When sleep does not count: clarifying impairment assessment for sleep disorders

Poor sleep is a common complaint following a workplace injury, particularly where a worker is experiencing ongoing pain, medication side effects or other consequential symptoms. But as this recent decision shows, sleep disturbance does not automatically amount to a separate assessable impairment under the NSW Workers Compensation Scheme.

In Lachlan Shire Council v Stanley [2025] NSWPICMP 765, the Medical Appeal Panel confirmed that a sleep and arousal disorder will only be assessable in limited circumstances - namely, where there is a primary sleep disorder following neurological injury. Sleep problems that are secondary to pain, reflux or another compensable condition should generally be considered as part of the underlying injury, rather than assessed separately.

For employers and insurers, the decision is a useful reminder to closely scrutinise the diagnosis, causation evidence and medical reasoning behind sleep-related WPI claims, particularly where there is a risk of double counting impairment.

What happened in Stanley?

Mr Stanley (the worker) was employed as a plant operator and labourer and sustained a lumbar spine injury on 17 February 2014. Following the injury, the worker alleged several consequential conditions, including weight gain leading to bariatric surgery, upper and lower gastrointestinal symptoms, and a sleep disorder. Litigation between the parties extended over a number of years and involved multiple disputes before the Commission.

In 2022, the worker presented a claim for 35% whole person impairment (WPI), comprising 7% WPI to the lumbar spine, 13% WPI to the upper and lower gastrointestinal tract, and 20% WPI for a sleep and arousal disorder. The sleep component was described as sleep disturbance due to chronic pain, prescribed medications with respiratory suppressant effects, and reflux symptoms following bariatric surgery. There was also an assessment for sleep apnoea.

The respondent investigated the impairment claim, which was declined in November 2022. The respondent relied on medical evidence from a sleep physician, a gastroenterologist, and an orthopaedic surgeon. Those practitioners assessed 5% WPI for the lumbar spine, 1% WPI for sleep and arousal disorder, and 0% WPI for the gastrointestinal tract.

Importantly, the sleep physician identified mild obstructive sleep apnoea as the only source of impairment and considered this unrelated to the work injury. Any residual sleep disturbance was attributed to reflux and pain, neither of which warranted assessment under the relevant guidelines.  

Why the sleep impairment assessment was challenged

The worker commenced further proceedings in the Personal Injury Commission in mid‑2024. The dispute concerned impairment to the gastrointestinal tract and the alleged sleep disorder. The matter was heard before Member Benk, who ultimately found the worker suffered from a consequential sleep disorder. However, in doing so, she said:

“Initially I was persuaded by the opinion of Dr Thomas who suggested that the sleep difficulties arose out of a combination of symptoms arising from the lumbar spine and gastrointestinal tract and therefore do not attract an assessment with reference to the impairment tables, as this could possibly allow for duplication in assessments. This is entirely correct, however overall, such matters ultimately become the province of consideration by a Medical Assessor”.

The matter was subsequently referred to two Medical Assessors, Dr Anderson and Dr Honeyman, for the respective assessments of the spine, gastrointestinal tract, and sleep disorder. The respective Medical Assessment Certificates (MAC) were issued, which contained a 15% WPI assessment for a sleep and arousal disorder.

On receipt of the MACs, the respondent identified several issues and an appeal was lodged. The core submission in respect of the sleep and arousal disorder assessment challenged the Medical Assessor’s compliance with Part 5.10 of the SIRA Guidelines, which says an assessment of a sleep and arousal disorder “refers to assessment of primary sleep disorders following neurological injury”. 

In its submissions, the respondent drew attention to the fact no primary sleep disorder had been diagnosed. Any sleep disturbance was attributed by the Medical Assessor as secondary to pain or reflux, rather than as a primary disorder following neurological injury. Accordingly, there was no basis for the assessment to have been made.

The submissions drew an analogy with chronic pain, which is assessed through the underlying condition rather than as a standalone impairment. Support for this approach was found in the 2024 decision of Bucca v QBE Insurance (Australia) Limited[1]. The Court observed sleep was not identified as a body system for independent assessment. Rather, the indirect effects of an injury (such as pain) ought to be incorporated into assessment of the originating injury.