What counts as a psychological injury
For workers compensation purposes, a psychological injury (sometimes called a mental injury, mental disorder, or psychological impairment) is a diagnosable mental health condition arising from your employment. Common diagnoses underlying claims:
- Major depressive disorder
- Generalised anxiety disorder, social anxiety, panic disorder
- Post-traumatic stress disorder (PTSD) and complex PTSD
- Adjustment disorders
- Burnout and occupational stress reactions (where they meet diagnostic criteria for an underlying condition)
- Acute stress reactions and acute trauma responses
Conditions diagnosed by a treating GP, psychologist, or psychiatrist are eligible — there is no requirement that the diagnosis come from a specialist, although insurer-instructed psychiatric assessment is common in disputed cases.
When a workplace mental injury qualifies
To qualify under workers compensation, the work must have caused or significantly contributed to the condition. Every state and territory has a slightly different threshold:
| State / scheme | Causation threshold |
|---|---|
| NSW (icare) | Employment a "substantial contributing factor" |
| VIC (WorkSafe) | Employment "the significant contributing factor" |
| QLD (WorkCover QLD) | Employment "the major significant contributing factor" |
| WA (WorkCover WA) | Employment "a contributing factor and the contribution was significant" |
| SA (ReturnToWorkSA) | Employment "the significant contributing cause" |
| TAS (WorkCover TAS) | Employment "a contributing cause and the contribution was substantial" |
| ACT (private + Comcare) | Employment "a substantial contributing factor" |
| NT (NT WorkSafe) | Employment "a material contributing factor" |
The "reasonable management action" exclusion applies in some form across all schemes — psychological injuries caused predominantly by reasonable performance management, transfer, discipline, or redundancy actions are excluded. The exception turns on what was reasonable in the specific case.
Evidence that wins psychological injury claims
Psychological injury claims succeed or fail on evidence quality. The strongest evidence packs include:
- Treating psychiatrist or psychologist report — diagnosis, treatment history, opinion on causation linking the condition to specific workplace factors
- Treating GP records showing pattern of symptoms, treatment, work incapacity certificates
- Contemporaneous workplace evidence — emails, text messages, performance reviews, HR complaints, witness statements about the workplace conduct or stressors
- Detailed witness statement from you describing specific incidents with dates, people, and what was said or done
- Independent medical examiner report if requested by the insurer (typically a psychiatrist)
Vague or generalised reports ("workplace stress causing depression") are weaker than reports tying specific events to specific symptoms with clinical reasoning.
What you can claim
- Weekly payments — typically 80–95% of pre-injury wages while you're certified unfit, capped, with reductions over time in some schemes
- Medical and treatment expenses — psychiatrist, psychologist, medications, hospitalisation, residential treatment programs
- Lump-sum impairment compensation — for permanent psychiatric impairment (commonly assessed using PIRS, the Psychiatric Impairment Rating Scale)
- Common-law damages — in serious cases caused by employer negligence (limited to specific states and thresholds)
- Vocational rehabilitation — return-to-work programs, retraining
The most common combined value of a psychological injury claim is in the $80,000 to $400,000 range across statutory benefits and lump sums, though serious common-law cases can substantially exceed this.
State-by-state schemes
Each Australian state runs its own workers comp scheme. Time limits, benefit caps, and PIRS thresholds differ. The biggest practical differences:
- NSW — icare scheme, free legal assistance via the Independent Review Office (IRO) means injured workers often pay nothing for legal advice in disputes
- VIC — WorkSafe Victoria, separate "serious injury" gateway for common-law damages
- QLD — WorkCover QLD, common-law damages available without statutory thresholds in negligence cases
- WA — WorkCover WA with 15% whole-person impairment threshold for common law
See our workers compensation hub for state-specific guides.
Common reasons psychological injury claims are rejected
- "Reasonable management action" — the most-cited exclusion. Whether the action was reasonable is contestable; many initial rejections are reversed on review when the surrounding context is properly examined.
- Pre-existing condition — insurers commonly cite prior mental health history. The legal test is whether work materially aggravated the condition, not whether you ever had symptoms before.
- Insufficient diagnosis evidence — initial GP-only diagnoses can be challenged; a treating psychiatrist or psychologist report addresses this.
- Disputed causation — insurer says non-work factors caused the condition. Detailed timeline and treating-clinician opinion linking work events to symptoms responds to this.
Related topics
- Workplace bullying compensation — claim pathway specific to bullying-induced injury
- Workplace stress claim guide — chronic stress conditions and burnout claims
- PTSD workers compensation — first responders, healthcare workers, trauma exposure
- TPD claims — for permanent mental health conditions, your super may pay a separate lump sum
Psychological injury claims by state
State-specific guides covering causation thresholds and the reasonable management action exclusion:
- NSW psychological injury — icare scheme, "substantial contributing factor" test, IRO funded legal advice
- Victoria psychological injury — WorkSafe, "the significant contributing factor", "serious injury" gateway for common law
- Queensland psychological injury — WorkCover QLD, strict "major significant" causation, common law without WPI threshold
- WA psychological injury — 2023 Act, 15% WPI threshold for common law