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Work capacity decisions and the importance of suitably qualified expert evidence

  • Newsletter Article
  • Published 16.03.2023

Houghton v Jack & Jill Pre-School Association (Lithgow) Incorporated (NSWPIC 2023)

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Key Takeaways

This decision reaffirms the importance of relying on up-to-date evidence from suitably qualified doctors when making any liability, WPI or work capacity decisions.

In this case, Delegate McAdam considered the evidence relied upon in the insurer’s work capacity decision did not carry significant weight and awarded weekly benefits to the worker.

Brief Facts

The worker suffered an accepted psychological injury in the course of her employment as a childcare worker on 13 December 2020. She had not returned to work since her injury.

In July 2022, the insurer issued a work capacity decision reducing the worker’s entitlement to weekly compensation, relying on a vocational assessment report, labour market analysis report, job seeking report and medico-legal reports from an occupational physician.

In its work capacity decision, the insurer determined that the worker had a current work capacity of four hours per day, three days per week in suitable employment. The suitable employment options of a childcare worker, call centre worker and receptionist were recommended in a labour market analysis report dated 29 October 2021.

The insurer relied on the reports of an injury management consultant (IMC), qualified as an occupational physician. The doctor recommended that the worker be referred for an independent psychiatric opinion to provide a formal psychological diagnosis. Despite the lack of a formal diagnosis, the doctor did not believe this interfered with his opinion that the worker had a physical capacity to work.

The worker relied on evidence from her treating psychiatrist and psychologist. Both treating doctors were of the view that the worker was not fit for work.

The worker commenced proceedings in the Personal Injury Commission claiming ongoing weekly compensation. The issue in this case was whether the worker satisfied the requirements of s38(2) of the Workers Compensation Act 1987 (the 1987 Act) – that is, whether the worker has no current work capacity and is likely to continue indefinitely to have no current work capacity.


Delegate McAdam was satisfied that the worker had no current work capacity and is likely to continue indefinitely to have no current work capacity, satisfying the criteria for ongoing weekly compensation under s38(2) of the 1987 Act.

He did not consider the IMC’s reports carried any weight. This was on the basis that:

  • the IMC has no qualifications in dealing with psychological injury and incapacity arising from psychological injury.
  • The IMC made incorrect assumptions regarding the injured worker’s treatment and motivation to work.

The Delegate also did not agree that the insurer’s vocational evidence accurately reflected the worker’s medical status at the time of the work capacity decision, noting the reports were one to two years out of date.

The Delegate preferred the opinion of the worker’s treating psychiatrist and psychologist, as they are suitably qualified to provide an opinion in respect of psychological injury and incapacity.


This case illustrates the importance of obtaining appropriate medical evidence when making a work capacity decision. The insurer’s reliance on an occupational physician IMC proved detrimental in circumstances where the worker had a psychological injury and associated incapacity.

When briefing medico-legal specialists, it is important to choose a suitably qualified doctor with the appropriate expertise. In circumstances where a worker has multiple injuries, consider whether multiple medico-legal specialists should be briefed.
When issuing a work capacity decision, it is best to adopt a common sense approach to the case at hand and consider:

  • Is the evidence relied upon up to date?
  • Does the evidence deal with all injuries claimed?
  • Are there any inconsistencies in the evidence relied upon?
  • Are the suitable employment options ‘suitable’?
  • Does the worker’s treating doctors and specialists support suitable employment options and capacity to work?