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AAD v QBE Insurance (Australia) Ltd [2018] NSWDRS MR 004 (formerly Merit Review MA 04/18)

Overview

Jurisdiction: Merit reviews

Catchwords: Weekly benefits – Statutory benefits – Pre accident weekly earnings – PAWE – no capacity for work fitness certificate – self employed – multiple sources of income – post accident earning capacity

Legislation CitedParties:

Parties:

  • AAD - claimant
  • QBE Insurance (Australia) Ltd – insurer

Disclaimer: This decision has been edited to remove all Unique Personal Identification including the name of the Claimant and injured persons.

Merit Review Certificate

View the certificate

Issued under section 7.13(4) of the Motor Accident Injuries Act 2017

The Claim
Claimant: AAD
Insurer: QBE Insurance (Australia) Limited
Claim Number: 36005216701

The Reviewable Decision
Decision Maker: Ozlem Sancar
Date of Decision 12 April 2018
Nature of Decision The amount of weekly payments of statutory benefits
The Merit Review
Our Reference: 10033203
Merit Reviewer: James Lowe
Date of this Certificate: 3 July 2018

Merit Reviewer’s Determination

This determination relates to a merit review matter, which is a reviewable decision under Schedule 2(1)(s) of the Motor Accident Injuries Act 2017 (the Act).

The merit review matter is about the amount of weekly payments of statutory benefits that is payable to AAD under Division 3.3 (weekly payments of statutory benefits to injured persons).

The determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
    • ○   The amount of AAD’s pre-accident weekly earnings (PAWE) is $1,638.77.
    • ○   Under section 3.4(2) of the Act, AAD’s entitlement to weekly payment of statutory benefits is $1,556.83.
  • Effective Date: This determination has effect from 10 March 2018. A brief statement of my reasons for this determination are attached to this certificate.

James Lowe

Dispute Resolution Service Merit Reviewer

Reasons

Background

1.   AAD was injured in a motor accident on 10 March 2018.

2.   On 12 April 2018, the insurer wrote to AAD and advised him that he was entitled to weekly payments of statutory benefits, which would be calculated on the basis that his PAWE is equal to $1,316.43. That decision covered the weekly payments of statutory benefits payable by the insurer to AAD from the date of accident.

3.   AAD applied for an internal review by the insurer. On 7 May 2018, the insurer gave AAD written notice that it had calculated his PAWE to be $418.57.

4.   AAD disputes the insurer’s decision and lodged an application for merit review with the Dispute Resolution Service on 25 May 2018. The application has been made in accordance with section 7.12(1) of the Act and the Motor Accident Guidelines (the Guidelines).

Documents and information

5.   I have considered the documents provided in and submitted with the application and the reply and any further information that has been provided to the Dispute Resolution Service and exchanged between the parties.

Submissions

6.   In the application for merit review, AAD submits the calculation of his weekly income is incorrect and it has not been calculated in the same manner for every week. He submits the calculations differ as per the insurer’s convenience. AAD submits that the insurer is not even able to explain their calculation criteria.

7.   AAD also submits that his weekly income should be the same according to the no capacity for work fitness certificate and the insurer does not have a valid answer, saying it is all computerised. He submits that his income should have been calculated similar every week, but what he has been given is differing from each week which is resulting towards his huge loss again after the accident.

8.   In reply, the insurer submits that it was not previously afforded the opportunity to review the further documentation and/or payslips provided within the application to the Dispute Resolution Service. The insurer submits that some of the Uber payslips are outside the required 52 week period to calculate PAWE and therefore should not be considered within the merit review.

9.   Since the insurer’s reply, AAD has provided further submissions that have been exchanged with the insurer. I have dealt with the issues raised by those further submissions in the reasons below.

Legislation

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

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

Pre-accident weekly earnings

11.   Clause 4(1) of Schedule 1 of the Act defines “PAWE” as:
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.

12.   Subclause (2) offers different methods to calculate PAWE. However, those other methods do not apply because AAD was a self-employed person when the motor accident occurred and he was obtaining earnings from other sources during the period of 2 years immediately preceding the motor accident.

13.   AAD has not referred for merit review the insurer’s decision that he is an earner who is injured as a result of a motor accident. Therefore, his PAWE is the average of the gross earnings he received during the 12 months immediately before the day on which the motor accident occurred (hereafter “the relevant period”) under clause 4(1) of Schedule 1.

14.   During the relevant period, AAD received earnings from Dash Mesh, PMK RK, Uber, Pristine Group, Kingsgrove RSL and DSB Group that totalled $85,450.41. The weekly average of that amount is $1,638.77. These figures are based on the calculations below.

Dash Mesh

15.   I have before me two payslips issued by Dash Mesh to AAD. The most recent payslip is dated 18 October 2017 and shows that his tax year to date gross earnings were $5,384.60.

16.   I also have before me a PAYG payment summary that was issued for the previous tax year, being 1 July 2016 to 30 June 2017. It shows that AAD’s gross earnings were $2,454 during that time. However, it is only the gross earnings received by AAD from 10 March 2017 that can be included in the calculation of his PAWE.

17.   AAD submits that he did receive a portion of the $2,454 from 10 March 2017 to 30 June 2017. I consider this submission is consistent with him earning $5,384.60 from 1 July 2017 to 18 October 2017. I therefore accept that he did receive some of the earnings that are shown in the PAYG payment summary during the relevant period. AAD estimated the amount he received was $759.73. The insurer was provided the opportunity to respond to AAD’s submissions and no response was given.

18.   On my calculation, AAD arrived at $759.73 by apportioning the full amount of $2,454 to the number of days that fall within the relevant period. This is set out below:

(formula to be inserted)

113 (days that fall within the relevant period) x $2,454 gross earnings = $759.73 365 (days covered by the payment summary)

19.   There is limited information before me determine the earnings AAD received from Dash Mesh from 10 March 2017 to 30 June 2017. Again, I do have a PAYG Payment summary which shows that AAD earned $2,454 gross from Dash Mesh between 1 July 2016 and 30 June 2017. This, together with his payslip showing that he received $5,384.60 from 1 July 2017 to 18 October 2017, in my view, supports that AAD did receive a portion of the $2,454 on or after 10 March 2017. Any amount received by AAD before that time is to be excluded from the calculation of his PAWE. On this information, it is my view that AAD provides the best estimate of the gross earnings he received for his employment with Dash Mesh from 10 March 2017 to 30 June 2017. It equally considers the days that fall in and outside of the relevant period.

20.   I am therefore persuaded that the gross earnings received by AAD from Dash Mesh during the relevant period is $6,144.33 ($5,384.60 + $759.73).

PMK RK

21.   AAD received earnings as a contractor for PMK RK from 10 March 2017 to 8 April 2017. His bank statement shows the amounts equal $2,440 and AAD confirmed this was his “tax free” earnings and that he incurred no business expenses for undertaking this contracting work.

Uber

22.   AAD submits that he received $40,154 from Uber during the relevant period. However, I consider he actually received $40,151.83, as this is the amount that his weekly pay records issued from Uber show that he received.

23.   AAD advised that Uber automatically deducted its own commission and fees from his pay, but his business expenses during the relevant period totalled $2,210. He incurred business expenses for operating costs which includes petrol, servicing his car and brake pads, vehicle insurance, car wash, owning a mobile and making calls.

24. As PAWE requires consideration of the “gross earnings received by the earner as an earner”, I must look at what the earner earns or profits from his or her skills and labour when calculating his or her PAWE. Put simply, AAD’s business expenses are not to be included in the calculation of PAWE. His gross earnings as an earner is the amount that he received from Uber minus operating costs.

25.   Accordingly, I find that the gross earnings AAD received during the relevant period for his work with Uber equals $37,941.83 ($40,151.83 - $2,210 = $37,941.83).

Pristine Group

26.   AAD’s 2017 PAYG payment summary for his employment with Pristine Group shows that his gross earnings were $22,536. He earned that amount between 10 January and 30 June 2017, which has 113 days that fall on or after 10 March 2017.

27.   AAD was also asked to clarify how much of the $22,536 he received during the relevant period. He estimated $14,805.62. On my calculation, AAD has again apportioned his total gross earnings with the number of days that fall within the relevant period. That is:

(formula to be inserted)

113 (days that fall within the relevant period) x $22,536 gross earnings = $14,805.62 172 (days covered by the payment summary)

28.   On balance, I am persuaded that AAD did receive some of the $22,536 of earnings as an earner during the relevant period as the number of days covered by the payment summary predominately falls after 10 March 2017, by approximately two-thirds. On balance, I do not consider that AAD received the full $22,536 outside the relevant period, being the period between 10 January 2017 and 9 March 2017. However, I am also not persuaded that AAD earned the full $22,536 from 10 March 2017 to 30 June 2017, as the information described earlier supports that he also worked for PMK RK, Uber and Dash Mesh during that time.

29.   I again note that there is no information before me to determine the exact gross earnings AAD received from Pristine Group during the relevant period. Consistent with my earlier reasons for AAD’s employment with Dash Mesh, it is my view that the amount provided by AAD, being that he received $14,805.62 in gross earnings, is the best estimate of the gross earnings he received for his employment with Pristine Group from 10 March 2017 to 30 June 2017. It equally considers the days that fall in and outside of the relevant period.

Kingsgrove RSL

30.   The information before me to assess AAD’s earnings with Kingsgrove RSL is a PAYG payment summary for the 2016/2017 tax year and his bank statement which shows the earnings he received after 30 June 2017.

31.   The 2016/2017 PAYG payment summary shows that AAD’s gross payments equalled $1,928. AAD submits that he received the full amount after 30 May 2017. This falls within the relevant period.

32.   On balance, I accept AAD’s submission. It is consistent with his pattern of regularly receiving earnings from Kingsgrove RSL soon after 30 June 2017, when the PAYG payment summary ends. His bank statement shows that the total earnings he received from Kingsgrove RSL from 1 July 2017 until 27 September 2017 was $4,256.

33.   AAD advised that the $4,256 paid into his bank account was the after tax or net amount. As PAWE contemplates the gross earnings received by the earner, AAD and the insurer were informed that the merit reviewer would calculate the gross amount by adding the tax-free threshold amounts obtained from the 2018 weekly tax table. This results in $4,403 gross earnings, as set out in the table below:

 

Date received into AAD’s bank account

(A) net amount deposited

 

(B) tax withheld

(A) + (B) gross payment

Kingsgrove RSL

5 July 2017

$447

2018 weekly tax tables (tax free threshold)

Kingsgrove RSL

12 July 2017

$414

$16

$430

Kingsgrove RSL

19 July 2017

$483

$43

$526

Kingsgrove RSL

26 July 2017

$376

$5

$381

Kingsgrove RSL

2 August 2017

$352

$0

$352

Kingsgrove RSL

9 August 2017

$379

$6

$385

Kingsgrove RSL

23 August 2017

$373

$5

$378

Kingsgrove RSL

30 August 2017

$367

$3

$370

Kingsgrove RSL

13 September 2017

$430

$23

$453

Kingsgrove RSL

20 September 2017

$414

$16

$430

Kingsgrove RSL

27 September 2017

$221

$0

$221

TOTAL $4,256   $147

34.   In light of the above, I find the gross earnings AAD received with Kingsgrove RSL during the relevant period is equal to $6,331 ($1,928 + $4,403).

DSB Group

35.   AAD has provided his payslips for his employment with DSB Group. The gross earnings he received from 5 July 2017 to 17 January 2018 equal $17,787.63.

Calculation of PAWE

36.   In light of the information before me and the reasons provided above, I find the gross earnings received by AAD as an earner during relevant period is $85,450.41, by adding the following amounts:

$6,144.33 (Dash Mesh) + $2,440 (PMK RK) + $37,941.83 (Uber) + $14,805.62 (Pristine Group)
+ $6,331 (Kingsgrove RSL) + $17,787.63 (DSB) = $85,450.41

37.   AAD’s PAWE is the weekly average of the gross earnings received by him as an earner during the 12 months immediately before the day on which the motor accident occurred. There was 365 calendar days or 52.14 weeks in that 12 months.

38.   I therefore find the amount of AAD’s PAWE is $1,638.77 (rounded to the nearest cent), calculated as follows: total earnings received $85,450.41 ÷ 12 months (52.14 weeks) = $1,638.774[…].

Calculation of weekly payments of statutory benefits

39.   AAD has also referred for merit review the insurer’s calculation of his statutory benefits. He submits:
Lastly, I want to request you to kindly prepare the appropriate table for my weekly earning as per the fitness certificate because the days calculated are different in every week and is not consistent by the insurance. Neither they are able to explain me the reason for the counted different days every week. This is just a friendly reminder from my end to please process my request.

40.   The certificates of fitness submitted by AAD cover the period 16 March 2018 to 12 May 2018, a period of 8 weeks and 2 days.

41.   AAD’s entitlement weekly payments of statutory benefits during the first 13 weeks is to be determined under the first entitlement period, which means:

first entitlement period, in respect of an injury resulting from a motor accident, means the period of 13 weeks that starts on the day after the day of the motor accident.

42.   The amount of weekly payments of statutory benefits during the first entitlement period is determined under section 3.4 of the Act. Subclause (1) provides:

(1) An earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits under this section during the first entitlement period.
Note. Only a person who was an earner when injured is entitled to statutory benefits under this section—see Schedule 1.

43.   Dr Mohammed Virk has issued the certificates of fitness that are before me. The insurer addressed those certificates on internal review (7 May 2018) and advised AAD (emphasis retained):

I note you have provided Certificates of Capacity from your GP that certify you unfit for work. Taking into consideration these Certificates of Capacity the following weekly payment amounts apply:
16/03/2018 - 22/03/2018 No current capacity for any work: $418.57 x 0.95 = $397.64 23/03/2018 - 29/03/2018 No current capacity for any work: $418.57 x 0.95 = $397.64 30/03/2018 - 05/04/2018 No current capacity for any work: $418.57 x 0.95 = $397.64 06/04/2018 - 12/04/2018 No current capacity for any work: $418.57 x 0.95 = $397.64

13/04/2018 - 15/05/2018 [sic] Capacity for 5 hours a day 3 days a week. QBE have not received any payslips from you in relation to any work completed from 13 April 2018 when you were certified with capacity to work 5 hours a day, three days a week. Should you have made any earnings from 13 April 2018 you must provide these to your case manager as they will be deducted from your PAWE amount and weekly statutory benefits payment. As such I am unable to calculate your weekly amount for this period. This will be done by your case manager upon receipt of your payslips up until 15 May 2018 if you have completed any paid work in this period.

44.   AAD has not referred for merit review the insurer’s decision that he is an earner who is injured as a result of a motor accident and that he suffers a total or partial loss of earnings. The decision referred for merit review is the insurer’s calculation of his entitlement to weekly payments of statutory benefits under section 3.4(2) of the Act, which provides:

A weekly payment of statutory benefits under this section is to be at the rate of 95% of the difference between the person’s pre-accident weekly earnings and the person’s post-accident earning capacity (if any) for the first entitlement period.

45.   AAD’s PAWE is $1,638.77. Clause 8(1) and (2) of Schedule 1 of the Act is the relevant provision to address AAD’s post-accident earning capacity:

(1)   Post-accident earning capacity of an injured person means:
(a)   for the first and second entitlement periods—the weekly amount that the person has the capacity to earn in the employment in which the person was engaged immediately before the motor accident, determined on the basis of the person’s fitness for work in that employment […]
(2)   A person’s fitness for work during the first and second entitlement periods is to be determined having regard to the following:
(a)   the nature of the injury and the likely process of recovery,
(b)   treatment and rehabilitation needs, including the likelihood that treatment or rehabilitation will enhance earning capacity and any temporary incapacity that may result from treatment,
(c) any earnings of the person in any employment engaged in by the person after the motor accident,
(d) any medical certificate provided by the injured person as to the person’s fitness for work. […]

46.   AAD has not referred for merit review the insurer’s decision that he no “post-accident earning capacity” from 16 March 2018 to 12 April 2018.

47.   Also, I am also not persuaded that AAD had post-accident earning capacity when Dr Virk certified him as “having capacity for some type of work” for 5 hours per day, 3 days per week between 12 April 2018 to 12 May 2018. In my view, Dr Virk’s certification that AAD could lift or carry up to 2 kilograms, sit up to 40 minutes, stand up to 30 minutes or drive up to 15 minutes and that he has “nil” capacity for pushing, pulling, bending, twisting or squatting does not support that AAD had the capacity to earn in the employment in which he was engaged immediately before the motor accident. Indeed, AAD confirmed to the Dispute Resolution Service that he has not engaged in any employment since the injury.

48. Therefore, I find the weekly payment of statutory benefits until 12 May 2018 is to be at the rate of 95% of the difference between AAD’s PAWE ($1,638.77) and his post-accident capacity ($0.00). This is equal to $1,556.83.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
    • The amount of AAD’s PAWE is $1,638.77.
    • Under section 3.4(2) of the Act, AAD’s entitlement to weekly payment of statutory benefits is $1,556.83.
  • Effective Date: The review decision referred for merit review by AAD is about the amount of his PAWE and the decision covers weekly payments of statutory benefits payable by the relevant insurer to AAD from the date of accident. It is the function of the Dispute Resolution Service on merit review to arrive at the correct and preferable outcome in respect of the weeks covered by the reviewable decision that is referred for review. Accordingly, this determination has effect from 10 March 2018. The insurer is to pay AAD the difference between what he has been paid and was entitled to be paid in accordance with the decisions above.

James Lowe
Dispute Resolution Service Merit Reviewer