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Published: 15 October 2018
Author: John Cramp
When a worker is unable to work due to a work injury, the first issue to get right is the amount they should be paid while off work. This is calculated by reference to their pre-injury average weekly earnings (PIAWE).
PIAWE is calculated by averaging the worker’s earnings for the period of 52 weeks prior to the injury. If the worker has not been employed by the employer for 52 weeks then the number of weeks of employment are averaged.
If the worker reduced their hours of work, or received a promotion during that 52-week period, the reduction or increase only affects the calculation for the period after the reduction or increase takes effect.
Overtime and shift allowances are also added to the PIAWE. No other allowances are accepted as increasing the PIAWE. The amount is added to the worker’s weekly payments for the first 52 weeks of incapacity.
Injured workers are entitled to annual cost of living increases based on the increase in the Consumer Price Index (CPI). This is generally calculated and added to the weekly payment rate on the anniversary of the date of injury.
Workers under 21 years of age and apprentices are entitled to increases each year on the worker’s birthday or when they would have moved into the next year of their apprenticeship.
Often rural workers are provided with residential accommodation as part of their salary, generally a house on the property they are working on. If the accommodation is withdrawn by the employer, the cost of alternative accommodation in the area forms part of the worker’s PIAWE.
Another common part of a salary package is a motor vehicle. If the worker is obliged to return the vehicle to the employer, the value of the use of the vehicle is added to the PIAWE.
There are a number of other less common salary package possibilities such as salary sacrifice into superannuation or where the employer is paying school fees or private health insurance on behalf of the worker. These should also form part of the PIAWE in the event they are withdrawn by the employer or the employment comes to an end.
No-one wants to be injured, especially if the injury results in a lengthy or permanent incapacity from work. We often meet injured workers for the first time after the WorkCover claim has been submitted. The details of earnings submitted by the worker and the employer can be incorrect. Unless this is rectified, it can lead to a lengthy period of incapacity where the worker is not being paid correctly. This can add financial hardship to the already stressful situation faced by injured workers.
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