Under the Workers Compensation Scheme, when a worker suffers an injury which causes them to take time off work, they receive weekly payments from the workers compensation insurer.
These weekly payments are not paid at the full amount that the injured worker was receiving prior to their injury but calculated as a percentage of their pre-injury average weekly earnings (PIAWE).
Under the Workers Compensation Act 1987, an injured worker is entitled to be paid up to 95% of their PIAWE for the first 13 weeks that they are off work. Following this, an injured worker is entitled to be paid up to 80% of their PIAWE providing they are working less than 15 hours per week. If they are working more than 15 hours a week but not working full time, the workers compensation insurer will top up their weekly payments so that they receive 95% of their PIAWE.
The PIAWE is calculated by taking into consideration a number of factors.
The number of weeks that need to be included in the calculation differs, depending on how long the injured worker has been employed with their employer. If the injured worker was working for their employer for more than 52 weeks before they were injured, their PIAWE is calculated over those 52 weeks prior to the date of their injury.
If the injured worker was working for the employer for more than 4 weeks but less than 52 weeks, the PIAWE is calculated over the time they were working with that employer.
It the injured worker was working less than 4 weeks at the time of their injury, the PIAWE is calculated as based on what they could reasonably have expected to earn had they not been injured.
If however, during the relevant period of time, the injured worker’s circumstances change, causing their weekly wages to be either increased or reduced, the relevant period becomes the date from when that change took effect. Examples of changes in circumstances include if they alter their usual hours of work, such as changing from part time work to full time work, if they alter the nature of their work with their employer, of if they receive a promotion or demotion.
Leave taken during the relevant period of time also needs to be considered whereby weeks that an injured worker received paid leave are included whereas weeks that an injury worker was on unpaid leave are excluded in the relevant period of time.
Once the relevant period of time is determined, the workers compensation insurer needs to include the injured worker’s base salary, overtime and shift allowances, piece rates, commissions, non-pecuniary benefits (residential accommodation, use of a motor vehicle, health insurance or education fees) and any salary sacrifice arrangement.
All the relevant information required can be provided by the employer and the insurer will calculate the PIAWE based on that information.
If an injured worker does not agree with how their PIAWE has been calculated and believes that it is incorrect, they can seek a review of the calculation to be completed independently. We are able to assist with these reviews.