Burns v Allianz Australia Insurance Limited
[2022] NSWPICMR 50
•30 August 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Burns v Allianz Australia Insurance Limited [2022] NSWPICMR 50 |
| ClaimanT: | Lilian Burns |
| Insurer: | Allianz Australia Insurance Limited |
| Merit Reviewer: | Terence O'Riain |
| DATE OF DECISION: | 30 August 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS - Statutory weekly benefits; Division 3 of the Motor Accidents Injuries Act 2017 (the MAI Act); statutory benefits claim Motor vehicle accident; pre-accident weekly earnings (PAWE); Merit Review; PAWE calculation; change of circumstances; full time employment offered before accident; claimant unable to accept due to injuries; earner previously casual employee; casual earnings rate; Covid 19; Jobkeeper payment not included in PAWE. |
| Determinations made: | The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Motor Accidents Injuries Act 2017 (the MAI Act), and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act. The reviewable decision dated 12 August 2022 is affirmed. |
REASONS
introduction
Background
The subject accident occurred on 27 January 2022.
Ms Burns lodged a claim for personal injury benefits under the Motor Accidents Injuries Act 2017 (MAI Act), which was accepted. The insurer calculated Ms Burns’ pre-accident weekly earnings (PAWE) at $471.11 and she objected to that calculation. The insurer carried out an internal review.
The insurer recalculated the PAWE at $479.62 as per s 3.6 (1) of the MAI Act.
Ms Burns did not accept that finding and lodged her application for merit review in the Personal Injury Commission (the Commission).
At the outset, the insurer relied on the Certificate of Determination issued on 8 April 2022 (A7)[1] in addition to submissions below.
[1] Designates document designation in evidence bundle
The insurer calculated Ms Burns' PAWE pursuant to cl 4(2)(a), Schedule 1 of the MAI Act, noting the relevant assessable period as 15 November 2021 to 26 January 2022. This equates to 10 weeks and 2 days and/or alternatively 72 days. This period was chosen because Ms Burns was unable to work up to that point due to the pandemic, leaving a large gap in the 12 months prior to the accident.
The assessable period was calculated using the payslips (R4, R6-R8) which reveal Ms Burns began to earn continuously at Compass Group from 15 November 2022 to immediately before the day of the motor accident
The insurer looked at Ms Burns’ various payslips and documents supporting her application (R4, R6-R8, R10, A1-A6), and Ms Burns’ job deployments.
Ms Burns’ employers in the 12 months pre–accident were:
(a) Silo Bakery;
(b) Pinnacle People;
(c) St Ignatius Riverview School (Riverview), and
(d) Compass Group.
The insurer’ did not consider the earnings from Silo Bakery relevant as the employment appeared terminated sometime in November 2021 and the payslips reveal Ms Burns last earnings as earner were in July 2021.
The insurer submits the payslips from Pinnacle People reveal there was a gap in earnings between 24 May 2021 to 2 January 2022, and Ms Burns last earned intermittently from that firm during the period 3 January 2022 to 9 January 2022.
Given Ms Burns was only employed for one week at Riverview in mid-January 2021, the insurer did not consider those to be relevant earnings. The insurer also disregarded that employment—because although Ms Burns claimed this employer offered a full-time position - there was no contract or payslips from same.
The payslips from Compass Group revealed that prior to 15 November 2021 there was a large gap in Ms Burns’ earnings for the period 12 July 2021 to 14 November 2021.
It was noted Ms Burns earned continuously from 15 November 2021 to 26 January 2022 and therefore the insurer has taken these earnings into account.
The insurer submitted the Silo Bakery and Riverview earnings were not 'continuous' pursuant to s 3.6(4) of the MAI Act.
In addition to the above, the insurer noted Ms Burns was in receipt of COVID-19 Disaster Payments, however such payments fell outside of the assessable period and are not considered earnings as they are not derived due to personal exertion.
The insurer summarised the relevant earnings to make the PAWE calculation, which is disputed.
There was no note in the insurer’s communications whether the insurer advised Ms Burns to ask Riverview to confirm the offer in writing. Written confirmation with the agreed hours and earnings could have been used to calculate PAWE.
I noted Ms Burns earned $1,246.79 in the week before that accident, which I assume was from Riverview.
Although more than six months had passed on 1 August 2022 I made an interim decision seeking among other things confirmation of fulltime employment at Riverview and directing that the insurer was to consider any material produced to recalculate PAWE.
PAWE calculation
On 12 August 2022 Ms Burns sent the Commission a copy of the insurer's letter dated 12 August 2022. The letter confirmed it had received a letter from Compass Group—not Riverview—confirming it offer Ms Burns full time employment shortly before the accident.
The letter acknowledged that as Ms Burns was unable to accept the role because of her accident related injuries. Accordingly, PAWE was recalculated at $825.36.
The insurer undertook to make an adjustment payment of $5,944.53 for the difference between this amount and previous payments.
The insurer stated it would pay $784.09 calculated as follows: ($825.36 - earning capacity) x 95% = $784.09
These payments would be made on a fortnightly basis from 28 January 2022 and continue until 28 April 2022 when payments would be made as follows: ($825.36 - earning capacity) x 85% = $701.56. That letter did not include the method it used to calculate the PAWE.
Ms Burns wrote to the Commission the following:
27."...I can also understand that I wouldn’t get the offer of the full amount of $1,250/week. But I still feel this amount is too low as it’s still about $200 under my net weekly earnings whereas the $1,250 would be the lowest amount Gross earnings per week. Please assess their decision and let me know as I believe it should be close to the $1,000 mark."
I directed the insurer to state how it calculated the PAWE, and it provided the following:
(a) an email from employer dated 11 August 2022 confirming the hourly rate for the offered role;
(b) Allianz revised PAWE decision dated 12 August 2022 (amended letter issued on 16 August 2022). The amended letter addresses the calculations of the revised PAWE as follows:
This amount forms the basis of the weekly payment benefits, which will be paid as follows: Hourly rate advised by employer as per letter: $21.72
Hours worked per week: 38 hours
$21.72 x 38 hours= $825.36
The email from the author of the Compass Group letter sent 11 August 2022 stated that Ms Burns would have been paid $21.72 per hour in a full-time role, "which would have been a slightly lower rate then [sic] she currently was on as part of Casual Pool."
Ms Burns asks that I review the decision 12 August 2022 (as revised 16 August 2022).
Legislation and guidelines
I considered the following:
· MAI Act;
· Personal Injury Commission Act 2020 (the PIC Act);
· The Motor Accident Guidelines (the Guidelines);
· Motor Accident Injuries Regulation 2017 (the Regulation), and
· Personal Injury Commission Rules.
Merit review
I am required to decide what the correct and preferable decision is in respect to this merit review. The rules of evidence do not bind this merit review and I may inquire into any matter relevant to the issues in dispute in such manner as I see fit.
I have decided that the insurer’s Internal Review Certificate dated 12 August 2022 is the reviewable decision.
In accordance with Procedural Direction PIC2 I am satisfied that sufficient information has been supplied in connection with the proceedings, so that I may determine the matter on the papers without holding a teleconference or formal hearing (see s 52(3) of the PIC Act).
Documents considered
I considered the Application and the documentation attached to the Application and Reply, as well as the later material lodged after my interim decision
Reasons
Ms Burns’ original submission overall appears to be that the insurer ought to have included the Silo earnings.
However, the insurer calculated it correctly based on the available information, because the insurer could not treat the Silo earnings as being continued, because the lockdowns intervened.
This is a situation where an injured party only worked for a shortened period over the 12 months previous to the accident because of the COVID-19 lockdowns. It is clear from the information that Ms Burns provided she could have worked the whole 52–week period had it not been for the lockdown as well as the particular problems the pandemic caused Ms Burns.
However, the MAI Act does not allow for the earnings in the weeks Ms Burns was actually working during the 12 months prior to the accident to be divided by the number of those weeks to determine her PAWE or to treat Jobkeeper as income paid to an earner.
This was recently confirmed in the Supreme Court where a merit review panel decision–which included me in the majority – was overturned when the panel calculated PAWE using the actual earnings divided by actual weeks worked, which obtained a higher PAWE result for a claimant.[2]
[2] Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481, at [70].
The Shahmiri decision also confirms that COVID–19 disaster payments cannot be included in calculating the PAWE.
I noted the insurer did not consider the Riverview earnings as it was one week only in mid-January 2022.
Ms Burns told the insurer that Riverview had offered her continuing full-time work verbally, and she would have accepted it but for the accident.
The insurer could have considered this but declined to do so because the offer was not made in writing. If the offer had been made in writing then the insurer could have used that to calculate the PAWE under cl 4(2) (c), Schedule 1 of the MAI Act which provides:
"if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self–employed person—the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement."
As noted above, Ms Burns submitted Compass Group’s letter dated 5 August 2022. That letter confirmed that it was the Compass Group which had offered full-time work to Ms Burns. It also confirmed that she was not able to accept the position because of the motor accident.
Conclusion
The insurer’s decision of 12 August 2022 is correct because, based on the Compass Group letter dated 5 August 2022 it accepted that Ms Burns had entered into an arrangement to undertake full-time employment.
It used the average weekly gross earnings that Ms Burns could reasonably have been expected to earn–but for the injury–in that role. This concurs with cl 4(2) (c), Schedule 1 of the MAI Act.
Under this clause in the schedule PAWE is based on prospective earnings. If Ms Burns had worked for the Compass Group she would have been paid that amount as a full-time worker (38 hours per week). The insurer could not include prospective overtime, because that had not been established or assumed as Ms Burns had not commenced the role.
Further, being a full-time role she would not have been able to work in other casual roles to increase her earnings.
This is the correct and preferable decision based on the information before me.
If Ms Burns can provide new evidence of the certainty of overtime or whether or not she would have worked additional roles to boost her earnings she may seek further internal review with the insurer.
Alternatively, if Ms Burns can demonstrate this merit review decision was incorrect in a material respect, as required by s 7.15(3) of the MAI Act. she may apply for a review panel to seek a substituted decision.[3]
[3] Procedural Direction MA6 – Review of a single merit review by a review panel
I make the following findings:
(a) The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the MAI Act, and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act.
(b) The reviewable decision dated 12 August 2022 is affirmed.
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