WorkCover payouts for back injury

If you suffer a back injury related to your employment, there are compensation options open to you under WorkCover.

What we will cover on this page is lump sum compensation. Compensation relating to medical expenses and weekly payments are covered elsewhere. 

The two lump sum options for a back injury under the WorkCover system

The two types of lump sum compensation you can receive for back injuries under the WorkCover system are an impairment benefit and a common law payment.

The difference between the two is that the impairment payment is open to anyone with a work related back injury (this doesn’t mean that everyone with a back injury will succeed in claiming an impairment benefit)

A common law claim on the other hand involves a person having a serious injury and negligence on behalf of another party.

In WorkCover matters, this commonly means the employer as the at fault party but it can also be other third parties.

An example of a third party would be if you are a truck driver making a delivery to another companies depot and are injured at that depot then your common law claim could involve the depot and the employer. 

Payout amounts available through impairment and common law for a back injury are very different.

There is a lower threshold to obtain an impairment benefit compared to a common law claim, and the amounts payable under an impairment claim typically much less.

As a general guide the typical amounts payable for an impairment benefit for a back injury will be in the range of $13,000 to $20,000.

In a common law claim, even for a claim limited to pain and suffering only (and not including a claim for loss of earnings – which we discuss further down the page) you would expect to receive at a minimum (roughly) $80,000 to $100,000.

If loss of earnings is claimed as part of a common law claim, then this amount referred to above could potentially be increased significantly.

Economic loss aims to compensate a person for their loss of earnings, considering the impact the injury has on a persons ability to earn, possibly up until retirement age. 

Compensation for a back injury under an impairment claim

Impairment claims are based on a persons whole person impairment, assessed in accordance with the American Medical Association Guides to the evaluation of permanent impairment, 4th edition (AMA guides).

The spine is divided into the lumbar, thoracic and cervical regions.

In this section, we’re going to specifically address the lumbar section of the spine and impairment claims relating to that. 

If you have minimal or no symptoms relating to your back injury and no radiology (shown on CT or MRI scans) then you may be assessed as having a 0 percent whole person impairment and you will not be entitled to an impairment lump sum. 

If radiology shows some damage to your lumbar spine and you have ongoing symptoms whether that be pain or restriction of movement in the spine then you will likely be entitled to a 5% whole person impairment.

What this means in monetary terms depends upon the date of your claim. Generally speaking a 5% assessment will result in about $16,000 in compensation payable (for a an injury in the 2023/4 year).

If you have radiculopathy, which is referred pain or altered sensation in the legs that is verifiable by the radiology then you may be assessed as having a 10% whole person impairment. This will entitle you to about $28,000 in compensation payable (for an injury in the 2023/4 year). 

Higher categories for lower back injuries that can result in 20% or greater whole person impairments being assigned which will also result in a higher lump sum payment being made.

These assessments are not common and usually apply only to the more severe cases of back injury.

An example of someone having a 20% impairment rating for their lumbar spine is when they suffer from cauda equina syndrome. This is a condition where the bladder or bowels of the injured person are affected in addition to severe symptoms in the legs. This would result in a compensation amount payable of $68,000 (for an injury in the 2023/4 year).

Compensation for a back injury under a common law claim

Common law claims as we discussed above require a person to have a ‘serious injury’ and also require that there is negligence on behalf of another party. This is most commonly the employer and the fault can be on behalf of either the management of the company or by employees of the company no matter where they stand in the company structure. 

The way compensation is assessed in common law claims is vastly different from impairment claims and takes into account a large number of factors.

Whereas an impairment claim is black and white in terms of entitlement and the amounts payable, a common law claim take into account the individual circumstances of someones claim which does result in payment amounts varying significantly from person to person. 

Unless otherwise noted, we are talking below about pain and suffering amounts only, and leaving economic loss to one side. 

While anyone that is injured at work can make an impairment claim and then go on to make a common law claim, the amount that they may receive in the common law claim is not directly connected to the impairment assessment rating they received.

As an example two people could be assessed as both having a 5% whole person impairment for a back injury.

They would receive the same amount of money on the impairment claim. 

However when it came to the common law claim, injured person A only received an additional $80,000 where injured person B received an additional $175,000. 

The difference between the two common law payment amounts could come down to a number of different factors.

The most common factor is that the effects of the injury on the second person was simply much greater than they were on the first person.

This can be the case even though they both scored 5% for their impairment benefit claim.

Impairment benefit categories do not really take into account the personal effects of the injury on the injured person.

They are more interested in what the radiology shows and fitting people into one of a few select categories. 

When it comes to common law claims we can look at the personal consequences. 

In the example given above it may be that person A had a fairly limited amount of restrictions caused by their lower back injury and as such they could only obtain $80,000 over and above what they had previously received.

As an example, they may have returned to full-time work and only required a minimal amount of painkillers on a weekly basis.

They may have had significant amounts of physiotherapy or other medical treatment in the first six months of the injury but after the first 12 months their treatment reduced to one physiotherapy treatment per month. 

Person B on the other hand took multiple Panadeine Forte daily and had only managed to return to work on reduced hours and reduced duties. 

Their recreational activities were reduced significantly and they were no longer able to play football as they did prior to the injury. 

To take a more extreme example, someone with cauda equina syndrome, severe back pain and an inability to work may receive an impairment payment based on a whole person impairment of 20%. They then move on to their common law claim.

Again, putting aside the economic loss component, lets say the consequences of the injuries were as follows: 

• Sleep interrupted due to pain, injured person is only getting 5 hours sleep per night. 
• Taking Endone (a heavy duty painkiller) and Panadeine Forte daily, as well as Lyrica to try and reduce leg pain. 
• Has urinary incontinence daily. 
• Most recreational activities severely restricted, limited to only walking 20 minutes maximum at a time.  

This claim may resolve for $350,000-400,000 for pain and suffering (note – this is for pain and suffering only – not taking into account any compensation for loss of earnings).

Economic loss

In a common law claim if certain loss of earnings thresholds are met an injured worker can claim common more for economic loss.

Once the relevant test that a person needs to meet is met (40% loss of earnings) then what the claim will be worth for economic loss will be decided by the impact the back injury has on a person’s ability to work.

You also look at the age of the worker their occupation, skill set, education, training and any other relevant factors.

This will give you a rough idea of how many years of work are left to the injured person and at what capacity whether it be full partial or nil, capacity the worker can sustain. 

Once those factors have been considered there is a prescribed formula that must be used to work out what a future loss of earnings claim is worth.

It is not as straightforward as multiplying the number of years left by the earnings lost by the worker.

There are certain reductions that are made to take into account the possibility that the worker had they not been injured may still not have been able to work until retirement age due to other factors.

It also takes into account the fact that compensation payment for loss of earnings is paid immediately upon settlement or award and not over time as a salary is paid. 

As a general rule, the younger the person is at the time of settlement of their economic loss claim the greater reduction that will be made to the person’s payment.

If on the other hand the injured person is for example one year from retirement age then the settlement amount for economic loss will not be reduced by any significant amount.