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17 Compensation claims

An employee can claim compensation for a mental illness if they consider their employment caused or contributed to or aggravated the illness. Your role as a manager is to understand and help employees through the workers’ compensation process and to support their recovery and early return to work, irrespective of whether their claim for compensation is accepted.

Why it matters

Compensation claims for psychological injury, known as mental stress claims, are increasing. For mental stress claims, the number and proportion of claims, as well as the cost, has increased over recent years.1

Claims related to mental stress are most commonly attributed to work pressure and/or workplace bullying.2

If an employee is unwell, the workers’ compensation claim process can appear daunting and cause unnecessary distress. There are significant differences in the time taken for injured employees to lodge claims involving mental stress with their employer, compared to all other disease claims (median of 51 days for psychological injury claims compared to 29 days for disease claims). 3

Employees with a psychological injury claim do not return to work as quickly as those with claims for physical injuries. Time away from work can be detrimental to longer term recovery outcomes so management support and assistance is critical to overcoming barriers to a safe return to work. Managers need to understand their responsibilities for supporting employees with a compensation claim to return to work.

APS employees are covered by the Comcare rehabilitation and workers’ compensation scheme under the Safety Rehabilitation and Compensation Act 1988.

Comcare is the ‘determining authority’—the organisation responsible for making a decision on the workers’ compensation claim.

The employer—the APS agency—is the ‘rehabilitation authority’ with the responsibility and authority to assist an injured employee to return to work. Employers also have a duty under the SRC Act to provide injured employees with suitable employment.

See www.comcare.gov.au

An employee may be eligible to claim compensation under the Safety Rehabilitation and Compensation Act 1988 if they were injured in the course of their employment as well as for an illness (disease) if employment caused, contributed to or aggravated the illness. This includes claims for psychological injury.

Psychological Injury in the Comcare Scheme4

Over the four-year period to 30 June 2010:

  • 10% of accepted Australian Government premium payer claims were attributed to mental stress; and
  • 35% of total claims costs related to these claims.

How it’s done

Understand and help employees with the process

An employee can claim compensation for an illness if they consider their employment caused or contributed to or aggravated the illness. However, for the claim to be accepted, Comcare must be satisfied that their employment caused or contributed to the illness to a significant degree. Some employment contributions are excluded where they were as a result of ‘reasonable administrative action’ taken in a reasonable manner by an employer. Reasonable administrative action is not a catchall phrase which covers every management action in the workplace. It is defined in section 5A(2) of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) to include a performance appraisal, counselling, suspension or disciplinary action. It must be directed and related to the terms and conditions of the employee’s employment, rather than merely to particular tasks involved in their employment or other purely operational matters.

The SRC Act is a ‘no fault’ scheme.5 It does not attribute blame, so your focus as a manager should be on assisting the employee’s recovery and return to work.

If an employee is lodging a claim they should:

  • access the form on the Comcare website (www.comcare.gov.au)
  • attach a medical certificate to the claim form (this is a legal requirement)
  • preferably lodge the claim through you or the case manager, to enable you to complete the employer part of the claim form (however there is no legal requirement for the employee to do so), or
  • lodge the claim directly with Comcare.

On claim lodgement, Comcare will explain its decision making processes, and encourage the employee to contact their workplace’s rehabilitation case manager about early intervention assistance and support in providing suitable employment. Once a liability decision has been made, Comcare will advise the employee in writing, explaining the reasons for the decision and information on what to do if they are not satisfied with the decision. Any enquiries about the process for lodging a claim, or the way a claim is managed, can be made by calling Comcare on 1300 366 979.

Early intervention

You need to be aware of any early warning signs of an employee who might be injured, and respond to them. Encourage your employees to tell you about any injuries or early warning signs.

It is important to advise your agency’s case manager when you become aware that a person has become unwell or is injured at work.

Sustainable return to work or remaining at work while recovering from mental ill health is facilitated by good job design and management.
Source: Safe Work Australia National Work Health and Safety Strategy 2012-2022

Support the ability to work through recovery and return to work

The recovery of an ill or injured employee can be greatly improved by helping them back to safe work, undertaken in an environment that is supportive of mental health and well-being.

If the employee has been, or is likely to be, away from work for more than ten days, the case manager may arrange a rehabilitation assessment to undertake a return to work program. Based on the assessment, you will be involved in working with the employee, the case manager, treating doctor, and Approved Rehabilitation Provider6 (if any) to help the employee back to work in line with the provisions of the plan.

‘One of the best things my agency has done for me was to allocate me a Return to Work Coordinator. When I am off work due to my mental illness, Cathy contacts me on a regular basis and liaises regularly with my manager and senior executives. This takes the pressure off me—she meets with my doctor and makes sure that everything is in place for my return to work. She also monitors me by checking that I stick to my return to work schedule—sometimes I feel that I have to make up for the time I have taken off and tend to overdo it.’

Anna, an APS employee

Take steps to prevent further injuries by understanding the cause of injuries or illness and putting safeguards in place. This can be done through a risk assessment process. Your agency’s health and safety advisers can help you.

Useful tools

Other relevant information sheets:


1 Comcare 2011, Submission to House Standing Committee on Education and Employment inquiry into mental health and workforce participation, Comcare, Canberra, p. 7.

2 Safety, Rehabilitation and Compensation Commission 2011, Compendium of OHS and Workers’ Compensation Statistics, SRCC, Canberra, p. 24.

3 Comcare, op. cit., p. 11.

4 SRCC, op. cit., p. 20.

5 Comcare 2006, Preventing and Managing Psychological Injuries in the Workplace: Managers’ Guide, Comcare, Canberra, p. 8.

6 A rehabilitation provider approved under Part III of the SRC Act to provide rehabilitation services and programs to the Commonwealth jurisdiction. They work in close cooperation with the injured employee, the treating doctors and the workplace to achieve a safe and early return to work following a work related injury.

Last reviewed: 
8 June 2018