Lump sum payments
A worker who has experienced a work-related injury or disease that’s led to a permanent impairment might be entitled to what’s called ‘lump sum compensation’.
What does this mean?
A lump sum is a single payment made at one particular time instead of a number of smaller payments over time.
Workers with a 'latent onset injury' or a pneumoconiosis injury
A latent onset injury is a condition caused by exposure to something (e.g. the sun or a chemical) that takes a long time to make a person sick. Workers with a latent onset injury or a disease that's considered to be a form of pneumoconiosis can see the Lump sum payments for pneumoconiosis injuries and latent onset injuries page for specific information.
What is a ‘permanent impairment’?
A permanent impairment is when an injury stays the same over time and isn’t likely to improve with further rehabilitation or treatment and has led to:
- loss of effective use of a part of the body, or
- loss of part of the body, or
- a psychological or psychiatric incapacity.
Eligibility for lump sum payments
A worker can ask to be assessed for a permanent impairment. An insurer can also choose to have a worker assessed at an appropriate point during their claim. This means they may refer a worker for an Independent Medical Examination, which they have an obligation to notify a worker of the purpose, date and time of the appointment, and the doctor’s name and specialty.
The assessment will work out the percentage of impairment. This is then used to calculate any lump sum a worker might be offered. The process of assessment is undertaken by a medical professional who then lets an insurer know the outcome.
What if a worker doesn’t agree with their assessment?
For physical injuries, a worker can ask to be assessed by another doctor or reviewed by a medical assessment tribunal (MAT). A worker will need to let their insurer know this is what they want to do. They must tell their insurer within 20 business days of receiving their assessment notice.
An insurer will decide whether to have a worker reassessed within ten days of their request.
If a worker is reviewed by a MAT, their decision will be final.
If a worker is reassessed by another doctor and still disagrees with the second assessment, they can then ask for a final assessment by a MAT. Their decision will be final.
For psychological injuries, a worker’s permanent impairment assessment can only be undertaken by a MAT and their decision will be final.
How much will the lump sum be?
The range of impairment and associated payment amounts are set out in the Workers' Compensation and Rehabilitation Regulation 2025.
Does a worker have to accept the lump sum offer?
If a worker’s impairment is less than 20%, they will have to choose between accepting the lump sum offer or rejecting it and seeking common law damages. Common law claims are when a worker sues their employer because they believe their employer is at fault for their injury.
A worker can also choose to defer their offer. This means they can decide between the lump sum offer or pursuing common law damages at a later date. Deferment happens automatically if a worker hasn’t responded within 20 business days.
If a worker’s impairment is 20% or more, they can accept the offer and seek common law damages.