Capacity for work disputes in NSW CTP weekly payments
A capacity for work decision can reduce or stop NSW CTP weekly payments. This page deals with medical, functional and vocational capacity evidence. It is not the same thing as a PAWE calculation, even though both can appear in the same insurer letter. General information only.
Capacity is not the same as PAWE
PAWE amount is the pre-accident earnings baseline. Work capacity asks what work you can safely and sustainably do after the accident. Post-accident earnings are what you are actually earning, or what the insurer says you have capacity to earn.
Do not answer a capacity decision only with payslips. Payslips may prove income, but capacity needs medical, functional, job-duty and vocational evidence. If one letter mentions PAWE and capacity, respond under separate headings.
Decision points to isolate before a capacity review
A capacity review should not repeat the PAWE calculation page. Its job is to test the medical and vocational reasoning behind the weekly-payment change, while still keeping the other calculation inputs visible.
| Decision point | Why it matters in a capacity dispute | Evidence to use |
|---|---|---|
| PAWE amount | Sets the earnings baseline, but does not prove what work is safe after the accident. | Use the insurer worksheet and earnings records only to confirm the baseline or identify a separate PAWE dispute. |
| Statutory percentage | Shows whether the payment changed because of the entitlement period rather than a new medical opinion. | Check accident date, week number, calculation sheet and the section relied on. |
| Work capacity | The core issue: what hours, duties, travel and pace are medically sustainable. | Certificates, treating reports, job-duty statements, rehabilitation notes, IME responses and vocational material. |
| Post-accident earnings | Distinguishes actual income from an assumed earning capacity that may not be realistic. | Current payslips, rosters, work-trial records, employer correspondence and business records. |
| Statutory cessation or suspension | Identifies whether the insurer is relying on a stop rule, certificate gap, authority issue, fault or threshold-injury position instead of capacity alone. | Decision notice, certificate history, information requests, medical classification and liability material. |
If more than one point is disputed, put them under separate headings. A corrected PAWE figure may change the baseline amount, but it does not by itself prove ongoing incapacity or avoid a statutory cessation rule.
Worker examples where capacity and income evidence overlap
- Employee: a warehouse worker returns to light duties for four hours a day. The capacity issue is whether those duties and hours are sustainable. The PAWE issue is whether regular overtime or allowances were included in the baseline.
- Casual worker: a hospitality worker completes two short shifts, then stops because symptoms flare. The evidence should show roster history, attempted hours, recovery time and treating restrictions.
- Self-employed person: a contractor invoices less after the accident but still has business expenses. Capacity evidence should be separated from the accounting evidence used to show actual post-accident earnings.
- Business owner: the business continues trading while the injured owner does less physical work. The file may need accountant evidence separating turnover, wages paid to others, owner drawings and personal exertion income.
- Multiple employment: a claimant returns to one lower-demand role but cannot resume a second physical job. The insurer should not treat one income stream as a complete answer without checking all pre-accident work and the restrictions affecting each role.
These are examples only. The correct calculation and review pathway depend on the decision wording, accident date and evidence.
Evidence checklist by issue
| Issue | Useful documents | Common gap |
|---|---|---|
| Capacity for work | Certificates of capacity, GP and specialist reports, rehabilitation notes, medication effects, job-duty statement, failed work-trial chronology. | Medical evidence states a diagnosis but does not address hours, duties, breaks, travel or sustainability. |
| PAWE amount | PAWE worksheet, payslips, rosters, tax returns, BAS, invoices, contracts, business records. | Income records are sent without an indexed table showing which item answers which calculation dispute. |
| Post-accident earnings | Current payslips, rosters, bank deposits, invoices, business income records, employer correspondence. | Actual earnings are mixed up with assumed earning capacity. |
| IME or vocational report | The report, treating response, job demands, qualifications, labour-market assumptions and rehabilitation history. | The response disagrees generally but does not identify the inaccurate assumption. |
| Cessation or suspension | Decision notice, certificate history, information requests, authorisations, threshold/fault notices and proof of lodgement. | The review argues hardship but does not answer the legal reason relied on. |
How capacity affects the statutory weekly-payment formula
During the first entitlement period, section 3.6 of the Motor Accident Injuries Act 2017 uses a 95% framework applied to the difference between PAWE and post-accident earning capacity or post-accident earnings, using the greater of those post-accident figures where relevant. During weeks 14 to 78, section 3.7 uses 80% for total loss and 85% for partial loss concepts. After week 78, section 3.8 uses pre-accident earning capacity and post-accident earning capacity concepts.
That is why a capacity decision can affect the amount even when PAWE is agreed. It can also interact with statutory caps, actual current earnings, notice requirements, certificate requirements and maximum payment periods.
For people determined to be wholly or mostly at fault, or whose only injuries are threshold injuries, weekly payments generally cease after 52 weeks under the current scheme. Different rules can apply to older accident dates, so check the accident date and decision notice. Do not use a PAWE argument as a substitute for capacity evidence.
Post-accident earning capacity after week 78
After the second entitlement period, earning-capacity comparisons become more important. The current Motor Accident Guidelines identify matters insurers consider when determining employment reasonably available after week 78, including the nature and extent of injuries, age, education, skills, work experience, rehabilitation, pre-injury employment, residence, Certificate of Fitness details and other relevant circumstances.
A practical response should test the insurer assumptions: whether the proposed work exists, whether it fits your restrictions, whether retraining is realistic, whether travel is sustainable, and whether the wage assumed is supported by evidence.
If an IME or vocational report is driving the decision
Read the report for assumptions, not just conclusions. Check whether it correctly records your job duties, treatment history, hours attempted, flare-ups, medication side effects, travel tolerance, education, qualifications and actual earnings.
Ask treating practitioners to answer the disputed functional issues directly. A useful response might say what hours are realistic, which duties are unsafe, what breaks are needed, why a work trial failed and whether the proposed duties are consistent with certificates of capacity.
Related guides: independent medical examinations and PIC merit review vs medical assessment.
Worked example - capacity and PAWE separated
Warning: this example is simplified. It is not a calculator, not legal advice and not a promise of entitlement. Individual facts, caps, accident date, fault, threshold injury, certificates and evidence can change the result.
Example: the insurer accepts PAWE of $1,300, then says the claimant can earn $700 per week in suitable duties. The claimant says regular overtime means PAWE should be $1,500, and that actual sustainable post-accident earnings are only $250 because duties cause symptom flare-ups.
A focused review would separate the issues. PAWE is answered with payroll, overtime and roster records. Capacity is answered with certificates, treating evidence, job-duty material and work-trial history. Post-accident earnings are answered with current payslips or business records. The decision notice identifies any cessation or suspension issue.
What to do after an adverse capacity decision
Use the review deadline stated in the insurer notice and the rule that applies to that decision. Do not assume every capacity, PAWE or weekly-payment dispute has the same period.
- Preserve the decision: save the notice, reasons, deadline, IME or vocational report, certificates and recent payment history.
- Separate the issues: identify whether each reason concerns PAWE, statutory percentage, capacity, post-accident earnings or a cessation rule.
- Close the evidence gap: request missing relied-on material and ask treating practitioners to address the actual functional assumptions.
- Protect the review date: lodge the focused internal review before the applicable deadline. If evidence is pending, identify it clearly and keep proof of each supplement.
The current Motor Accident Guidelines require written reasons and review information when weekly payments are reduced or discontinued. The notice wording, decision type and applicable rule should drive the evidence and pathway.
Internal review and PIC pathway
Many weekly-payment disputes begin with internal review. If unresolved, the Personal Injury Commission pathway depends on what remains disputed. The amount of weekly benefits, suspension of payments and notice issues can sit differently from medical assessment questions or threshold injury disputes.
Before filing, identify the decision date, decision type, review outcome, documents relied on and the exact orders or outcome sought. Do not assume that a PAWE dispute, capacity dispute and threshold injury dispute all use the same evidence or pathway.
When to get legal advice
Get advice promptly if weekly payments have been cut, the insurer relies on an IME or vocational report, the letter mixes PAWE and capacity, you are self-employed or a business owner, you have multiple jobs, or a review/PIC deadline is close.
Send the decision notice, review deadline, PAWE worksheet, certificates, IME/vocational material, wage records before and after the accident, tax or business records if relevant, and a short work-attempt timeline.
Frequently asked questions
- Is work capacity the same as PAWE?
- No. PAWE is the pre-accident earnings baseline. Work capacity is the medical and vocational question of what work you can safely and sustainably do after the accident. A weekly-payment decision can involve both, but each issue needs its own evidence.
- Can the insurer reduce payments because I tried to return to work?
- A return to work or changed earnings can affect the calculation, but it should be assessed against the actual earnings, the work attempted, the medical restrictions and whether the work is sustainable. A short trial does not automatically prove ordinary earning capacity.
- What evidence helps in a capacity dispute?
- Useful evidence can include certificates of capacity, treating reports, specialist restrictions, rehabilitation notes, job-duty descriptions, employer correspondence, work-trial history, current payslips and any IME or vocational report relied on by the insurer.
- Why does the 78-week point matter?
- After the second entitlement period, the Act uses pre-accident earning capacity and post-accident earning capacity concepts. That can make vocational evidence, labour-market assumptions and sustainable hours especially important.
- Does a capacity dispute belong in the same pathway as a PAWE dispute?
- Not always. A PAWE amount dispute is commonly a calculation or merit-style issue. A capacity dispute may involve medical, vocational or merit issues depending on the decision wording. The insurer notice and review outcome should be checked before choosing a PIC pathway.
- Should I wait for every report before requesting review?
- If a review deadline is close, it is usually safer to lodge a focused review using the decision notice and available core evidence, then identify what supplementary material will follow. Keep proof of lodgement and date every supplement.
Sources
Official public sources relevant to this guide.