top of page
Search

Lump Sum Payments Under Workcover NSW: A Complete Guide

  • Writer: Dr Bishoy Marcus
    Dr Bishoy Marcus
  • 5 days ago
  • 3 min read

When a workplace injury leaves lasting effects, financial support can extend beyond weekly wage replacement and treatment costs. In New South Wales, injured workers may be entitled to a lump sum payment under the Workcover (now icare) scheme. This payment recognises the permanent impairment caused by the injury and compensates you for the long-term impact on your life.


What Is a Lump Sum Payment in NSW?


A lump sum payment is a one-off compensation made to a worker who has suffered a permanent impairment because of a work-related injury or illness. It is different from weekly payments (which replace lost income) or medical expenses (which cover treatment). Instead, it acknowledges that the injury has caused permanent damage to your health or body.


Who Can Claim a Lump Sum in NSW?


Under the Workers Compensation Act 1987 (NSW), you may be entitled to a lump sum payment if:

  • Your injury has stabilised (no major improvement or decline is expected with treatment).

  • You are assessed by an Independent Medical Examiner (IME) accredited by SIRA (the State Insurance Regulatory Authority).

  • Your level of permanent impairment meets the required threshold.


Thresholds in NSW

  • Physical injuries: You need at least 11% whole person impairment (WPI).

  • Psychological injuries: You need at least 15% WPI.


These thresholds are higher than in some other states, which means not every injury will qualify for a lump sum.


How Is Permanent Impairment Assessed?

Permanent impairment is assessed using the NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment, which are based on the AMA Guides (5th edition). The IME will examine you, review your medical history, and provide a report stating your impairment percentage.


Lump Sum Compensation Amounts in NSW

The amount you may be entitled to depends on your WPI percentage. Below is the current compensation table (2025 figures):

Whole Person Impairment (WPI)

Lump Sum Compensation (approximate)

11%

$15,350

12%

$20,100

13%

$25,050

14%

$30,000

15%

$35,350

20%

$57,500

30%

$100,000

40%

$142,500

50%

$185,000

60%

$227,500

70%

$270,000

75%+

$300,000 (maximum)

✅ Key Notes

  • You need at least 11% WPI for physical injuries and 15% WPI for psychological injuries.

  • Payments increase as your impairment percentage rises, according to a sliding statutory scale set by SIRA.

  • The maximum lump sum in NSW is $300,000.

  • These amounts are indexed annually, so they may change slightly each year.


What About Pain and Suffering?


Since 2012 legislative reforms, lump sum compensation in NSW no longer covers “pain and suffering.” Instead, payments are strictly linked to impairment percentages. The higher your impairment, the larger your lump sum entitlement.


Key Things to Know

  • One Claim Rule: You can only make one claim for lump sum compensation per injury. If your condition worsens, you generally can’t claim again, unless you meet very limited exceptions.

  • No impact on weekly benefits: Receiving a lump sum does not usually affect your entitlement to weekly payments or medical expenses.

  • Legal advice is essential: Because accepting a lump sum may affect your rights to pursue a common law damages claim (for negligence and loss of future earnings), always seek legal advice before finalising.

  • Time limits apply: While there’s no absolute cut-off for impairment claims, delays can complicate your case, especially if medical evidence is lacking.


Frequently Asked Questions (FAQ)


1. Do I get a lump sum for psychological injuries? Yes — but the threshold is higher. You need 15% WPI or more for a psychological injury to qualify for a lump sum payment in NSW.


2. Can I get both weekly payments and a lump sum? Yes. A lump sum payment is separate from weekly compensation and medical expenses. Receiving one does not automatically cancel out the other.


3. Can I claim more than once if my condition gets worse? Generally no. NSW has a “one claim rule” for lump sum compensation. You can usually only make one claim for each injury, unless your impairment increases significantly and meets strict legal criteria.


4. Is pain and suffering included in the lump sum? No. Since 2012, pain and suffering compensation has been removed from the NSW system. Lump sums are now based only on permanent impairment percentage.


5. Do I need a lawyer for a lump sum claim? It’s strongly recommended. A lawyer can ensure your impairment is properly assessed and that your claim does not affect your right to pursue common law damages for negligence.


Final Thoughts


In NSW, lump sum payments under Workcover are designed to provide fair compensation for the lasting impact of workplace injuries. However, the thresholds are strict, and the process can be complex. If you believe you may qualify, getting proper medical and legal advice is crucial to ensure you receive your full entitlement.

Comments

bottom of page