GN 3.6 Investigating changes in capacity
Published: 12 August 2019
Last edited: 12 August 2019
Application: This guidance does not apply to exempt workers
Overview
It is important that work capacity assessments are undertaken promptly following receipt of a certificate of capacity indicating a change in a worker’s capacity. This ensures that workers continue to receive appropriate compensation and support.
This guidance covers changes in capacity, and considers what activities the insurer should undertake if there is a change in a worker's capacity. This includes investigating the reasons for the change, and further consultation with the worker, nominated treating doctor and any treating specialists or workplace rehabilitation providers.
S11. Changes in capacity
Principle
A worker’s work capacity will be re-assessed promptly upon receipt of new information indicating a change in work capacity.
Improvement in capacity
When an insurer receives a certificate of capacity indicating an improvement in the worker’s capacity, they are to assess the available information and make a work capacity decision about the worker’s current work capacity and their current weekly earnings. In other words, take steps to review and update the return to work plan with the employer and worker and make adjustments to the worker’s weekly payments.
Example
The insurer made a work capacity decision on Anneliese’s claim to determine pre-injury average weekly earnings (PIAWE) just after injury notification eight weeks ago.
Anneliese submitted her most recent certificate of capacity, reflecting an upgrade in her capacity for work from four hours per day, five days per week, to six hours per day, five days per week.
Work capacity assessment and decision
The insurer made a work capacity decision that Anneliese had a current work capacity and ensured the return to work plan reflected this change in capacity.
The insurer then made a work capacity decision about her current weekly earnings as follows:
Impact on weekly payments
Prior to the upgrade:
Anneliese’s current work capacity is for four hours per day, five days per week. She therefore is working 20 hours per week.
PIAWE = $1,000
(95% x $1,000) - $500 (her current weekly earnings)
$950 - $500 = $450 (weekly compensation payment)
Total weekly payment (earnings and weekly compensation payment) = $950
After the upgrade, the insurer agrees that Anneliese has a current work capacity and that her current weekly earnings are therefore $750 per week.
Anneliese increases her working hours with her employer from 20 hours to 30 hours per week. As a result, her current weekly earnings increase.
Her weekly payment is calculated as follows:
PIAWE = $1,000
(95% x $1,000) - $750 (her current weekly earnings)
$950 - $750 = $200 (weekly compensation payment)
Total weekly payment (earnings and weekly compensation payment) = $950
The work capacity decision resulting in a change in weekly payments was noted on Anneliese’s file, the insurer notified Anneliese and her employer of the work capacity decision and the return to work plan was updated accordingly. The insurer continued to support her recovery and return to work.
Reduction in capacity
It is important for the insurer to establish the cause of the reduction, for instance was there was a specific incident that precipitated the reduction and if so, what was it?
The insurer should also confirm the expected timeframe for an improvement in capacity. In some instances, the insurer may need to consider, in consultation with the nominated treating doctor and employer, whether the worker is able to perform other suitable work.
If, after investigation, the insurer concludes that the reduction is reasonable in the circumstances, the insurer should make a new work capacity decision and work with all parties to increase the work capacity of the worker.
If, as a result of these investigations, there is conflicting information, the insurer may choose to engage an injury management consultant (see Insurer guidance GN 6.6 Referral to an injury management consultant and Part 6 of the Workers compensation guidelines) or request the worker attend other assessments before making a work capacity decision.
Example
The insurer made a work capacity decision to determine pre-injury average weekly earnings (PIAWE) just after injury notification six weeks ago. Lisa submitted her most recent certificate of capacity, reflecting a reduction in her capacity for work from six hours per day, five days per week, to four hours per day, three days per week.
Work capacity assessment and decision
The insurer investigated the reason for the reduction promptly. Lisa was experiencing pain and fatigue following her return to work and her doctor reduced her capacity for work as a result. Lisa’s employer confirmed that Lisa was experiencing difficulty undertaking the suitable duties that were in Lisa’s return to work plan.
Lisa’s doctor confirmed that Lisa should be able to gradually return to her previous capacity for work in approximately four weeks, after a change in treatment and a more gradual increase in work hours.
The insurer was satisfied that the certificate of capacity accurately reflected Lisa’s capacity for work. The work capacity decision resulting in a change in weekly payments was noted on Lisa’s file, and Lisa was informed of the decision.
Impact on weekly payments
Lisa’s weekly payments were adjusted in accordance with the reduction in her current weekly earnings.
Action to be taken when a reduction occurs after a work capacity decision
If a reduction in capacity occurs after a work capacity decision is made, the insurer may take a different action.
No work capacity decision other than for pre-injury average weekly earnings (PIAWE)
If the only written advice of a work capacity decision is the decision about PIAWE, and the worker’s capacity for work has subsequently been reduced, a work capacity assessment should be conducted with a view to making a new work capacity decision.
During the notice period, and where there is no change to the original work capacity decision
If a worker’s capacity for work is reduced during the notice period before a work capacity decision takes effect, the circumstances around the reduction should be investigated.
If the work capacity assessment results in no change to the original work capacity decision, the worker and the nominated treating doctor should be informed that the outcome of the work capacity assessment is that the original work capacity decision is maintained.
Example
Jerry was unable to return to his pre-injury employment and had been in receipt of weekly payments for 82 weeks. Jerry has recently commenced working 10 hours per week and earning $300 per week as a barista.
The insurer undertook a work capacity assessment and made a work capacity decision that Jerry had a current work capacity and could work in suitable employment as a sales assistant for 38 hours per week, earning $789.90 per week. The insurer provided a notice period of 3 months plus a further seven days for postage as required by section 80(3) of the 1998 Act and section 76 of the Interpretation Act 1987.
One week after Jerry received the work capacity decision notice, he submitted a certificate of capacity to the insurer stating he had no capacity for work.
Work capacity assessment and decision
The insurer investigated the reason for the reduction in work capacity promptly. Jerry’s doctor stated that Jerry told him that he had had an exacerbation of his symptoms but did not provide any further information about whether there was a specific incident that caused the reduction.
His doctor could not give an indication about when Jerry might be able to increase his work capacity. Jerry did not identify a specific cause for the increase in his symptoms either. Jerry’s treating specialist provided a report confirming that Jerry’s condition had remained stable and that his current capacity for work remained unchanged.
The insurer performed a work capacity assessment and concluded that another work capacity decision was not required, as there was insufficient new information to support a different decision.
The insurer advised Jerry and his doctor that the original work capacity decision had been maintained - that he has current work capacity. The insurer reminded Jerry about his right to request a review of the work capacity decision, and the options he had to apply to the Workers Compensation Commission for an expedited assessment.
Impact on weekly payments
The new work capacity decision maintained the original work capacity decision. Weekly payments continue until the notice period expires.
During the notice period, when the worker has requested an insurer review of the work capacity decision
If the worker requests a review of a work capacity decision and during the review period a reduction occurs, the insurer should investigate the reduction.
If the work capacity assessment results in a change to the original work capacity decision, the worker and the nominated treating doctor should be informed of the assessment and decision outcome once the new work capacity decision has been made.
The review of the original work capacity decision is therefore discontinued. In these instances, the insurer should confirm with the worker that the review has been discontinued and the reasons why.
Example
The insurer made a work capacity decision indicating Maggie had capacity for suitable employment as a call centre operator for 38 hours per week, earning $837.40 per week. Maggie is currently working 15 hours per week as an assistant dry cleaner earning $303.30 per week.
During the notice period Maggie submitted a certificate of capacity to the insurer stating she had no capacity for work.
Work capacity assessment and decision
The insurer investigated the reason for the reduction in capacity promptly. Maggie’s doctor stated that Maggie had been experiencing an increase in symptoms since her co-worker had resigned and Maggie’s workload had significantly increased. Maggie and her doctor confirmed that surgery was an option they had been discussing.
After re-assessing Maggie’s work capacity, the insurer made another work capacity decision reflecting her changed capacity.
Impact on weekly payments
As Maggie’s current weekly earnings had decreased because of her reduced capacity her weekly payment of compensation was increased in accordance with the insurer’s work capacity decision which reflected her reduced capacity. This rate will continue until the insurer makes another work capacity decision.
After the notice period, when the work capacity decision has come into effect
If a reduction is notified after a work capacity decision has come into effect, the insurer should investigate the reduction.
At the conclusion of the work capacity assessment, the insurer should make a work capacity decision.
Example
The insurer made a work capacity decision regarding Dave’s capacity for work six months ago. The work capacity decision advised that Dave had capacity to work 20 hours per week as a florist.
Dave had been working 20 hours per week since before the work capacity decision was made, but last week presented a certificate of capacity indicating he had no capacity for work.
Work capacity assessment and decision
The insurer investigated the reduction and discovered that Dave had reported to his doctor he was not able to work, however this was due to a temporary viral illness, and was not related to the injury.
Once the work capacity assessment was completed, the insurer made a work capacity decision that Dave had a current work capacity, and was able to work 20 hours per week in suitable employment as a florist.
Impact on weekly payments
It was determined that the reduction in capacity was not due to an exacerbation of his work-related injury. The insurer informed Dave and his nominated treating doctor of the work capacity decision.
Weekly payments of compensation continue to be paid at the same rate. Regardless of a change in his current weekly earnings, the work capacity decision determined his ability to earn in suitable employment.
As per Standard of practice S11. Changes in capacity the insurer must conduct a work capacity assessment as soon as practicable after receiving a certificate of capacity indicating a change in the worker’s capacity. They must also make a work capacity decision and advise the worker of the outcome.
Related: Legislation and regulations
Related: Guidelines and standards
Related: Insurer guidance
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