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Merit review MA02/18

Determination and reasons on Merit Review MA02/18 issued under section 7.13(4) of the Motor Accident Injuries Act 2017.

Nature of the decision: The amount of pre-accident weekly earnings

Our reference: MA02/18

Determination

The reviewable decision is affirmed.

Reasons

Background

  • The claimant is employed as a canteen manager. They were injured in a motor vehicle accident in January 2018. The insurer accepted their claim for weekly payments of statutory benefits under the Motor Accidents Injuries Act 2017 (“the Act”).
  • The dispute is about the calculation of the claimant’s pre-accident weekly earnings (“PAWE”). The amount of PAWE affects the amount of weekly payments of statutory benefits.
  • In March 2018, the insurer decided that the amount of the claimant’s PAWE was $1,036.63. The claimant applied for an internal review and submitted that their PAWE should be increased to include an additional amount of $25.10 per hour for 12 hours per week. On internal review dated April 2018, the claimant’s PAWE was increased to $1,149.61 due to a miscalculation in the claimant’s PAWE.
  • The claimant applied for a merit review by the Dispute Resolution Service dated May 2018.

Documents and information

  • I have considered the documents provided in the application and the reply and any further information provided by the parties.

Submissions

  • The claimant submits:
    • They entered into an agreement with their employer in November 2017, which was before the date of the subject motor vehicle accident;
    • They were not earning anything the day prior to their accident;
    • Their income was to include an additional amount of $25.10 per hour for 12 hours per week from January 2018 (the day following the accident) and onwards but for the accident;
    • The intention of the statute is to make up for their economic loss caused due to the accident by way of payment of statutory benefits;
    • Their wage loss is a direct consequence of the accident;
    • They were contracted to be on higher wages in November 2017 and would have been earning the extra income if for any reason they had been called in to work;
    • It is unfair and prejudicial that they are not paid the amount agreed upon, and
    • Their circumstances should be interpreted in a way to effect the fair and equitable purpose and intention of the statute.
  • The insurer submits:
    • Consideration must be given to whether the claimant falls under sub-clauses 4(2)(b) and (3) of Schedule 1 of the Act;
    • Based on the information the insurer has, the claimant entered into an agreement for a significant change in their entitlements to earn more on a weekly basis and this agreement occurred in the 12 months prior to the subject accident;
    • However, the claimant does not meet the requirements of sub-clause 4(2)(b) for an injured person to be entitled to additional PAWE on the basis of being entitled to additional earnings, it must be demonstrated that they had received the earnings prior to the subject accident, and
    • The email from their employer dated April 2018 shows that they were going to commence the additional hours in January 2018, therefore they became entitled to the additional earnings on the day post-accident.
  • The claimant made further submissions in May 2018 as follows:
    • The insurer has placed an incorrect emphasis on earnings received, whereas in fact sub-clause 4(3) of Schedule 1 makes reference to this sub-clause “if, during the 12 months immediately before the date of the motor accident … a significant change in his or her earning circumstances …, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred”;
    • This is specifically relevant in terms where they had come to an agreement prior to the date of the accident with their employer that after the date of the accident they would have worked increased hours, and
    • Becoming entitled to earn is the relevant section that should be applicable and on this basis, their earnings should be adjusted to be at the higher rate as at January 2018.

Legislation

In conducting my review, I have considered the following legislation and guidelines:

  • Motor Accident Injuries Act 2017 (NSW) (“the Act”)
  • Motor Accident Guidelines effective from 30 April 2018 (“the Guidelines”)
  • Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)

Pre-accdient weekly earnings

PAWE is defined by clause 4 of Schedule 1 of the Act. Sub-clauses 1 to 3 states:

(4) Meaning of “pre-accident weekly earnings” — general

(1) Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.

(2) In the following cases, pre-accident weekly earnings, in relation to an earner (other than a self-employed person) who is injured as a result of a motor accident, means:

(a) if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months—the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,

(a1) if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period—the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,

(b) if subclause (3) applies—the weekly average of the gross earnings received by the earner as an earner during the period from when the change of circumstance referred to in that subclause occurred to immediately before the day of the motor accident,

(c) if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person—the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.

(2A) The pre-accident period, in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.

(3) This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred.

  • The claimant submits that as they were contracted for higher wages by an agreement in November 2017 to start on the day after the subject accident, then sub-clause 4(3) should apply.
  • Sub-clause 4(2)(b) commences with the words “if subclause (3) app". Therefore, once an earner falls within sub-clause 4(3), sub-clause 4(2)(b) also becomes applicable, and the earner must also meet the requirements of that sub-clause.
  • Sub-clause 4(2)(b) requires that “the weekly average of the gross earnings received by the earner as an earner during the period from when the change of circumstance referred to in that subclause occurred to immediately before the day of the motor accident” [my emphasis].
  • The ordinary and grammatical sense of the words in this provision are that the earner’s earnings must be received by the earner immediately before the day of the motor accident. The claimant had not “received” any earnings for the additional hours due to commence in January 2018. Although the claimant submits that the provision should be interpreted in a way to affect a fair and equitable purpose and the intentions of the statute, the interpretation of the provision must be within the confines of the actual language employed.
  • I consider that the insurer has applied sub-clauses 4(2)(b) and (3) correctly.
  • The claimant was not to commence the additional hours until the day after the subject accident, therefore, they had not received the gross earnings immediately before the day of the motor accident. As none of the exceptions in sub-clause 4(2) apply, the claimant’s PAWE is calculated on the basis of the the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred (Schedule 1, sub-clause 4(1)).
  • The insurer’s decision of April 2018 is affirmed.

[NAME]
Dispute Resolution Service Merit Reviewer