The workers compensation scheme ‘WorkCover’ helps people who have been injured at work access financial assistance; predominantly lost wages and medical expenses. If that person has suffered a ‘serious injury’, they are able to sue for compensation.

Injury claims are often physical – but increasingly we are asked to assist people who have suffered a psychological injury at work. 

Psychological illness in Australia

According to the Australian Institute of Health and Welfare, 45 per cent of Australians aged between 16-65 will experience a psychological health disorder in their lifetime.

Such injuries/illnesses can be caused by stressors in the workplace (e.g., bullying) or may be a secondary consequence of a physical injury.

Can I receive workers compensation if I have a psychological injury/mental injury?

Although psychological illness claims can be more complex than a physical injury, it is possible to access entitlements under the WorkCover scheme. The law defines a mental injury as being one that:

1. Causes significant behavioural, cognitive or psychological dysfunction; and
2. Has been diagnosed by a medical practitioner (GP or psychiatrist) in accordance with the Diagnostic Statistical Manual of Mental Disorders (‘DSM’).

The mental injury must have also been predominantly caused by or arisen out of the course of employment.

Certain exclusions apply, however, and make the law complex.

Is it possible to have both a physical injury and a psychological injury?

Yes. A person can develop a psychiatric or psychological injury as a result of a physical injury. These symptoms and conditions can be accepted as part of a claim.

Why are psychological injury claims so difficult?

The symptoms and treatment of a physical illness is more consistent than with a psychological illness. Although the diagnosis may be the same for two people with a mental injury, the symptoms and treatments can greatly vary between each person. It can also be difficult to separate out the consequences of the psychological injury caused by employment and the consequences caused by other factors.

What happens if my claim is rejected?

Whilst sometimes claims can be relatively straight forward, it can be a rude shock when the insurer rejects a claim under WorkCover and the injured person is left without payment for the medical expenses and time off work.

There are a number of reasons why a claim might be rejected. There may be medical disputes or factual disputes that need to be challenged.

Some of the most common reasons for rejection include that:

• the insurer deems the injury does not meet the required definition
• the insurer deems the injury did not predominantly occur in the course of employment
• the insurer deems a pre-existing unrelated medical condition is the cause of the worker’s ongoing problems
• the worker did not report the injury in a timely manner
• the worker was injured as a result of reasonable management action and is therefore excluded from claiming compensation in accordance with law. This is a standard reason for the rejection of psychological injury claims.
• The worker's psychological injury was predominantly caused by work related stress or burnout resulting from events that are considered typical or reasonably expected in the worker's duties and therefore excluded from claiming compensation in accordance with the law. This is a new exclusion introduced from 31 March 2024.

On 31 March 2024, a number of legislative amendments were introduced into the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic). These changes will have a significant impact on workers who have suffered a psychological injury at work. For more information on these changes, please refer to Changes to WorkCover laws by the Workplace Injury Rehabilitation and Compensation Modernisation Act 2023.

If you have suffered a mental injury at work, it is important to seek legal advice at an early stage. We recommend seeking legal advice and assistance prior to lodging your WorkCover claim.

The doctor said that it is too difficult to lodge a worker's compensation claim for a psychological injury

While we acknowledge the challenging nature of the workers compensation regime, a person with work-related psychological problems may still be entitled to ‘no fault’ benefits even if the injury is not ‘severe’. 

We encourage all people with a psychological injury to seek advice as to whether they are entitled to WorkCover assistance. If you would like advice about your circumstances and potential entitlements, call Redlich's Work Injury Lawyers on (03) 9321 9988.