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Lump sum compensation for permanent impairment

If you have a permanent impairment as a result of a work related injury or illness, you may be entitled to receive a lump sum payment as compensation.

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

The information below is generalised and the payments you receive may vary based on your circumstances.

Eligibility

Claims for lump compensation for injuries that occurred on and from 1 January 2002 are based on an assessment of your permanent impairment.

If your claim for lump sum compensation was made on or after 19 June 2012, a minimum level of permanent impairment must be assessed to be eligible for permanent impairment compensation. You must have 11 per cent or more permanent impairment for a physical injury or 15 per cent or more for a primary psychological injury. No permanent impairment compensation is available for secondary psychological injuries.

Only one claim for permanent impairment compensation can be made in respect of the injury. However, if you made a claim for permanent impairment before 19 June 2012, you may be entitled to make one further lump sum compensation claim if your condition has deteriorated.

Assessment of permanent impairment

The degree of impairment must be assessed by a medical specialist listed on this website as a trained assessor of permanent impairment.

To undergo an assessment, your injury must have reached maximum medical improvement. This means your condition has stabilised and is unlikely to change substantially in the next year with or without treatment. If you are unsure if you have reached maximum medical improvement, speak with your treating doctor or specialist.

Making a claim

A permanent impairment claim form is required unless your claim for weekly and other benefits has already included a claim for lump sum compensation for permanent impairment. The form provides details of the information that must be supplied when making a claim.

The insurer’s role in determining liability

Once the insurer has received the claim for lump sum compensation for permanent impairment, it must within one month either accept liability and make a reasonable offer of settlement or dispute liability.

If the insurer determines that all the relevant information has not been provided about the claim, within two weeks of receiving the claim it must:

  • ask you to supply this information, and/or
  • arrange for a permanent impairment assessor to examine you.

If the insurer requires this further information, they have two months after you have provided all relevant information to make an offer of settlement or dispute liability.

Complying agreement/making a settlement offer

A complying agreement is a written agreement between you and the insurer regarding the assessed level of permanent impairment.  This assessed level may result in a lump sum payment for permanent impairment being made to you.

Before entering into the agreement about the assessed permanent impairment, the insurer must be satisfied that you have either obtained independent legal advice or have waived the right to independent legal advice.

The insurer is required to record evidence that this advice has been obtained, or that you have chosen not to obtain it, and the details of the agreement.

Compensation for permanent impairment

The maximum lump sum payment for permanent impairment injuries incurred varies depending on the time your injury/illness occurred and whether or not you are an exempt worker. See the table below for more.

TimeframeLump sum $ amountOther factors
1 January 2002 - 31 December 2006$200,000+ 5% for permanent impairment of the back for injuries on or after 1 January 2006
1 January 2007 - 4 August 2015$220,000+ 5% for permanent impairment of the back
On or after 5 August 2015$584,580+ 5% for permanent impairment of the back
From 1 July 2016 this amount is indexed annually.
For all exempt workers$220,000+ 5% for permanent impairment of the back

View detailed information on benefits for permanent impairment and pain and suffering in the workers compensation benefits guide.

Further information

Refer to the guidelines for claiming workers compensation for more information on the process for claiming for lump sum permanent impairment.

Disputes

Sometimes there can be disputes about permanent impairment. If there’s a dispute, there’s help available. Our workers compensation disputes section has more information.