Workers’ Compensation is an important system that supports injured workers in reducing financial anxiety and providing fair recovery conditions.
This guide will provide an overview of workers' compensation payouts in NSW, from main types to maximum payouts.
What is Workers Compensation?
The workers’ compensation scheme is designed to support workers who receive injuries while performing their work duties. These injuries can vary in terms of types, impact, and health consequences.
Common Types of Workplace Injuries Covered
Workers’ compensation covers various types of injuries such as
- Cuts and bruises
- Soft tissue injuries
- Concussions
- Fractures
- Burns
- Mental health injuries
- Musculoskeletal injuries
- Others.
The range of injuries covered greatly varies. Based on the severity of the injury, the compensation amount and period will also vary, but more on this later.
Eligibility Criteria
An individual is eligible to file a workers’ compensation claim if the injury or illness arises out of, or in the course of employment, or if employment was the main contributing factor.
How Workers’ Compensation Settlements are Calculated?
Workers’ compensation settlements are calculated based on various factors. The three main factors affecting the compensation period and amount include:
- Medical assessment and reports. These reports outline the severity and nature of the injuries as well as clarify the treatment needed.
- Amount of lost earnings. As a result of an injury, a worker might be unable to return to work for a certain period of time. During this time, a worker may be entitled to weekly compensation payments, or there may be lost earnings. When calculating the amount of compensation, a worker's pre-injury earnings play a crucial role.
- Injury impact on workers’ future earnings. Another factor that affects the compensation amount is the impact of the injury on workers’ future earning potential.
How Long Can You Claim Workers’ Compensation Payments?
The time period throughout which an individual is eligible to receive workers’ compensation varies depending on the severity of the injury, its impact, and the time required for recovery. Once a worker’s injury has sufficiently stabilised, an assessment of their whole person impairment (WPI) can occur. A worker’s WPI, as agreed or determined, is a gateway to accessing other statutory workers compensation benefits.
In some circumstances, a worker’s entitlement to claim weekly compensation payments will be limited to an aggregate period of 260-weeks (5-years), providing the worker continues to meet the eligibility conditions. In other cases, where a worker has an agreed or determined WPI of at least 21%, that time limit does not apply and a worker may be eligible to claim weekly compensation payments up to 1 year beyond the statutory retiring age, although the worker must continue to meet the eligibility conditions in order to receive their weekly payments.
It is important to note in respect of weekly compensation payments, that the insurer can review a workers capacity for employment, and the outcome of this review could vary a workers entitlement.
Types of Workers Compensation Payouts in NSW
Weekly Payments
If a worker experiences a total or partial incapacity as a result of their work injury, they may be entitled to claim weekly payments during the period of incapacity.
Weekly payments compensate for the lost income of a worker as a result of a work injury. From weeks 0 to 13, workers with no current work capacity are entitled to claim 95% of their paycheck (pre-injury earnings). If a worker has a current work capacity in this period, then they may be entitled to claim the lesser of 95% of their pre-injury earnings, less the current weekly earnings, or the maximum weekly compensation amount, less the current weekly earnings.
From weeks 14 to 130, workers with no current work capacity are entitled to claim 80% of pre-injury earnings. If a worker has a current work capacity in this period, and they are working at least 15 hours per week, then they may be entitled to claim the lesser of 95% of their pre-injury earnings, less the current weekly earnings, or the maximum weekly compensation amount, less the current weekly earnings. If a worker has a current work capacity and has not returned to work, or has returned to work but for less than 15 hours per week, hen they may be entitled to claim the lesser of 80% of their pre-injury earnings, less the current weekly earnings, or the maximum weekly compensation amount, less the current weekly earnings.
To continue receiving weekly payments between weeks 130 to 260, a new worker assessment is required to determine the ability to return to work. If the worker is able to work, the weekly benefits will stop. If the employee cannot return to work, then they will continue to receive 80% of their pre-injury earnings.
Suppose the worker cannot return to work for over 260 weeks (beyond 5 years). In that case, they may be entitled to continue to claim weekly benefits if their WPI is agreed or determined to be greater than 20%, and they continue to meet the eligibility conditions.
Maximum Weekly Payments
In NSW, there is a limit on the amount of weekly compensation payable, which is known as the maximum weekly compensation amount. The maximum weekly payment amount is indexed twice per year in April and October.
For example, the maximum weekly compensation amount from the period of 1 April 2024 to 30 September 2024 is $2,497.70.
Medical Expenses Coverage
Workers compensation in NSW also covers various types of medical expenses, such as treatments, ambulance services, rehabilitation, and travel expenses that are reasonably necessary as a result of the work injury.
Medical treatment should take place while the worker is eligible to receive compensation. It is always best to obtain pre-approval from the insurer prior to incurring any treatment costs.
Permanent Impairment Payouts
Workers injured in the course of their employment, may be entitled to claim lump sum compensation for whole person impairment.
Lump sum compensation for whole person impairment is paid to eligible workers and in addition to other statutory benefits including weekly payments and medical expenses.
Permanent Impairment Payout
Let’s take a more detailed look at the permanent impairment payouts.
Eligibility Criteria
For most workers injured in the course of their employment in NSW, in order to receive permanent impairment compensation, there must be agreement with the insurer or an assessment by the Personal Injury Commission at 11 percent or more whole person impairment if it is a physical injury.
If it is a psychiatric injury, it must be a primary injury, and the threshold requirement is 15% or more whole person impairment.
If a worker's injuries are assessed below the threshold, they will not be entitled to any compensation for permanent impairment.
In circumstances where there are two separate injuries (physical and primary psychological) arising from the same injurious event, you are entitled to receive compensation for the higher amount of the two injuries, as agreed or determined.
It is important to note that the eligibility criteria is different for NSW exempt workers, such as police, paramedics and firefighters, in that the minimum whole person impairment required to make a claim for physical injuries is 1 percent, although for psychological injuries the minimum threshold remains at 15 percent.
Further, if an exempt worker is agreed or determined to have sustained at least 10 percent whole person impairment for physical injuries, or 15 percent for a psychological injury, then in addition to lump sum compensation for whole person impairment, the exempt worker will be able to claim a discretionary amount for pain and suffering.
Exempt workers may also be entitled to bring a further claim for whole person impairment, if they experience a deterioration in their condition following the first assessment. This differs markedly from the majority of NSW injured workers who are only eligible to receive one payment of compensation for whole person impairment, this is referred to as to the ‘one claim rule’.
How Much is the Permanent Impairment Payout?
The amount of compensation that a worker may receive for permanent impairment depends on the degree of permanent impairment, and the date of the injury.
Common Law Claim Payouts
A work injury damages claim is a claim for past and future economic loss only. A work injury damages claim can only proceed if a worker has 15% or above impairment, either by way of agreement to that threshold with the insurer or by way of a determination in the Personal Injury Commission.
In order to succeed in a work injury damages claim, a worker must establish that their injury was caused by the negligence of their employer.
Win the Best Settlement for Workers’ Compensation Claim
If you want to win the best settlement for workers’ compensation claims, then you are in the right place.
At Walker Law Group we work exclusively in personal injury law. Our qualified lawyers have years of expertise and a proven track record of success when it comes to workers’ compensation claims in NSW. We also have a team of approved lawyers who can obtain a grant of funding from the Independent Review Office to assist eligible NSW injured workers with their workers compensation claim at no cost to the worker.
Contact us today and find out how we can help you win.
