If you have been seriously injured at work in New South Wales because your employer did something unsafe, the standard workers compensation benefits — weekly payments, medical expenses, a permanent impairment lump sum — may not reflect what the injury has actually cost you. A work injury damages claim is the pathway that can.
This is a separate, higher-value claim built on your employer’s negligence, and it is gated by a strict eligibility test most people first hear about as “the 15% threshold.” This guide explains what that threshold means, what else has to line up, and why the timing of your medical evidence matters far more than most injured workers realise.
This is general information, not legal advice about your own claim. Every matter turns on its own medical evidence, insurer decisions, and deadlines.
What a work injury damages claim actually is
Work injury damages — often called a common law claim — is a negligence claim against your employer for the financial loss caused by a work injury. It sits alongside the ordinary workers compensation scheme rather than replacing it, and it is governed mainly by the Workers Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers Compensation Act 1998 (NSW).
The key thing to understand is what this claim compensates. Unlike a personal injury claim outside the workplace, a NSW work injury damages claim is limited to economic loss only — your past and future loss of earnings, plus lost superannuation, calculated through to retirement age. You cannot claim for pain and suffering or for medical expenses through this pathway. Those non-economic losses simply are not part of a work injury damages award in NSW.
That makes these claims fundamentally about your earning capacity: what you could have earned over your working life had you not been injured, compared with what you can realistically earn now.
The 15% whole person impairment threshold
The headline requirement comes from section 151H of the Workers Compensation Act 1987 (NSW): for a physical injury, you generally cannot recover work injury damages unless your injury has been assessed at at least 15% whole person impairment (WPI).
Whole person impairment is a medical rating, expressed as a percentage, of the permanent effect of your injury on your body as a whole. It is assessed by a specially trained, accredited assessor, and only once your injury has stabilised — reached what doctors call maximum medical improvement. Before that point, a WPI figure is not reliable.
A few features of this threshold trip people up:
The 15% figure is a hard gate, not a sliding scale. A worker assessed at 13% or 14% WPI may have a genuinely serious, life-altering injury and a large economic loss — and still be shut out of a common law claim entirely. The threshold does not bend for the size of your financial loss.
The WPI must be accepted by the insurer or determined by the Personal Injury Commission. Your own doctor’s view that you “should” reach 15% is not enough on its own; the figure has to be locked in through the proper assessment process.
It is also worth separating this from the permanent impairment lump sum, which is a different entitlement. That lump sum has a lower entry point for physical injuries (generally 11% WPI) and does not require you to prove your employer was at fault. Work injury damages sit above it: a higher impairment threshold and proof of negligence.
A major change for psychological injuries from 1 July 2026
The 15% threshold described above continues to apply to physical injuries. For primary psychological injuries, the law is changing significantly.
Under the Workers Compensation Legislation Amendment Act 2025 and the Workers Compensation Legislation Amendment (Reform and Modernisation) Act 2026, the WPI threshold to access work injury damages for a primary psychological injury rises from 15% to at least 25% for new claims from 1 July 2026, then to more than 26% from 1 July 2027, and to at least 28% from 1 July 2029.
In practice this is a steep increase — 25% WPI for a psychological injury is a high bar, and far fewer psychological injury claims will qualify for common law damages than under the old 15% test. If your injury is psychological and connected to your work, the date your injury is notified can directly affect which threshold applies to you, so early advice matters more than ever. (Start dates for parts of these reforms are still being proclaimed by the NSW Government, which is another reason to check your position rather than assume.)
Negligence: clearing the threshold is only half the claim
Reaching 15% WPI gets you through the gate. It does not win the claim. A work injury damages claim is, at its core, a negligence case, and you carry the burden of proving it. That generally means establishing three things:
Your employer owed you a duty of care — which, as an employer, they almost always do. They breached that duty: they failed to provide a safe system of work, safe equipment, adequate training, proper supervision, or a reasonable workload. And that breach caused, or materially contributed to, your injury and the resulting loss.
This is where many otherwise strong claims are won or lost. “The workplace was unsafe” is a feeling; a successful claim needs the actual breach pinned down — rushed output, an unsafe manual-handling design, a missing machine guard, understaffing, ignored prior incidents, or a hazard the employer knew about and did nothing to fix. The evidence that proves this — incident reports, witness accounts, safety records, photographs, prior complaints — is strongest when gathered early, before memories fade and before the insurer’s file hardens around a different version of events.
How the process works
While every claim differs, NSW work injury damages claims generally move through a recognisable sequence:
First, your injury is assessed and the 15% WPI threshold is met and accepted. You must also have already received any permanent impairment lump sum you are entitled to before a work injury damages claim can be finalised.
Your lawyer then serves the claim details on the employer’s insurer, setting out when and how the injury happened, the impairment, any relevant prior injuries, the economic loss claimed, and the alleged negligence. The insurer has a defined period to investigate and respond on liability.
If the matter does not resolve, your lawyer serves a pre-filing statement — a formal document setting out the full claim and the evidence relied on. The matter then usually proceeds to mediation, where the large majority of work injury damages claims settle. Court proceedings are a last resort if mediation fails, and must generally be commenced within three years of the date of injury, though a court may grant leave to proceed later where there is a satisfactory explanation for the delay.
What settling means — and why it is a one-way door
A work injury damages settlement is, in nearly every case, final. Once you resolve a work injury damages claim, your ongoing workers compensation benefits end — weekly payments and medical, hospital and rehabilitation expenses for that injury stop. You are exchanging the continuing safety net of statutory benefits for a single lump sum.
That is why the calculation has to be right. A work injury damages award is built on your projected loss of earnings and superannuation to retirement, then adjusted — past weekly payments and certain other payments you have received are accounted for, and standard legal deductions apply for receiving future money now and for life’s general uncertainties. Insurers frequently understate future loss by overestimating how much you will be able to earn going forward. Getting the future-loss figure right, often with vocational and economic evidence, is usually where the real value of the claim is decided.
The single biggest mistake to avoid
The most common and costly error is treating common law as something to think about “later” — after the weekly payments, after the treatment disputes, after the impairment assessment.
By then, the insurer’s file may already contain unhelpful assumptions about your work capacity, your earnings, or how the injury even happened. A denied surgery, an unfavourable independent medical examination, a low PIAWE rate, or an adverse work-capacity decision early in the claim can quietly shape the medical and economic record your damages claim will later depend on. The threshold, the negligence evidence, and the economic-loss case are all easier to build forward from the start than to reconstruct after the narrative has set against you.
Frequently asked questions
Can I claim work injury damages if I’m still working?
Possibly. You do not need to be completely unable to work. If you are now in a reduced role, earning less than before, or unable to progress as you otherwise would have, you may still have a genuine economic loss to claim.
Do I get pain and suffering through this claim?
No. NSW work injury damages are limited to economic loss — lost past and future earnings and superannuation. Pain and suffering is not recoverable through this pathway.
What if my WPI comes in just under 15%?
For a physical injury, falling below 15% generally means a work injury damages claim cannot proceed, regardless of your financial loss. This is exactly why accurate, well-prepared medical assessment is so important — and why advice should be sought before the assessment, not after.
How long do I have?
Generally three years from the date of injury to commence court proceedings, with limited exceptions requiring court approval. Threshold and evidence work should start well before that deadline.
Where Stephen Young Lawyers can help
Work injury damages claims reward early, careful preparation: getting the impairment assessment right, building the negligence evidence while it is still fresh, and modelling your true future economic loss rather than accepting an insurer’s discounted figure. As an Accredited Specialist personal injury firm based in Sydney CBD, with a multilingual team and a No Win, No Fee approach for eligible matters, we can review where your claim sits and what the next step should be.
If you think employer negligence may have played a part in your work injury, the most valuable thing you can do is have your position assessed early — before the insurer’s file shapes the outcome for you.
or call +61 2 9635 0889.
This article provides general information only and is current as at June 2026. It is not legal advice and should not be relied on as a substitute for advice tailored to your own medical evidence, insurer decisions, time limits and circumstances. NSW workers compensation law is undergoing significant reform, and threshold rules — particularly for psychological injuries — are changing. Liability limited by a scheme approved under Professional Standards Legislation.