NSW workers’ compensation claims: How is permanent impairment assessed?

Everyone has the right to go to work each day, knowing they’ll come home safely. If you’ve been injured or become ill at work you may be entitled to make a claim for workers’ compensation to cover lost wages, medical and rehabilitation costs, retraining expenses or a lump sum payment for permanent injuries. There have been a lot of changes to arrangements in NSW for seeking workers’ compensation in recent years. You could be forgiven for being a little confused about where to start. After all, workers’ compensation laws and entitlements are already a little hard to keep up with because they vary between states and territories and may be known as WorkCover, CTP or WorkSafe. Compensation and benefits can vary greatly depending on your injury and on the law you’re covered by.

Read more:

Want to know what the process is for claiming workers’ compensation in NSW? Here’s how! – Littles

Been injured in NSW and wondering what ‘work injury damages’ are? – Littles

If you’ve been injured at work in NSW, Littles has you covered. This blog explores one of the most important terms you need to be aware of: “assessment of permanent impairment”.

The basics

First things first. An assessment of permanent impairment of a worker as a result of an injury is undertaken by specialist medical practitioners applying diagnostic criteria and evaluation processes. The result is expressed as a percentage of “whole person impairment”.

Read more here: NSW workers’ compensation claims: I’ve been injured and my medical expenses are piling up. Help! – Littles

Why is an assessment of permanent impairment important?

An assessment of permanent impairment is very important to your workers’ compensation claim.

Firstly, it determines the amount of lump sum compensation that you may be entitled to under NSW workers’ compensation legislation.

Secondly, the assessment of permanent impairment acts as a ‘threshold’ to other entitlements under the legislation and at common law. 

Important: if you are an “exempt worker”, different arrangements apply. Jump over here to find out more!

Read more: NSW workers’ compensation claims: What is a certificate of capacity? – Littles

Who assesses permanent impairment? My GP?

Usually, your employer’s insurer will arrange for an independent medical examination by a registered medical practitioner who will then provide an assessment of medical impairment. This person will typically be someone who is a specialist with qualifications, training and experience relevant to the issue being assessed.

What is the basis of their assessment?

Medical practitioners conducting assessments have to have reference to specific criteria, including the NSW workers compensation guidelines for the evaluation of permanent impairment. These are designed to ensure that there is an objective, fair and consistent method of evaluating the degree of permanent impairment.

Read more: NSW workers’ compensation claims: What’s an independent medical examination (IME)? – Littles

What if I have multiple impairments?

Workers’ compensation injuries and illnesses can be complex, and you may have more than one injury from the same incident. Generally, those injuries are treated together as one injury for the purposes of assessing whole person impairment.

IMPORTANT: if you receive both a psychological injury and a physical injury out of the same injury, you are only entitled to receive lump sum compensation for whichever injury results in the greater amount of compensation. Impairments for psychological and physical injuries are assessed separately. 

Read more: Help! My NSW workers’ compensation claim has been rejected. What do I do? – Littles

Psychiatric and psychological injuries

You may not be aware that psychiatric and psychological injuries in NSW are defined as ‘primary’ psychological and psychiatric injuries in which work was found to be a “substantial contributing factor”. It’s important to distinguish a ‘primary’ psychiatric condition from a ‘secondary’ condition which arises as a consequence of a physical injury – for example, if you have depression related to a back injury sustained at work. This is because NO permanent impairment compensation is payable for permanent impairment that results from a secondary psychological injury. You may be able to have reasonable medical expenses covered.

IMPORTANT! There are strict time limits for making and disputing a claim, so take advantage of our FREE initial consultation and get in touch. You have nothing to lose by speaking to one of our compensation law experts. The sooner we determine your eligibility to make or appeal a claim, the sooner we can help you to obtain or continue getting funding from the insurer so your rehabilitation can proceed smoothly.

Free advice and no upfront fees

Not only do we offer a FREE initial consultation we handle most insurance claims on a no win, no fee basis.


The Head of our NSW team, Jessica Cheung, is an expert in NSW workers’ compensation claims. If you think you might have a claim, reach out to Jessica and her team for high quality legal advice.


Please note that this information is intended to provide general guidance only. You should not act or refrain from acting on the basis of such information. Appropriate professional advice should be sought based upon your individual circumstances. For further information, please contact Littles.

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