Workers compensation benefits guide

Commencement date: 1 April 2025

1. Introduction

The Workers Compensation Act 1987 (1987 Act) provides for the indexation of workers compensation benefits. Indexation occurs on 1 April, 1 July and 1 October each year and the specific benefits indexed at each period are detailed in Part 3, Divisions 6 and 6A of the 1987 Act. Amounts are adjusted by reference to movements in the Wage Price Index, Consumer Price Index or Average Weekly Earnings survey published by the Australian Bureau of Statistics (ABS).

Increases in indexation amounts are declared by an Order published on the NSW legislation website and reproduced in SIRA’s Workers Compensation benefits guide.

1.1. What benefits are workers entitled to?

Depending on the individual claim and the type, nature and severity of the work-related injury, a worker may be eligible for the following compensation benefits:

• weekly payments
• permanent impairment
• medical, hospital and rehabilitation expenses
• property damage expenses.

Death benefits and funeral expenses may be payable when a worker dies as a result of a workplace injury.

2. Indexation

2.1. Indexed adjustments based on movements in the Wage Price Index

NSW workers compensation legislation provides that certain weekly payments, death benefits (excluding funeral expenses) and the interim payment direction for medical expenses be indexed.

Sections 79 and 80 of the 1987 Act describe how indexation is to be calculated. Essentially, these indexation changes are linked to movements in an Australian Bureau of Statistics (ABS) wages measure.

The indexation of workers compensation benefits commenced on 1 April 1978. Indexation adjustments are applied from 1 April and 1 October each year according to the ‘latest index number’ prescribed by regulation. These index numbers are contained in clause 4 of the Workers Compensation (Indexation) Order 2019.

2.2. ‘Latest index number’ based on movements in the Wage Price Index

Table 1: The latest index numbers for benefit periods since October 1995.

Note: ARPI = Award Rates of Pay Index, WCI = Wage Cost Index, Equivalent WCI = Rescaled Wage Price Index (WPI)

^*The new WPI is now presented on a reference base of 2008-09, where previously the old WPI was presented on a reference base of 2003-04. The new WPI is converted to the old WPI and is then converted to the equivalent WCI.

2.3 Indexed adjustments based on movements in the Consumer Price Index

With the introduction of section 82A to the 1987 Act made by the Workers Compensation Legislation Amendment Act 2012, a worker’s pre-injury average weekly earnings (PIAWE) (within the meaning in Division 2 of the 1987 Act in force prior to 21 October 2019, or within the meaning in Schedule 3 to the 1987 Act after that date) will be adjusted on 1 April and 1 October each year based on movements in the Consumer Price Index (All Groups Index for Sydney) published by the ABS. Under section 82A (1) of the 1987 Act the adjustments are calculated in accordance with the formula: A x B/C

A is the amount of the worker’s pre-injury average weekly earnings or, if that amount has been varied in accordance with this section, that amount as last so varied.

B is:

• the CPI for the December quarter immediately prior to the review date when the review date is 1 April, or
• the CPI for the June quarter immediately prior to the review date when the review date is 1 October.

C is:

• the CPI for the June quarter immediately prior to the review date when the review date is 1 April, or
• the CPI for the December quarter immediately prior to the review date when the review date is 1 October.

Under section 82A (4) of the 1987 Act the number that equates to the factor B divided by C (B/C) is to be published, by order on the NSW legislation website.

2.3.1. Table of numbers equating to the factor B/C from April 2013

Table 2: Table of numbers equating to the factor B/C.

¹ The number that equates to the factor B/C in respect of 1 October 2020 is 0.9795. Applying this number to vary the amount of a weekly payment to a worker, in accordance with section 82A of the Workers Compensation Act 1987, has the effect of reducing the amount. Accordingly, under section 82C(a) of the Act, the variation is deemed not to have taken effect and the amount varied by applying the number specified in respect of 1 April 2020 continues to apply. Section 82C(b) provides for the variation of the amount in respect of the next or a subsequent financial year.

2.3.2. Historical indexation - Table of numbers equating to the factor B/C

In response to the New South Wales Court of Appeal decision in Theoret v Aces Incorporated [2021] NSWCA 3 (in which the Court found that a worker’s PIAWE was to be varied from the date of injury in 2002), the following historical indexation table is provided to assist insurers in calculating weekly compensation entitlements.

Table 3: Historical numbers equating to the factor B/C.

Note: number equating to the factor B/C from 1 April 2013 can be found in Table 2.

² Section 82C(b) of the Workers Compensation Act 1987 provides that any variation of the amount in respect of the next year or a subsequent financial year may increase the amount only to the extent to which the amount of the increase exceeds the amount of the reduction in respect of a preceding financial year (or that part of such a reduction that has not been set off against a previous increase).

³ The numbers that equate to the factor B/C in respect of 1 October 1992 and 1 October 1997 are 0.9950 and 0.9985. Applying these numbers to vary the amount of a weekly payment to a worker, in accordance with section 82A of the Workers Compensation Act 1987, has the effect of reducing the amount. Accordingly, under section 82C(a) of the Act, the variation is deemed not to have taken effect and the amount varied by applying the numbers specified in respect of 1 April 1992 and 1 April 1997 continues to apply.

2.4. Indexed adjustments to certain amounts based on movements in Average Weekly Earnings

From 1 July 2012, the amount of $155 specified in sections 38, 40, 41 (or the amount last so varied) is to be adjusted on 1 July each year based on movements in Average Weekly Earnings (All employees’ total earnings for NSW) published by the ABS. The amount is adjusted in accordance with the formula outlined in section 82B of the 1987 Act and describes how the amount will be adjusted in accordance with the formula: A x B/C.

A is the amount of $155 specified in sections 38, 40 and 41 or, if that amount has been varied in accordance with this section, that amount as last so varied.

B is the latest average weekly earnings as at 30 May in the preceding financial year of all employees for NSW published by the Australian Statistician in respect of the December quarter of that financial year or, if that is not available, the latest available quarter.

C is the average weekly earnings of all employees for NSW as at 30 May in the year preceding the financial year published by the Australian Statistician in respect of the quarter preceding that 30 May corresponding to the quarter referred to above.

Table 4: Indexation of the amount prescribed in section 38, 40 and 41 of the 1987 Act.

2.4.1. Changes to Average Weekly Earnings published by the Australian Bureau of Statistics

Note 1: Frequency change

From 2012, the ABS changed the frequency of the publication of Average Weekly Earnings (AWE) from quarterly to biannually. The AWE will relate to May (usually released in the following August) and November (usually released in the following February) each year. Therefore, the November AWE will be used to calculate the yearly adjustments to section 82B of the 1987 Act.

Note 2: Series labelling

From the November 2012 issue, the Series Label for All employees’ total earnings changed and is now listed as Persons; Total earnings in Column J of Table 13A – Average Weekly Earnings, NSW (Dollars), original.

3. Weekly payments

The 2012 and 2015 workers compensation reforms modified weekly payments arrangements for all new and existing workers compensation claims, except for claims from:

• police officers, paramedics and fire fighters
• workers injured while working in or around a coal mine
• bush fire fighter and emergency service volunteers (Rural Fire Service, Surf Life Savers, SES volunteers)
• people with a dust disease claim under the Workers Compensation (Dust Diseases) Act 1942.

For these claims see section 3.5.

3.1. Weekly payment arrangements

3.1.1. Weekly payments during the first entitlement period

• Workers who have no current work capacity will receive 95 per cent of their PIAWE.
• Workers with current work capacity will receive either:
  • 95 per cent of their PIAWE, less their current weekly earnings, or
  • the maximum weekly compensation amount, less their current weekly earnings.

3.1.2. Weekly payments during the second entitlement period

• Workers who have no current work capacity are entitled to be paid the lesser of 80 per cent of their PIAWE or the maximum weekly compensation amount.
• Workers who have returned to work for at least 15 hours per week during the second entitlement period are entitled to the lesser of 95 per cent of their PIAWE less any current weekly earnings or the maximum weekly compensation amount less any current weekly earnings.
• Those who have capacity to work, but who are working less than 15 hours per week during the second entitlement period, are entitled to receive the lesser of 80 per cent of their PIAWE less any current weekly earnings or the maximum weekly compensation amount less any current weekly earnings.
• After 130 weeks, eligible workers will continue to receive the lesser of up to 80 per cent of their PIAWE or the maximum weekly compensation amount.

3.1.3. After the second entitlement period

• Continuation of weekly payments after 130 weeks will depend on the person having no capacity for work and if having capacity for work having achieved an actual return to paid employment of at least 15 hours per week earning at least $155 per week (as indexed in accordance with Table 4).
• Workers must apply in writing to the insurer for continuation of weekly benefits beyond the second entitlement period – section 38(3)(a).
• Weekly payments will be limited to a maximum of five years except for workers with a permanent impairment of over 20 per cent.
• Workers with an assessed permanent impairment of 21-30 per cent are eligible to receive weekly payments until reaching the Commonwealth pension age, subject to ongoing work capacity assessments.
• Workers with an assessed permanent impairment of greater than 30 per cent are eligible to receive weekly payments until reaching the Commonwealth pension age.

3.2. Maximum weekly compensation amount

Table 5: Maximum weekly compensation amount (section 34(1) of the 1987 Act)

3.3. Transitional amount

Table 6: Transitional amount (clause 2 of Part 19H of Schedule 6 of the 1987 Act)

3.4. Special provision for workers with highest needs

Workers with highest needs (more than 30 per cent permanent impairment) have access to a minimum weekly payment of compensation of $788.32 per week. This amount is indexed in April and October each year in accordance with the formula outlined in s82BA of the 1987 Act. The first indexed adjustment review date is 1 April 2016.

Table 7: Special provision for workers with highest needs (section 38A(1) of the 1987 Act)

⁴ Section 82C(b) of the Act provides that any variation of the amount in respect of the next year or a subsequent financial year may increase the amount only to the extent to which the amount of the increase exceeds the amount of the reduction in respect of a preceding financial year (or that part of such a reduction that has not been set off against a previous increase).

⁵ The amount specified in section 38A of the Workers Compensation Act 1987, as varied in accordance with section 82BA of the Act on 1 October 2020, is $836. This variation has the effect of reducing the amount. Accordingly, under section 82C(a) of the Act, the variation is deemed not to have taken effect and the amount $854, as specified in respect of 1 April 2020, applies for the review date 1 October 2020.

3.5. Weekly payment arrangements for workers entitled to the pre-2012 arrangements

Police officers, paramedics and fire fighters; workers injured while working in or around a coal mine; bush fire fighter and emergency service volunteers (Rural Fire Service, Surf Life Savers, SES volunteers and people with a dust disease claim under the Workers Compensation (Dust Diseases) Act 1942 have the following weekly benefit arrangements without regard to the amendments made by the 2012 amending Act.

A worker is entitled to weekly payments during any period of incapacity resulting from a workplace injury. The amount of the weekly payment will vary depending on whether the:

• level of incapacity is total or partial
• worker’s pre-injury earnings are paid under an award, industrial or enterprise agreement
• period is within the first 26 weeks of incapacity or later.

The maximum weekly payment of compensation in respect of any period of total or partial incapacity for work is capped.

3.5.1. Weekly payments to workers who are totally incapacitated

For the first 26 weeks of total incapacity, the worker’s weekly payments are calculated as the worker’s current weekly wage rate. After 26 weeks of incapacity the weekly payments are reduced and will usually be the lesser of the statutory rate or 90 per cent of average weekly earnings. However, the total weekly benefit cannot exceed the worker’s current weekly wage rate.

3.5.2. Weekly payments to workers who return to work on suitable duties

If a worker is partially incapacitated following a workplace injury and returns to work on suitable duties the worker will earn income for the hours worked while undertaking those duties. If this income is less than what the worker earned before the injury, then the worker may also receive a weekly workers compensation payment, often referred to as ‘make-up’ pay.

‘Make up’ pay is usually calculated based on the difference between the worker’s pre-injury earnings (including overtime, shift work, and penalty rates) and the amount the worker earns while on suitable duties. Under the legislation, the amount of ‘make up’ pay cannot exceed the amount the worker would receive if the worker was totally incapacitated. For the first 26 weeks after the worker first received incapacity payments, this would be the worker’s current weekly wage rate and for any later period, the statutory rate.

3.5.3. Weekly payments to workers who are fit for suitable duties but no suitable duties are provided by the pre-injury employer

If a worker is partially incapacitated and fit for suitable duties but no suitable duties are provided by the worker’s pre-injury employer, the worker may be entitled to receive a weekly section 38 payment. To be eligible, the worker must be undertaking rehabilitation, or undertaking retraining approved by the insurer or job seeking. Section 38 benefits are paid for a maximum of 52 weeks.
For the first 26 weeks of incapacity, the worker may receive the worker’s current weekly wage rate. The first 26 weeks of incapacity includes any period of total incapacity already taken. Therefore, if the worker has been totally incapacitated for the first 10 weeks following the injury and the worker then becomes fit for suitable duties but no duties are available, the worker will be paid the worker’s current weekly wage rate for a maximum of 16 weeks.

For any remaining period up to a total of 52 weeks, the worker may receive the greater of 80 per cent of the worker’s current weekly wage rate or the statutory rate.

After this, if the worker remains fit for suitable duties, the worker may be entitled to weekly ‘make-up’ pay. This payment will be based on an assessment of the worker’s capacity for work and likely to be at the statutory rate.

The following weekly payments tables only apply to workers described in section 3.5.

3.6. Indexed adjustments based on movements in the Wage Price Index

The amounts below are adjusted under sections 79/80 of the 1987 Act – based on movements in the Wage Price Index.

3.6.1. Maximum weekly benefits payable for workers entitled to the pre-2012 weekly payments arrangements

Table 8: Maximum weekly payment (section 35(1) of the 1987 Act in force before its amendment by the Workers Compensation Legislation Amendment Act 2012)

3.6.2. After 26 weeks, maximum weekly payment

Table 9: Maximum weekly payment after 26 weeks (section 37(1)(a)(i) of the 1987 Act in force before its amendment by the Workers Compensation Legislation Amendment Act 2012)

3.6.3. After 26 weeks, for workers aged 21 or more, minimum weekly payment

Table 10: Minimum weekly payment after 26 weeks for workers aged 21 or over (section 37(1)(a)(ii) of the 1987 Act in force before its amendment by the Workers Compensation Legislation Amendment Act 2012)

3.6.4. After 26 weeks, where average weekly earnings do not exceed Column A, weekly payment is 100 per cent of earnings, subject to an upper limit of Column B

3.6.5. After 26 weeks, additional payments for spouse and/or dependent children

Table 12: Additional payments for spouse and/or dependent children after 26 weeks (sections 37(1)(b) and 37(1)(c) of the 1987 Act in force before its amendment by the Workers Compensation Legislation Amendment Act 2012)

3.6.6. Weekly wage rate, where no award exists

Table 13: Weekly wage rate where no award exists (clause 7(2)(a) of Part 4 of Schedule 6 of the 1987 Act)

This applies to a worker who became entitled to receive weekly payments in respect of incapacity for work before the commencement of Schedule 1(5) to the Workers Compensation (Benefits) Amendment Act 1991 and who, immediately before becoming so entitled, was not a worker to whom Section 42(1)(a), (b) or (c) of the 1987 Act applied.

3.6.7. Partial incapacity weekly payment, formula ceiling

Table 14: Partial incapacity weekly payment – formula ceiling (section 40(2A)(a) of the 1987 Act in force before its amendment by the Workers Compensation Legislation Amendment Act 2012)

3.6.8. After 26 weeks, maximum weekly payment (no dependants)

Table 15: Maximum weekly payment after 26 weeks, no dependents (clause 4A(2)(a) of Part 4 of Schedule 6 of the 1987 Act (re 1926 Act))

3.6.9. After 26 weeks, for workers aged 21 or more, minimum weekly payment

Table 16: Minimum weekly payment for workers aged over 21 years, after 26 weeks (clause 4A(2)(b) of Part 4 of Schedule 6 of the 1987 Act (re 1926 Act))

3.6.10. After 26 weeks, additional payment for a dependent spouse

Table 17: Additional payment for a dependent spouse, after 26 weeks (clause 4(1)(b)(i) of Part 4 of Schedule 6 of the 1987 Act (re 1926 Act))

3.6.11. After 26 weeks, additional payment for each dependent child

Table 18: Additional payment for each dependent child, after 26 weeks (clause 4(1)(b)(ii) of Part 4 of Schedule 6 of the 1987 Act (re 1926 Act))

3.6.12. After 26 weeks, where average weekly income earnings do not exceed Column A, weekly payment is 100 per cent of earnings, subject to an upper limit of Column B

Table 19: Weekly payments after 26 weeks subject to upper limit (clause 4A(2)(c) of Part 4 of Schedule 6 of the 1987 Act (re 1926 Act))

3.7. Weekly payments for people with a dust disease claim

3.7.1.  After 26 weeks, maximum weekly payment

Table 20: Maximum weekly payment after 26 weeks (section 8(2)(a), Workers Compensation (Dust Diseases) Act 1942)

3.7.2. After 26 weeks, for workers aged 21 or more, minimum weekly payment

Table 21: Minimum weekly payment for workers aged over 21 years, after 26 weeks (section 8(2)(a), Workers Compensation (Dust Diseases) Act 1942)

3.7.3. After 26 weeks, where average weekly earnings do not exceed Column A, weekly payment is 100 per cent of earnings, subject to an upper limit of Column B

Table 22: Weekly payments after 26 weeks subject to upper limit (section 8(2)(a), Workers Compensation (Dust Diseases) Act 1942)

3.7.4. After 26 weeks, additional payments for spouse and/or dependent children

Table 23: Additional payments for spouse and/or dependent children after 26 weeks (section 8(2)(a), Workers Compensation (Dust Diseases) Act 1942)

4. Death benefits and funeral expenses

Benefits are payable upon the death of a worker under the:

• Workers Compensation Act 1987(1987 Act)
• Workers Compensation (Dust Diseases) Act 1942.

These amounts are adjusted under sections 79 and 80 of the 1987 Act – based on movements in the Wage Price Index.

4.1. Death benefits that may be payable

The benefits that may be payable when a worker dies as a result of a work-related injury include:

• a lump sum
• weekly payments for dependants
• an additional amount for the management of the lump sum death benefit (applicable from 16 December 2022), where the child’s share of the lump sum death benefit is managed by the NSW Trustee and Guardian
• reasonable funeral expenses
• The lump sum benefit payable is the amount that is applicable at the date of the worker’s death.

All death benefits, except the funds management costs and funeral expenses, are indexed on 1 April and 1 October each year.

4.2. Benefits payable for the death of a worker

4.2.1. Death of worker: Lump sum

Table 24: Lump sum payable for the death of a worker (section 25(1)(a) of the 1987 Act)

Note: The amendment made by the Workers Compensation Amendment Act 2015 to section 25(1)(a) of the 1987 Act does not apply for the purposes of the Workers’ Compensation (Dust Diseases) Act 1942.

4.2.2. Death of worker: Lump sum (without regard to any amendment made by the Workers Compensation Amendment Act 2015)

Table 25: Lump sum payable for the death of a worker (section 25(1)(a))of the 1987 Act in force before it’s amendment by the Workers Compensation Amendment Act 2015)

Note: The amendment made by the Workers Compensation Amendment Act 2015 to section 25(1)(a) of the 1987 Act does not apply for the purposes of the Workers’ Compensation (Dust Diseases) Act 1942.

4.2.3. Death of worker: Weekly payment to each dependent child

Table 26: Weekly payment to each dependent child (section 25(1)(b) of the 1987 Act)

4.2.4. Death of worker: Funeral expenses

Table 27: Funeral expenses (section 26 of the 1987 Act)

4.2.5. Death of worker: Lump sum to dependants

Table 28: Lump sum to dependents (clause 2(2) of Part 3 of Schedule 6) of the 1987 Act (re 1926 Act))

4.2.6. Death of worker: Weekly payment for each dependent child

Table 29: Weekly payment to each dependent child (clause 2(3)(b) of Part 3 of Schedule 6) of the 1987 Act (re 1926 Act))

4.2.7. Death of worker: Lump sum to dependent relatives

Table 30: Lump sum to dependent relatives (section 8(2B)(b)(i), Workers Compensation (Dust Diseases) Act 1942)

4.2.8. Death of worker: Weekly payment to dependent spouse

Table 31: Weekly payment to dependent spouse (section 8(2B)(b)(ii), Workers Compensation (Dust Diseases) Act 1942)

4.2.9. Death of worker: Weekly payment to each dependent child

Table 32: Weekly payment to each dependent child (section 8(2B)(b)(iii), Workers Compensation (Dust Diseases) Act 1942)

4.2.10. Death of worker: Funeral expenses

Table 33: Funeral expenses (section 8(2A), Workers Compensation (Dust Diseases) Act 1942)