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InPsych 2015 | Vol 37

August | Issue 4

Cover feature : Assessment of capacity

Assessment of capacity in compensable clients and their ability to work

Psychological assessment of functional capacity to work is important with compensable clients because in Australia we still lose too many people, via the generation of ‘medically unnecessary disability’, to long-term unemployment and relatively poorer health outcomes. There are multiple contributors to this phenomenon: liberal medical certification practises; dealing with mental health issues differently than physical injuries (more hands-off and more latitude); lack of access to work-focused treatments; confounding clinical status with psychosocial issues and excessive reliance on personal preferences in assessments; and various insurance policy parameters and unwitting incentives in some compensation schemes to maintain claims.

There are four key questions to address in the assessment of work capacity with compensable clients from a mental health perspective: (1) to what extent can the person attend work regularly, reliably and consistently; (2) to what extent can the person undertake various tasks in terms of range, complexity and within specified timeframes; (3) can the person abide by a behavioural code of conduct; and (4) will work make them sicker?

Typical referral scenarios

Jack has a psychological injury claim and been off work for four months, with GP certification for ongoing total work incapacity specifying an ‘adjustment disorder’ diagnosis. He is referred for a fitness for duty assessment.

Monica presents with persistent left shoulder and back pain, following a (compensable) transport accident some eight months ago. She has undertaken multiple treatments but there has apparently been negligible improvement in her reported pain and she has not been able to return to work.

Practice and ethical considerations

In the assessment of work capacity, diagnosis and symptoms are considered, but actual functioning is more important: what the person can actually do. Clinical diagnosis typically correlates poorly with functional capacity.

In the psychological injury referral above, the assessment indicated that Jack is maintaining most of his usual personal commitments, can drive and independently manage usual activities, regularly updates his Facebook page and daily responds to emails. He described an unsupportive manager and feeling disgruntled with his employer. This case highlights the difference between substantive work capacity and reported work capacity – Jack’s ability to maintain various involvements outside of work clearly indicates some substantive work capacity. Furthermore, it highlights that diagnoses such as adjustment disorder (currently the most common mental health diagnosis in compensable populations) indicate nothing at all about actual functional status. In these circumstances, barriers to engaging in employment are likely to be psychosocial in nature and not medical, and include poor motivation, job dissatisfaction and a sense of entitlement to benefits as redress for perceived slights. In the assessment of functioning these factors must be carefully differentiated from clinical status.

Persistent pain-related claims share a number of characteristics with psychological injuries. Psychosocial factors are critical in driving the transition from acute to chronic pain. However, insurers frequently face the following frustrating situation. In relation to Monica, a psychology assessment concluded she had no psychiatric condition and hence has work capacity from a strict mental health perspective. Concurrently, a surgeon’s report stated there were no organic factors contributing to the reported incapacity and that a mental health assessment was indicated. Such reports are still premised on an outmoded dualistic understanding of pain, whereas contemporary models of neuroplasticity and centralised sensitisation have advanced our understanding. The psychological factors contributing to the development of chronic pain are often not diagnosable disorders (although, particularly depression and PTSD are major recognised mental health disorder risks) – but rather factors such as fear-avoidance, trait emotionality, re-activated echoes from childhood adversity experiences, and the often poor manner in which these individuals are clinically managed. Clarification of contributing psychosocial issues typically provides a more compelling explanation.

A common dilemma for treating psychologists is a request from an insurer for assessment reports on capacity and liability issues. The core challenge centres on prioritising the therapeutic alliance as a treater, and thus being reluctant to report on non-work related and pre-existing factors. In such circumstances, it is prudent to report that functional capacity has not been formally assessed, rather than denying or deliberately understating these factors.

Considerations for test selection and interpretation

In the assessment of work capacity, the detailed clinical interview provides the most valuable information. Psychological testing can be useful – particularly to triangulate with interview information and mental status examination and numerous standardised psychopathology assessment tools are available (e.g., the PAI is widely used). Some of these tests have validity and malingering scales. Paradoxically, the DASS can be useful, precisely because it is so transparent in terms of what it is assessing. It is not uncommon to find DASS scores in the extreme range whilst interview behaviour and mental status examination are highly inconsistent. This is not necessarily indicative of malingering per se, but is more likely to reflect a sense of injustice or perceived lack of support: effectively, the person is communicating feeling hurt by their employer through inflating symptom inventory scores.


  • Cronin, S., Curran, J., Iantorno, J., Murphy, K., Shaw, L., Boutcher, N., & Knott, M. (2013). Work capacity assessment and return to work: a scoping review. Work, 44(1), 37-55.
  • Schult, M. L., & Ekholm, J. (2006). Agreement of a work-capacity assessment with the World Health Organisation International Classification of Functioning, Disability and Health pain sets and back-to-work predictors. Int J Rehabil Res, 29(3), 183-193.

Disclaimer: Published in InPsych on August 2015. The APS aims to ensure that information published in InPsych is current and accurate at the time of publication. Changes after publication may affect the accuracy of this information. Readers are responsible for ascertaining the currency and completeness of information they rely on, which is particularly important for government initiatives, legislation or best-practice principles which are open to amendment. The information provided in InPsych does not replace obtaining appropriate professional and/or legal advice.