Weekly payments

Definition of ‘pre-injury average weekly earnings’

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 calculation of the worker’s PIAWE is a work capacity decision. The weekly payment formula used depends on the worker’s capacity for work, and their entitlement period (see 'Weekly payments').

PIAWE is expressed as a weekly sum. It consists of:

1. the average of a worker’s ordinary earnings, and
2. any permissible shift and overtime amounts.

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 calculated before this time.

If the insurer is unable to obtain the required information from the employer, then an interim PIAWE calculation is to be made.

Ordinary earnings

A worker’s ordinary earnings in respect of a week is the total of:

• either their base rate of pay (if calculated on the basis or ordinary hours worked) or actual earnings
• any piece rates or commissions, and
• the monetary value of non-pecuniary benefits.

Ordinary earnings do not include employer superannuation contributions.

Piece rates

Workers receiving piece rates are paid for each unit produced or completed.

Commissions

Workers who receive commission payments are paid based on completion of a task, or by how much they sell. This may or may not be in addition to an hourly rate of pay.

Non-pecuniary benefits

Non-pecuniary benefits are “non-cash” benefits earned by workers in place of salary. This might include education fees, a company car, residential accommodation and so on.

Allowances

A worker’s PIAWE may include allowances that are not related to the performance of shift work or overtime. Not all of these allowances can be included in the calculation of PIAWE.

Shift and overtime payments

Shift and overtime amounts can be included in PIAWE if the worker:

• performed overtime and/or shift work during the relevant period, and
• would likely have continued to perform such work during the 52-week period after the date of injury had they capacity to do so.

Determining the ‘relevant period’

The ‘relevant period’ is the number of weeks over which PIAWE is calculated. The relevant period is:

• the period of 52 weeks immediately before the date of injury for workers who have been continuously employed with the same employer during that time, or
• the period of continuous employment immediately before the injury for workers who have been continuously employed with the same employer for less than 52 weeks.

Some changes in working arrangements and rates of pay may also alter the relevant period. Refer to Insurer guidance GN 5.1 Calculating PIAWE for workers injured before 21 October 2019 for further information.

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 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.

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.

More than one job

Items 2 to 8 of Schedule 3 of the Workers Compensation Act 1987 provide for the method to determine PIAWE where a worker was employed by more than one employer at the time of injury. The method used to calculate the worker’s PIAWE is to follow the methods prescribed.

Indexation of PIAWE

Section 82A of the 1987 Act provides that a worker’s PIAWE is to be indexed on 1 April and 1 October each year. Refer to the Workers Compensation Benefits Guide for the applicable indexation rate.