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Writer's pictureJoanne Mortimer-Fox

Lump sum compensation for workplace injuries

Updated: Mar 1, 2021


Workers in NSW* with injuries that result in a permanent impairment, may be entitled to claim lump sum compensation.

How is permanent impairment assessed?

Injuries are assessed using the Workers Compensation Guidelines for the Evaluation of Permanent Impairment which prescribes the method for assessing different body parts.


Once all parts of an injury have been assessed, the impairments will be combined to give a total “whole person impairment (WPI)”.

Only specialists trained by SIRA in the use of the Guidelines can carry out impairment assessments.

If you were injured before 1 January 2002, these guidelines do not apply and your impairments from each body part listed in the Table of Disabilities will be separately assessed.

What can be included in the impairment assessment?

If you injure one part of your body in multiple accidents, the impairment from each accident can be combined if it is the same pathology.

Alternatively, if you have multiple injuries resulting from one “injurious event”, all the impairments from those injuries can be combined.

This includes consequential conditions that may develop as a result of the original injury.

An exception to this is psychological injuries which cannot be combined with physical injuries ever.

Some common consequential conditions include:

  • Complications from surgery or medications prescribed for the injury

  • Where an arm or leg is injured, a condition develops in other limb due to altered gait or over-reliance on that limb following the injury

  • Inactivity following injury can lead to weight gain and conditions like obstructive sleep apnoea and type 2 diabetes

  • Injuries from falls cased by instability due to injury or medication.

What if I have a pre-existing condition or injury?

If you have a pre-existing condition that contributes to your impairment, the assessor will make a deduction for the proportion of the impairment caused by that condition.

If that is too difficult or costly to work out, then 10% of the impairment will be deducted under s 323 Workplace Injury Management and Workers Compensation Act 1998.

What is the WPI threshold for claiming lump sum compensation?

Lump sum compensation is only payable if you have at least 11% WPI* for physical injuries and 15% WPI for psychological injuries .

The threshold for physical injuries does not apply if you have previously claimed lump sum compensation for the same injury prior to 19 June 2012, or if your injury was sustained prior to 1 January 2002.


How is the lump sum compensation calculated?

The Workers Compensation Act 1987 fixes the lump sum compensation by reference to your assessed level of permanent impairment.

No compensation is payable for pain and suffering.


How are disputes about permanent impairment resolved?

Disputes about permanent impairment are resolved by the Personal Injury Commission (PIC).

A final assessment of your impairment is usually carried out by a Medical Assessor appointed by the PIC.

Sometimes, if it is a straight-forward case, an Arbitrator will make the assessment.

This assessment is final and binding for all purposes. There are limited grounds of appeal, for example if there is an error in the assessment.

It is important to note you can only ever have one assessment of your permanent impairment by the PIC. This assessment will then be relied on to determine thresholds relevant to your other compensation entitlements, including:

  • Weekly payments

  • Medical expenses

  • Domestic assistance

  • Work injury damages or negligence claims.

Workers who were assessed prior to 19 June 2012 are allowed one further assessment after that date.

What if I get worse after making a claim?

Generally, you can only make one claim for lump sum compensation, even if your condition significantly deteriorates in the future.

If you made a lump sum claim before 19 June 2012, you are entitled to make one further claim after that date.

Contact us for more information.



* Click here for information about lump sum compensation for police officers, paramedics, fire fighters.


* This does not apply to coal miners.


DISCLAIMER:  This blog is made available by Mortimer Fox Lawyers to give you general information and a general understanding of the law, not to provide specific legal advice. Unless otherwise stated, all information provided pertains to injuries sustained in or in connection with New South Wales.  By using this blog you understand that there is no solicitor client relationship between you and Mortimer Fox Lawyers. This blog should not be used as a substitute for legal advice.  If you require legal advice please contact us for an appointment.

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