AGZ v NRMA Insurance Pty Ltd [2019] NSWDRS MR 184

JurisdictionMerit Review
CatchwordsPAWE – pre-accident weekly earnings – self-employed – carpenter – gross earnings – gross business income – net business income – personal exertion – earner – sole director
Legislation cited Motor Accident Injuries Act 2017 (NSW) ss 7.13(4), 8.3(1)(c), 8.3(3), 8.10(3), 8.10(4)(b), Schedule 2 cl 1 (aa)
Motor Accident Injuries Regulation 2017 cl 10(d), 22, Schedule 1 Part 2 Section 2
Motor Accident Guidelines 2017 (as amended on 15 January 2019) cl 7.18.1
Cases citedN/A
Text cited N/A
Parties AGZ – Claimant
NRMA Insurance Pty Ltd – 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.   The Claimant was injured in a motor vehicle accident on 10 March 2019.

2.   There is a dispute between the Insurer and the Claimant as to the amount of the Claimant’s pre- accident weekly payments of statutory benefits payable to him under Division 3.3 of the Motor Accidents Injuries Act 2017 (weekly payments of statutory benefits to injured persons).

3.   The Claimant was self-employed at date of accident working as a carpenter.

4.   On 28 May 2019, the Insurer wrote to the Claimant to inform him that he was entitled to weekly payments of statutory benefits and that they had calculated his PAWE to be $388.32.

5.   The Claimant requested an internal review of the Insurer’s decision with respect to his PAWE.

6.   The Insurer conducted an internal review and an Internal Review Certificate was issued on 14 August 2019 affirming the original decision.

7.   The Claimant disputes the Insurer’s decision and lodged an application for Merit Review with the Dispute Resolution Service on 4 September 2019.

8.   The application for Merit Review was lodged in accordance with s7.12(1) of the Act and the Motor Accidents Guidelines.

Documents and Information

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


10.   The Claimant’s submissions in support of their application for Merit Review are summarised below:

  • The Claimant maintains that the accountant qualified by the insurer (PFK Forensic Accountants Pty Limited) “has adopted an incorrect approach when assessing self- employed persons pre-accident weekly earnings. He has calculated the PAWE on the basis of nett profit and has deducted such payments as:
i.      Accounting fees;

ii.   Entertainment expenses;

iii.   Fuel and oil;

iv.   General expenses;

v.   Hire of plant and equipment;

vi.   Motor vehicle expenses;

vii.   Salaries.

  • The Claimant maintains that this is “clearly an incorrect approach to assessing the PAWE of this Claimant.”
  • The Claimant relies on a letter from his accountant (A2Z Tax) dated 17 June 2019.
  • The Claimant submits that “gross earnings” is not defined in the Act and further states that “it is clear in the definition of PAWE the term refers to the gross earnings received by an earner as an earner. The issue for determination is therefore the amount of gross earnings received by AGZ in self-employment in the 12months before the motor accident, expressed as weekly earnings.”

11.   The insurer’s submissions in reply are summarised below:

  • The insurer has submitted that the Claimant’s PAWE is $388.32 and relies on the forensic accounting report of PKF Forensic Accountants dated 15 May 2019.
  • The insurer has submitted that “gross earnings” is not defined in the Act. Additionally, the Act does not refer to “gross business income” (i.e. before expenses) or “net business income” (i.e. after expenses); however, the State Insurance Regulatory Authority (SIRA) Guidance note: Weekly benefits during the first entitlement period refers to “…net income derived from a business…” (i.e. net business income) which is to be used to calculate PAWE.
  • The insurer submits that “gross earnings” refers to the net profit earned by a self- employed Claimant after accounting for business expenses but before tax.


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

  • Motor Accident Injuries Act 2017 (NSW) (“the Act”)
  • Motor Accident Guidelines effective 13 July 2018 (“the Guidelines”)
  • Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)


13.   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.

14.   Subclause (2) has no application to this matter because the Claimant had been self-employed when the motor vehicle accident occurred and he was obtaining earnings derived during the period immediately preceding the motor vehicle accident.

15.   Clause 3(2) of Schedule 1 of the Act defines income from personal exertion to include:

a)   The amount that is income of the person consisting of earnings, salary, wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to services rendered, and

b)   the proceeds of any business carried on by the person either alone or in partnership with any person, and

c)   any amount received as bounty or subsidy in carrying on a business.

16.   In accordance with Clause 4(1) of Schedule 1, determining PAWE requires consideration of “gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred.”

17.    interpret the phrase “gross earnings” to mean net profit earned by a self employed claimant after accounting for business expenses but before tax.

18.   The Insurer does not dispute that the Claimant is an earner.

19.   The 12 month period is from 10 March 2018 to 9 March 2019.

20.   I have been provided with numerous financial documents including the Claimant’s individual tax return and notice of assessment for the year ending 30 June 2018. The return declared a gross business income of $70,700.00. The Claimant claimed deductions for work expenses totalling $24,399.00 as follows:

a.   Depreciation expenses of $16,501.00

b.   Motor vehicle expenses of $4,843.00

c.   All other expenses of $3,055.00.

21.   Consistent with the tax return, the Claimant’s notice of assessment for the year ending 30 June 2018 confirms that the Claimant’s taxable income was $46,301.00.

22.   Further expenses were claimed by the Claimant in relation to XXX Constructions Pty Ltd from which he derives income as the sole director.

23.   The financial records provided demonstrate that the Claimant has claimed a number of company and business expenses.

24.   I have considered the financial documentation provided and accept that the summary of the Claimant’s income and business expenses, completed by PFK Forensic Accounting is accurate.

25.   I do not accept, based on the financial documentation furnished, that the Claimant was earning $2,200.00 net per week before the accident occurred.

26.   I accept that the Claimant’s net earnings for the 12 months prior to the subject accident were $20,193.00. When divided by 52 (weeks) this results in a PAWE of $388.32.


My determination of the Merit Review is as follows:

  • The reviewable decision is affirmed:
o      The Claimant’s pre-accident weekly earnings are $388.32.
  • Effective Date: This determination takes effect on 10 March 2019.
  • Legal Costs: In accordance with Schedule 1 of the Motor Accidents Regulation 2017 no costs are payable for this dispute.

Michael Sofoulis
Merit Reviewer, Dispute Resolution Service