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ACN v GIO General Ltd [2018] NSWDRS MR 066

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMerit Review
CatchwordsPre-accident weekly earnings – PAWE – weekly payments of statutory benefits – dentist – maximum weekly statutory benefits amount
Legislation cited                    Motor Accidents Injury Act (NSW) ss 3.6, 3.9, 7.13, Schedule 1 cl 4, Schedule 2(1)(b)
Motor Accident Injuries Regulation 2017
Motor Accident Guidelines effective 30 April 2018
Cases cited

N/A

Text citedN/A
Parties ACN - Claimant
GIO - Insurer
DisclaimerThis decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Merit Review Certificate

ACN Certificate

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

The Claim
Claimant ACN
Insurer GIO
Claim Number Y05947600101
The Reviewable Decision
Reviewable decision-makerAnthony Qi
Date of Reviewable decision                                         16 October 2018
Nature of Reviewable decision A decision as to pre-accident weekly earnings (PAWE)
The Merit Review
Our Reference 10059583
Merit Reviewer Rachel Brittliff
Date of Merit Review Certificate 21 November 2018

Merit Reviewer's Determination

This determination relates to a merit review matter, which is a reviewable decision under Schedule 2(1)(b) of the Motor Accident Injuries Act 2017, about the calculation of ACN’s PAWE and the amount of his entitlement to weekly statutory benefits.

My determination of the Merit Review is as follows:

  • The reviewable decision is affirmed

A brief statement of my reasons for this determination are attached to this certificate.

Merit Reviewer, Dispute Resolution Service

Reasons for determination

Background

1.  This is a dispute about ACN’s entitlement to statutory payments of weekly benefits under section 3.6 of the Motor Accidents Injuries Act 2017 (“the Act”).

2.  ACN was injured in a motor vehicle accident, in which he was not at fault. The date of the accident was 27 September 2018. Following the accident, ACN was not able to work and made a claim for weekly payments of statutory benefits with the Insurer.

3.  ACN applied for an internal review of the Insurer’s decision as to the amount of his weekly statutory benefits payment. The Insurer conducted the review and wrote to ACN in a letter dated 30 October 2018.

4.  The application for merit review was received by the Authority on 1 November 2018 and is made within the required time frames under the Act.

Documents and information

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

Submissions

6.  In his application for a merit review of the Insurer’s decision, ACN has made the following submissions:

  • He cannot afford to live with the income provided by the Insurer.
  • He is a dentist and his wife is due to have their third child in four weeks’ time.
  • He has two children and a single income.
  • His annual earnings are close to $400,000 per year and he has many financial commitments.
  • On the dispute they [the Insurer] calculated his income incorrectly using this same amount for September and October 2017. And they did not calculate total earnings but the “payment due” which does not include cash payments or GST which he receives back every trimester.
  • Even making these unacceptable mistakes, his income is still higher than what the Insurer is paying him.
  • There is also a lot of tax deducted from the income suggested by the Insurer and he ends up with a minimal amount that does not even cover his credit card expenses.
  • He was not the “at fault driver” and did not ask to be in the situation that he is in.
  • He would like to receive 100% of his current monthly income after proper calculation. By doing so he can focus on his health and also focus on the recovering process of his shoulder.
  • The Insurer is forcing him to return to work very soon and according to the shoulder specialist and the physiotherapist, whom he sees three times a week, it might cause damage for life or force the condition into surgery which will get him of word [sic] for four to six months.
  • With the current income provided by the Insurer he will probably go bankrupt within two or three months.

7.  In reply, the Insurer has made the following submissions:

  • While the Insurer sympathises with ACN’s financial situation, section 3.9 of the Act sets out the maximum weekly statutory benefits amount that he is entitled to.
  • It is currently paying ACN the maximum weekly statutory benefit amount.
  • It maintains that it cannot pay more than the legislated maximum.

Legislation

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

  • Motor Accident Injuries Act 2017 (NSW) (“the Act”)
  • Motor Accident Guidelines effective July 2018(“the Guidelines”)
  • Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)
  • [List any other legislation or guidelines considered in decision]

Reasons

9.  ACN has requested a review of the Insurer’s calculation of his PAWE. PAWE is defined at item 4 of Schedule 1 of the Act as follows:

(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.

Note.

Examples of a change of circumstances to which this subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards.

(4)    For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.

10.  I have been provided with copies of a breakdown of income for ACN from his dental surgery, XXX Pty Limited. This information indicates that ACN was either employed or self-employed for the full 12 month period prior to his accident. The information does not support that he was an earner of the kind described in item 4(2) or items 5 or 6.

11.  I therefore find that ACN’s PAWE is to be calculated in accordance with item 4(1) of Schedule 1 of the Act. ACN’s PAWE is therefore “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”.

12.  The information that has been provided to me does not include ACN’s earnings for the month of September 2018, the month in which he was injured. Instead there is information as to ACN’s income for the period of September 2017 to the end of August 2018.

13.  I am to make the correct and preferable decision on the information that is before me. I have information for a 12 month period that ended 27 days prior to ACN’s accident. I consider that using this information, which spans a full 12 month period that ends in the month prior to ACN’s accident is likely to provide the most accurate estimate of his PAWE as intended under the Act.

14.  The earnings statements provided by ACN provide considerable data. I understand from ACN’s submissions that the gross collections indicated on the documents are his actual monthly takings. There are deductions set out which appear to be paid from the takings such as management, lab and transaction fees. Also listed and deducted from the amounts received by ACN are “expenses”. I consider that ACN’s gross earnings are the amount left after removing the deductions and expenses from the gross earnings.

15.  ACN has made submissions that he is reimbursed GST on a quarterly basis and that the GST component of the deductions should be included in his earnings. There is no information before me to show that this is the case. Regardless of this, in light of my ultimate finding as to ACN’s PAWE, there is no practical impact to him as a result of the exclusion of the GST amount from my calculations.

16.  The table below sets out the information that I have extracted and summarised from the documents provided by ACN in relation to his earnings:

Period End

Gross Collections

Deductions

Expenses

30/09/2017

$          73,888.75

$ 45,603.50

$    836.84

31/10/2017

$          70,935.10

$ 44,411.40

$ 1,413.44

30/11/2017

$          50,152.85

$ 30,880.71

$    494.47

31/12/2017

$          65,754.15

$ 40,123.26

$    649.87

31/01/2017

$          69,515.20

$ 43,163.63

$ 1,021.35

28/02/2018

$          83,021.65

$ 51,270.11

$    968.73

31/03/2018

$          90,005.10

$ 55,672.79

$    119.96

30/04/2018

$          83,899.10

$ 52,617.60

$ 1,711.93

31/05/2018

$          78,640.30

$ 49,293.28

$ 1,606.11

30/06/2018

$          45,124.55

$ 28,469.34

$ 1,068.27

31/07/2018

$          70,825.70

$ 44,316.00

$ 1,375.81

31/08/2018

$          60,055.80

$ 38,383.00

$ 1,869.40

Totals

$      841,818.25

$ 524,204.62

$ 13,136.18

17.  ACN’s total earnings were $841,818.25 during the 12 month period prior to his accident and the total deductions and expenses were $537,340.80.

18.  I have therefore calculated ACN’s weekly average earnings during the 12 months before the accident as follows:

($841,818.25 - $524,204.62) ÷ 52

= 304,477.45 ÷ 52

=$5,855.34

19.  ACN’s PAWE is therefore $5,855.34, in accordance with item 4(1) of Schedule 1 of the Act.

20.  Calculation of entitlement to weekly payments of statutory benefits. ACN has referred the matter of the amount of weekly benefits that are payable to him as part of this merit review. ACN states that he would like to receive 100% of his current income in the form of statutory benefits from the Insurer.

21.  Weekly payments of statutory benefits are payable to an earner who is injured in accordance with Division

3.3 of the Act. For the first 13 weeks after a motor accident, earners are paid statutory benefits in accordance with section 3.6 of the Act. Section 3.6 of the Act is as follows:

(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.

(2)   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.

(3)    A weekly payment of statutory benefits to a person under this section is not to exceed the maximum weekly statutory benefits amount less the person’s post-accident earning capacity (if any) for the first entitlement period.

(4)    A weekly payment of statutory benefits to a person under this section is not to be less than the minimum weekly statutory benefits amount or the person’s pre-accident weekly earnings, whichever is the lesser.

(5)    If a weekly payment of statutory benefits is payable under this section, but further information is required to determine the amount of the payment, interim payments are to be made in accordance with the Motor Accident Guidelines until the correct amount of the payment can be determined and paid.

22.  I am satisfied on the information available that ACN is an earner as he was employed or self-employed during a period equal to at least 13 weeks during the year immediately preceding the motor accident, in accordance with the definition under item 2(1)(ii) of Schedule 1 of the Act.

23.  I draw ACN’s attention to section 3.6(3) of the Act, which states:

(3) A weekly payment of statutory benefits to a person under this section is not to exceed the maximum weekly statutory benefits amount less the person’s post-accident earning capacity (if any) for the first entitlement period.

24.  Section 3.9 of the Act sets the maximum weekly statutory benefits amount as follows:

(1) For the purposes of this Division, the maximum weekly statutory benefits amount is $3,853.

25.  The above amount has been adjusted in accordance with 3.9(4) of the Act has been adjusted to $4,039 from 1 October 2018.

26.  The Insurer has no discretion to pay statutory weekly benefits beyond the maximum benefits amount as set out by the Act.

27. As ACN’s PAWE exceeds the amount of the maximum weekly statutory benefits, I find that his weekly benefits are to be determined in accordance with section 3.9(1) of the Act as indexed on 1 October each year.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is affirmed

Rachel Brittliff
Merit Reviewer, Dispute Resolution Service