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Review of section 323 deductions for primary psychological injuries

  • Newsletter Article
  • Published 15.02.2024

Holmes v Secretary, Department of Education (NSWPICMP 2024)

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Key Takeaways

In this case ,the Appeal Panel determined that the Medical Assessor (MA) had provided adequate reasons to support his application of a one-third deduction under s323 of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act) to the assessment of WPI of the worker’s primary psychological injury.

Brief Facts

The worker was employed as a teacher with the Department of Education (The Department) and suffered a primary psychological injury deemed to have occurred on 15 August 2018 for which liability was accepted.

The worker commenced proceedings in the Personal Injury Commission (PIC) for lump sum compensation pursuant to s66 of the Workers Compensation Act 1987. The Medical Assessor assessed 19% whole person impairment (WPI) to which he applied a deduction of one-third under s323 of the 1998 Act for a pre-existing condition. The total WPI assessed was therefore reduced to 13% WPI.

The worker filed an appeal against the Medical Assessment Certificate (MAC) on the basis that the MA did not refer to the requirements or provide sufficient reasons in assessing the relevant categories under the psychiatric impairment rating scales (PIRS). The worker appealed the MA’s findings under the categories of self-care and personal hygiene, travel and social functioning. The worker also appealed the MA’s decision to deduct one-third of the assessment under s323 of the 1998 Act.

The Department conversely argued that the MA had provided adequate reasons to support his assessment under the PIRS categories as well as his decision to make a one-third deduction.

Decision of Medical Appeal Panel

In relation to the worker’s appeal against the PIRS ratings of self-care and personal hygiene, travel and social functioning the Appeal Panel advised that it:

did not consider that it was necessary for the Medical Assessor to set out the relevant descriptors of the competing relevant classes for each category under the PIRS, or to specifically indicate that he had considered those alternatives when making his assessment. It can be inferred that these alternatives would have been considered when making the assessment. It can also be inferred that the Medical Assessor considered activities that were usual for the appellant’s age, sex and cultural norms when making the assessment.

The Panel addressed the assessment made by the MA for self-care and personal hygiene, travel and social functioning and determined in each case that the MA had not made any demonstrable error and that it was open to him to make the assessments made in each category.

The Panel confirmed the views previously espoused in Jenkins v Ambulance Service of NSW (NSWSC 2015) where Garling J said at [73]:

…[I]n seeking judicial review, a mere disagreement about the level of impairment is not sufficient to demonstrate error of a kind susceptible to judicial review.

In relation to the s323 deduction of one-third, the Panel referred to the facts of the matter, including the worker’s complex mental health history dating back to childhood. The MA’s report of the worker’s previous injuries/conditions was considered as well as his diagnoses of Autism Spectrum Disorder, ADHD and complex PTSD.

The Panel noted that the MA had commented on the worker’s tendency to minimise her pre-existing mental health problems from prejudicial childhood and early relationships.

The Panel accepted that the MA had considered the medical evidence relied on by the parties and carried out a detailed review of that evidence in the MAC. The Panel agreed with the MA that the worker’s deficits, including reduced memory and below average executive functioning were fixed and long standing and related to her ADHD or autism, predating the work injury. The clinical records before the Panel were considered as supporting this view, along with the IME evidence.

The Panel noted the decisions in Camden Council v Harle (NSWPICMP 2022) and Secretary, Department of Communities and Justice v Lewandowski (NSWPICMP 2023) and confirmed that the focus of the calculation should be on the pre-existing condition itself and its actual consequence.

The Panel found that the MAC needed to be read as a whole and accepted that it contained a very detailed review of the evidence available. The Panel agreed with the MA that the worker’s long standing complex PTSD had affected the impact of trauma even when the complex post-traumatic stress disorder is asymptomatic.

The MA was therefore found to have provided adequate reasons to support the decision to deduct one-third of the assessment under s323.


A deduction greater than 10% can be made under s323 of the 1998 Act when there is supporting evidence (including clinical records) and the decision is not made solely on assumption or hypothesis based on experience. It should therefore not automatically be assumed that no deduction (or the standard 10% deduction) is applicable under s323 for primary psychological injuries, even if the pre-existing condition was asymptomatic at the time of the work related injury.