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ADC v Allianz Insurance Ltd [2019] NSWDRS MR 081

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMerit Review
CatchwordsPre-accident weekly earnings – PAWE – insufficient evidence – director fees – earner
Legislation citedMotor Accident Injuries Act 2017: Division 3.3 ; Schedule 1 Clause 2
Cases citedN/A
Text citedN/A
PartiesADC – Claimant
Allianz Australia Insurance Limited - Insurer
DisclaimerThis decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Merit Review Certificate

View the certificate

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

The Claim
Claimant ADC
Insurer Allianz Insurance
Claim number 37C000323
Date of accident March 2018
The Reviewable Decision
Date of decision November 2018
Nature of decision The amount of pre-accident weekly earnings
The Merit Review
Our Reference 10063595
Merit Reviewer Jeremy Lum
Date of this Certificate February 2019

Merit Reviewer’s Determination

The reviewable decision is the decision of the Insurer about ADC’s pre-accident weekly earnings (PAWE). This is a decision that affects the amount of weekly payments of statutory benefits and is therefore a merit review matter under Schedule 2(1)(a) of the Motor Accident Injuries Act 2017.

The reviewable decision is set aside and the following decision is made in substitution:

o ADC’s PAWE is $579.97 per week.
o The Insurer is to calculate ADC’s weekly payments under Division 3.3 of the Act in accordance with this determination.
o The Insurer is to pay ADC the difference of payments already made (if any) and any amounts owed to her in accordance with this determination.

A  brief statement is attached setting out my reasons for the determination.

Jeremy Lum
Dispute Resolution Service Merit Reviewer

Reasons

Background

1.  ADC was injured in a motor accident on 25 March 2018.

2.  On 29 May 2018, ADC completed an application for personal injury benefits however did not fully complete section 7 regarding her earnings at the time of the accident.

3.  On or around 1 November 2018, the Insurer made a decision that ADC’s PAWE could not be calculated because there was “insufficient evidence”. The Insurer requested ADC to provide 52 weeks of payslips before the accident date in order to calculate her PAWE.

4.  On 25 May 2018, ADC provided salary documents in the form of a PAYG payment summary and a tax return.

5.  On 5 November 2018, ADC requested the Insurer to conduct an internal review.

6.  In an email dated 7 November 2018, the Insurer stated that it could not proceed with an internal review as a decision has not been made in relation to ADC’s PAWE.

7.  On 30 November 2018, ADC lodged an application for merit review.

8.  I am satisfied I have jurisdiction to conduct the merit review because the Insurer has declined to conduct an internal review in accordance with section 7.11(2) of the Act.

Submissions

9.  ADC submits that despite providing the Insurer with salary documents on 25 May 2018, the Insurer has refused to conduct an internal review on the decision to cease her weekly benefits from week 1 to week 26 after the motor accident.

10.  The Insurer submits that ADC has failed to provide sufficient information for the Insurer to calculate her entitlement to statutory benefits.

11.  In addition, the Insurer submits that there is contradictory information in the PAYG payment summary (2017-2018) and tax return (2016-2017) where the claimant is documented as an employee and received wages.  However, on 21 November 2018, the claimant’s legal representative advised that the claimant is a director of a company and is paid by way of director fees.

12.  On the information available, the Insurer says it is unable to proceed to determine whether the claimant is an “earner” pursuant to Clause 2 of Schedule 1 of the Act and is unable to determine the claimant’s PAWE.

Legislation

13.  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 2016 (NSW) (the Regulation)

Documents and information considered

14.  I have considered the documents provided in and submitted with the application and the reply.

Pre-accident weekly earnings

15.  I consider the documents relevant to the determination of ADC’s PAWE are:

  • Application for personal injury benefits
  • PAYG payment summary (individual) 01/07/2017 – 30/06/2018
  • Tax Return (individual) 01/07/2016 – 30/06/2017
  • Email from ADC’s legal representative dated 21/11/2018
  • Certificate of capacity/fitness (various dates)

16.  In relation to ADC’s employment status at the time of the accident, I note that the application for personal injury benefits states that she was a “manager” working at XYZ. Her tax return indicates her occupation as “sales assistant” at the same company.

17.  In contrast, the email from ADC’s legal representative and the various certificates of capacity/fitness state that she is a “director”.

18.  Before PAWE can be calculated, the injured person must be an earner as defined under Clause 2 of Schedule 1 reproduced below.  The PAYG payment summary and the tax return both cover periods before the motor accident.

Was ADC an “earner”?

19.  Clause 2 of Schedule 1 defines an “earner” as:

Meaning of “earner”
A person who is injured as a result of a motor accident is an earner if the person is at least 15 years of age and who:
(a)  was employed or self-employed (whether or not full-time):
(i)at any time during the 8 weeks immediately preceding the motor accident, or
(ii)during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii)during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident, and, at the date of the motor accident, had not retired permanently from all employment, or
(b)  before the motor accident, had entered into an arrangement (whether or not an enforceable contract):
(i)with an employer or other person to undertake employment, or
(ii)to commence business as a self-employed person,
at a particular time and place, or
(c)  was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987.

20.  The PAYG payment summary indicates that ADC received gross payments of $34,000 for the financial year ended 30 June 2018.

21.  The tax return indicates that ADC received gross payments of $20,000 for the financial year ended 30 June 2017.

22.  In my view, regardless of whether ADC was employed as a director or a manager/sales assistant at the time of the motor accident, the PAYG payment summary and Tax Return satisfies me for the purposes of Clause 2(a)(i) of Schedule 1 that she was employed at the time of the motor accident.

23.  Even if she was not employed at any time during the 8 weeks before the motor accident, her earnings of up to $34,000 for the financial year ending 30 June 2018 satisfy me that she would have been employed for at least 13 weeks in the year before the motor accident (Clause 2(a)(ii) of Schedule 1).

24.  I am therefore satisfied ADC was an “earner” as defined in Clause 2 of Schedule 1.

Calculation of PAWE

25.  Clause 4(1) of Schedule 1 of the Act applies to ADC and defines pre-accident weekly earnings 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.

26.  I note the Insurer’s submission that ADC’s PAWE cannot be calculated because she did not provide 52 weeks of payslips for the 12-month period before the day of the motor accident.

27.  ADC’s legal representative indicate that ADC cannot provide payslips as she is a director of the company and is remunerated through director fees.  She has requested that her PAWE be calculated using the “salary documents” provided.  I interpret these to be the abovementioned PAYG payment summary and tax return.

28.  In my view, having established that ADC is an earner, she is entitled to have her PAWE calculated based on the available documentation.  To not make any calculation would deny ADC her entitlement to weekly payments of compensation as an earner injured in a motor accident.

29.  The date of accident is 25 March 2018.  Therefore, the relevant period for the calculation of ADC’s PAWE is 25 March 2017 to 24 March 2018 (inclusive).

30.  As I do not have a detailed memorandum of the pay cycle payments made to ADC, her PAWE is calculated below using the information contained in the PAYG payment summary and tax return.

Tax return
1/07/2016 – 30/06/2017 = 365 days with gross earnings of $20,000
$20,000 / 365 = $54.79452 per day
25/03/2017 – 30/06/2017 = 98 days
$54.79452 x 98 = $5,369.86 (rounded to nearest cent)

PAYG payment summary
1/07/2017 – 30/06/2018 = 365 days with gross earnings of $34,000
$34,000 / 365 = $93.150684 per day
1/07/2017 – 24/03/2018 = 267 days
$93.150684 x 267 = $24,871.23 (rounded to nearest cent)

31.  ADC’s total gross earnings for the period 25 March 2017 to 24 March 2018 is calculated as $5,369.86 + $24,871.23 = $30,241.09.

32.  Therefore, ADC’s PAWE is calculated as $30,241.09 / 365 days x 7 days = $579.97 per week.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution:  
    o  ADC’s PAWE is $579.97 per week.
    o  The Insurer is to calculate ADC’s weekly payments under Division 3.3 of the Act in accordance with this determination.
    o  The Insurer is to pay ADC the difference of payments already made (if any) and any amounts owed to her in accordance with this determination.


Jeremy Lum
Dispute Resolution Service Merit Reviewer