In New South Wales (NSW), workers compensation is a crucial system designed to support employees who suffer an injury or illness resulting from their work-related duties. According to State Insurance Regulatory Authority (SIRA), from 2022 to 2023 there were a total of 111,744 reportable workers compensation claims recorded. With a total of $368M being paid in February 2023 alone, whereby 47% of the total was made up of weekly payments. These statistics highlight the importance of workers understanding their entitlements in order to maximise their compensation in NSW.
This guide will provide a clear understanding of the different payouts available under workers compensation in NSW. The topics we’ll be covering include:
- How workers Compensation payouts are calculated
- Understanding the 4 main entitlements: Weekly benefits, Medical Expenses, Permanent Impairment Payouts & Work Injury Payouts
- Eligibility for each of the workers compensation payouts
- Complying Agreements & Settlement offers
If you are looking for more information on Workers Compensation, make sure you visit our Comprehensive Guide to Workers Compensation in NSW.
What are my Workers Compensation entitlements?
A workers compensation payout is a form of insurance that provides benefits to workers who suffer an injury or develop a medical condition as a result of their employment. Workers compensation in NSW operates on a no-fault basis, which means that employers are responsible for providing compensation to their employees regardless of who is at fault for the injury or illness.
There are different types of Workers Compensation entitlements that can be paid out to injured or sick workers under the NSW workers compensation scheme. These include:
|Workers Compensation Payouts in NSW||Description|
|Weekly payments||These payments are designed to compensate injured workers for lost wages. The amount paid depends on the worker’s pre-injury earnings and the number of hours they were working per week.|
|Medical Expenses||This covers the cost of medical treatment, such as consultations with specialists, diagnostic tests, surgery, and travel for medical reasons.|
|Work Injury Damages/Common Law Payout||This is compensation paid to a worker who has suffered a work-related injury and has also suffered loss or impairment due to the injury. This payout covers losses beyond what is covered by the other benefits. Successful claims are eligible for lump sum compensation.|
|Permanent Impairment Payout||This is compensation paid to a worker who is left with a permanent impairment, including both physical and psychological injuries. Similar to Work Injury Damages, successful claims are also eligible for lump sum compensation.|
What are the types of workplace injuries workers can claim?
Workplace injuries can take many forms, ranging from minor cuts and bruises to life-threatening conditions. Common types of workplace injury claims include
- musculoskeletal disorders
- wounds and cuts
- head trauma
- psychological injuries
- asbestos disease and mesothelioma
- silicosis and silica dust exposure
How are workers’ compensation settlements calculated?
Workers’ compensation settlements are calculated based on three main factors. The first is an expert medical assessment that determines the severity and extent of the injuries sustained by the worker. This assessment considers various factors such as the nature and extent of physical injuries, the impact of psychological injuries, and the amount of medical treatment required.
The second factor is the amount of lost earnings due to the worker’s inability to work as a result of the injury. This includes not only the actual amount of income lost but also factors such as the worker’s level of education, skill set, and experience.
The third factor is the extent to which the injury has impacted the worker’s future earning potential. This takes into account the likelihood of the worker being able to return to their previous occupation as well as their ability to perform other types of work.
Understanding Weekly payments
Workers with work-related injuries or illnesses may qualify for weekly payments to compensate for their loss of income. Eligibility starts after 13 weeks and lasts for 2.5 years from the injury date.
Initially, the payment is 95% of the worker’s pre-injury average weekly earnings (AWE) for the first 13 weeks. After that, it depends on their level of impairment. AWE is reviewed annually and adjusted as needed. The table below provides a summary of the weekly payments workers are eligible for.
|Time off work||Entitlements|
|0-13 weeks||95% of worker’s pre-injury earnings|
|14 – 130 weeks||80% of worker’s pre-injury earnings|
|130 – 260 weeks||A work capacity assessment is required to understand if the worker can return back to work:|
– Unable to work (no work capacity): 80% of worker’s pre-injury earnings
– Able to work (some work capacity): weekly benefits stop
|260 weeks (5 years)||80% of worker’s pre-injury earnings, only applicable for workers with a whole person impairment (WPI) of more than 20%|
To qualify for weekly benefits payments, the worker must have sustained an injury or illness arising from their work or workplace which has resulted in:
- Total or partial incapacity to work
- Loss of earnings due to be not being able to work
The worker also must report the injury to their employer within a reasonable timeframe and seek medical attention from a doctor or GP who will assist in providing a medical certificate to the insurer.
How long can you receive weekly workers compensation payments?
The duration of weekly workers compensation payments may depend on various factors such as the level of impairment, medical improvement, and reaching the five-year limit. The five-year limit means that workers who have received weekly payments for five years may not be entitled to further weekly payments unless they are assessed to have a WPI of greater than 20%.
Workers may continue to receive weekly payments after 130 weeks and until their retirement age if they have a total and permanent disability or a serious injury. The worker’s entitlement to weekly payments may also be affected if they engage in specified employment or if their weekly earnings increase significantly.
Medical expenses covered
Workers compensation in NSW covers various medical expenses that are incurred due to work-related injuries or illnesses. If you get injured at work in NSW, you are entitled to have your medical expenses covered, including hospital, medical, ambulance, rehabilitation, or travel expenses, among others.
This table summarises the types of costs you can claim under workers compensation NSW.
|Type of cost||Description|
|Medical & Related Treatments||Treatments and services covered include:|
– Treatment by physiotherapist, chiropractors, psychologists, and other allied health professionals
– Domestic assistance services i.e. garden care, laundry, household cleaning
– Medical and medicine supplies provided outside of hospital treatment
|Hospital treatment||Treatment provided at both public and private hospitals are covered under workers compensation NSW.|
|Ambulance services||Fees related to the services provided by the Ambulance Service of NSW such as emergency, non-emergency or inter-hospital transfers are covered.|
|Rehabilitation||Approved workplace rehabilitation is also covered, these can include:|
– Supporting workers in their recovery process and facilitating their return to work.
– Conducting vocational, functional, and workplace assessments.
– Analyzing and modifying job tasks to accommodate workers’ abilities.
|Travel expenses||If you use a private motor vehicle, the maximum payable amount is $0.58 per kilometer, so it’s important to keep a record of the kilometers traveled. For public transport, you should retain the receipts to ensure you are compensated.|
To be eligible for reimbursements related to medical, hospital, and rehabilitation expenses is contingent upon the following conditions:
- The treatment or service aligns with the definition outlined in section 59 of the 1987 Act.
- The treatment occurs while the worker is eligible to receive compensation for these expenses.
- The treatment or service is pre-approved by the insurer, unless it falls under an exemption from pre-approval.
To assess the necessity of the requested treatment or service, you or the service provider must provide sufficient information to the insurer. This information may include your workers’ compensation certificate of capacity recommending the treatment, allied health recovery requests, or specialist referrals and reports.
How long can medical expenses be covered for?
The timeframe for claiming medical, hospital, and rehabilitation expenses is determined by your compensation entitlement period, which is based on the assessed degree of permanent impairment resulting from your injury.
For workers with no permanent impairment or a permanent impairment of 10% or less, expenses can be claimed for:
- Two years after weekly payments cease
- Two years from the date of the claim if no weekly payments were made.
Workers with a permanent impairment assessed between 10% and 20% can claim expenses for:
- Five years after weekly payments stop, or
- Five years from the date of the claim if no weekly payments were made.
Workers with high needs, including those with a permanent impairment assessed as over 20%, pending assessment, or where the insurer expects the impairment to be over 20%, can claim medical and related expenses for their lifetime.
Permanent Impairment payout
If the worker’s impairment meets the threshold for permanent impairment, they may be entitled to a lump sum payment for permanent impairment compensation. This payment is designed to provide financial support for any long-term effects of the worker’s injury that may affect their ability to work or carry out daily activities.
It’s important to note that the lump sum payment is in addition to the weekly payments and medical expenses that are covered by workers compensation.
In New South Wales, to be eligible for lump sum payments through permanent impairment, a worker must meet the minimum threshold for whole person impairment, which is currently set at 11% for physical injuries and 15% for psychiatric injuries (for claims made on or after 19 June 2012).
This threshold is determined through a medical assessment conducted by an independent and qualified specialist. The specialist will rate the worker’s level of impairment according to the Workers Compensation Guide for the Evaluation of Permanent Impairment.
It’s important to note that a worker who has made one claim for permanent impairment compensation cannot make another claim for the same injury. However, there is an exception to this rule if the worker’s condition has deteriorated after the initial claim was made.
How much is permanent impairment payout in NSW?
The table below, taken from our Whole Person Impairment Guide, is a breakdown of how much lump sum compensation for permanent impairment from 1 July 2023 to 30 June 2024 you can receive pursuant to Section 66 of the Workers Compensation Act 1987:
|Degree of Permanent Impairment||Permanent Impairment Payout|
|0 – 10%||$0*|
|11% – 30%||$27,790 – $96,760|
|31% – 50%||$102,690 – $216,310|
|51% – 55%||$299,300|
|56% – 60%||$382,170|
|61% – 65%||$465,040|
|66% – 70%||$547,910|
|71% – 74%||$630,770|
|75% – 100%||$713,660|
*No permanent impairment compensation is payable for a degree of permanent impairment of 10% or less under Section 66 of the Workers Compensation Act 1987.
What is the maximum payout for workers’ compensation in NSW?
Maximum Weekly Payments
In New South Wales, the maximum payout for workers’ compensation is determined by the maximum weekly payment amount and maximum payout for weekly benefits over five years. These amounts change every April and October and are based on when the claim is made. For claims made between April and September 2022, the maximum weekly compensation payment increased to $2,318.40, and the maximum payout for weekly benefits over five years increased to $602,439.
These amounts continued to increase every year due to indexation, with the latest figures for claims made between October 2023 and March 2024 being a maximum weekly payment of $2,423.60 and a maximum payout for weekly benefits over five years of $630,136*. It’s important to keep in mind that these figures are subject to change and depend on the timing of the claim.
*Figures taken from SIRA’s Workers Compensation Benefits Guide – October 2023
Maximum permanent impairment lump sum compensation
The maximum permanent impairment payout you can receive as of July 2023 to June 2024 for injuries received on and from 5 August 2015 is $713,660.
Work injury damages/Common Law Claim payout
Work Injury Damages is a type of common law claim available for workers who have suffered permanent impairment and economic loss as a result of their work-related injury. To qualify for a work injury damages payout, the injured worker must prove that their employer’s negligence caused their injury, and that their economic loss is more than 15% of their average weekly earnings.
The payout for work injury damages is a lump sum payment to the injured worker to compensate for their economic loss, including loss of earnings, medical costs, and travel expenses.
The figure of Work Injury Damages payouts can be quite complex to calculate, however, we were able to achieve a Work Injury Damages payout for our client of over $600,000.00.
Work Injury Damages/Common Law Claim Case study: Injured Worker in 50’s claims over $600,000.00 in Work Injury Damages Settlement
To be eligible for a lump sum compensation payout for permanent impairment, workers in NSW must meet certain criteria. This includes:
- Having a work-related physical or psychological injury that results in at least 15% permanent impairment. The level of impairment must reach a certain threshold, which is determined by a permanent impairment assessor.
- The work injury was a result of negligence by the employer
- You must already have received all the statutory lump sum entitlements for permanent impairment that you are eligible for.
It is important to note that secondary psychological injuries, such as anxiety or depression caused by the primary injury, may also be covered under workers’ compensation. However, there are specific requirements that need to be met in order to make a claim for secondary psychological injuries.
Considerations about lump sum compensation for Work Injury Damages
When a work injury damages settlement is reached, it ends any future entitlements to workers’ compensation benefits related to that specific injury. This includes weekly payments, as well as medical, hospital, and rehabilitation expenses. It is possible that the settlement amount may need to be used to repay any weekly payments that have already been provided to the worker.
The compensation payable will be reduced if the worker’s own negligence contributed to the injury. It’s recommended that experienced workers compensation lawyers are consulted for legal advice when making a work injury damages/common law claim.
Case study: $350k Workers Compensation payout
Complying agreement/making a settlement offer
A complying agreement is a written agreement between you and the insurer regarding the level of your permanent impairment. It must meet specific criteria set by the legislation to ensure that you receive fair compensation. A complying agreement must be made after an assessment by a trained permanent impairment assessor and must take into account your loss of earning ability.
Before agreeing to a settlement offer and signing any documents, it’s essential to obtain legal advice. Our experienced workers compensation lawyers can provide you with guidance on your rights and entitlements, as well as help you negotiate a fair settlement. If you choose not to seek legal advice, you should waive your right to do so in writing.
Remember, the insurer’s goal is to minimize their costs, so making a complying agreement without legal advice could potentially result in a lower payout than you deserve. Protect your rights and ensure that any settlement offer you receive is fair and just by obtaining legal advice before making a decision.
What to do if you don’t accept the work injury damages settlement
If you are not satisfied with the work injury damages settlement offered by the insurer, you have the right to dispute it. The first step is to try to resolve the dispute through negotiation with the insurer. If this is unsuccessful, you may need to take the matter to court.
To take a dispute to court, you need to complete a pre-filing statement. This statement outlines why you are disputing the settlement and provides the evidence supporting your claim. It is important to complete this statement carefully and accurately, as it will be used in court if the dispute cannot be resolved through negotiation.
The timeframe for taking a dispute to court varies depending on the state or territory, but it is generally within three years of the injury. It’s best to seek legal advice as soon as possible to ensure you are aware of the process and your legal rights. Experienced workers compensation lawyers can review your case and provide legal representation if needed.
Can you get workers compensation for life in NSW?
In New South Wales, it is possible for workers to receive lifelong workers compensation under certain conditions. While most workers’ compensation payments in NSW stop after five years, an injured worker may continue to receive weekly payments if they are assessed as having a permanent impairment of more than 20%. This means that if a worker’s injury is considered permanent and leaves them unable to work for the rest of their life, they may be entitled to ongoing weekly payments to support them financially.
It is important to note that not all injuries will result in lifelong workers compensation. A worker’s entitlement to ongoing payments will depend on the severity of their injury and how it impacts their ability to work. If you have sustained a work-related injury in NSW, it’s recommended to seek legal advice from experienced workers compensation lawyers to help you understand your situation and your options.
Can you return to work after a workers compensation settlement?
After a workers’ compensation settlement, a worker can return to work if they have recovered from their work-related injury or illness. Successfully returning to work can provide a sense of normalcy and improve overall well-being. However, returning to work after a settlement may end compensation entitlements, such as weekly benefits or medical costs.
If a worker chooses to file a work injury damages claim or agrees to a lump sum payout, they may no longer be entitled to workers’ compensation benefits. This is because these forms of compensation provide a final settlement for the injury or illness.
If you’re thinking about how to lodge a workers compensation claim, visit our guide on How to Lodge a Claim for Workers Compensation NSW.
Will I still get Workers Compensation if I am made redundant?
Redundancies will not affect your ability to continue receiving Workers Compensation Entitlements. Weekly payments, medical expenses, and lump sum compensation can still continue if you’ve been made redundant.
To learn more about Redundancies and Workers Compensation, read our article: Redundancy While on Workers Compensation.
Speak to our Workers Compensation Lawyers today
If you have questions regarding your entitlements or would like to explore your options regarding Workers Compensation, our experienced Workers Compensation Lawyers are happy to help.
Alliance Compensation & Litigation Lawyers have helped thousands of Australians receive the maximum compensation they’re entitled to regarding Workers Compensation.