Reduced work capacity

The calculation for reduced work capacity within the first 45 weeks will have regard to any AE and will always be:

NWE - AE = COMPENSATION

Reduced work capacity can take several forms, and is usually, but not always, tied to a rehabilitation program.  There are three main categories of reduced work capacity.  An employee:

  • can't do his or her normal job, but can do a different or modified job;

  • can do his or her normal job, but can't do so full time; or

  • a combination of these two.

Each of these usually involves a loss of income.  If they don't, then there is no incapacity.  It is not whether an employee can do his or her original job, but whether there is any earning loss that is the deciding factor.

Example

An Administrative Service Officer Class 4 Counter Officer has an accepted claim for anxiety and depression, arising from the high level of public contact in his job.

He returns to work in another Administrative Service Officer Class 4 position that does not require public contact.  His pay is unchanged, so he is not 'incapacitated'.

However, if the only available position is at an Administrative Service Officer Class 2 level and he returns to that job instead, that would involve a loss of earnings and compensation for incapacity would be payable.

Source URL: https://clik.dva.gov.au/military-compensation-reference-library/historical-information/comcare-operations-manual/volume-ten-incapacity-payments/part-three-basic-incapacity/ability-earn/using-section-19-2-formula/reduced-work-capacity