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Merit review MA04/18

Nature of the decision: The amount of weekly payments of statutory benefits

Our reference: MA04/18

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 the Claimant 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 the Claimant’s pre-accident weekly earnings (PAWE) is $1,638.77.
    • Under section 3.4(2) of the Act, the Claimant’s entitlement to weekly payment of statutory benefits is $1,556.83.
  • Effective date: This determination has effect from XX March 2018. A brief statement of my reasons for this determination are attached to this certificate.

Reasons

Background

The Claimant was injured in a motor accident on XX March 2018.

In April 2018, the Insurer wrote to the Claimant and advised them that they were entitled to weekly payments of statutory benefits, which would be calculated on the basis that their PAWE is equal to $1,316.43. That decision covered the weekly payments of statutory benefits payable by the Insurer to the Claimant from the date of accident.

The Claimant applied for an internal review by the Insurer. In May 2018, the Insurer gave the Claimant written notice that it had calculated their PAWE to be $418.57.

The Claimant disputes the Insurer’s decision and lodged an application for merit review with the Dispute Resolution Service in 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

  • 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.
  • In the application for merit review, the Claimant submits the calculation of their weekly income is incorrect and it has not been calculated in the same manner for every week. They submit the calculations differ as per the Insurer’s convenience. The Claimant submits that the Insurer is not even able to explain their calculation criteria.
  • The Claimant also submits that their 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. They submit that their income should have been calculated similar every week, but what they have been given is differing from each week which is resulting towards their huge loss again after the accident.
  • 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 pre-injury employer’s payslips are outside the required 52 week period to calculate PAWE and therefore should not be considered within the merit review.
  • Since the Insurer’s reply, the Claimant 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

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 earning

  • 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.
  • Subclause (2) offers different methods to calculate PAWE. However, those other methods do not apply because the Claimant was a self-employed person when the motor accident occurred and they were obtaining earnings from other sources during the period of 2 years immediately preceding the motor accident.
  • The Claimant has not referred for merit review the Insurer’s decision that they are an earner who is injured as a result of a motor accident. Therefore, their PAWE is the average of the gross earnings they 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.
  • During the relevant period, the Claimant received earnings from the pre-injury employer (1), pre-injury employer (2), pre-injury employer (3), pre-injury employer (4), pre-injury employer (5) and pre-injury employer (6) that totaled $85,450.41. The weekly average of that amount is $1,638.77. These figures are based on the calculations below.

The pre-injury employer (1)

I have before me two payslips issued by the pre-injury employer (1) to the Claimant. The most recent payslip is dated XX October 2017 and shows that their tax year to date gross earnings were $5,384.60.

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 the Claimant’s gross earnings were $2,454 during that time. However, it is only the gross earnings received by the Claimant from XX March 2017 that can be included in the calculation of their PAWE.

The Claimant submits that they did receive a portion of the $2,454 from XX March 2017 to XX June 2017. I consider this submission is consistent with them earning $5,384.60 from XX July 2017 to XX October 2017. I therefore accept that they did receive some of the earnings that are shown in the PAYG payment summary during the relevant period. The Claimant estimated the amount they received were $759.73. The Insurer was provided the opportunity to respond to the Claimant’s submissions and no response was given.

On my calculation, the Claimant 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:

  • There is limited information before me determine the earnings the Claimant received from the pre-injury employer from XX March 2017 to XX June 2017. Again, I do have a PAYG Payment summary which shows that the Claimant earned $2,454 gross from the pre-injury employer (1) between 1 July 2016 and 30 June 2017. This, together with their payslip showing that they received $5,384.60 from XX July 2017 to XX October 2017, in my view, supports that the Claimant did receive a portion of the $2,454 on or after XX March 2017. Any amount received by the Claimant before that time is to be excluded from the calculation of their PAWE. On this information, it is my view that the Claimant provides the best estimate of the gross earnings they received for their employment with the pre-injury employer (1) from XX March 2017 to XX June 2017. It equally considers the days that fall in and outside of the relevant period.
  • I am therefore persuaded that the gross earnings received by the Claimant from the pre-injury employer (1) during the relevant period is $6,144.33 ($5,384.60 + $759.73).

The pre-injury employer (2)

  • The Claimant received earnings as a contractor for the pre-injury employer (2) from XX March 2017 to XX April 2017. Their bank statement shows the amounts equal $2,440 and the Claimant confirmed this was their “tax free” earnings and that they incurred no business expenses for undertaking this contracting work.

The pre-injury employer (3)

  • The Claimant submits that they received $40,154 from the pre-injury employer (3) during the relevant period. However, I consider they actually received $40,151.83, as this is the amount that their weekly pay records issued from the pre-injury employer (3) show that they received.
  • The Claimant advised that pre-injury employer (3) automatically deducted its own commission and fees from their pay, but their business expenses during the relevant period totaled $2,210. They incurred business expenses for operating costs which includes petrol, servicing the car and brake pads, vehicle insurance, car wash, owning a mobile and making calls.
  • 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, the Claimant’s business expenses are not to be included in the calculation of PAWE. Their gross earnings as an earner is the amount that they received from the pre-injury employer (3) minus operating costs.
  • Accordingly, I find that the gross earnings the Claimant received during the relevant period for their work with the pre-injury employer (3) equals $37,941.83 ($40,151.83 - $2,210 = $37,941.83).

The pre-injury employer (4)

  • The Claimant’s 2017 PAYG payment summary for their employment with the pre-injury employer (4) shows that their gross earnings were $22,536. They earned that amount between XX January and XX June 2017, which has 113 days that fall on or after XX March 2017.
  • The Claimant was also asked to clarify how much of the $22,536 they received during the relevant period. They estimated $14,805.62. On my calculation, the Claimant has again apportioned their total gross earnings with the number of days that fall within the relevant period. That is:

  • On balance, I am persuaded that the Claimant 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 XX March 2017, by approximately two-thirds. On balance, I do not consider that the Claimant received the full $22,536 outside the relevant period, being the period between XX January 2017 and XX March 2017. However, I am also not persuaded that the Claimant earned the full $22,536 from XX March 2017 to XX June 2017, as the information described earlier supports that they also worked for the pre-injury employer (2), the pre-injury employer (3) and the pre-injury employer (1) during that time.
  • I again note that there is no information before me to determine the exact gross earnings the Claimant received from the pre-injury employer (4) during the relevant period. Consistent with my earlier reasons for the Claimant’s employment with the pre-injury employer (1), it is my view that the amount provided by the Claimant, being that they received $14,805.62 in gross earnings, is the best estimate of the gross earnings they received for their employment with the pre-injury employer (4) from XX March 2017 to XX June 2017. It equally considers the days that fall in and outside of the relevant period.

The pre-injury employer (5)

  • The information before me to assess the Claimant’s earnings with the pre-injury employer (5) is a PAYG payment summary for the 2016/2017 tax year and their bank statement which shows the earnings they received after XX June 2017.
  • The 2016/2017 PAYG payment summary shows that the Claimant’s gross payments equaled $1,928. The Claimant submits that they received the full amount after XX May 2017. This falls within the relevant period.
  • On balance, I accept the Claimant’s submission. It is consistent with their pattern of regularly receiving earnings from the pre-injury employer (5) soon after XX June 2017, when the PAYG payment summary ends. Their bank statement shows that the total earnings they received from the pre-injury employer (5) from XX July 2017 until XX September 2017 was $4,256.
  • The Claimant advised that the $4,256 paid into their bank account was the after tax or net amount. As PAWE contemplates the gross earnings received by the earner, the Claimant 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:

  • In light of the above, I find the gross earnings the Claimant received with the pre-injury employer (5) during the relevant period is equal to $6,331 ($1,928 + $4,403).

The pre-injury employer (6)

  • The Claimant has provided their payslips for their employment with the pre-injury employer (6). The gross earnings they received from XX July 2017 to XX January 2018 equal $17,787.63.

Calculation of PAWE

  • In light of the information before me and the reasons provided above, I find the gross earnings received by the Claimant as an earner during relevant period is $85,450.41, by adding the following amounts:
    • $6,144.33 (pre-injury employer (1)) + $2,440 (pre-injury employer (2)) + $37,941.83 (pre-injury employer (3)) + $14,805.62 (pre-injury employer (4)) + $6,331 (pre-injury employer (5)) + $17,787.63 (DSB) = $85,450.41
  • The Claimant’s PAWE is the weekly average of the gross earnings received by them 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.
  • I therefore find the amount of the Claimant’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

  • The Claimant has also referred for merit review the Insurer’s calculation of their statutory benefits. They submit:
    • 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.
  • The certificates of fitness submitted by the Claimant cover the period XX March 2018 to XX May 2018, a period of 8 weeks and 2 days.
  • The Claimant’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.
  • 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.
  • The treating doctor has issued the certificates of fitness that are before me. The Insurer addressed those certificates on internal review (XX May 2018) and advised the Claimant (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:
      • XX/03/2018 - XX/03/2018 No current capacity for any work: $418.57 x 0.95 = $397.64
      • XX/03/2018 - XX/03/2018 No current capacity for any work: $418.57 x 0.95 = $397.64
      • XX/03/2018 - XX/04/2018 No current capacity for any work: $418.57 x 0.95 = $397.64
      • XX/04/2018 - XX/04/2018 No current capacity for any work: $418.57 x 0.95 = $397.64
      • XX/04/2018 - XX/05/2018 [sic] Capacity for 5 hours a day 3 days a week. The Insurer have not received any payslips from you in relation to any work completed from XX 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 XX 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 XX May 2018 if you have completed any paid work in this period.
  • The Claimant has not referred for merit review the Insurer’s decision that they are an earner who is injured as a result of a motor accident and that they suffer a total or partial loss of earnings. The decision referred for merit review is the Insurer’s calculation of their 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.
  • The Claimant’s PAWE is $1,638.77. Clause 8(1) and (2) of Schedule 1 of the Act is the relevant provision to address the Claimant’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. […]
  • The Claimant has not referred for merit review the Insurer’s decision that they have no “post-accident earning capacity” from XX March 2018 to XX April 2018.
  • Also, I am also not persuaded that the Claimant had post-accident earning capacity when the treating doctor certified them as “having capacity for some type of work” for 5 hours per day, 3 days per week between XX April 2018 to XX May 2018. In my view, the treating doctor’s certification that the Claimant 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 they have “nil” capacity for pushing, pulling, bending, twisting or squatting does not support that the Claimant had the capacity to earn in the employment in which they were engaged immediately before the motor accident. Indeed, the Claimant confirmed to the Dispute Resolution Service that they have not engaged in any employment since the injury.
  • Therefore, I find the weekly payment of statutory benefits until XX May 2018 is to be at the rate of 95% of the difference between the Claimant’s PAWE ($1,638.77) and their 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 the Claimant’s PAWE is $1,638.77.
    • Under section 3.4(2) of the Act, the Claimant’s entitlement to weekly payment of statutory benefits is $1,556.83.
  • Effective Date: The review decision referred for merit review by the Claimant is about the amount of their PAWE and the decision covers weekly payments of statutory benefits payable by the relevant Insurer to the Claimant 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 XX March 2018. The Insurer is to pay the Claimant the difference between what they have been paid and was entitled to be paid in accordance with the decisions above.

[NAME]
Dispute Resolution Service Merit Reviewer