Start with the NSW Guidelines, not an AMA table in isolation
A correct report identifies the NSW chapter and paragraph first, then the adopted AMA table or method where relevant. Using an AMA5 value that NSW has modified, excluded or replaced can produce the wrong result even if the arithmetic is accurate.
Which assessment system applies?
Many physical body systems
NSW adopts AMA5 with specific modifications for areas including spine, upper and lower limbs, neurological, respiratory, cardiovascular, digestive, urinary, endocrine, skin and haematopoietic impairment.
Vision
NSW uses AMA4 Chapter 8 for visual-system impairment rather than AMA5's visual chapter.
Hearing
Occupational hearing loss is assessed under the NSW hearing methodology using audiometric data and the required binaural calculation. A generic AMA5 percentage should not be substituted.
Primary psychiatric impairment
Primary psychiatric impairment uses the NSW Psychiatric Impairment Rating Scale (PIRS). It is assessed separately from physical impairment. Secondary psychiatric impairment is not assessed for WPI.
How a NSW permanent impairment percentage is built
For an AMA5 and NSW method review, a valid WPI opinion should show a chain from the accepted diagnosis to the applicable NSW method, measured findings, any regional conversion, any permitted combination and any pre-existing impairment deduction. This matters when checking whether the report has applied the controlling NSW modification to the relevant AMA method; a report that only records an examination does not explain the percentage.
1. Confirm the body system and diagnosis
Spine, upper limb, lower limb, hearing, respiratory, skin, neurological and primary psychiatric impairments use different methods. The referral should identify the accepted injury and any consequential physical condition being assessed.
2. Decide whether maximum medical improvement has been reached
In an AMA5 and NSW method review, NSW Guidelines paragraph 1.15 requires a well-stabilised condition unlikely to change substantially in the next year, with or without treatment. If adequate treatment could still materially improve the assessed condition, paragraph 1.16 requires the timing to be deferred.
3. Apply the correct NSW/AMA method and measure the required findings
When preparing an AMA5 and NSW method review, the NSW Guidelines prevail over AMA5. The body system determines whether the assessor measures DRE clinical features, active joint movement, nerve sensory and motor loss, audiometric thresholds, pulmonary function, skin criteria, neurological function or the six PIRS domains.
4. Convert regional values and combine only where permitted
For an AMA5 and NSW method review, a digit, hand, upper-extremity, foot or lower-extremity value may require conversion before it becomes WPI. Permitted physical WPI values use the AMA5 Combined Values Chart rather than ordinary addition. For example, 20% WPI combined with 10% WPI is 28%, because the second value applies to the remaining 80%. This arithmetic only demonstrates the chart.
5. Explain deductions and excluded methods
In an AMA5 and NSW method review, a pre-existing diagnosis does not justify an automatic deduction. Section 323 first requires a finding that a previous injury, pre-existing condition or abnormality actually contributed to the assessed degree of permanent impairment. Only the proportion due to that earlier impairment is deducted. AMA5 Chapter 18 pain is excluded; pain is ordinarily addressed through the underlying diagnosed condition. Primary psychiatric WPI is assessed separately and cannot be combined with physical WPI, secondary psychiatric impairment is not assessed for WPI, and NSW excludes using ADL to alter upper- or lower-extremity ratings.
Worked illustration: a pre-existing impairment deduction
In this illustration of an AMA5 and NSW method review, assume the body-system method produces 20% WPI and the assessor first finds that an earlier condition contributed to that assessed impairment. If the extent of that contribution is too difficult or costly to determine, section 323 permits an assumed deduction of one tenth of the impairment unless that assumption is at odds with the available evidence. One tenth of 20 is 2, so the arithmetic produces 18% WPI after deduction.
The threshold finding matters. In Walton v State of New South Wales (Hunter New England Local Health District) [2026] NSWSC 824, the Court explained that the mere existence of a condition, or evidence that it caused pain, is not enough. The condition must have increased or contributed to the degree of impairment being assessed before the one-tenth assumption can be used. The figures above explain deduction arithmetic only and do not predict an individual result.
Read the Walton section 323 case note or section 323 in the current 1998 Act.
Sources for this framework
Sources used for an AMA5 and NSW method review: NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment, Fourth Edition, paragraphs 1.6-1.24 and 1.27-1.31; AMA5 Chapters 1-2 and the Combined Values Chart at pages 604-606. NSW uses AMA4 Chapter 8 for the visual system. The body-system guides identify the additional paragraph and table where relevant.
Choose the body-system permanent impairment guide for the measurements, conversion steps and verified examples relevant to the injury.
Examples of NSW modifications that matter
- NSW spine assessment generally uses the Diagnosis-Related Estimate method and excludes the AMA5 spine range-of-motion method.
- AMA5 Chapter 18 pain impairment is excluded. Pain is ordinarily addressed within the method for the underlying condition.
- Activities of daily living do not alter calculated upper- or lower-extremity ratings under NSW paragraph 1.24.
- Primary psychiatric and physical impairment cannot be combined.
- A digit, hand, upper-extremity, foot or lower-extremity value may need a specified conversion before it becomes WPI.
Current process
Permanent impairment assessments from 1 July 2026 to mid-2027
NSW is in an interim period. Separate examinations arranged by the worker and insurer can still occur, but an interim assessment must be performed by an assessor on SIRA's register. Liability for the injury must have been determined before an interim assessment is made.
Independent legal advice is compulsory
A worker must receive independent legal advice about the full legal implications before being seen by a permanent impairment assessor. Advice is also required before entering an impairment agreement.
The assessment can affect several entitlements
The principal assessment is used across weekly payments, medical and related treatment expenses, Section 66 lump sum compensation, commutation access and work injury damages. It is not only a lump sum calculation.
Agreement or medical dispute
If the worker and insurer agree on the degree of impairment, they may enter a written impairment agreement. If they do not agree, the insurer must give written notice and either party may refer the disagreement to the Personal Injury Commission as a medical dispute, supported by medical evidence.
A further assessment is tightly restricted
A second or later assessment during the interim period requires agreement that there appears to be unexpected and material deterioration. The deterioration must be capable of increasing the impairment by at least a further 10 percentage points. Ordinary age-related deterioration does not meet that test.
Last reviewed 20 July 2026. Sources: SIRA worker guidance and SIRA interim assessment guidance. See also the PIC dispute guide.
Pre-existing conditions and section 323
The assessment is not reduced merely because the records mention degeneration, an earlier diagnosis or previous pain. The assessor must first find that the earlier injury, condition or abnormality contributed to the degree of permanent impairment. The proportion due to that contribution is then deducted.
If the proportion is too difficult or costly to determine, section 323 permits a one-tenth assumption unless that would be inconsistent with the evidence. The Walton decision guide explains why this causal step cannot be skipped.
Evidence and report checks
- Identify the accepted injury and body system actually referred for assessment.
- Confirm that the condition is permanent and fully ascertainable at maximum medical improvement.
- Check the NSW paragraph and adopted guide/table used.
- Compare the required objective findings with the examination, investigations and treatment records.
- Trace regional conversions, permitted combinations and rounding.
- Check every deduction against section 323 and the records.
- Keep the WPI opinion separate from work capacity, treatment necessity and legal liability questions.
Common questions
Does NSW use AMA5 for every permanent impairment assessment?
No. The NSW Workers Compensation Guidelines control. They adopt and modify AMA5 for many body systems, use AMA4 Chapter 8 for vision, a separate NSW hearing methodology for hearing loss and PIRS for primary psychiatric impairment.
Can a worker calculate WPI from a diagnosis or scan?
Usually not. The method may require clinical signs, measured movement, neurological loss, functional class, test results or another defined criterion. A diagnosis, imaging abnormality, operation or pain level does not by itself establish a percentage.
Why is AMA5 Chapter 18 not used?
The NSW Guidelines exclude AMA5 Chapter 18 pain impairment. Pain is generally considered through the assessment method for the underlying diagnosed condition. CRPS follows the specific NSW method rather than a generic Chapter 18 pain rating.
How are several physical impairments combined?
Each value must first be expressed in the correct unit and converted to WPI where required. Permitted physical WPI values are then combined using the AMA5 Combined Values Chart, not ordinary addition. Overlapping loss must not be counted twice.
What should a reliable report show?
It should identify the accepted injury, maximum medical improvement, controlling NSW paragraph, adopted table or category, measured findings, conversions, permitted combinations and any section 323 deduction.
Question about the method used in an assessment?
Call (02) 7233 3661 with the report available, or request a review through the claim-check form.
Last reviewed 20 July 2026. This information is general and does not replace advice from a qualified permanent impairment assessor or legal advice about a particular claim.