GN 3.9 Work capacity assessments and decisions

Published: 12 August 2019
Last edited: 17 April 2020

Application: This guidance does not apply to exempt workers

Overview

Where a worker is entitled to receive weekly payments, an insurer may review their capacity to work. This is called a work capacity assessment.

The insurer may consider a work capacity assessment necessary for the purpose of informing a work capacity decision.

A work capacity decision is made by an insurer and may impact a worker’s entitlement to weekly payments.

Insurers perform work capacity assessments and make work capacity decisions regularly throughout the life of a claim.

This guidance outlines useful information in relation to:

  • understanding work capacity assessments, including what information may be considered, assessing work capacity and suitable employment
  • keeping records of the assessment and the timing for assessments
  • attending assessment appointments and when weekly benefits may be suspended
  • understanding work capacity decisions.

Understanding work capacity assessments

An insurer performs a work capacity assessment to determine whether a worker has a current work capacity or no current work capacity.

A work capacity assessment can be simple and based on limited information, or it can be more complex, such as where the worker has some capacity but cannot return to their pre-injury employment.

A work capacity assessment may be based on available information already on the worker’s claim file, or it may require an insurer to gather additional information.

Considering information

A worker can provide any information to the insurer that they wish to be considered in a work capacity assessment.

Insurers should consider a range of information including:

  • certificate of capacity
  • reports from the worker’s nominated treating doctor, treating specialist or allied health practitioners
  • independent medical report
  • injury management consultant report
  • the worker’s self-report of their abilities and any other information from the worker
  • reports from a workplace rehabilitation provider such as workplace assessment reports, return to work plans, or functional capacity evaluation
  • job description, vocational assessment report, work trial documents, job-seeking logs, activities of daily living assessments etc
  • information from the employer such as documents relating to return to work planning.

Assessing work capacity

When assessing the worker’s present ability to return to their pre-injury employment, the insurer should assess the worker’s functional capacity against the nature, duties, tasks, and hours of work of their pre-injury employment.

This may include considering information such as:

  • certificates of capacity
  • reports and notations from the worker’s nominated treating doctor and specialists
  • independent medical examination and injury management consultant reports
  • functional assessment reports.

If the insurer determines that the worker cannot return to their pre-injury employment, then it must decide if the worker can instead work in other suitable employment.

Assessing suitable employment

The insurer should assess suitable employment using all the available information and applying the definition outlined in section 32A of the Workers Compensation Act 1987 (1987 Act).

Suitable employment is work for which the worker is currently suited, having regard to:

  • the nature of the worker’s incapacity
  • the worker’s age, education, skills and work experience
  • any plan or document prepared as part of the return to work planning process
  • any occupational rehabilitation services that are being, or have been, provided to/for the worker, and
  • any other matters as the Workers compensation guidelines (the Guidelines) may specify.

An assessment of the worker’s ability to perform suitable employment does not take into consideration:

  • whether the work or the employment is available
  • whether the work or the employment is of a type or nature generally available in the employment market
  • the nature of the worker’s pre-injury employment, or
  • the worker’s place of residence.
Worker age, education, skills and work experience

The insurer should consider the worker’s age, education, skills and work experience when assessing suitable employment. The insurer should consider whether the suitable employment option requires a qualification such as a degree or certification.

In some situations, although the worker has completed a qualification, the suitable employment option may not be appropriate if they do not have the relevant work experience.

The insurer also considers whether the worker has the necessary skills and experience to be competitive in the open labour market.

Language skills

Where necessary, insurers should assess the English language skills of a worker against the requirements of a suitable employment option.

The insurer should consider requesting the worker to participate in an objective test undertaken by a vocational assessor to help determine the worker’s English language abilities.

Work trials

Insurers should also consider the outcome of any work trials the worker has completed to determine whether they have the practical experience required for the suitable employment option.

Work trials should be given the appropriate weight in conjunction with the worker’s transferrable skills, education and occupational rehabilitation services.

Occupational rehabilitation services

Insurers should consider whether the worker has received any occupational rehabilitation services when assessing suitable employment options.

These may include job seeking assistance, resume development and interview techniques.

Vocational assessment

Insurers may use a vocational assessment when assessing suitable employment. These assessments are tailored to the worker and consider the worker’s skills, past work experience and whether the worker has previously been provided with any relevant occupational rehabilitation services.

For example, a vocational assessment may include an analysis as to whether the worker’s age can be considered as a barrier to a particular employment option.

Sometimes a worker may already be working in a particular role. If they are and the insurer would like to make a decision about whether that role is suitable employment, then information about the role should be provided in the report.

Keeping assessment records

Whenever an insurer gathers and reviews information about a worker’s capacity, they are completing a work capacity assessment. The insurer should keep a record of any work capacity assessment on the worker’s file.

The record of a work capacity assessment should include:

  • the date of the work capacity assessment
  • where applicable, the dates of contact with the worker and case notes of discussion points
  • the details and dates of any other assessment the worker had to attend
  • the outcome of the assessment (for example, whether a work capacity decision is made).

Timing of assessments

Work capacity assessments occur regularly throughout the life of a claim whenever new information about the worker’s capacity is received, and the insurer needs to assess a worker’s work capacity.

An insurer is required to conduct a work capacity assessment:

  • when required to do so by the workers compensation legislation,
  • when required to do so by the Guidelines, or
  • at any other time.

Section 38 of the 1987 Act outlines special requirements for the continuation of weekly payments after 130 weeks.

For the purpose of assessing a worker’s entitlement to weekly payments after 130 weeks, section 38(4) provides that an insurer must ensure that a work capacity assessment is conducted:

  • during the last 52 weeks of the second entitlement period (i.e. after the worker has received a total of 78 weeks of weekly payments, and before reaching 130 weeks of weekly payments), and
  • thereafter at least once every two years.

When the insurer assesses the worker (other than a worker with high needs) as having a current work capacity, it must provide them with the Application for continued weekly payments after 130 weeks form and inform them they need to use this form to apply in writing for weekly payments to continue (see section 38(3)(a) of the 1987 Act).

Part 5.2 of the Guidelines outlines when an insurer is to conduct a work capacity assessment. Work capacity assessments are to be conducted throughout the life of the claim whenever new information about the worker’s claim, such as a certificate of capacity, is received.

Note: Insurers must not perform a work capacity assessment for a worker with highest needs, unless the insurer thinks it appropriate and the worker requests it (see section 44A(4) of the 1987 Act).

Attending assessment appointments

An insurer may require the worker to attend and participate in an assessment appointment in accordance with Part 5.3 of the Guidelines if further information is required.

The Guidelines require the insurer to advise the worker of the date and time of each appointment at least 10 working days before the appointment, unless otherwise agreed by the worker.

The content of the advice to be provided to the worker is also prescribed by the Guidelines, and includes:

  • the location of the appointment
  • the purpose of the appointment and how it may inform the work capacity assessment
  • the information that refusing to attend or failing to properly participate (so that the assessment cannot take place), may result in the insurer suspending weekly payments until the assessment is completed
  • contact information for the Workers Compensation Independent Review Office (WIRO).

Note: The insurer should consider contacting the worker by telephone and advising them of the available appointment options. Once they have agreed on a suitable appointment time and location the insurer should confirm this in writing.

Insurers should carefully consider what, if any, assessment appointments they are requiring the worker to attend for a work capacity assessment. Under the Guidelines, insurers must consider whether the requirement to attend an appointment is reasonable in the circumstances, including having regard to amendments to existing laws and public health orders made in response to COVID-19 (Coronavirus).

A worker cannot be required by the insurer to attend more than four appointments per work capacity assessment. Of these, there cannot be more than:

  • one appointment with the same type of medical specialist (for example, orthopaedic surgeon, psychiatrist)
  • one appointment with the same type of healthcare professional (for example, physiotherapist, psychologist).

If the worker is required to attend an appointment with an independent medical examiner, this must in accordance with Part 7 of the Guidelines.

Suspending benefits due to worker refusal or non-participation

Where the insurer requires the worker to attend an assessment appointment and the worker has refused to attend, or the assessment did not take place due to the failure of the worker to properly participate in the assessment, the insurer may consider suspending the worker’s weekly payments (section 44A(6) of the 1987 Act).

Before suspending the payments, the insurer should be satisfied that it possesses sufficient information to confirm that the worker has refused to attend the appointment, or the assessment did not take place due to the failure of the worker to participate in the assessment.

The insurer should advise the worker that weekly payments will remain suspended until the assessment has taken place. Where suspension has occurred, the insurer should expedite the new assessment appointment and advise the worker of the details.

Understanding work capacity decisions

Insurers should consider the principles of procedural fairness, including fair notice, when making any decision that may affect a worker’s rights or interests.

Insurers will need to determine what the principles of procedural fairness require, on a case by case basis, having regard to the nature and potential consequences of each decision that may be made (see Insurer guidance GN 1.5 Procedural fairness for more information).

It is important that work capacity decisions are not confused with other claim decisions. For instance, the following are not work capacity decisions:

  • a decision to dispute liability for weekly payments
  • a decision to dispute liability for a medical, hospital or rehabilitation expense.

Section 43 of the 1987 Act provides that an insurer may make a work capacity decision about:

  • the worker’s current work capacity
  • what is suitable employment for the worker
  • how much the worker can earn in suitable employment
  • the worker’s pre-injury average weekly earnings (PIAWE) or current weekly earnings
  • whether a worker is, as a result of injury, unable without substantial risk of further injury, to engage in employment of a certain kind because of the nature of that employment
  • any other insurer decision that affects a worker’s entitlement to weekly payments of compensation, including a decision to suspend, discontinue or reduce the amount of weekly payments of compensation payable to a worker on the basis of any decision referred to in the above.

Work capacity decisions that do not change the amount of weekly payments a worker receives can be simple and based on limited information. These decisions do not require any process that could potentially interrupt or delay weekly payments.

Some decisions can be more complex, for example, where an insurer is making a decision that establishes or changes the amount of weekly payments that a worker will receive.

In these cases, the worker should be informed of the decision and the right to request a review if they do not agree with the decision.

The insurer should provide to the worker, all the information and reasons used to make a work capacity decision that establishes or changes the amount of weekly payments the worker receives, for example:

  • PIAWE
  • ability to earn in suitable employment.

When making a work capacity decision the insurer should:

  • evaluate all available and relevant material
  • have regard to the particular circumstances of the worker
  • follow a transparent decision-making process with clear, concise and understandable information provided to the worker, and giving reasons for decisions.

Notifying the worker of a work capacity decision

Insurers can advise a worker of a work capacity decision in different ways depending on its impact.

Where an insurer’s decision is to discontinue or reduce the amount of weekly payments that a worker receives, this should be communicated in writing and by phone.

Refer to Insurer guidance GN 8.1 Insurer decisions and decision notice requirements for further detail regarding decision notice requirements.

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