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Home | Blog | What injured workers need to know about Work Capacity Decisions

What is a Work Capacity Decision?

One of the effects of the widespread changes to the 2012 workers compensation scheme in NSW was the introduction of a work capacity assessment. This means that workers’ compensation insurers may conduct an assessment on an injured worker and their claim at any time in relation to making formal decisions on the following:

  • Can an injured worker return to their pre-injury employment?
  • Does the injured worker at the time of the assessment, have the ability to return to suitable employment?
  • The amount of earnings an injured worker can earn in suitable employment

Work Capacity Assessments consider medical evidence, including reports from a worker’s nominated treating doctor or specialist, independent medical opinion and vocational and functional assessments arranged by the insurer with rehabilitation and return to work specialists.

Work Capacity Assessments consider an injured worker’s capacity to work on a weekly basis, the hours they are able to work, any medical restrictions that prevent them from returning to pre-injury work or expose an injured worker to further risk of injury or aggravation.

What is the effect of a Work Capacity Decision?

A Work Capacity Decision can have a significant effect on the following:

  • A decision on an injured worker’s capacity to work.
  • types of suitable employment that a worker may be able to attain
  • whether an injured worker is able to, or unable to engage in their pre-injury employment or any other employment.
  • affect the worker’s entitlement to compensation, including a decision to pause, stop or reduce/increase weekly compensation payments. 

Work Capacity Decisions prior to 1 January 2019

A Work Capacity Decision may have a significant effect on injured workers and are easily a large point of dispute between injured workers and insurers. Prior to 1 January 2019, there was a strict procedural guide for a worker to reviewing and/or appealing a work capacity decision:

  1. The injured worker, on receiving a work capacity decision, must request an internal review be conducted by the insurer as soon as possible. Failure to notify an insurer that you want an internal review within 30 days of a notice may lead to your weekly compensation being affected whilst a review is undertaken.
  2. If an injured worker is dissatisfied with the decision from an Internal Review, they may proceed to have the decision reviewed by the State Insurance Regulatory Authority (SIRA) Merit Reviews Service (MRS).
  3. If an injured worker is dissatisfied by the decision of the MRS, they may finally apply to the Workers Compensation Independent Review Office (WIRO) for a procedural review of the work capacity assessment and decision.

Between 2012 and 15 December 2016, the workers compensation legislation made it nearly impossible for an injured worker to seek legal advice on a work capacity decision or have it reviewed in the Workers Compensation Commission.

Furthermore, injured workers express confusion and misunderstanding of decisions which can complicate the process where they miss the 30 day time limit to lodge applications for review, thereby missing the opportunity to request a stay of the decision and pause any effect of a work capacity decision until a review has been completed.

On 16 December 2016, injured workers were able to obtain legal advice on work capacity decisions, but only if advice has been obtained within the 30 day time frame to submit a review.

Work Capacity Decisions made after 1 January 2019

Due to the recent Workers Compensation 2018 Amendments, the Workers Compensation Commission now has jurisdiction to arbitrate on disputes involving work capacity decisions issued after 1 January 2019. (Decisions issued prior to this date are subject to the reviews cannot be heard and determined by the Commission).

An injured worker must be given required notice of 3 months by the insurer if their weekly entitlements are to change.

In that time, the injured worker must speak to their lawyer and if advised, instruct their lawyer to commence proceedings in the Workers Compensation Commission within the required notice period of 3 months, so the work capacity decision may be ‘stayed’ or paused. This means that your entitlements will not be affected until the dispute is determined.

This amendment is a welcome and long overdue change to the workers compensation scheme where workers could not seek appropriate review or legal representation on work capacity disputes.

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