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5.1.2 Explanatory statement - Approved Guide


The Minister for Industrial Relations issued an Explanatory Statement when the first edition of the Approved Guide was tabled in 1989. It discussed the operation of the Guide in the following terms:

The Guide requires that the degree of permanent impairment be assessed on the basis of whole person impairment, a concept drawn from the American Medical Association's guides. Evaluation of whole person impairment is a medical appraisal of the nature and extent of the effect of an injury or disease on a person's functional capacity and on the fundamental activities of daily living.

It is structured by assembling detailed descriptions of impairments into groups according to body system and expressing the extent of each impairment as a percentage value of the functional capacity of a normal healthy person. Thus a percentage value can be assigned to an employee's impairment by reference to the relevant description in the Guide.

Under the Guide, a zero rating would represent normal health or well being while a 100% rating would, in effect, represent death [note that as injuries are now assessed separately in most cases, this is only the case in practice when the 100% rating derives from a single injury]. The loss of a middle finger is rated at 10%, loss of half normal range of knee movement 30%, and blindness 85%.

Under the whole person approach to impairment assessment, permanent impairment of any part of the body, bodily function or system will qualify for payment providing the impairment rating is at least 10%. (Injuries to fingers and toes are exempted from the 10% qualifying requirement.)

For the first time in the history of Commonwealth compensation legislation workers will be entitled to a lump sum benefit for back injuries, skin disorders, cardiovascular conditions, mental illness etc. Such conditions were excluded under the previous system which restricted payment to set losses specified in a Table of Maims e.g. loss of limbs, digits, sight, hearing, sexual capacity, facial disfigurement, speech and sense of taste or smell.

The Guide provides for a combined impairment rating in the case of multiple impairments [note this is now only applicable in specific cases involving multiple impairments resulting from one compensable injury]. For example a serious spinal injury resulting in paraplegia and associated other impairments would result in a combined impairment rating of 99%.

The degree of permanent impairment is to be assessed by reference to Part A [now Part 2 Division 1] of the Guide.

The degree of non-economic loss is to be assessed by reference to Part B [now Part 2 Division 2] of the Guide. Of the maximum amount of $30,000.00 [indexed] payable a percentage of $15,000.00 [indexed] is to be set by reference to the degree of impairment assessed under Part A [Part 2 Division 1], e.g. if the impairment rating was 10% the worker would automatically qualify for 10% of the $15,000.00 [indexed].

The workers entitlement to a proportion of the remaining $15,000.00 [indexed] is to be assessed by rating the effects of the impairment under the headings pain and suffering, loss of amenities, other losses and loss of expectation of life. The scores under these headings are tallied and a simple formula applied to determine the percentage of the remaining $15,000.00 [indexed] that is payable.

The Guide offers a comprehensive system for assessing the level of worker's impairment. It will ensure a consistent approach to the assessment of the compensation payable for both permanent impairment and non-economic loss.

Independent, private medical consultants will be required to report on the degree of impairment in accordance with the Guide.


A full copy of the Permanent Impairment Guide is provide on the ComLaw site.