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How a WorkCover payout is calculated?

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Please note that this post was written for Victorian audiences and the information within may not apply to other regions.

Acquiring an injury at work and attempting to seek compensation can be a stressful process, where complicated terms and rules surrounding WorkCover payments can generate a confusing procedure. An injury at work can entitle you to several differing compensation options, of which are dependent upon the extent of injury, and the circumstances causing it. However, each differing benefit option (which is seen here on our WorkCover page) are calculated separately and require different circumstances when considering the magnitude of each payment. This blog will outline how a WorkCover Payout is calculated.

Treatment Expenses

Treatment expenses will cover ‘medical and like expenses’ that are considered to be reasonable and necessary for all expenses concerned with the injury sustained from work.

This can be for either physical and/or psychological injuries. Physical injuries, such as a broken leg or shoulder, will often include several treatments such as GP, scans, surgery, and rehabilitation.

However, with such services, WorkSafe will only ever pay for one allied health at a time. For example, if you are seeing both a physiotherapist and a chiropractor for the injury, WorkSafe will only be able to cover the cost of one of these services.  

Conversely, psychological injuries can be covered for treatment expenses for mental injuries that cause significant behavioral or cognitive dysfunction and have been diagnosed by a medical practitioner.

For psychological injuries, regardless of your claim being accepted or rejected, you will be entitled to receive 13 weeks of provisional payments for counselling and mental health services.

Arrangements can be made where your treating health provider will send invoices directly to the WorkSafe agent.

Often, a WorkSafe agent will approve these expenses, however, it remains possible for treatment requests to be rejected if they are deemed ‘unreasonable’ or ‘unnecessary’. This standard of reasonability is at WorkSafe’s discretion; however, it often involves medical opinions and a potential Independent Medical Examination or a review from an in-house insurance doctor.

Weekly Payments

Weekly payments reimburse you for the hours you have or may be missing from work due to your injury.

Your pre-injury average weekly earnings (PIAWE) will be calculated based on the amount you were earning each week prior to suffering the injury. You will be able to claim weekly payments at the rate of:

  • 95% of your calculated PIAWE figure for the first 13 weeks; and
  • 80% up until 130 weeks.

Weekly payments are also subject to statutory limitations. Currently, the maximum amount that can be awarded for weekly payments (regardless of your pre-average weekly earnings amount) is $2800 (as of 1 July 2024).

You will only be able to stay on payments after the 130 weeks will be awarded if:

  • It is found you have no capacity to work; and
  • You have been assessed as having a whole-person impairment rating of 21% or more.

An Agent or Insurer may make an interim decision to cease or continue weekly payments without a whole-person impairment medical assessment. This can arise in circumstances where:

  • The injury is not stable or is unlikely to become stable, or
  • The worker is under the age of 18, or
  • For any reason, the information required to make the impairment determination is unavailable.

To successfully cease weekly payments, it must be satisfied that there is current work capacity, or either the injury is not likely to be permanent, or it is likely there is a whole impairment rating of below 20%.

Certificate of Capacity

To claim compensation for time off work, a WorkCover Certificate of Capacity must be submitted.

The first certificate must be issued by a GP and can be longer than 14 days. Each subsequent certificate can be 28 days and can also be issued by a physiotherapist.

Impairment Benefit Expenses

The permanent impairment claim is a lump sum payment that can be awarded on a one-off basis.

Eligibility for such a payment is dependent upon suffering a permanent and ongoing impairment. From the outset, it is necessary that from your injury assessment, your injury is concluded as ‘stable’. This means that your situation is unlikely to worsen or get better.

To be awarded this one-time payment, your injury’s permanent impairment rating must reach a certain injury threshold rating. Such a process takes place via an independent impairment assessment, where a doctor examines your injury, reviewing and rating the impairment level.

Each impairment rating for each injury is seen with:

  • Any musculoskeletal injury requiring an impairment rating of 5% or above for entitlement to the lump sum payment.
  • All other physical conditions require a 10% rating.
  • Psychological conditions require 30%.

If you satisfy the threshold, the amount you will be awarded will depend on the level of impairment. The higher the rating, the more compensation awarded. 

See more on our post about what to know about Impairment Benefits in Victoria.

Common Law Damages

A common law claim is a fault-based claim. This means that in these types of claims, there is something that the party at fault could or should have done to prevent your injury from occurring that is considered reasonable and practical.

Common law claims are under strict time limits. A claim must be brought within six years of the date of injury. Despite this, there are special circumstances where a claim can be brought outside this 6-year period. We suggest you speak with a lawyer if this may be your situation.

The damages available in a common claim are for:

  • Pain and suffering/loss of enjoyment of life; and
  • Loss of earning capacity
    • This aspect can only be pursued if you can show that you have lost 40% or more of your earning capacity.

When pursuing common law damages, the following two requirements must be demonstrated.

  1. Serious Injury

Firstly, it must be established that your injury is one that is ‘serious’. Establishing this can be achieved in one of the following two ways:

  • Given at least a 30% whole person impairment rating, where your injury/s impair you to an extent of at least 30%.
  • From a narrative lifestyle test
  • Negligence

The second aspect of common law damages is proving a degree of negligence. This means you must prove that your injury was at the fault of and came about from the actions or inactions of another party – such as your employer.

Unlike other forms of compensation, common law damages have no strict formula for calculating the damages amount, each case is separate depending on the extent of injury and fault from the other party.

If you would like assistance with your work injury or more information, please speak with Zaparas Lawyers.