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Presidential decision on the application of the transitional provisions relating to lump sum compensation

  • Newsletter Article
  • Published 14.06.2023

State of New South Wales (Fire & Rescue NSW) v Dixon (NSWPICPD 2023)

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Key Takeaways

Section 323 of the Workplace Injury Management and Workers Compensation Act 1998 and the transitional provisions under Part 18C, Schedule 6 of the Workers Compensation Act 1987 (‘the transitional provisions’) both relate to a worker’s entitlement to lump sum compensation.

Section 323 allows for a deduction in a worker’s impairment resulting from a work-injury, for any pre-existing condition, injury or abnormality that contributed to the impairment.

The ‘transitional provisions’, on the other hand, can result in the reduction of the amount of compensation payable for a worker’s impairment, for any proportion of that impairment that was caused by events occurring prior to 1 January 2002.

A recent presidential decision has affirmed the correct method for applying a reduction under the transitional provisions.

Brief Facts

In August 2022 the Personal Injury Commission issued a decision in the matter of Dixon v State of New South Wales (Fire & Rescue NSW) (NSWPIC 2022).

That decision involved an employee of Fire & Rescue NSW who had sustained a primary psychological injury with a deemed date of injury of 6 December 2002. The injured worker commenced employment with Fire & Rescue NSW in 1997 and attended a number of traumatic events in the course of his employment. The worker was assessed with 20% WPI as a result of his psychological injury.

The Member was asked to consider whether the ‘transitional provisions’ applied and if so, to what extent.

The Member determined that the ‘transitional provisions’ were not applicable on the basis that there was no expert medical evidence to establish that there were functional limitations resulting from the injury, as at 31 December 2001.

The Member observed [at 31 and 32]:

…the mere presence of symptoms is not sufficient to satisfy the requirements for making out a deductible proportion without establishing the presence of functional limitations as required in the Psychiatric Impairment Ratings Scale (PIRS) ratings.
…no doctor has undertaken a causal analysis akin to that contained in s 323 with a view to providing an opinion as to what proportion of the applicant’s loss was caused by matters occurring before 1 January 2002.

Absent such medical evidence, the Member found there was no causal basis to make a finding that those matters actually resulted in a ‘rateable (but non-compensable) impairment at 31 December 2001’.

The decision was subsequently appealed by the State of New South Wales and the decision was handed down in March 2023: State of New South Wales (Fire & Rescue NSW) v Dixon (NSWPICPD 2023).


Acting Deputy President Parker noted that the Member had declined to make a reduction because no doctor had assessed the functional limitations as required by the PIRS ratings in relation to events occurring before 1 January 2002.

ADP Parker found that the reasoning applied by the Member made the reduction under the ‘transitional provisions’ dependent on the existence of a pre-existing condition or impairment ‘which is not what cl 3 of the transitional provision requires’. Instead, the ‘transitional provisions’ require an assessment of ‘whether the events before 1 January 2002 contributed to the impairment’.

ADP Parker found that the Member had erred in requiring medical evidence to address the functional limitations prior to 2002 and the matter has been remitted to another non-presidential member for re-determination.


The Commission’s initial decision in Dixon changed the longstanding application of the ‘transitional provisions’ from a consideration of a causal connection between the impairment and events occurring prior to 2002, to a question of whether there was medical evidence to establish functional limitations as a result of the events prior to 2002, as at 31 January 2001.

DP Parker has now determined that the Member had erred in applying the provisions in this manner.