Luo v QBE Insurance (Australia) Limited
[2022] NSWPICMR 32
•27 April 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Luo v QBE Insurance (Australia) Limited [2022] NSWPICMR 32 |
| CLAIMANT: | Yan Luo |
| INSURER: | QBE Insurance (Australia) Limited |
| MERIT REVIEWER: | Kriesen Seeneevassen |
| DATE OF DECISION: | 27 April 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Dispute about the amount of weekly payments of statutory benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (MAI Act); calculation of pre-accident weekly earnings (PAWE) under Schedule 1 clause 4(1) of the MAI Act; gross earnings of self-employed; JobKeeper payments not gross business income; Held – the reviewable decision is varied. |
| DETERMINATIONS MADE: | The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Act, and is therefore a merit review matter under Schedule 2(1) (a) of the Motor Accident Injuries Act2017. 1. The reviewable decision is: i) varied. 2. The claimant’s PAWE is $654.74. The matter is remitted to the insurer for recalculation of her entitlement to weekly payments of statutory benefits in accordance with these reasons and Division 3.3 of the Motor Accident Injuries Act 2017 (MAI Act). 3. The amount of legal costs awarded in this case is $NIL |
Background
There is a dispute between Yan Luo (the claimant) and QBE (the insurer) about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Act,
The claimant was injured in a motor accident on 5 March 2021. She lodged an application for statutory benefits with the insurer the next day.
On 8 November 2021, the insurer advised her that her pre-accident weekly earnings (PAWE) had been determined at $507.64.
On 24 November 2021, the claimant applied to the insurer for an internal review of their decision.
On 9 December 2021 of the MAI Act, the insurer issued a Certificate of Determination with a revised PAWE of $523.80.
The claimant now seeks a further review of her PAWE.
Submissions
I issued direction to the parties on 17 March 2022 requesting them to lodge all the relevant material that they would like me to consider in reviewing the claimant’s PAWE.
I have reviewed all the documents that the parties have made available.
The claimant submits that her PAWE should be $1,372.19. She has several sources of income. The ones that are to be included in as gross earnings for the purpose of the PAWE determination are Jobkeeper, Acare salary and wages, Usana commissions, aged care services provided to Better Living, and housekeeping services. Excluded are earnings from rent, ride sharing and the sale of masks and sanitisers.
The insurer has not lodged a submission. My understanding of their considerations when determining the claimant’s PAWE is based on their Certificate of Determination of 9 December 2021.Their PAWE determination is based on sources of earnings from ACare, Better Living, and the claimant’s delivery of housekeeping services.
The law
Schedule 1 clause 2 of the MAI Act states as follows:
Meaning of "earner"
A person who is injured as a result of a motor accident is an
"earner" if the person is at least 15 years of age and who--(a) was employed or self-employed (whether or not full-time)--
(i) at any time during the 8 weeks immediately preceding the motor accident, or
(ii) during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii) during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,
and, at the date of the motor accident, had not retired permanently from all employment, or
(b) before the motor accident, had entered into an arrangement (whether or not an enforceable contract)--
(i) with an employer or other person to undertake employment, or
(ii) to commence business as a self-employed person,
at a particular time and place, or
(c) was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987.
Schedule 1 clause 3 of the MAI Act states as follows:
Meaning of "loss of earnings"
(1) "Loss of earnings" means a loss incurred or likely to be incurred in a person's income from personal exertion.
(2) A person's "income from personal exertion" is--
(a) the amount that is the income of the person consisting of earnings, salaries, wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered, and
(b) the proceeds of any business carried on by the person either alone or in partnership with any other person, and
(c) any amount received as bounty or subsidy in carrying on a business.
(3) A person's "income from personal exertion" does not include--
(a) interest, unless the person's principal business consists of the lending of money, or unless the interest is received in respect of a debt due to the person for goods supplied or services rendered by the person in the course of the person's business, or
(b) rents or dividends, or
(c) any employer superannuation contributions, or
(d) the monetary amount of any annual, sick or other leave entitlement.
Schedule 1 clause 4 of the MAI Act states as follows:
Meaning of “pre-accident weekly earnings”—general
(1) "Pre-accident weekly earnings", in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.
(2) In the following cases, "pre-accident weekly earnings", in relation to an earner who is injured as a result of a motor accident, means—
(a) if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months—the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,
(a1) if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period—the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,
(b) if subclause (3) applies—the weekly average of the gross earnings received by the earner as an earner during the period from when the change of circumstance referred to in that subclause occurred to immediately before the day of the motor accident,
(c)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.
(2A) The "pre-accident period", in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.
(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.
[Note: Examples of a change of circumstances to which this subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards.](4) For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.
Reasons
The claimant’s PAWE is her average weekly earnings over a relevant period determined pursuant to Schedule 1 clause (4) of the MAI Act.
The relevant period
The claimant’s PAWE falls under Schedule 1 clause (4)(3) of the MAI Act because she started employment with Acare on 5 October 2020. It was a significant change in her earnings circumstances that resulted in her regularly earning more on a weekly basis than she was earning before she took up the employment. Her PAWE needs to be determined pursuant to Schedule 1 clause (2)(b). That is, it is the weekly average of her gross earnings during the period from 5 October 2020 to 4 March 2021. This relevant period is made up of 151 days or 21.57 weeks.
Gross earnings
Acare
According to the claimant’s payslips, she earned $4,585.45 from Acare for the 154-day period from 5 October 2020 to 7 March 2021. The relevant period being 151 days, I will allow $4,496.12 ($4,585.35 ÷ 154 x 151) as the claimant’s Acare earnings for the relevant period
Jobkeeper
The claimant refers to Shqau v AAMI [2022] NSWPICMR 6 (Shqau) when submitting that her Jobkeeper payments should be included as earnings. In Shqau the Merit Reviewer noted that the Jobkeeper scheme was a wage subsidy program announced by the Prime Minister on 30 March 2020 to help keep Australians in jobs in the face of the economic impact of the coronavirus. He found that Jobkeeper payments were earnings because they are subsidies received in carrying on a business, within the meaning of clause 3(2)(c) of Schedule 1 of the MAI Act.
Merit reviews are not binding decisions.
Division 3.3 of the Act provides for the weekly payments of statutory benefits to injured persons as follows:
a. An injured person needs to have incurred a loss of earnings to be eligible for weekly payments of statutory benefits.
b. Loss of earnings is defined in Schedule 1, clause 3 of the Act to include any the loss of any amount received as bounty or subsidy in carrying on a business.
c. Having incurred a loss of earnings, the amount of the person’s statutory weekly benefits is based on their PAWE among other factors.
d. PAWE is based on the person’s gross earnings.
Jobkeeper is a business subsidy that may go towards determining the claimant’s entitlement to statutory benefits. They are only a relevant consideration for determining PAWE if they are also gross earnings.
Gross earnings are not specifically defined in the Act. According to the Macquarie dictionary:
a. The ordinary meaning of “earning” is money earned, wages, profits.
b. To earn is to gain by labour or service.
I find that Jobkeeper payments are not gross earnings for the purpose of determining the claimant’s PAWE because they are not gained by labour or service.
Usana commissions
The claimant says that the $6,055 of Usana commissions in her 2020/2021 tax return should be included as earnings. She was a self-employed online marketing salesperson for Usana at the time of the accident.
The insurer did not include any Usana earnings because of insufficient information.
I find that the claimant was deriving earnings from Usana during the relevant period because her NAB statements show credit payments of $1,952.08 for the 143-day period from 16 October 2020 to 4 March 2021.
I will allow $2,061.28 ($1,952.08 ÷ 143 x 151) as the claimant’s earnings from Usana.
Better Living
The claimant submits that her NAB statements shows that she earned $3,895 from Better Living for the 13 October 2020 to 4 March 2021. The insurer says that the claimant’s Better Living earnings, as verified by her bank statements, is $3,125.
The claimant’s bank statements show total Better Living credit payments of $3,895 but they are for the 155-day period from 16 October 2020 to 19 March 2021, not to the 4 March as the claimant submits.
I will allow $3,794.48 ($3,895 ÷ 155 x 151) as the claimant’s Better Living earnings.
Housekeeper
The claimant submits that her earning from housekeeping was $9,140 for the period 15 October 2020 to 5 March 2021. The insurer found that her earnings from her housekeeping role, as verified by her bank statements was $3,604.18.
I have based my earnings estimation of the claimant’s housekeeping earnings from her 2021 tax return because I have been unable to discern which credit transactions in her bank statement relate to her housekeeping services.
The claimant’s 2021 tax return shows that she derived income from her housekeeping activities of $9,140 for that financial year. It was a leap year with 366 days. I will allow $3,770.87 ($9,140 ÷ 366 x 151) as her gross earnings from housekeeping activates for the relevant period.
Rental income
Neither party had included the claimant’s rental income as earnings. I accept that this should be so. Rents are not earned by labour or service.
Ride sharing and mask/sanitiser sales
The claimant excluded these sources of earnings from her PAWE determination because they fell outside the relevant period. I accept that it is so. I do not have any documents to suggest otherwise.
The claimant’s PAWE is:
Acare
$4,496.12
Better Living
$3794.48
Usana Commission
$2,061.28
Housekeeper
$3,770.87
Gross Earnings
$14,122.77
PAWE ($14,123/21.57) =
$654.75
Conclusion
The reviewable decision is:
(a) varied
The amount of the weekly payments is to be calculated based on the claimant’s pre-accident weekly earnings of $654.75.
The amount of legal costs awarded in this case is $NIL.
Legislation and Guidelines
In making this decision, I have considered the following:
· The application, reply and supporting documentation, and
· MAI Act.
Kriesen Seeneevassen
Merit Reviewer
Personal Injury Commission
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