Workplace accidents in New South Wales (NSW) can result in both physical and psychological injuries. If you’ve experienced both as a result of the same incident, it’s natural to ask: can you claim permanent impairment compensation for both? The answer lies in a key distinction under the NSW workers compensation framework.
While both injuries can be assessed, you can only receive permanent impairment compensation for the injury with the greater degree of impairment. This article explains how that works, what thresholds apply, and what injured workers need to be aware of when lodging a claim.
What is Permanent Impairment Compensation?
Under the Workers Compensation Act 1987 (NSW), workers who suffer a permanent injury because of their job may be entitled to a lump sum payment. This payment is designed to compensate for the long-term impact of a permanent condition.
Permanent impairment compensation applies only once, and a worker can only make one claim for lump sum compensation for permanent impairment arising from an injury.
Assessment of Physical and Psychological Injuries
If you’ve sustained both a physical and psychological injury in a single workplace incident—for example, a physical injury from a fall, and PTSD from the trauma—both injuries can be medically assessed.
However, under current law, you may only claim compensation for the impairment with the higher Whole Person Impairment (WPI) rating. You cannot receive two separate lump sum payments.
- A physical injury must exceed 10% WPI.
- A primary psychological injury must reach 15% WPI to qualify.
Secondary psychological injuries—those that develop as a result of a physical injury, such as depression following chronic pain—are not compensable under permanent impairment claims.
No Combining of Impairments
Even if both injuries are assessed, their WPI percentages cannot be combined. For example, if a worker is assessed at 11% for a physical injury and 14% for a psychological injury, they can only claim the lump sum for the physical injury, as it is the higher qualifying impairment.
Proposed Changes in 2025
In May 2025, the NSW Government proposed reforms that would raise the minimum threshold for psychological injuries to 31% WPI. If enacted, this would dramatically reduce the number of workers eligible to claim compensation for psychological injuries.
Legal Advice is Essential
Because of the technical nature of impairment assessments and strict eligibility thresholds, it’s critical to seek advice from a workers compensation lawyer. A legal professional can help ensure:
- Help secure legal advice with an ILARS State Government grant of legal funding
- Arrange for appropriate medical assessments and ensure those assessments are assessed correctly
- Your entitlements are maximised
- You understand whether your psychological condition is primary or secondary
- You meet time limits and procedural requirements
Conclusion
While NSW workers compensation law allows for both physical and psychological injuries to be assessed, a worker can only claim permanent impairment compensation for one injury—whichever produces the highest Whole Person Impairment.
Navigating this process requires experienced legal support. At BPC Lawyers, our Sydney-based team specialises in helping injured workers secure their full entitlements under the law.
Need advice about your injury claim?
Contact our experienced personal injury lawyers at (02) 8280 6900 for a free initial consultation.