Stress leave and WorkCover

If you need to take time away from work due to stress, in certain instances you may have an entitlement to be paid a weekly income payment from WorkCover.

However, there are a number of criteria that must first be satisfied, and a process that must be followed.

This page will explore the issue of stress leave and WorkCover.

Nothing in the WorkCover laws that specifically refer to ‘stress leave’

Firstly, there’s nothing in the WorkCover legislation – either the Accident Compensation Act 1985 and Workplace Injury Rehabilitation and Compensation Act 2013 – that specifically refers to ‘stress leave’.

What you may have an entitlement to is weekly payments – a regular income payment if your ability to work has been impacted by your stress related condition.

How to lodge a claim

In order to be paid for time off work related to stress, you would need to complete and lodge a WorkCover claim form.

Your claim then gets processed by the WorkCover insurer (or self insurer if you’re employed by a company that handles their own WorkCover matters).

If your claim is accepted, then assuming that you are obtaining certificates of capacity that confirm that your work capacity has been impacted by your stress related medical condition, you should have an entitlement to weekly payments.

These certificates of capacity are not normal medical certificates.

The certificates of capacity are specifically for the purposes of your WorkCover claim.

The certificates of capacity will comment on your ability to work.

They will say that you can work your full on restricted duties, or you can work some modified duties – whether that’s a reduction in hours or a change in your duties or something else.

The final thing the certificate can say is that you have a capacity for no work at all.

You should also have an entitlement to medical and like expenses, and potentially an impairment lump sum claim and a common law lump sum claim.

Note also that regardless as to whether your claim relating to your stress condition is accepted or rejected, you will have an entitlement to 13 weeks of medical expenses paid for (the insurer will refer to this as provisional payments).

If your claim is rejected, then you can look to contest the decision via the conciliation process.

The above is a general summary of the process.

The reality, however, is that claiming weekly payments for a stress related condition can be a little more complicated than what’s outlined above.

This is particularly so given amendments to the WorkCover laws, introduced in 2024 by the Workplace Injury Rehabilitation andCompensation Amendment (WorkCover Scheme Modernisation) Act 2024.

Tests to satisfy

In order to be paid weekly payments under the WorkCover scheme, it’s not enough that you simply have a stress related condition and therefore you’re entitled to payments.

There are two tests, one of which you must satisfy, in order to have your WorkCover claim accepted and have an entitlement to payments.

We’ve written extensively about those tests on our page about WorkCover claims for psychological injury.

We cover the tests briefly again, with specific commentary on stress related conditions below:

Test number 1 – The ‘old test’

All parts of the below test will need to be satisfied.

1. You have a diagnosable psychological injury

In order to make a WorkCover claim relating to stress, you will need to show that you are suffering from a work related condition.

Stress, in and of itself, sometimes is not enough to have a WorkCover claim accepted.

However, many times if people go to the doctor when they are stressed, the doctor may diagnose something more than stress such as anxiety or depression or post traumatic stress disorder.

It can be very difficult to pursue a claim for WorkCover related to your stress related condition if you have not been seeking medical treatment for your condition.

This is because you need a diagnosable condition in order to have your claim accepted and the opinion of doctors with respect to any diagnosable psycholoigcla injury, will be important.

2. That the injury does not arise out of reasonable management action taken in a reasonable manner

You will not have an entitlement to compensation if the stress related condition was caused by reasonable management action taken on reasonable grounds and conducted in a reasonable manner.

For example, it may be argued by the insurance company in conjunction that your claim should not be accepted because, even though you may be very stressed, that stress came about as a consequence of action that management took that was reasonable.

They may say that it arose, for example, as a result of you having an issue with your wage or hours.

3. That work was a contributing factor to the injury

The stress related condition needs to have been caused or aggravated by your employment.

Any part of the stress related condition that may be contributed to by personal or relationship problems, finances or health issues unrelated to work is not taken into account.

Test number 2 – The ‘new test’

Again, all parts of the below test will need to be satisfied.

1. That you have a psychological injury that causes significant behavioral, cognitive or psychological dysfunction

You must have a diagnosable injury, which means one that diagnosed by a medical practitioner in accordance with Diagnostic and Statistical Manual of Mental Disorders (DSM)

‘Stress’ or is not a diagnosable condition under the above.

So if that is the only diagnosis, you’re not likely to have the claim accepted.

2. That the psychological injury does not arise out of reasonable management action taken in a reasonable manner

Refer to the reasonable management action section discussed above.

3. That work was the predominant cause of the psychological injury

Your work must be the predominant cause of your stress related condition. There may be other causes, but your work must be the predominant one. If it’s not, your claim will likely not be accepted.

4. That the psychological injury was not caused predominantly by work related stress or burnout that has arisen from events that may be considered usual or typical and reasonably expected to occur in the course of the worker’s duties

This is a major difference between the two tests if you’re intending to claim WorkCover related to stress.

The new test specifically references stress and burnout – where the old test does not.

Under the new test, if your condition arose predominantly by work related stress or burnout, arisen because of events that could be considered usual or typical and reasonably expected to occur during the course of your work duties, your claim is likely to be rejected.

An exception to this is if the stress or burnout was caused by traumatic work events that you experienced that could be considered to be usual or typical and reasonably expected to occur in the course of your duties.

As an example, if you were an emergency service worker exposure to traumatic events, you may be entitled to have a claim in relation to stress or burnout accepted.

Which test applies to you?

Test 1 applies if your stress related condition occurred prior to 31 March 2024.

Test 2 applies if your stress related condition occurred on or after 31 March 2024.

What happens if your stress related condition is caused both prior to the new test commencing and continuing after the new test comes into effect remains to be seen.

The reason for the uncertainty is that the new test, as at the time of writing, has not long been introduced.

As time goes on, this issue will be clarified but for now, there is a lack of clarity in relation to this issue.

Considerations when claiming WorkCover for a stress related condition

The first consideration is what is the likelihood of the claim being accepted.

Claiming WorkCover can be stressful. You will likely need to be medically assessed, you’ll need to correspond with the WorkCover insurer, obtain certificates of capacity on an ongoing basis, you’ll be off work and uncertain as to what impact the claim might have on your employment.

Your claim could also be rejected, and the process to contest the rejection can also be stressful.

So if you do intend to lodge a WorkCover claim related to a stress related condition, it’s not a bad idea to seek assistance from a lawyer before pursuing the claim. This is particularly so if the new test applies to you, given it has been made harder under that new test to have your WorkCover claim accepted.

Another consideration is whether claiming weekly payments for your stress related condition under WorkCover worth it?

Even if your claim is accepted, will WorkCover be worth it for you?

If, for example, you’re only going to take two weeks off work and then get back to work, and you have a huge amount of sick leave saved up – then perhaps a WorkCover claim might not be worth it.

Do you have any other options in terms of stress leave from work without relying on WorkCover?

Yes. One option you have is to simply use your sick leave.

Many people may have a significant amount of sick leave saved up if they’ve been long term employees of a company which they will likely never use.

It can be a good idea to use this sick leave up as opposed to lodging a WorkCover claim.

Many people choose to go down this route and when it looks like they’re going to need more than a few days or a few weeks off work, that is when they decide to lodge a WorkCover claim for stress.

Some people may also elect to take annual leave if they do not have an adequate amount of stress leave saved up.

This is certainly not a solution that is recommended for anything more than say a few days here or there off work as your annual leave should not be used to take time off for medical related issues that are connected to employment, if it can be avoided.

That’s what sick leave and WorkCover payments are for.

You can read more about that here.

Conclusion

If you need to take a step back from work because of a stress related condition that is related to your work, you may have an entitlement to income payments (and other benefits) from WorkCover.

Just having a stress related condition does not automatically entitle you to WorkCover payments. There are criteria that you must satisfy before you have an entitlement to WorkCover.

Before pursuing a WorkCover claim, you should determine whether it’s a worthwhile pursuit. And finally, remember that you do not need to necessarily pursue a WorkCover claim if you wish to take a step back from work due to stress. There may be better options. You can elect instead to use any accrued sick leave or annual leave or long service leave.