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Your complete guide to compensation payouts for psychological injury

A psychological injury can look very different between individuals, however Health Direct found that 20% of Australians have some kind of mental illness that affects their thoughts, mood, behaviour or perception of the world. These mental health problems commonly result in depression, anxiety and even substance abuse. 

If you’ve found yourself with psychological injuries after a car accident, workplace bullying or any other situation where you are not at fault, you have the right to file a psychological injury claim. This article will explore the causes of this type of damage, how to prove you have it and how we helped a client earn $500,000 in compensation. 

What is considered a psychological injury?

No one goes to work expecting trauma to hit. Some forms of workplace psychological abuse can occur that would cause mental injury and therefore qualify you for compensation for treatment:


There is no single answer as to why mental stress occurs in some and not in others. In the previously mentioned article, Health Direct highlighted that it could be due to factors ranging from genetic mutation, your childhood environment or your life experiences.

While the cause of psychiatric injury isn’t exactly clear, the signs that you do have it are becoming more researched and supported. Some signs that you may be suffering from an undiagnosed mental illness include:

  • The persistent feeling of sadness and loss of interest in things you once loved.
  • The inability to set aside worry and restlessness despite the impact of the event ahead.
  • The constant need for items and patterns to align in a particular way or a growing fear of germs.
  • The avoidance or flashbacks of unwanted memories related to an event or series of events that caused you trauma.
  • The consistent shift in moods without explanation from high energy to depressive dissociation from reality.

Mental health treatment for emotional distress can come in the form of therapy sessions, lifestyle changes or medical treatment. If you were injured in an accident you did not cause, the bill for treatment should not be on your shoulders to bear, instead — file a claim.

How do you prove psychological injury?

To qualify for a psychological injury compensation claim, you’ll need to be assessed as having a Whole Person Impairment (WPI) of 15% or more. 

Proving injury is the most important part of earning compensation to cover your medical expenses. The first step to filing a claim is gathering medical evidence outlining your diagnosis and treatment plan from reputable health professionals. Receiving treatment from a psychologist for 3 months can not only help your mental recovery, but it will also allow you to prove psychological injury as part of your compensation claim. 


If you take your psychological injury compensation claim to court, the judge will need to see that you are pursuing treatment for your emotional distress. Taking on management action for your psychological trauma means setting up your future for success and committing to a long and happy life.

Filing a psychological injury claim

As an employee you have the right to claim any pain and suffering you may be going through as a result of your job. To make a claim for psychological injury at work, you must:

  1. Inform your employer that you are experiencing a work-related mental injury and fill in any forms they give you to document your experience. 
  2. Prepare to give details about your situation at work that has resulted in mental damage, including symptoms, to your employer. 
  3. Seek medical attention from a private physician to get a professional opinion on your symptoms. 
  4. Provide your employer with a copy of the notice for their documentation. 
  5. Contact your insurance if your employer hasn’t already done so to get a worker’s compensation claim started. 

If you are experiencing a psychological injury or emotional damages as a result of an accident such as a car crash, you would follow similar steps. In this case you would contact your insurer and lawyer directly. 

You have six months after seeking professional help to file a claim. From there, it usually takes between 12 to 18 months to receive compensation, however it may take up to three years if the claim goes to court. Your common law solicitors at Gerard Malouf & Partners are here to support your journey toward compensation so you can focus on recovery. Make sure to gather the following information to help support your claim:

  • Background information on how much you need to be covered regarding your current psychological condition. 
  • Written details of your injury and mental impairments you’re experiencing.
  • Facts of the event that lead to your injury.
  • Medical permanent impairment report from an assessor.
  • Work history that could be relevant to your psychological injury.
  • Records of any previous injury or condition that could have played a role in your current injury. 
  • Documentation regarding compensation payouts related to previous injuries or conditions.
  • Information on how your employer may have breached their duty of care to you. 

What is the average compensation payout for psychological injury?

The average compensation payout will depend on your level of injury. The goal of compensation is to cover your needs while you recover from the injury. For psychological injury, this could mean permanent impairment compensation which would usually result in a lump sum. 


For a successful psychological claim, you could receive any one or a combination of the following:

  • For 15% or less whole person impairment, your lump sum compensation payment could fall anywhere between $22,480 and $631,360.
  • If you miss work for 13 weeks or more, you will receive 95% of your pre-injury wages, which decreases to 80% starting week 14. As of June 2022, your weekly earnings will max at $2,318.10. 
  • Reimbursement of your eligible medical and recovery expenses. 
  • An additional lump sum based on your past and future lost earnings. This payment is added on top of any other impairment compensation you have earned. 

Book an appointment with our expert team

CASE SUMMARY: Successful psychological injury claim

Worker receives over $500,000 for psychological injuries arising from workplace bullying and harassment.

Our Approach

Our client sustained a psychological injury during the course of his employment as a result of workplace bullying and harassment. Under the current Workers Compensation Scheme, a minimum threshold of 15% whole person impairment (WPI) is required to seek lump sum compensation for a psychological injury arising from a workplace incident. 

This threshold is much higher and more difficult to achieve compared to a physical injury, which requires only 11% whole person impairment.

For this particular client, his quality of life following this psychological injury took a major impact and rendered him effectively unemployable for the foreseeable future.

Following his entitlements for lump sum compensation, where he satisfied the impairment threshold of 15% whole person impairment, we were able to commence a work injury damages claim (common law negligence claim). This was only possible because the minimum threshold requirement of 15% whole person impairment for a lump sum claim is the exact same threshold required in order to pursue a work injury damages claim.

Having already satisfied the impairment rating required, we knew the claim had merits in a work injury damages claim.

After ongoing negotiations with the insurer, the parties ultimately agreed to a settlement that resulted in our client receiving over half a million dollars in payments for economic loss.


Our client placed his trust in Gerard Malouf & Partners to achieve a maximised compensation. For our client, the outcome, coupled with the fact that the process had concluded after many years of turmoil, put him at ease. With this now behind him, he hopes for a brighter future.

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Working with GMP Law to build a successful psychological injury claim

Working with the right lawyer is essential to ensure you receive the compensation you deserve. At Gerard Malouf & Partners our experienced lawyers will work closely with you to help you build the strongest case possible. 

From listening to the details of your case to gathering information and working toward getting you a lump sum compensation payout, Gerard Malouf & Partners are here to support you every step of the way. We offer our legal services on a no-win, no-fee basis, so you don’t need to worry about the legal costs until you’ve won compensation.

Contact us today for a no-obligation consultation.


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About Us
Gerard Malouf & Partners have provided friendly, experienced legal advice to communities across Australia for over 35 years. Our Personal Injury Lawyers have taken on ten’s of thousands of cases and we are proud to have won billions of dollars for our clients.
Meet the diverse and dynamic team of compensation lawyers and supporting staff that have made this all happen below. Our multi-lingual team can discuss your claims in Arabic, Assyrian, Turkish, Greek, Italian, French, Serbian, Croatian, Armenian, Mandarin, Hindi, Punjabi or Malayalam.
Meet the diverse and dynamic team of compensation lawyers and supporting staff that have made this all happen below. Our multi-lingual team can discuss your claims in Arabic, Assyrian, Turkish, Greek, Italian, French, Serbian, Croatian, Armenian, Mandarin, Hindi, Punjabi or Malayalam.

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