Reduced Weekly Compensation Due to Work Capacity ?

Jonathan Coyle
Tony Chow

Section 33 of the Worker Compensation Act (NSW) 1987 (“the 1987 Act”) requires the employer to pay compensation to an injured worker weekly compensation if the injury has caused either total or partial incapacity for employment. 

Section 43 of the 1987 Act allows an insurer to adjust the amount of weekly compensation payable to the injured worker in certain circumstances. For example, an insurer can reduce the weekly compensation alleging the injured worker is fit for employment. 

Current Work Capacity

Under section 9(1) of Schedule 3 of the 1987 Act, a worker has capacity for employment if able to return to pre-injury employment or is able to return to work in suitable employment though earning a lesser amount of money than the pre-injury level.  

In Lawarra Nominees P/L v Wilson [1996] NSWSC 584, Mahoney P held that “the incapacity for work…is a physical incapacity for doing work in the labour market in which the employee was working or might reasonably be expected to work”. When a dispute about work capacity arises, the court will take the realities of the labour market and the physical and mental state of the injured worker into account and ask two questions in a practical sense:

  1. What is the relevant labour market, i.e., what work was the worker doing or could he reasonably be expected to do; and 
  2. Of that kind, what is he/she physically able to do

Suitable Employment

Insurers can reduce the weekly compensation entitlements if they believe the workers have current work capacity in suitable employment.

Suitable employment under section 32A means employment in work for which the worker is currently suited, having regard to:

  1. the nature of the incapacity and the details provided in medical information; 
  2. the worker’s age, education, skills and work experience; 
  3. any return to work plan, and 
  4. any occupational rehabilitation services that have been provided to the worker etc. 

The issue of whether a worker is able to return to work in suitable employment is determined on a case-by-case basis with the available evidence dealing with the considerations of what constitutes suitable employment mentioned above.  

In Campos v Genesis Care Pty Ltd [2021] NSWPIC 226, the Applicant, a project manager, was psychologically injured during his employment. The Applicant submitted that his weekly compensation should not be reduced on the basis that he is able to work part-time in project management for the period during which he was still suffering from psychological injury with a minimum capacity to work, the member agreed with the applicant holding that the insurer respondent is unable to locate a real work in the labour market suitable for the applicant under his state which would justify a reduction of the Applicant’s weekly compensation entitlement. 

In Wollongong Nursing Home Pty Ltd v Dewar [2014] NSWWCCPD 55, the respondent worker was a part-time assistant in nursing for the employer appellant and injured herself during the course of her employment. The appellant submitted that the arbitrator was erred in finding for the respondent that she had no current work capacity in suitable employment only because her position with the former employer after the injury does not longer exist. Roach P, agreed with the appellant, held that before reaching the decision with respect to whether there is suitable employment for the respondent, the arbitrator must refer to the considerations under section 32A. 

If your weekly compensation entitlement is reduced because of work capacity please contact our personal injury team immediately for legal advice.

*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice beforetaking any course of action.*

Key Contact

Jonathan Coyle
Founding Partner
Tony Chow


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Further reading .

Another successful medical negligence claim for a couple
Another successful medical negligence claim for a couple