Weekly payments beyond 130 weeks: guidance on future earning capacity in Macarthur Fresh v Deitz

Insurers have often faced difficulties when seeking to bring weekly benefits to an end after 130 weeks where a worker remains employed but works fluctuating or reduced hours.

The recent decision in Macarthur Fresh Wholesalers Pty Ltd v Deitz [2026] NSWPICPD 23 has provided further guidance on the operation of section 38(3)(c) of the Workers Compensation Act 1987 (NSW). In a welcome outcome for insurers and employers, the Appeal Panel overturned the original decision and confirmed that a worker's entitlement to weekly payments after 130 weeks requires a forward looking assessment of their capacity to increase earnings, not merely a review of their current earnings position.

For employers and insurers, the decision provides useful guidance on the evidence that insurers should obtain when assessing a worker's ongoing entitlement.

Background

The worker sustained a right shoulder injury during the course of his employment, and underwent surgical treatment in September 2022 and a further shoulder procedure in September 2023.

Liability for workers compensation benefits was accepted and the worker received weekly compensation payments.

In June 2024, the insurer issued a work capacity decision relying on medical evidence certifying the worker fit for suitable employment for 8 hours per day, 3 days per week. The worker had obtained alternative employment, however his hours varied depending on the shifts made available to him.

As the claim approached the second entitlement period, the insurer issued a further section 78 notice advising that weekly payments would cease after 130 weeks because the worker did not satisfy the requirements of section 38.

The worker disputed that decision and commenced proceedings in the Personal Injury Commission.

The dispute

The central issue concerned section 38(3)(c) of the Workers Compensation Act 1987.

To remain entitled to weekly payments beyond 130 weeks, a worker with current work capacity must establish that they are likely to continue indefinitely to be incapable of undertaking further additional employment or work that would increase their current weekly earnings.

The worker argued that any unrealised earning capacity was already accounted for by the statutory concept of "current weekly earnings", meaning the greater of either the worker's actual gross weekly earnings or the weekly amount the worker is able to earn in suitable employment.[1] With that approach, they argued evidence that a worker might be capable of working more hours than they presently work was of little relevance to the section 38 assessment.

In the initial proceedings, the Member accepted this argument and found that the worker remained entitled to weekly compensation beyond 130 weeks. The Member reasoned that section 38(3)(c) “current weekly earnings” operates to include any unutilised capacity to deal with “prospective changes”, meaning that if a worker has a capacity for work that is not reflected in their actual gross earnings, this is taken into consideration in the assessment of their ‘current weekly earnings’.[2]

What the Appeal Panel decided

The Appeal Panel reached a different conclusion. The Panel held that section 38(3)(c) requires a prediction of the worker’s ability in the future to undertake additional work. The Panel concluded that the test for a decision maker is to:

‘…engage in a prediction, based on a test of ‘likely’, in respect of the worker’s ability in the future to undertake additional work. This prediction involves an assessment of whether the worker could perform work additional to that which generated the current weekly earnings, work that would increase the current weekly earnings…’.[3]

That assessment necessarily involves consideration of present evidence demonstrating what the worker is capable of doing.

The Panel rejected the proposition that evidence of unutilised work capacity is irrelevant. Instead, evidence showing that a worker has capacity beyond the hours they presently work may be highly relevant when assessing whether they are likely to be incapable of increasing their earnings in the future.

In doing so, the Panel drew upon the established interpretation of the term "indefinitely" as meaning an unknown or non-specific period into the future.[4] The Acting Member on Appeal utilised this definition to reinforce the predictive nature of section 38(3)(c) assessments. The statutory exercise therefore requires more than a snapshot of the worker's current earnings position. It involves an assessment of future earning potential based on the available evidence.

The Appellant’s evidence

We highlight the objective evidence available regarding the worker's capacity, which was deemed relevant to the assessment of the worker’s ability to earn in the future.  

The following evidence was relied on by the insurer:

• Certificates of Capacity identifying a greater work capacity than the hours regularly being worked;

• a Functional Capacity Evaluation Report supporting an ability to undertake additional work;

• payslip evidence that demonstrated the worker had, at times, worked beyond the restrictions relied upon by him; and

• evidence suggesting the worker's reduced hours resulted from the availability of work rather than an inability to perform it.

Collectively, this evidence supported the view that the worker had unused earning capacity.

Key takeaways

The decision provides useful guidance for insurers considering entitlement disputes after 130 weeks.

• When assessing capacity after 130 weeks, the relevant question is not confined to what the worker is presently earning. It extends to whether the worker is likely to remain incapable of earning more in the future.

• Evidence that a worker's ability to work additional hours or undertake further duties may be highly persuasive, even where that capacity is not currently being utilised by the worker.

• Functional capacity assessments and Certificates of Capacity may provide the basis to establishing future earning potential.

• Where work capacity fluctuates because of external factors, such as the availability of work, insurers should consider whether the worker's current weekly earnings accurately reflects their future earning capacity.

• Evidence should be obtained proactively, addressing not only present work capacity, but also whether the worker could undertake additional work or work that could increase earnings in the future.

Authors: Kate Ralph, Caitlin Perritt & Sol Adamcewicz

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.