Part B - what compensation may cover

Question 1

B1.1 Weekly payments

Weekly payments may be made to a worker to compensate for

Answer 1

loss of earnings as a result of a work related injury

Question 2

To be entitled to weekly payments, the worker must be

Answer 2

■ totally or partially incapacitated for work due to an injury
■ losing earnings due to the incapacity

Question 3

How to demonstrate capacity

As a worker, you must provide a completed

Answer 3

Workers compensation certificate of capacity (your
medical practitioner will have this)

Question 4

How to demonstrate capacity

Part A and C of the certificate should be completed by

Answer 4

the worker

Question 5

How to demonstrate capacity

Part B of the certificate must be completed by the medical practitioner and:

Answer 5

■ specify a period of no more than 28 days (if the medical practitioner gives special reasons for a longer period that satisfy the insurer, the certificate may be accepted)
■ certify your capacity for work during this period, which must be no more than 90 days before the date the certificate is provided
■ state the expected length of your incapacity

Question 6

How to demonstrate capacity

You can give the certificate to the insurer, or to your employer who must forward it to the insurer

Answer 6

7 days

Question 7

Determining liability

The insurer must within 21 days of receiving a claim for weekly payments:

Answer 7

■ accept liability and start weekly payments, or
■ dispute liability (see B10)

Question 8

Determining liability

However, if the insurer has started provisional payments and notified the worker (see A2), it only needs to determine liability

Answer 8

before these provisional payments end (no more than 12 weeks)

Question 9

Calculating pre-injury average weekly earnings (PIAWE)

The insurer should ask the employer and worker for

Answer 9

information to calculate the worker’s PIAWE.

Question 10

Calculating pre-injury average weekly earnings (PIAWE)

Workers and employers can either:

Answer 10

■ complete the Calculating pre-injury average weekly earnings form (see www.sira.nsw.gov.au), or
■ give the insurer the minimum information necessary, which the form outlines.

Question 11

Calculating pre-injury average weekly earnings (PIAWE)

Workers with more than one current employer or who are self-employed should

Answer 11

provide any other information the insurer needs to correctly calculate their PIAWE

Question 12

Calculating pre-injury average weekly earnings (PIAWE)

The insurer should calculate the PIAWE promptly to work out the

Answer 12

worker’s weekly payment entitlement and meet the legislative timeframes for commencing weekly payments (seven days for provisional
payments or 21 days for accepting liability)

Question 13

Calculating pre-injury average weekly earnings (PIAWE)

The insurer should then try to agree on the amount with the worker and employer.
This calculation is a

Answer 13

work capacity decision and should be communicated as outlined in B1.3. If the
worker disagrees with the calculated PIAWE, they can ask the insurer to review it (see B1.4).

Question 14

Calculating pre-injury average weekly earnings (PIAWE)

If the insurer is required to start weekly payments but does not have enough information to determine
PIAWE, it should

Answer 14

d identify a suitable work classification in an award or industrial instrument and use the ordinary earnings rate for setting PIAWE at an interim rate.

Question 15

Calculating pre-injury average weekly earnings (PIAWE)

The insurer should try to get the missing information as soon as possible and review the PIAWE so the worker receives the correct amount.
Where the PIAWE amount is incorrect, the insurer should

Answer 15

advise the worker in a work capacity decision of the new PIAWE amount and how any discrepancies will be remedied

Question 16

Calculating weekly payments

The insurer must use a formula from the

Answer 16

1987 Act to calculate the worker’s weekly payments.
The formulas are referenced in the table at the end of this chapter.

Question 17

Calculating weekly payments

The amount the insurer must pay depends on, but is not limited to

Answer 17

■ whether the worker has current work capacity or no current work capacity (as defined at s32A of
the 1987 Act)
■ the worker’s PIAWE and any current weekly earnings
■ how long the worker has received weekly payments
■ whether the worker has returned to work
■ the worker’s ability to earn in suitable employment
■ whether the worker’s income includes non-pecuniary benefits from the employer (for example, residential accommodation, use of a car, health insurance or education fees)

Question 18

Calculating weekly payments

If the worker is earning in any paid employment, the worker must

Answer 18

provide enough information for the insurer to calculate the correct weekly amount

Question 19

Calculating weekly payments

The weekly payment entitlement period starts on

Answer 19

on the day of the worker’s first incapacity (total or partial) from a work related injury. This means that what constitutes a week is different for each worker and there is no set period (as in Sunday to Saturday)

ie: r a worker first incapacitated on a Wednesday, their weekly entitlement period is Wednesday to Tuesday.

Question 20

Calculating weekly payments

A worker’s entitlement week may not correspond with the worker’s payroll week; however workers should

Answer 20

continue to be paid in line with their payroll period. The insurer should calculate the worker’s weekly payment and adjust it to their payroll week and where necessary, inform the employer of the payments to be made

Question 21

Calculating weekly payments

When calculating weekly payments, the earnings factor of the calculation must be

Answer 21

in accordance with the entitlement period, not the payroll week.

Question 22

Calculating weekly payments

Where weekly payments change because of entitlement periods, the insurer should

Answer 22

advise the worker, by phone (keeping a record of the conversation) and in writing

Question 23

Calculating weekly payments

If making payments directly to the worker, the insurer must ask the worker to

Answer 23

to fill in an Australian
Taxation Office tax file number declaration form and must arrange for tax to be paid in line with income
tax law

Question 24

How to start weekly payments

As the insurer, you should inform the worker and employer in writing when starting weekly payments. This information should explain

Answer 24

■ that the payments have started as the insurer has accepted liability for them
■ the amount of weekly payment and how that amount has been calculated (including a copy of the completed PIAWE form where one has been provided)
■ who will pay the worker (either the employer or the insurer)
■ what to do if the worker disagrees with the amount calculated and explain the review process
■ what to do if the worker does not receive payment
■ that an injury management plan will be developed, if the worker is unable to return to their pre-injury employment for seven continuous days
■ that to continue to be entitled to weekly payments the worker must give the employer or insurer a properly completed Workers Compensation certificate of capacity
■ that the worker must tell the insurer of any change in employment that affects their earnings, such as starting work for another employer

Question 25

How to start weekly payments If you include information which is a work capacity decision, you should

Answer 25

ensure that it is communicated to the worker as outlined in the ‘Work capacity decision’ chapter (see B1.3). You should also include the Information for injured workers brochure

Question 26

Weekly payments

Answer 26

refer to pages 19-20 of the guideline

Question 27

B1.2 Work capacity assessments Where a worker is entitled to receive weekly payments, an insurer may review their capacity to work. This is called a

Answer 27

work capacity assessment. The insurer may consider this necessary for the purpose of informing a work capacity decision (see B1.3)

Question 28

Understanding work capacity assessments An insurer performs a work capacity assessment to determine whether a worker has

Answer 28

■ current work capacity – a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment, or ■ no current work capacity – a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment.

Question 29

Assessing work capacity A work capacity assessment should consider two questions

Answer 29

1. Does the worker have a present ability to return to their pre-injury employment? 2. Does the worker have a present ability to return to suitable employment?

Question 30

Assessing work capacity A work capacity assessment can be simple and based on limited information, or it can be more complex, such as where the worker has some capacity but cannot return to their pre-injury employment. Insurers should consider the principles of

Answer 30

procedural fairness, including fair notice, when making any assessment that may affect a worker’s rights or interests. Insurers will need to determine what the principles of procedural fairness require, on a case by case basis, having regard to the nature and potential consequences of the outcome of the assessment.

Question 31

Assessing work capacity A worker is able to provide

Answer 31

any information to the insurer that they wish to be considered in a work capacity assessment (for example certificate of capacity, treating specialist reports, job description)

Question 32

Assessing work capacity The insurer must keep a record of a work capacity assessment in the worker’s file, including the

Answer 32

■ work capacity assessment date ■ where applicable, dates of contact with the worker and case notes of discussion points ■ details and dates of any other assessment the worker had to attend ■ assessor’s identity ■ outcome of the assessment (for example, whether a work capacity decision is required)

Question 33

Assessing work capacity If the insurer assesses that the worker cannot return to their pre-injury employment, then

Answer 33

it must assess if the worker can instead work in other employment that is suitable If this is the case, the insurer must also identify the type(s) of employment the worker is currently suited to

Question 34

Assessing suitable employment The insurer should assess suitable employment using

Answer 34

all the available information and applying the definition within the legislation

Question 35

Assessing suitable employment suitable employment means employment in work for which the worker is currently suited:

Answer 35

(a) having regard to: (i) the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and (ii) the worker’s age, education, skills and work experience, and (iii) any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and (iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and (v) such other matters as the Workers Compensation Guidelines may specify, and (b) regardless of: (i) whether the work or the employment is available, and (ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and (iii) the nature of the worker’s pre-injury employment, and (iv) the worker’s place of residence

Question 36

Timing the assessments Insurers can perform a work capacity assessment whenever they need to assess a worker’s work capacity. An insurer must perform a work capacity assessment after

Answer 36

a worker has received a total of 78 weeks of weekly payment, where it is likely that the worker will have an entitlement to weekly payments after receiving 130 weeks of weekly payments

Question 37

Timing the assessments This assessment must be completed prior to the worker accumulating 130 weeks of weekly payments. Before the insurer does this assessment it must notify the worker in writing including:

Answer 37

■ the purpose of the assessment ■ what information the worker can provide to the insurer for consideration ■ the expected completion date ■ the matters it may decide on

Question 38

Timing the assessments Where the insurer assesses the worker as having a current work capacity, it must provide them with the

Answer 38

Application for continued weekly payments after 130 weeks form and inform them they need to use this form to apply in writing for weekly payments to continue. See www.sira.nsw.gov.au for this form.

Question 39

Timing the assessments The insurer must assess the worker’s current work capacity at least every

Answer 39

two years from the date of this assessment

Question 40

Timing the assessments Insurers must not perform a work capacity assessment for a worker with

Answer 40

highest needs, unless the worker requests one and the insurer thinks it appropriate

Question 41

Attending assessment appointments An insurer may use available information to assess work capacity, or they may require the worker to attend an assessment appointment if

Answer 41

further information is required. Any assessment appointments required by the insurer must be reasonably necessary.

Question 42

Attending assessment appointments A worker cannot be required by the insurer to attend more than four appointments per work capacity assessment. Of these there cannot be more than:

Answer 42

■ one appointment with the same type of medical specialist (for example orthopaedic surgeon, psychiatrist) ■ one appointment with the same type of health care professional (for example physiotherapist, psychologist)

Question 43

Attending assessment appointments If the worker is required to attend an appointment with an independent medical examiner, this must be

Answer 43

in accordance with the Guidelines on independent medical examinations and reports

Question 44

Attending assessment appointments The insurer must advise the worker of the date and time of each appointment at least 10 working days before the appointment occurs. The advice must include

Answer 44

■ location of the appointment ■ the purpose of the appointment and how it may inform the work capacity assessment ■ that refusing to attend, or failing to properly participate so that the assessment at the appointment cannot take place, may result in the insurer suspending weekly payments until the assessment appointment is completed.

Question 45

Attending assessment appointments If the worker agrees, the insurer can

Answer 45

set the date of an assessment appointment in less than 10 working days. The insurer should keep a record of this discussion

Question 46

Suspending benefits due to refusal or non-participation Where the insurer requires the worker to attend an assessment appointment and the worker has refused to attend or the assessment did not take place due to the failure of the worker to properly participate in the assessment, the insurer may

Answer 46

suspend a worker’s weekly payments. Before suspending the payments, the insurer should be satisfied that it possesses sufficient information to confirm that the worker has refused to attend the appointment or the assessment did not take place due to the failure of the worker to participate in the assessment

Question 47

Suspending benefits due to refusal or non-participation The insurer should advise the worker that weekly payments will remain suspended until the assessment appointment has taken place. Where suspension has occurred, the insurer should

Answer 47

expedite the new assessment appointment and advise the worker of the details

Question 48

B1.3 Work capacity decisions

Answer 48

A work capacity decision is made by an insurer and may affect a worker’s entitlement to weekly payments.

Question 49

Understanding work capacity decisions An insurer may make a work capacity decision about

Answer 49

■ the worker’s current work capacity ■ what is suitable employment for the worker ■ how much the worker can earn in suitable employment ■ the worker’s pre-injury average weekly earnings (PIAWE) or current weekly earnings ■ whether a worker is, as a result of injury, unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment ■ any other decision of an insurer that affects a worker’s entitlement to weekly payments of compensation, including a decision to suspend, discontinue or reduce the amount of the weekly payments of compensation payable to a worker on the basis of any decision referred to in the above bullet points

Question 50

Understanding work capacity decisions Insurers make work capacity decisions regularly throughout the life of a claim. Insurers should consider the principles of

Answer 50

procedural fairness, including fair notice, when making any decision that may affect a worker’s rights or interests. Insurers will need to determine what the principles of procedural fairness require, on a case by case basis, having regard to the nature and potential consequences of each decision that may be made

Question 51

Understanding work capacity decisions It is important that work capacity decisions are not confused with other claim decisions. For instance, these are not work capacity decisions

Answer 51

■ a decision to dispute liability for weekly payments (see B10) ■ a decision to dispute liability for a medical, hospital or rehabilitation expense (see B10)

Question 52

Understanding work capacity decisions Work capacity decisions that do not change the amount of weekly payments that a worker receives can be simple and based on limited information. These decisions do not

Answer 52

require any process that could potentially interrupt or delay weekly payments, however the worker should be informed of the decision and the right to request an internal review if they do not agree with the decision

Question 53

Understanding work capacity decisions Work capacity decisions can be more complex, such as here an insurer is making a decision that establishes or changes the amount of weekly payments that a worker will receive. In these cases, the insurer should provide to the worker, all the information and reasons used to make a work capacity decision that establishes or changes a worker’s amount of weekly payments for example:

Answer 53

■ PIAWE ■ ability to earn in suitable employment

Question 54

Understanding work capacity decisions Where a worker has received weekly payments for a continuous period of at least 12 weeks, the insurer must provide a

Answer 54

three month period of notice before the work capacity decision that reduces or terminates the worker’s weekly payments takes effect. This provides an opportunity for workers to seek a review of the decision and to submit additional information to be considered in the review (See B1.4).

Question 55

Understanding work capacity decisions Where an insurer identifies that they have made an error in a work capacity decision, they should make

Answer 55

a new work capacity decision and inform the worker accordingly

Question 56

How to advise the worker of the work capacity decision As an insurer, you can advise the worker of a work capacity decision in different ways. Where the decision does not change the amount of weekly payments that a worker receives, you should contact the worker to

Answer 56

inform them of the decision and the right to request an internal review if they do not agree with the decision. You should also keep a record of the communication

Question 57

How to advise the worker of the work capacity decision Where the decision establishes or changes the amount of weekly payments that a worker receives, this should be communicated in writing and by phone providing the following information:

Answer 57

■ the work capacity decision ■ its consequences, including any effects on the worker’s entitlement to weekly payments and future medical, hospital and rehabilitation services under Division 3 of Part 3 of the 1987 Act ■ reasons for the decision ■ the information considered ■ the date that the work capacity decision takes effect including when the required period of notice will cease ■ the process for requesting an internal review of the decision ■ the date by which the worker needs to apply for a stay of the decision to operate (see B1.4) ■ that if the worker requests a review: – they may provide any additional information relevant to the request for the internal review – they need to specify the decision or decisions for review and the grounds on which the review is sought – the operation of any stay on the original decision during the review. ■ the review process after an internal review ■ the Work capacity – application for internal review by insurer form ■ that the worker can seek help from their insurer, SIRA’s Customer Service Centre on 13 10 50, the Workers Compensation Independent Review Officer (WIRO) on 13 94 76, or their trade union.

Question 58

How to advise the worker of the work capacity decision You can include the work capacity decision in other correspondence, but

Answer 58

t it should always be clearly identified. For example, a letter accepting liability for a claim for weekly payments might include the work capacity decision with the amount of the worker’s PIAWE

Question 59

How to advise the worker of the work capacity decision The work capacity decision can be delivered personally to a worker. Where provided to the worker by post, the work capacity decision is taken to have been delivered to the worker on the

Answer 59

fourth working day after it was posted. Any required period of notice needs to include this additional time period.

Question 60

B1.4 Reviews of work capacity decisions

Answer 60

A worker can ask for a work capacity decision to be reviewed

Question 61

Understanding the available review options A work capacity decision can only be reviewed if the worker makes an application for the decision to be reviewed. There are three types of administrative review

Answer 61

1. an internal review, where the insurer undertakes the review and informs the worker of the review decision 2. a merit review, where SIRA undertakes the review and informs the worker and insurer of its findings and recommendations 3. a procedural review, where the Workers Compensation Independent Review Officer (WIRO) undertakes the review and informs the worker, insurer and SIRA of its findings see page 26 of the guidelines

Question 62

Understanding the available review options Additionally, workers may seek a judicial review of work capacity decisions by the

Answer 62

Supreme Court of NSW.

Question 63

The stay of a work capacity decision Where a work capacity decision is made by an insurer, the worker is able to

Answer 63

request the work capacity decision be reviewed. Where the work capacity decision involves discontinuation or reduction of a worker’s weekly payments, an application for review may act to stay the operation of the work capacity decision.

Question 64

The stay of a work capacity decision Where a stay operates, it temporarily prevents the insurer taking action on

Answer 64

the decision for the period between the application for the review and the notification of the decision or findings of the review

Question 65

The stay of a work capacity decision The purpose of the stay is to

Answer 65

provide protection to the worker by maintaining their weekly payments while the review is being undertaken.

Question 66

The stay of a work capacity decision A stay can only

Answer 66

prevent a decision taking effect. It cannot reinstate what has already occurred

Question 67

The stay of a work capacity decision A stay does not extend the

Answer 67

required period of notice contained in the work capacity decision. If the required period of notice expires at a time when a review is not being undertaken, the worker’s weekly payment of compensation will be reduced or discontinued in accordance with the work capacity decision. If the worker then subsequently applies for a review, for example, a merit review by SIRA, the workers weekly compensation rate during the review will continue at the rate shown in the work capacity decision.

Question 68

The stay of a work capacity decision An application for review can stay the effect of the decision if it is made in these timeframes:

Answer 68

Internal review Merit review Procedural review

Question 69

Internal review

Answer 69

Applies to the insurer within 30 days of receiving the work capacity decision.

Question 70

Merit review

Answer 70

Applies to SIRA: ■ within 30 days of receiving the insurer’s internal review decision (or after 30 days from making an application to the insurer for an internal review, where the insurer has failed to conduct the internal review and notify the worker within 30 days), and ■ before the work capacity decision has taken effect after the required notice period

Question 71

Procedural review

Answer 71

Applies to WIRO: ■ within 30 days of receiving the merit review findings, and ■ before the work capacity decision has taken effect after the required notice period

Question 72

The stay of a work capacity decision A stay will no longer apply if

Answer 72

a worker withdraws a review application

Question 73

Applying for an internal review A worker can apply to the insurer to perform an internal review of the work capacity decision at any time. The worker must apply for an internal review within

Answer 73

30 days of receiving the work capacity decision advice for a stay of the decision to apply during the internal review process

Question 74

Applying for an internal review The application must be made by

Answer 74

supplying a completed Work capacity – application for internal review by insurer form to their insurer. The form is available from www.sira.nsw.gov.au or the insurer

Question 75

Applying for an internal review The application form must identify the decision that the worker is

Answer 75

requesting be reviewed and include the worker’s reasons for seeking the review of the decision. It can also include additional relevant information for the insurer to consider (for example medical or employment information)

Question 76

Applying for an internal review The insurer cannot refuse to perform an internal review after

Answer 76

receiving a review application

Question 77

How to acknowledge and respond to a request for internal review As an insurer, your response will vary depending on the timing of a worker’s application for an internal review. If a worker applies within 30 days of being notified of the work capacity decision, your response must

Answer 77

explain that the work capacity decision is stayed and the decision will not take effect until you notify them of your internal review decision, or at the end of the notice period, whichever is later.

Question 78

How to acknowledge and respond to a request for internal review If a worker applies after 30 days of being notified of the work capacity decision, your response must explain that

Answer 78

the work capacity decision is not stayed and the decision will take effect at the end of the required notice period.

Question 79

How to acknowledge and respond to a request for internal review In both cases, within or after 30 days, your response must be in writing and posted to the worker within five business days of receipt of the application. The cmmunication must include:

Answer 79

■ that the review will be completed within 30 days of the application being made by the worker ■ the date by which the worker will be notified (with consideration to the postal rule) ■ how to apply for a merit review, and that this option is available if the worker does not receive the decision within 30 days of making the application for internal review ■ the Work capacity – application for merit review by the authority form ■ confirmation that you have received any new information the worker has supplied

Question 80

How to complete an internal review As an insurer, you must comply with the following when completing an internal review of a work capacity decision

Answer 80

■ the review must be completed within 30 days of the worker’s application ■ no one involved in the original decision may conduct the review ■ the reviewer must be identified by name ■ the reviewer can ask the worker for more information ■ the reviewer must consider any new information obtained or provided

Question 81

How to complete an internal review The purpose of the internal review is to

Answer 81

make the most correct decision based on all the available information that may or may not have been available when the original work capacity decision was made.

Question 82

How to notify the worker of the internal review decision As an insurer, you must notify the worker of the review decision when the internal review is complete. The review decision will either affirm the original decision or give a different decision. You must notify the worker of the review decision as soon as practicable. This must be in writing and you should use the Work capacity – notice of decision of the insurer following an internal review of a work capacity decision form. It should include:

Answer 82

■ the review decision ■ its consequences, including any effects on the worker’s entitlement to weekly payments and future medical, hospital and rehabilitation services under Division 3 of Part 3 of the 1987 Act ■ reasons for the decision ■ the information considered ■ the process and timeframe for requesting a merit review of the decision ■ whether a stay of the operation of the decision applies and, if so, the required timeframe for applying for a merit review ■ a copy of the Work capacity – application for merit review by the authority form ■ the review process after a merit review ■ that the worker can seek help from their insurer, SIRA’s Customer Service Centre on 13 10 50, the Workers Compensation Independent Review Officer (WIRO) on 13 94 76, or their trade union.

Question 83

Applying for a merit review After the insurer has completed the internal review (or has not completed the review within 30 days of the application), the worker has the option to seek a merit review of the insurer’s work capacity decision by SIRA. The worker must apply for a merit review within 30 days of:

Answer 83

■ receiving the internal review decision, or ■ the due date of the internal review decision if the insurer has not notified the worker of its decision.

Question 84

Applying for a merit review The worker must apply using the Work capacity – application for merit review by the authority form. The worker must also notify the insurer of the merit review application by providing them with a copy of the application form. The reviewer may decline to review a decision if:

Answer 84

■ it determines that the application is frivolous or vexatious ■ the worker does not provide information that it has requested ■ the application is made outside the 30 day timeframe outlined above

Question 85

Applying for a merit review The insurer is bound by the

Answer 85

reviewer’s findings and recommendations and must give effect to them. This should happen immediately. Further information in relation to merit reviews can be found within the Merit review user guide.

Question 86

Applying for a procedural review

Answer 86

After the worker is informed of the findings from the SIRA reviewer, the worker can seek a procedural review of the work capacity decision by applying to the Workers Compensation Independent Review Officer (WIRO)

Question 87

Applying for a procedural review The worker must apply using the

Answer 87

WIRO Application for a procedural review form within 30 days of receiving the SIRA reviewer’s merit review decision. The form is available from www.wiro.nsw.gov.au. The worker must also notify the insurer of the procedural review application by providing them with a copy of the application form

Question 88

Applying for a procedural review A procedural review examines the insurer’s procedures in making the work capacity decision. It does not assess the merits of the decision. The reviewer may decline to review a decision if

Answer 88

■ it determines that the application is frivolous or vexatious ■ the worker does not provide information that it has requested ■ the application is made outside the 30 day timeframe outlined above. The insurer is bound by the reviewer’s findings and recommendations and must give effect to them. This should happen immediately.