Book your consultation

Book Now Mobile

Psychological Injuries at Work Claims Process

Table of Contents

Understanding psychological injuries can be confusing. In this article, we explore the intricate landscape of psychological injuries in the workplace and the corresponding claims process in New South Wales. Covering essential topics such as eligibility criteria, legislative frameworks, claims procedures, and potential compensation amounts, readers will gain invaluable insights into navigating psychological injury claims effectively.

What is a psychological injury?

A psychological injury, or mental injury, encompasses various cognitive, emotional, and behavioural symptoms that disrupt a worker’s life, profoundly influencing their feelings, thoughts, behaviours, and interactions with others. Conditions like depression, anxiety, and post-traumatic stress disorder fall under this category.

While job stress often triggers physical and emotional symptoms in response to work environments, it doesn’t qualify as a disorder or psychological injury on its own. Psychological injuries significantly impact an individual’s overall well-being, necessitating appropriate support and interventions to address symptoms and facilitate recovery.

Eligibility Criteria

To receive workers’ compensation for psychological injuries like PTSD, anxiety, and depression in New South Wales (NSW), two main criteria must be met. Firstly, the individual must fit the scheme’s definition of a worker or deemed worker. Secondly, it must be demonstrated that work significantly contributed to the development of psychological injury.

Consideration of Employer Actions

It’s essential to note that in some cases, eligibility for compensation might be affected if the psychological injury occurred in response to a reasonable decision or action taken by the employer. This adds complexity to the assessment of eligibility for compensation in cases of mental illness or mental health issues stemming from the workplace.

Concerns for Employers

Mental health conditions among employees, including psychological injuries from employment, are major concerns for employers across Australia. This is not only because of the adverse effects of mental illness on employees but also due to the substantial costs incurred by businesses through employee absences, compensation payouts, and increased insurance premiums resulting from workplace injuries.

Statistics and Trends

According to Safe Work Australia, approximately 7,200 Australians receive compensation for work-related mental health conditions annually, constituting about 6% of all the times that individuals try to claim workers compensation. nationally. These claims amount to approximately $543 million in workers’ compensation payments each year.

The majority of claimants for psychological injuries are women (58%), with 42% being men. Additionally, 60% of claims awarded are to individuals aged 40 and over. Primary causes of serious mental health condition claims, resulting in one or more weeks off work, include work pressure (21%), work-related harassment or bullying (20%), and exposure to workplace or occupational violence (10%).

Call for Reform

ICARE NSW has highlighted that instances of psychological injury are increasing exponentially, indicating the need for reform. This issue has been underscored in a recent submission by the ALA to the NSW Legislative Council Standing Committee on Law and Justice, signalling the urgency for comprehensive measures to address and mitigate the incidence and impact of psychological workplace injuries in NSW.

Workers Compensation Act

In New South Wales (NSW), the Workplace Injury Management and Workers Compensation Act 1998, along with the Workers Compensation Act 1987, are the primary legislative frameworks governing psychological injury. These laws establish procedures for reporting, assessing, and compensating for such injuries, ensuring affected workers receive support and rehabilitation.

It’s important to note that workers’ compensation legislation, including provisions for psychological injury, varies across Australian states. Each state has its laws tailored to its workforce’s needs. Thus, understanding the specific legislation in NSW is crucial for employers and employees navigating psychological injuries in the workplace.

Important Exclusions to the Workers Compensation Act

According to the Act, certain circumstances are not covered under workers’ compensation for psychiatric or psychological disorders. These include:

  1. Reasonable Management Action: If your boss gives you feedback on your work performance fairly and reasonably, and you develop stress or anxiety as a result, that stress or anxiety may not be covered under workers’ compensation.

  2. Worker’s Expectation or Perception: Let’s say you believe your employer is going to demote you, even though they haven’t mentioned anything about it. If this expectation causes you anxiety or depression, those mental health issues might not be covered by workers’ compensation.

  3. Action by Authority or Insurer: If you’re going through the process of applying for workers’ compensation and you find it stressful or upsetting, any resulting mental health issues you experience during the application process might not be covered by workers’ compensation.

The Claims Process

To successfully claim for a psychological injury, you must first get a diagnosis, report it to your employer, and file a workers’ compensation claim. If approved, you’ll receive weekly benefits covering lost wages and payments for medical expenses. The second step involves making separate claims for lump sum compensation, including permanent impairment and a common law claim. For this, assistance from workers compensation lawyers – like those at Jameson Law is essential.

Step 1: Proving Your Diagnosis

Proving your diagnosis for a psychological injury is crucial in the first step of making a successful psychological injury claim. This typically involves obtaining a professional diagnosis from a qualified mental health practitioner, such as a psychologist or psychiatrist.

Documentation of your diagnosis, often in the form of medical reports or assessments, serves as evidence to support your claim. Further, seeking medical treatment can be a way to show the impact of a psychological injury.

For example, if you’ve been diagnosed with post-traumatic stress disorder (PTSD) following a workplace incident, your psychologist’s report detailing your symptoms and their impact on your ability to work can strengthen your case.

Once diagnosed, it’s important to report your condition to your employer promptly and accurately. This involves notifying them of your psychological injury and submitting a workers’ compensation claim. Providing detailed information about how your injury occurred, its impact on your work performance, and any relevant medical documentation can help streamline the claims process and increase the likelihood of a successful outcome.

Step 2: Initiating the Claims Process

To initiate the claim process for a psychological injury, the second step involves notifying your employer and completing the necessary paperwork. Upon notifying your employer about your work-related mental injury, request the required forms to start the claims process, which they should provide promptly. Thoroughly fill out all paperwork, providing detailed information about the incidents causing the injury and the symptoms experienced.

It’s essential to be comprehensive and accurate in your responses to ensure a smooth claims process. Accuracy is what leads to the most successful workers compensation claims! Additionally, gather any relevant medical evidence from your private physician supporting your case.

Submit this evidence to your employer, reinforcing the connection between your mental health condition and your work environment. By following these steps diligently and providing thorough documentation, you set the stage for a successful claim for psychological injury.

What are the benefits covered by workers’ compensation?

Workers’ compensation covers various benefits including medical expenses for treatments by doctors, psychiatrists, psychologists, or counsellors. It also provides income replacement payments for injured workers unable to work, along with covering costs related to rehabilitation and retraining for alternative employment or duties.

Additionally, workers may receive lump sum payments for permanent injuries or disabilities sustained on the job. These benefits aim to support injured workers in their recovery process, ensuring they have access to necessary medical care, financial assistance, and rehabilitation services to help them return to work or adjust to any permanent impairments.

To file a Personal Injury Claim for an injury sustained at the workplace, contact Jameson Law today. 

Maximum Amount for Psychological Injury Compensation

In a psychological injury claim, the potential largest payout depends on various factors outlined in the compensation structure. Initially, individuals can receive up to 95% of their pre-injury wages for the first 13 weeks, decreasing to 80% thereafter, with a maximum weekly payment capped at $2,423.60. Medical and treatment expenses deemed reasonable and necessary are fully reimbursed. If a permanent impairment claim is successful and the Whole Person Impairment is assessed at least 15%, the lump sum can range from $22,480 to $713,660.

Lump Sum Compensation

Additionally, a successful common law claim for psychological injury can result in an additional lump sum, calculated based on past and future lost earnings, on top of any permanent impairment payments. Eligibility for this compensation depends on meeting specific criteria, including having a certain percentage of permanent impairment assessed by a medical specialist.

Only one claim for permanent impairment compensation is allowed per injury, with the potential for an additional claim if the condition deteriorates. The insurer plays a pivotal role in determining liability and making a settlement offer within specified timeframes.

Before reaching an agreement, the insurer must ensure the individual has obtained independent legal advice or waived this right. This process ensures fair compensation for individuals with permanent impairment, including those with psychological injuries. The combined total of these potential payouts represents the maximum compensation achievable in a psychological injury claim.


Proving psychological injury at work typically involves providing evidence such as medical records, diagnoses from qualified mental health professionals, documentation of work-related stressors or incidents, and witness testimonies. Additionally, demonstrating how the injury has impacted one's ability to work and daily functioning strengthens the case. Contact the legal professionals at Jameson Law today for any questions you might have.

In certain circumstances, you may be able to sue your employer for psychological injury if they were negligent or failed in their duty of care to provide a safe work environment. This typically requires demonstrating that the employer's actions or lack thereof directly caused the psychological harm. Consulting with a legal expert can help determine the viability of your case.

Compensation for mental injury varies widely depending on factors such as severity, impact on work, and jurisdictional laws. Typically, it can include coverage for medical expenses, lost wages, rehabilitation costs, and pain and suffering. Lump sum payments for permanent impairment or successful common law claims may also be awarded, with amounts varying based on individual circumstances and legal regulations.


02 8806 0866

Book Online


Explore More Legal Resources and Articles

Public Liability Claim Guide

Definition of a Public Liability Claim A public liability claim is claim for compensation to cover the losses incurred as a result of sustaining an


Book your consultation

Scroll to Top