Lump sum payments

Each potential lump sum entitlement has legislative criteria that must be satisfied to receive payment.

The most common form of lump sum payments are whole person impairment (WPI) payments. There is also work injury damages (WID) settlements and commutations. 

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Whole Person Impairment (WPI)

Work injury damages (WID)

Commutation

Lump sum payments for exempt workers

Whole Person Impairment (WPI)

If your injured worker has sustained an injury that results in a permanent impairment (that is a permanent deterioration in their functional abilities because of the workplace injury) they may be entitled to receive a lump sum payment as compensation.

This is in addition to weekly payments, medical and related expenses that are available through the workers compensation system.

Someone who has sustained a psychological injury must reach a threshold of at least 15 per cent WPI to have an entitlement for a lump sum payment. For a physical injury, an injured worker must have 11 per cent or more WPI.

Whole person impairment for a psychological injury can only be paid for primary psychological injuries:

• A primary psychological injury is a psychological or psychiatric disorder that has arisen because of the initial incident
• A secondary psychological injury is a psychological injury that has developed as a consequence of the initial injury. An example of this would be when ongoing pain and loss of your pre-injury function results in a diagnosis of a psychological or psychiatric disorder.

If an injured worker has sustained a primary psychological injury as well as a physical injury, they may be able to choose to receive whole person impairment for the psychological injury instead of the physical injury. It can't be received for both.

An injured worker's whole person impairment is assessed by an independent medical examiner. In order to receive whole person impairment, the injured worker's condition must be stable and not expected to improve significantly. This is referred to as having reached maximum medical improvement.

Work injury damages (WID)

A work injury damages claim may be appropriate if an employer's negligence caused the injury. A WID settlement resolves the entirety of the claim and afterwards there is no longer an entitlement for weekly benefits or medical expenses.

Commutation

If all efforts for injury management have been fully exhausted and there is an ongoing entitlement to weekly benefits a claims service provider may consider a commutation to resolve a claim. This would mean that the entire claim is resolved when the worker receives a lump sum benefit.

Following this, the worker would no longer be entitled to receive support with weekly benefits or medical expenses.

Lump sum payments for exempt workers

Permanent impairment for exempt workers

Exempt workers are a class of worker that can include police officers, paramedics and fire fighters. They are not subject to most of the amendments made to the workers compensation acts in 2012 and 2015.

Your worker may be eligible for lump sum payments when they have:

• A permanent impairment sustained as a result of their work-related injury
• Pain and suffering arising from their impairment.

Permanent impairment for psychological injuries

A lump sum compensation may be paid when the threshold for impairment is assessed at 15 per cent or more.

When your insurer receives the claim for lump sum compensation, they will acknowledge receipt of it, accept liability and make a reasonable offer of settlement, or they will dispute liability. If the insurer requires further information, they may ask the worker to supply further information, and/or attend a permanent impairment assessor.

The worker may be eligible to claim more than once for lump sum compensation

Pain and suffering

Your worker may be eligible for lump sum compensation for any pain and suffering they have due to their permanent impairment.

To be eligible to claim they must have a permanent impairment of 10 per cent or more to have access to a pain and suffering payment.

Please note the eligibility criteria for permanent impairment and pain and suffering payments can vary depending on the date of injury. Please consult your insurer for further detail.