Work Capability Choices in NSW Staff Compensation – Half One – Employment and HR

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In this series of three articles, we delve into work capacity decisions and work capacity assessments under the NSW Employee Compensation Act.

A work capacity assessment is performed by the insurer of an employee’s current work capacity under Section 44A of the NSW Workers Compensation Act of 1987 (hereinafter the 1987 Act).

A work capacity assessment (s44A of the 1987 Act) is not required in order to make a work capacity (WCD) decision, ie a WCD can take into account more than just a worker’s work capacity.

What is a Work Capacity Decision (WCD)?

Section 43 (1) of the 1998 Act defines what a WCD can be, while Section 43 (2) of the 1987 Act explains what they are not. A WCD, usually performed at the time the employee has received or will receive 130 weeks of weekly allowance, usually determines whether an employee:

  1. Can go back to work
  2. Or earn an income that, in turn, either lowers employees’ weekly compensation or completely stops payments altogether.

It is also important to note that a Pre-Injury Worker’s Average Weekly Income Decision (PIAWE) also constitutes a WCD (Section 43 (1) (d) of the 1998 Act). A letter explaining the employee’s PIAWE cannot be forwarded to the Workers Compensation Commission (WCC).

For example, an insurer may decide to conduct a WCD after reviewing a WorkCover certificate completed by the designated attending physician and determining that an employee with certain restrictions can perform 4 hours per day three times a week. An insurer could then receive a professional assessment showing that the worker could do some type of office or administrative work and earn some form of income, thereby reducing or stopping weekly payments overall.

Whether this decision can be successfully challenged depends on what evidence the WCD is based on and what the employee receives in response.

Refusal to breach is not considered a WCD (Section 43 (2) (a) of the 1987 Act). Also, the decision of an insurer in need of a referral to a licensed medical practitioner relating, for example, to claims set out in Section 39 of the 1987 Act is not a WCD (Section 43 (2) (b) of the 1987 Act) . .

43 Insurers’ workability decisions

(1) The following decisions by an insurer are

“Work Capacity Decisions” –

(a) a decision about an employee’s current ability to work,

(b) a decision on what constitutes suitable employment for an employee;

(c) a decision on the amount an injured worker can earn in suitable employment;

(d) a decision on the average weekly earnings of an injured worker prior to the injury or the current weekly earnings;

(e) a decision as to whether an employee is unable to perform a particular type of employment because of an injury due to the nature of that employment without a significant risk of further injury;

(f) any other decision by an insurer that affects an employee’s entitlement to weekly compensation payments, including a decision to suspend, suspend, or suspend the amount of weekly compensation payable to an employee based on a decision referred to in to decrease paragraphs (a) – (e).

(2) The following decisions are not work capacity decisions –

(a) a decision to contest liability for weekly compensation payments,

(b) a decision that may be the subject of a medical dispute under Part 7 of Chapter 7 of the 1998 Act.

The content of this article is intended to provide general guidance on the subject. You should seek advice from a professional about your particular circumstances.

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