Work Capacity Decisions (recent changes)

Work Capacity Decisions are made by a worker’s compensation insurer to determine the work capacity of an injured worker.

It is a formal process involving information gathering, medical assessment and then a formal decision by the insurer as to whether a worker is unfit for work, fit for work or partially fit for work.

A Work Capacity Decision can affect a workers ongoing entitlement to weekly payments of compensation.

When can a Work Capacity Decision be made?

A Work Capacity Decision can be made at any time throughout the life of the claim but will usually be made at or prior to the worker being in receipt of weekly compensation for a period of 130 weeks (2.5 years).

This period is important as a worker is only entitled to receive weekly payments after 130 weeks if they are either:

  1. Totally unfit for work; or
  2. The worker is working at least 15 hours per week.

For more information, please see What is a Work Capacity decision?

Examples of Work Capacity Decisions

A Work Capacity Decision is usually made in the following circumstances. At or just prior to 130 weeks, a worker has a medical certificate from the doctor that certifies them fit to work 4 hours per day, 5 days per week, that is 20 hours per week. There are restrictions on such employment including limitations on lifting, carrying and sitting for extended periods. The worker is unfit to return to their pre-injury employment but is fit to undertake suitable work, let’s say office type work. The worker however has no experience in office type work and is finding it difficult to obtain such employment.

The insurer is paying 80% of the worker’s pre-injury wages (without allowance or overtime) which in this example is the equivalent of $800.00 gross per week.

The insurer can make a Work Capacity Decision and obtain evidence, for example, that the worker is fit to undertake sedentary office type duties such as administrative or computer data entry work, working at least 20 hours per week and earning $22.00 per hour. That is the equivalent of earning $440.00 gross per week.

The insurer therefore makes a Work Capacity Decision that the worker can earn $440.00 per week (that is despite the worker not yet being able to find such employer).

The worker’s benefits are therefore reduced from the prior payment of $800.00 per week down to $360.00 per week being the difference.

The insurer has therefore made a Work Capacity Decision reducing the weekly payments.

Challenging the Decision

If such a decision is now made on or after 1 January 2019, the worker can dispute or challenge this decision through the Workers Compensation Commission (WCC). Previously the worker must have requested an internal review from the insurer and then sought a merit review from the WorkCover Authority of NSW.

Recent changes to the workers compensation legislation have now allowed a worker to seek a determination by the Workers Compensation Commission.

The Workers Compensation Commission is an independent commission set up to deal with dispute between insurers and workers. You are allowed the assistance of a lawyer to assist you in challenging the insurer’s Work Capacity Decision. Legal costs are payable by WIRO.

If you do apply to challenge a Work Capacity Decision in the Workers Compensation Commission, then the decision is stayed until such time as such dispute is determined. That means that the insurer must pay you the old rate of $800.00 until the dispute is determined.

Any such dispute is now determined by an Arbitrator of the Workers Compensation Commission with the assistance of legal advice.

If you receive a Work Capacity Decision from the insurer, and you disagree with the decision, you should contact a lawyer immediately to see if the decision can be challenged in the Workers Compensation Commission. If the lawyer thinks you have an arguable case, then legal funding can be obtained through WIRO and the decision challenged in the Workers Compensation Commission.

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.

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