*The contents in this blog relates to legislation in New South Wales.
Under the Motor Accident Injuries Act 2017 (NSW), the CTP insurer is required to make weekly payments based on the injured person’s pre-accident weekly earnings or PAWE.
If a Claimant is unable to work due to a motor vehicle accident, the CTP insurer is obligated to make payments at the rate of 95% for the first 13 weeks after the accident. Thereafter, payments are to be made at 80% of the Claimant’s PAWE (where there is a total incapacity for work) or 85% (where there is a partial incapacity for work). How long weekly payments will continue for depends on factors including whether the Claimant’s injury is “minor”, and whether their impairment exceeds 10%.
The method for calculating PAWE is set out at Schedule 1 of the Motor Accident Injuries Act 2017. In many instances, it is a simple matter of calculating the injured person’s gross wages for the 12 months before the accident.
However, there are exceptions to this depending on the injured person’s circumstances. This includes the exception set out at Schedule 1, Section 4 (3) of the 2017 Act:
“(3) This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred.”
Applying this to a hypothetical situation, an injured person who was promoted a month before their accident is entitled to have their weekly payments calculated based on their wage following the promotion, rather than for the 12 months prior to the accident.
There is also an exception for trainees and young people, whereby the payments made by the insurer must increase throughout the life of the claim in line with the increments the injured person would have been entitled to had they continued in their apprenticeship or traineeship contract.
Experience suggests that CTP insurers will at first instance simply calculate pre-accident weekly earnings across the 12 months prior to the accident, instead of considering whether one of the above exceptions might apply. The effect on the weekly payments made in the injured person’s favour can be significant
Challenges to an insurer’s calculation of pre-accident weekly earnings are subject to strict time limits and so injured persons should seek legal advice urgently to ensure they are being paid appropriately.
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Each State has different legislation that deals with motor vehicle claims. Turner Freeman Lawyers can also assist if you have suffered an injury in Western Australia, Queensland or South Australia. Please contact our friendly team if you need some advice.