What is a work capacity decision?

The NSW Workers Compensation system determines a worker’s entitlement to weekly payments of compensation.

The “Work Capacity Decisions” were introduced into the NSW Workers Compensation system to determine a worker’s entitlement to weekly payments of compensation. The insurer must undertake a work capacity assessment to determine whether a worker is fit for work, unfit for work or partially fit for work. It is a process involving information gathering, usually including a medical assessment of the worker’s functional, vocational and medical status to make a decision as to whether they are fit to return to work or not.

What is a Work Capacity Decision?

The “work capacity decision” is a decision made by the insurer about:

  • The worker’s current work capacity
  • What constitutes suitable employment for a worker
  • The amount the injured worker is able to earn in suitable employment
  • The amount of pre injury average weekly earnings and current weekly earnings
  • Whether a worker is, as a result of injury, unable without substantial risk of further injury to engage in employment because of the nature of that employment
  • Any other decision that affects a worker’s entitlement to weekly compensation.

A work capacity decision can be made at any time throughout the life of the claim, but in particular will be made at or prior to being in receipt of weekly benefits for a period of 130 weeks of compensation (2.5 years). This period is important as a worker is only entitled to receive weekly payments beyond 130 weeks if they are either;

  1. Totally unfit for work or
  2. If the work capacity decision accepts that the worker is partially unfit for work, the worker must be working at least 15 hours per week.

A work capacity decision can be appealed and the NSW government has now allowed payment for legal costs if the decision was made after 16 December 2016. A work capacity decision can be reviewed as followed:

Review by insurer.

A worker may request an internal review of a work capacity decision by the insurer after receiving that decision, the worker must give a completed Work Capacity – Application for Internal Review by Insurer form to the insurer specifying the grounds on which the review is being sought with any information on why you disagree with the decision and including medical information.

Review by WorkCover NSW.

If the worker is not satisfied with the outcome of the insurer’s internal review, or if the review is not completed within 30 days, the worker may lodge a Work Capacity –Application to Merit Review Authority form. The worker must lodge an application of Merit Review within 30 days of receiving the insurer’s decision with Workcover NSW.

Review by the WorkCover Independent Review Office

If the worker is still not satisfied with the outcome of the Work Cover Merit review, the worker may lodge an Application for Receiving Review from the Work Cover Independent Office (WIRO) within 30 days of receiving the review decisions, contact WIRO on 139 476.

The Work Cover Authority of NSW has issued guidelines for work capacity decisions, for internal review by the insurers and the merit review by the authority which can be found on the Work Cover NSW website.

The NSW government has just recently allowed lawyers to assist in seeking a review either from the insurer or Work Cover. Workers can now seek the assistance of a lawyer if the work capacity decision was made after 16 December 2016.

Should you have any questions in relation to work capacity decisions please do not hesitate to contact us on (02) 8518 1120 or

About Matthew Garling

Matthew Garling, Founder of Garling & Co is a NSW Law Society Accredited Specialist in Personal Injury Law. He specialises in compensation law and has acted on behalf of thousands of injured people in work accidents, motor vehicle accidents and negligence cases over the last 20 years.

Google Rating