In Brief

  •  In June 2012 the government introduced changes to the NSW Workers Compensation Scheme that focus on assisting injured workers to return to work.
  • If you are an injured worker, your work capacity is your fitness to work – whether it be in your pre-injury employment,  on reduced hours, on modified duties or with another employer.
  • The insurer assesses your work capacity based on your activities of daily living, medical evidence, injury management and return to work plans and the WorkCover Certificate of Capacity that is determined by your doctor.
  • Based on this assessment, the insurer makes decisions on your work capacity, your entitlement to weekly payments and what constitutes suitable employment for you.


The changes in the Scheme are intricate and may prove difficult for a worker to understand without legal assistance. Four points have been identified that all workers with workers compensation claims should be aware of.

  1. An insurer may make a work capacity assessment at any time throughout the life of a worker’s claim.1 However, an assessment is not necessary for the making of a work capacity decision.2
  1. A work capacity decision is made by an insurer and is final and binding on the parties. A worker may refer the decision of the insurer for review within 30 days of receiving a decision notice.3 A work capacity decision may be made at any point in time and can be about a worker’s current work capacity, what constitutes suitable employment for a worker and the amount an injured worker is able to earn in suitable employment.4
  1. At least 2 weeks notice – usually by telephone – must be given to a worker before a work capacity decision is made.5 The insurer must inform the worker that a review of their current work capacity is being undertaken and that a work capacity decision is going to be made. However, this provides an opportunity for the worker to supply any further information about their injury or claim to the insurer for further consideration.
  1. At least 3 months notice – usually by post – must be given to a worker if the decision results in termination or reduction of weekly payments: Section 54.


A recommendation was made by the WorkCover Independent Review Office on 3 September 2013 which followed a matter review by a WorkCover Independent Review Officer.6 The decision demonstrates that workers have a number of rights under the new laws if they wish to appeal a work capacity decision made by an insurer.  Note that this is not a binding decision from a superior court.  It remains to be seen if the insurers who are assuming what was a judicial function are able to meet the procedural requirements consistently.

How can a worker appeal a work capacity decision?
  •  Firstly, an Application for a Review by Insurer form should be completed within 30 days of receiving a decision to ask the insurer to review a decision (“internal review”).
  • Secondly, a WorkCover Application for a Review by the Authority form should be completed to ask WorkCover for a review of the merits of the insurer’s decision (“merit review”).
  • Lastly, the WorkCover Independent Review Office (WIRO) can review the insurer’s procedures in making the first work capacity decision. This decision from WIRO is binding and can be requested by completing a WIRO Application for Work Capacity Review form (“procedural review”).
On what grounds can a worker appeal a work capacity decision?
  •  If the insurer has not given a worker proper notice of the decision. The insurer must give the worker 3 months notice in addition to four clear working days for service by post. Failure to give the proper notice is regarded is an offence.
  • If the worker’s application was not dealt with by the insurer or merit review service within 30 days.
  • If the information that the insurer relied upon was incorrect, incomplete or out of date.

Note that there is no funding for aid to prepare reviews and lawyers are unable charge fees for drawing review applications and making submissions.

If you have any further questions about work capacity or reviews, call WIRO on 13 9476.

Written by Terence O’Riain (Senior Solicitor) and David Kim (Associate Solicitor)

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Section 44A(1) of the Workers Compensation Act 1987.

Section 44A(3).

Section 44.

Section 43(1).

Guideline 5.2 of the WorkCover Work Capacity Guidelines (published on 28 September 2012).

“Recommendation Following an Application for Review of the Insurer’s Work Capacity Decision Pursuant to Section 44(1)(c) of the Workers Compensation Act 1987”  (Accessed on 20 September 2013).