AFF v QBE Insurance Ltd [2019] NSWDRS MR 132

Jurisdiction Merit Review 
CatchwordsStatutory benefits – PAWE – pre-accident weekly earnings – self-employed podiatrist – sole employee – company profits – individual tax return – business profits – business expenses – bank statement – director fee – wages
Legislation cited Motor Accident Injuries Act 2017 (NSW) ss 7.12(1), 7.13(4), Schedule 1 clause 4(1) & (2), Schedule 2 clause (1)(a)
Motor Accident Injuries Regulation 2017
Motor Accident Guidelines 
Cases cited N/A
Text cited N/A
Parties AFF – Claimant
QBE Insurance – Insurer 
Disclaimer This decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Merit Review Certificate

Merit Reviewer's Reasons for Determination


1.  There is a dispute between the Claimant and the Insurer as to the amount of the Claimant’s pre- accident weekly earnings (PAWE) for the purposes of calculating the Claimant’s entitlement to weekly payments of statutory benefits pursuant to Division 3.3 of the Act.

2.  The Claimant sustained injury as a result of a motor vehicle accident on 12 March 2019.

3.  I do not have a copy of the correspondence, however, it would appear that the insurer at some point after the motor accident wrote to the Claimant and advised him that he was entitled to weekly payments of statutory benefits and that they had determined the Claimant’s PAWE to be $1,212.83.

4.  The Claimant disputed the insurer’s determination of the PAWE amount and lodged an application for internal review.

5.  The internal review decision affirmed the original decision of the insurer in respect of the PAWE amount.

6.  The Claimant disputes the determination of the insurer as to the amount of the PAWE and lodged an application for merit review with the Dispute Resolution Service. The application has been made in accordance with section 7.12(1) of the Act, and the Guidelines.

Documents and Information

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

8.  Upon this matter being referred to me, I requested further information from both parties to assist me in making a decision. In response a large amount of material was forwarded by the claimant over a number of weeks.

9.  That further information provided by the parties include a large list of documents listed as follows

a.  Claimant’s application for internal review dated 21 June 2019.

b.  Profit and Loss statement for 2018.

c.  Company tax return 2018 – XXX Podiatry Pty Ltd

d.  Internal Review decision dated 4 July 2019

e.  A complete copy of the Claimant’s submissions attached to his application (due to the copy provided to me being incomplete)

f.  Spreadsheet of expenses for 2017-2018 financial year

g.  Financial statements for financial year ending 30 June 2017 – XXX Podiatry P/L

h.  Financial statements for financial year ending 30 June 2018 – XXX Podiatry P/L

i.  Personal taxation return and ATO Notice of Assessment of the claimant for financial year ended 30 June 2018.

j.  from “YYYY” for amounts paid to the claimant as a contractor for period 10 August 2018 to 11 July 2019.

k.  Spreadsheet from “YYYY” for amounts paid to the claimant as a contractor for period 10 August 2017 to 10 July 2018.

l.  Business bank statements from 2016 to 2018.

m.  Company tax return for financial year ending 30 June 2017

n.  Company tax return for financial year ending 30 June 2018

o.  A list of fees taken from July 2016 to March 2019 by “private patients, Medicare and DVA”

p.  Several remittance advices from NSW Health

q.  Account from XYZ Real Estate in respect of rental property

r.  BAS statements for XXX Podiatry P/L for the period July 2018 to March 2019.


10.  The Claimant submits that the PAWE determination of the insurer in no way reflects his pre accident weekly earnings. He notes that he is a self employed podiatrist, and is the sole employee of XXX Podiatry Pty Ltd. Relying on a letter from his accountant, Paul Cavallaro dated 18 June 2019, it would appear that the Claimant submits that his PAWE ought to be $4,484.

11.  The insurer sets out in their submissions that the PAWE calculation was arrived at with reference to the Claimant’s business taxation return for the 2018 financial year. They noted wages paid of $50,000 and an amount of $13,067 in company profits. Thereby, totalling $63,067.21, thereby equating to a weekly figure of $1,212.83.

12.  The Insurer submits that they requested further information from the Claimant including his individual taxation returns and ATO Notices of Assessment for the years 2016-2018. In addition, particulars as to any staff employed by the business was requested.

13.  The Insurer states that they were prepared to reassess the PAWE calculation upon receipt of such additional information.


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

a.  Motor Accident Injuries Act 2017 (NSW) (“the Act”)

b.  Motor Accident Guidelines effective 13 July 2018 (“the Guidelines”)

c.  Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)


15.  PAWE is defined by Clause 4 (1) of Schedule 1 of the Act as follows:

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.

16.  Subclause (2) does not apply to this matter and neither party has suggested that subclause (2) applies.

17.  I have interpreted the phrase “gross earnings” to mean the net profit earned by a self employed Claimant after accounting for business expenses, but before income tax.

18.  It is acknowledged that it may be the case that some of the business expenses may be ongoing despite any level of incapacity suffered by Claimant. I have not been asked to make a determination of the amount of ongoing statutory benefit entitlements. My task is confined to the calculation of PAWE. It is therefore not open to me to make a determination as to how any ongoing business expenses are to be treated for the purposes of the calculation of ongoing weekly statutory benefit entitlements.

19.  Whilst not explicitly stated, it would appear that the Claimant’s figure of $4,484 is reflective of the total business income without taking into account business expenses.

20.  I have reached that assumption on the basis of the figure quoted by the Claimant’s accountant of $4,484, as being somewhat consistent with gross total income (before expenses) of the business for the 2018 taxation year ($223,413.89).

21.  The aforementioned letter of the accountant states that such figure was arrived at based on “discussions and the accounts…for the financial year ending 30 June 2018” for weekly income over 48 weeks. I am not privy to those “discussions” and I do not know what they entailed. Further, it is not clear what the dates of the 48 weeks are. There is no mention of any business expenses. On such basis, I do not consider this letter to be a reliable source upon which to base a PAWE calculation.

22.  Whilst a large amount of business bank statements have been provided, having examined the content, I cannot be satisfied that the statements accurately reflect all income sources. Further, in terms of business expenses, I can not be satisfied that the bank statements reflect the entirety of relevant expenses. Also, it is not possible from analysis of the bank statements to come to a conclusion as to amounts relating to GST.

23.  The BAS statements that have been provided to me unfortunately do not set out a summary of each quarter’s income and expenses. Therefore, they also do not represent a reliable source upon which to calculate weekly earnings for the 12 months prior to the accident.

24.  I have therefore reached a conclusion that the most reliable source of information before me upon which to make a PAWE assessment is the 2018 taxation returns (business and individual).

25.  The business 2018 taxation return reveals wage payments totalling $50,000. Reference to the Claimant’s individual 2018 taxation return confirms that he received the entirety of such amount. The individual taxation return also reveals the Claimant received a director fee of $30,000.

26.  The business 2018 taxation return reveals business profits totalling $13,067.

27.  I am satisfied that all 3 amounts should be included in the calculation of the PAWE, on the basis that the amounts were earned through the Claimant’s own personal exertion.

28.  The total of the wages, director fee and profits is $93,067. On such basis I calculate the PAWE to be $1,789.75.


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:
o  The Claimant’s pre-accident weekly earnings are $1,789.75
  • Effective Date: This determination takes effect from 12 March 2019.
  • Legal Costs: The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Regulation 2017 is $0 inclusive of GST.

Elizabeth Medland
Merit Reviewer, Dispute Resolution Service