Weekly payments

A worker may be entitled to receive weekly compensation payments. These payments are calculated by the insurer using a formula and the worker’s pre-injury average weekly earnings (PIAWE).

The weekly payment formula used depends on the worker’s capacity for work, and their entitlement period (see ‘Weekly payments’).

Refer to the PIAWE Reference Guide for an overview of how PIAWE is calculated.

Supplying the required information

If a worker is entitled to weekly payments, the insurer must start payments within seven days of the initial notification of injury, unless there is a reasonable excuse not to. Therefore, PIAWE must be determined promptly to calculate the payment due.

SIRA’s Pre-Injury Average Weekly Earnings Form may be used to supply the required information.

It is very important that the employer and worker give sufficient information to the insurer for them to accurately determine PIAWE. Delays in obtaining information can result in delays for the worker receiving weekly payments. Important information may include:

• a fully completed PIAWE form
• copies of payslips or any available payroll records covering the relevant earning period
• leave records
• other supporting documentation specific to a worker’s employment circumstances, including dates and amounts relating to ongoing changes in earnings during the relevant earning period
• any relevant Fair Work instrument, contract of employment or enterprise bargaining agreement
• tax returns (where payroll records or payslips are unavailable)

If the insurer is unable to obtain the required information from the employer or worker, then an interim PIAWE determination is to be made. This interim amount is not always an accurate reflection of the worker's PIAWE.

Definition of ‘pre-injury average weekly earnings’

PIAWE is the weekly average of a worker’s gross earnings over the 52 weeks prior to their date of injury. There are some exceptions to this definition (see sections below).

To calculate a worker’s PIAWE, the insurer will determine:

1. The relevant earning period, which is the period over which PIAWE will be calculated (usually 52 weeks), and
2. A worker’s earnings during the relevant earning period.

As shown below, the worker’s earnings during the relevant earning period divided by the number of weeks in the relevant earning period equals the worker’s PIAWE.

More than one job

The earnings for each job that a worker was working in at the time of injury must be included in a worker’s PIAWE. However, each job may have a different relevant earning period depending on the specific circumstances of that job. The average weekly earnings from each job are added together to determine the worker’s PIAWE.

The relevant earning period

The relevant earning period is the 52-week period before the worker’s date of injury. However, the relevant earning period may be adjusted where:

• The worker started in the job less than 52 weeks before their injury. The period before starting in the job is excluded from the relevant earning period.
• There was an ongoing change to the worker’s job which had a financial impact (for example, a promotion, or a change from part-time to full-time). The period prior to the change is excluded from the relevant earning period.
• The worker had taken extended periods of unpaid leave. Any period of 7 or more consecutive days of no earnings (commencing from the first day of unpaid leave until the day before earnings start again) is excluded from the relevant earning period.
• The worker had a financially material reduction in earnings (including earnings reduced to zero) due to the COVID-19 pandemic's impact on their employer. Workers may be eligible to have up to two prescribed periods in 2020 excluded from their relevant earning period.

In some circumstances, the insurer may also align a worker’s relevant earning period to the worker’s pay period in order to simplify the calculation.

Further detailed information on adjustments to the relevant earning period can be found in Insurer guidance GN 5.1A Calculating PIAWE.

Earnings and income

Earnings are the income received by the worker for work performed in any employment.

Income may include:

• wages, including any paid leave and loadings
• shift, overtime and other allowances paid
• commissions and piece rates.

The following amounts are not considered income for the purposes of calculating PIAWE:

• compulsory superannuation contributions made by the employer
• workers compensation or other compensation payments for loss of earnings
• the monetary value of any non-monetary benefit (while the worker continues to have access to that benefit following injury)
• any payment made without obligation by the employer (for example, bonuses and performance incentives)
• any additional payment subsidised by the JobKeeper scheme is not considered earnings (that is, any 'top-up' component of the JobKeeper Scheme payment).

Non-monetary benefits

Non-monetary or ‘non-cash’ benefits are earned by workers in the place of salary. They can include, for example, education fees, residential accommodation, child care or the use of a motor vehicle.

Where a worker has use of a non-monetary benefit at the time of injury, and following injury the benefit is given-up by the worker or withdrawn by the employer (for example, a company car is returned), the cash value of that benefit must be included in PIAWE.

Further information on calculating the value of non-monetary benefits can be found in Insurer guidance GN 5.1A Calculating PIAWE.

Short term workers

Workers who have been continuously employed by the same employer for less than four weeks before the injury may have their PIAWE calculated by considering the weekly earnings they could have expected to earn in that employment in the 52 weeks after the injury.

PIAWE by agreement

Instead of an insurer calculating a worker’s PIAWE, a worker and employer may agree to the PIAWE amount to be used.

An application to use an agreed amount must be provided to the insurer within five days of the initial notification of injury. The application must include:

• the agreed PIAWE amount*
• the date of the agreement
• the worker's name, injury date and claim number
• the name of the employer
• the name and contact details of the person authorised by the employer to enter into the agreement
• details of any other employment in which the worker is engaged
• any evidence which supports the agreement (e.g. recent payslips or contract of employment)
• any other information the employer or worker considers were taken into account in reaching the agreement
• acknowledgement of consent by the worker and employer to the agreement

* The agreed PIAWE remains subject to the minimum PIAWE ($155 per week).

SIRA’s PIAWE application for agreement template can be used, but is not required, as long as all of the above information is included.

The worker and employer can consent to the agreement by physically signing the agreement or by electronic signature. Consent can also be given by email, as long as it is clear that both the worker and employer have given their express consent to the entire agreement (for example, the consent was sent in an unbroken chain of emails along with all of the information required in the application).

The insurer must determine whether to approve or refuse to approve the agreement within seven days of receiving the application. To approve the agreement the insurer needs to be satisfied that:

• the agreed amount reasonably reflects the worker's PIAWE, and
• the agreement is fair and reasonable.

The insurer cannot approve a PIAWE agreement for a worker who is under legal incapacity (as defined at clause 8K of the Workers Compensation Regulation 2016).

Note that where the insurer has yet to approve or refuse to approve an agreement, the insurer must still start payments within seven days of the initial notification of injury (unless there is a reasonable excuse not to, or liability is disputed).

Further information on PIAWE agreements can be found in Insurer guidance GN 5.1A Calculating PIAWE.

Workers under 21 years of age, apprentices and trainees

Some workers are entitled to incremental earning increases at certain ages or stages during their employment. This includes:

• workers under the age of 21
• apprentices, or
• trainees for the purposes of becoming qualified to carry on an occupation.

For these workers, PIAWE is to be recalculated following injury at each age or stage in accordance with what they would have been entitled to receive, had they not become injured and continued in that employment.

Minimum PIAWE

The minimum PIAWE is $155 per week. This amount is not indexed until it is used as the PIAWE after the worker is injured.

If a worker’s PIAWE is calculated to be lower than the minimum PIAWE ($155), then the minimum PIAWE is set as the worker’s PIAWE. The minimum PIAWE should not be used as an interim PIAWE until an insurer has sufficient information to determine PIAWE, unless there is information to indicate that the worker’s PIAWE will be less than $155 per week.

Indexation of PIAWE

A worker’s PIAWE is indexed by the insurer on 1 April and 1 October each year with reference to the Consumer Price Index. Refer to the Workers Compensation Benefits Guide for the applicable indexation rate.