management and return-to-work programs, emphasizing the importance of timely support and rehabilitation for injured workers.

3. The Workers Compensation Regulation 2016: These regulations detail the specific procedures and requirements that insurers must follow when making Work Capacity Decisions. It covers aspects such as notice periods, continuous payments, and the assessment of a worker’s capacity to work.

4. The Workers Compensation Guidelines: These guidelines provide additional guidance to insurers and medical professionals in assessing and determining work capacity. They assist in ensuring consistency and fairness in decision-making processes.

These legislations and regulations aim to protect the rights of injured workers while also providing a framework for insurers to make informed judgments about a worker’s capacity to work. It is crucial that insurers adhere to these provisions to ensure fair and just outcomes for injured workers in NSW.

Looking for more information around Workers Comp? Visit our Complete Guide on Workers Compensation in NSW.

How do I dispute a Work Capacity Decision?

If you disagree with a Work Capacity Decision made by your workers’ compensation insurer, you have options for dispute resolution. You can either dispute your work capacity decision by requesting a review from your insurer, or to lodge an assessment directly with the personal injury commission.

It’s important to note that time limits apply for each stage of the dispute resolution process. Seeking legal advice or assistance from a workers’ compensation specialist can help you navigate the process effectively and increase your chances of a successful outcome.

Requesting the insurer to review the decision

To request a review of a work capacity decision by your workers’ compensation insurer, you will need to submit a completed Work Capacity Application for Internal Review by Insurer form. Here’s how the process works:

1. Download and complete the review form: Download the Review Form – Application for review by the insurer form and fill it out. 

2. Specify the grounds for review: In the form, clearly state the reasons why you disagree with the work capacity decision. Be specific and provide supporting evidence to strengthen your case.

3. Include relevant information and medical evidence: Attach any relevant documents, such as medical reports or specialist opinions, that support your disagreement with the decision. Make sure to provide comprehensive and detailed information to strengthen your argument.

4. Submit the application: Once the form is completed and all relevant documents are attached, submit the application to your workers’ compensation insurer within the specified timeframe. Keep a copy of the application and any supporting documents for your records.

5. Await the internal review decision: The insurer will reassess your work capacity based on the information provided in the application and any additional evidence. They must respond to you within 14 days of receiving the request for a review.

Important note: Workers who had requested an internal review by the insurer prior to 1 January 2019 will not be able to dispute their work capacity decision through the Personal Injury Commission. 

Submit an application to the Personal Injury Commission

If you are dissatisfied with a work capacity decision in NSW, you can submit an application directly to the Personal Injury Commission to dispute the decision. This process allows workers or their legal representatives to seek resolution if they are not satisfied with the insurer’s decision after a review, or if they do not wish to seek a review by the insurer. 

Here are the steps involved in submitting an application to the Personal Injury Commission:

1. Complete the Application Form: Fill out the necessary application form provided by the Commission. Include all relevant details and supporting documentation.

2. Lodge the Application: Submit the completed application form to the Personal Injury Commission. Ensure that all required documents and information are included.

3. Review and Assessment: The Commission will review your application and assess its merits. They will consider all available evidence, including medical reports and any other relevant documentation.

4. Dispute Resolution: The Commission will facilitate a discussion or mediation process to encourage parties to resolve the dispute amicably. If an agreement cannot be reached, the Commission may proceed to a formal determination.

5. Final Determination: The Commission will make a final determination based on the evidence presented and the applicable laws. Their decision is binding on all parties involved.

Why should you seek legal advice for Work Capacity decisions?

Seeking legal advice from Workers Compensation Lawyers is crucial when disputing a Work Capacity Decision in NSW. These legal professionals have in-depth knowledge of workers’ compensation laws and can provide the necessary guidance and support throughout the process. Here’s how Alliance Compensation & Litigation Lawyers can help:

1. Expertise in workers’ compensation laws: We specialize in this area of law and have a thorough understanding of the relevant legislation, guidelines, and legal procedures. We can analyse your case, assess the strength of your claim, and help you navigate through the complexities of the legal system.

2. Ensuring your rights are protected: Our Lawyers who specialise in workers’ compensation disputes know the rights of injured workers inside out. We will advocate for your rights, making sure you receive fair treatment and the full compensation you deserve.

3. Building a strong case: We’ll also help gather and evaluate all the necessary evidence, including medical reports, witness statements, and any other relevant documentation. While strategically presenting your case, addressing any weak points and highlighting the strengths to maximize your chances of success in disputing the Work Capacity Decision.

4. Time and stress management: Dealing with a work capacity dispute can be overwhelming, especially when you are trying to recover from an injury. Engaging with Alliance Compensation & Litigation Lawyers will alleviate the burden of handling the legal aspects of your claim, allowing you to focus on your health and well-being.

Book your free no-obligation consultation today.

If you’ve have recently received a work capacity decision, you will need to respond in a timely manner. We understand that it can be very difficult when you’re dealing with an injury whilst trying to navigate your claim. 

We are readily available to provide you with advice promptly so you can ensure your compensation is maximised following a decision by the insurer. 

Schedule your consultation by calling us at (02) 8764 1776 or email us at refer@alliancecomplawyers.com.au

Frequently Asked Questions

What is Section 43 of the Workers Compensation Act NSW?

Section 43 of the Workers Compensation Act in NSW governs Work Capacity Decisions. These decisions are made to assess an injured worker’s current work capacity and determine their eligibility for weekly benefits.

The decisions falling under Section 43 include:

  1. Current Work Capacity: This decision determines whether the worker is capable of returning to work in any capacity, taking into account their functional limitations and vocational circumstances.
  2. Suitable Employment: This decision assesses whether the worker is capable of undertaking suitable employment that is both within their current work capacity and reasonably available in the employment market.
  3. Earning Capacity: This decision determines the worker’s ability to earn, considering their pre-injury average weekly earnings and any impact the injury may have on their ability to earn their pre-injury income.
  4. Substantial Risk to Health or Safety: This decision considers whether the worker’s current work or proposed employment presents a substantial risk to their health or safety, taking into account their injury and any functional restrictions.

Work Capacity Decisions are made based on medical evidence, certificates of capacity, and other relevant information. In case of a dispute, workers have the right to seek legal advice or request an internal review. They may also pursue a judicial review if they disagree with the review decision.

Work Capacity Decisions are crucial in determining the worker’s entitlement to weekly compensation payments, and they play a significant role in injury management plans and vocational assessments.

How do you determine your work capacity?

To determine work capacity, Insurers follow a specific process that considers various factors. These factors include:

  1. Worker’s current abilities: A thorough assessment is conducted to evaluate the worker’s current physical and mental capabilities, taking into account their injury and any medical evidence provided.
  2. Suitable employment options: Claims Service Providers assess whether there are any suitable employment opportunities available that match the worker’s capacity and skills. This includes considering the physical requirements of the job and whether it poses any substantial risk to the worker’s health and safety.
  3. Pre-injury average weekly earnings: The worker’s pre-injury average weekly earnings (PIAWE) are an important consideration in determining their work capacity. PIAWE is used to calculate the worker’s entitlements and plays a role in assessing their capacity to earn income after the injury.

Visit our article on Work Capacity Assessment for more details.

What are the legal costs of disputing a work capacity decision?

The NSW government has allowed payment for legal costs if the decision was made after December 16, 2016. This means that workers can now seek legal assistance in challenging a work capacity decision and have the potential for their legal costs to be covered by the insurer. 

Can the insurer refuse to review my work capacity decision?

In certain circumstances, an insurer may refuse to review a work capacity decision. These circumstances include:

  • The worker fails to provide new information or evidence that they believe was not previously considered in the initial decision.
  • The decision being reviewed is not a “work capacity decision” as defined by the relevant legislation.
  • The worker has not lodged the internal review form within the specified time frame.
  • The worker has failed to attend a medical appointment or cooperate with the insurer’s requests for information.
  • There is an ongoing dispute regarding the worker’s medical condition or injury.

When deciding whether to review a work capacity decision, the insurer considers several factors, including:

  • The nature and quality of the evidence provided by the worker to support their request for review.
  • Any relevant medical reports or assessments that may impact the decision.
  • The worker’s pre-injury employment and their current work capacity.
  • Whether suitable employment without risk of further injury is available.

If the insurer refuses to review a work capacity decision, the worker can take the following steps:

  1. Seek internal review: Lodge an application for merit review within 30 days of receiving the insurer’s decision.
  2. External review: If the internal review does not resolve the issue, the worker can apply to an independent tribunal for a review.
  3. Judicial review: If the worker believes the decision was made unlawfully or improperly, they can seek a judicial review in a court.

It is important for workers to understand their rights and options in relation to work capacity decisions and to seek legal advice if necessary.

Get in touch to find out more HERE … or call 02 8764 1776
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