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Terminal condition lump sum compensation eligibility

Workers and eligible dependents can claim lump sum compensation if their work has caused an injury or illness which is expected to end their life in the immediate to short term—for example a worker with mesothelioma.

Although workers can seek common law damages, for some the prompt assessment and payment of this additional lump sum alleviates the immediate need to seek common law damages. It allows them to spend more time with their family at this crucial time. This compensation also supports workers who need palliative care and ensures they can plan and attend to the financial needs of themselves and their families.

Lump sum compensation for terminal conditions is not intended for workers whose condition will result in a short decrease in their life expectancy, or whose life is predicted to end a considerable time into the future. Other compensation for loss of function and/or impairment is available for these workers who will be better supported through ongoing compensation entitlements and access to rehabilitation, vocational counselling and re-training.

What is a terminal condition?

Terminal conditions are generally considered as a work-related illness or an injury that is likely to result in the death of the person in the immediate to short term (for example, usually two or three years but up to five years from diagnosis) and is not able to be cured.

A condition is terminal if:

  • it is certified by a doctor as being a condition that is expected to terminate the worker’s life
  • the insurer accepts the doctor’s diagnosis of the terminal nature of the condition.

There is no set list of terminal illnesses. Examples of common workers’ compensation claims for terminal conditions include:

  • accelerated silicosis with progressive massive fibrosis
  • mesothelioma
  • end stage work-related cancers.

When does a worker have a terminal condition?

A doctor must first certify the worker’s condition is terminal. A doctor must use their clinical judgement considering a range of factors, such as the nature of the worker’s injury, their prognosis, available treatments, their overall health and personal medical history.

Reaching a terminal diagnosis is a complex clinical decision and a worker’s prognosis may be uncertain. For some conditions, such as those where the disease or its progression are medically well understood, a doctor may be able to make this certification with a high degree of certainty. However, for other conditions, such as the emergence of accelerated silicosis in the engineered stone industry, doctors may be required to provide a more speculative assessment of a worker’s life expectancy where there is limited knowledge about the disease or its progression is not well understood.

The Workers’ Compensation and Rehabilitation Act 2003 (the Act) provides insurers with discretion to accept the doctor’s diagnosis that the worker’s condition is terminal. This provides insurers with flexibility to consider each worker’s claim on its own merits and ensure workers who are in the final stage of their illness, particularly those needing palliative care, are able to access vital financial support.

Insurers are expected to exercise their discretion reasonably, in accordance with the beneficial nature and objectives of the workers’ compensation scheme. In making these determinations insurers will need to consider the standard and contemporaneous nature of medical advice available.

Factors considered in determining to accept the terminal nature of a worker’s injury may include:

  1. What is the current progression of the worker’s injury (e.g. is the injury stable or deteriorating?)
  2. Has a sufficient period of time passed since the worker was diagnosed with their injury to enable the doctor to assess the trajectory of their injury or is further observation time required? If further observation time is required, how much time does the doctor anticipate before the relevant assessment can be made?
  3. Can the injury be cured?
  4. Is the worker currently undertaking any treatment and, if so, what is the likely course of treatment and its impact on the worker’s life expectancy (e.g. is the worker responding to the treatment?)
  5. What would the worker’s life expectancy have been if they did not suffer from their injury and what is the basis for the doctor’s estimation of this life expectancy?
  6. Does the worker suffer from any co-morbidities not related to their injury? If so, what is the expected course and impact of these co-morbidities on the worker’s life expectancy (e.g. is it more probable than not that any of these co-morbidities will end the worker’s life?)
  7. Does the doctor expect the worker’s life will end due to their compensable injury? If so:
    1. What is the doctor’s estimation of when the worker’s life will end? (e.g. generally months or less, in the next two years)
    2. What is the doctor’s explanation of the process of how the worker’s injury will cause the end of their life?
    3. At what stage of the injury is the worker at? (e.g. needs a caregiver, palliative care, terminal phase).

Each case must be considered and determined based on its own particular circumstances.

What if I disagree with the insurer’s decision?

If the insurer decides not to accept a worker’s condition is terminal, it does not mean the worker is precluded from accessing terminal compensation in the future. If the worker’s claim remains open and their condition deteriorates or further medical evidence becomes available, the insurer may make a new decision in the future to accept the worker’s condition is terminal.

It may be more appropriate to monitor the worker’s condition and assess at a later point in time if the worker is stable, has a capacity for work, is not adversely affected by the condition or its symptoms, or is unlikely to die of their condition in the immediate to short term.

There are important safeguards for workers and employers to seek an independent review by the Workers’ Compensation Regulator if they are not satisfied with an insurer’s decision, including whether to accept a condition is terminal. Read more about the review process.