McLuckie v Insurance Australia Limited ACN 000 016 722 Trading As NRMA Insurance (Motor Accident Injuries) - [2023] ACAT 70

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

MCLUCKIE v INSURANCE AUSTRALIA LIMITED ACN 000 016 722 TRADING AS NRMA INSURANCE (Motor Accident Injuries) [2023] ACAT 70

MAI 1/2023
Catchwords: MOTOR ACCIDENT INJURIES – application for review of insurer’s decision pursuant to section 193 of the Motor Accident Injuries Act 2019 – payment of income replacement benefits -meaning of “week” and “weekly” in Division 2.4.3 of the Motor Accident Injuries Act 2019 - calculation of Pre-injury weekly income for fixed term contractor - meaning of employee in Division 2.4.1 of the Motor Accident Injuries Act 2019
Legislation cited: Motor Accident Injuries Act 2019 ss 17, 20(4), 52, 76, 81, 89, 93, 96, 97, 100, 101, 102, 197, 487
Superannuation Guarantee (Administration) Act 1992 (Cth) s 12(2)

Subordinate

Legislation cited: Motor Accident Injuries (Income Replacement Benefit) Guidelines 2021 cl 5.1.4, 8.1.1
Cases cited:Butler v Fife Coal Co Ltd [1912] AC 149
Kebby v Waldron (1943) 43 SR (NSW) 342
Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622
Williams v AAI Limited [2021] ACAT 100

Tribunal:Acting Presidential Member T Kyprianou
Date of Orders:  15 November 2023
Date of Reasons for Decision:      15 November 2023
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          MAI 1/2023

BETWEEN:

THOMAS ALOYSIUS MCLUCKIE

Applicant
AND:

INSURANCE AUSTRALIA LIMITED ACN 000 016 722
TRADING AS NRMA INSURANCE

Respondent

TRIBUNAL:Acting Presidential Member T Kyprianou
DATE:15 November 2023

ORDER

The Tribunal orders that:

The decision made by the Nominal Defendant dated 5 February 2022 is set aside and remitted to the respondent for reconsideration pursuant to the following directions:
(a)The calculation of the applicant’s entitlement to income replacement benefit be made for each weekly period as set out in the decision of 4 February 2022; and
(b)Factor A in that calculation is to be calculated by using the amount of $6,548.07 for the applicant’s pre-injury weekly income and an hourly rate of $163.70 for each hour of income lost.
Within 14 days of the date of this order, the respondent to pay the applicant the amount of the ACAT filing fee for this application which was paid by the applicant.
………………………………..

Acting Presidential Member T Kyprianou

REASONS FOR DECISION

The applicant in these proceedings lodged an Application for Review of insurer’s decision with the tribunal dated 27 February 2023 (the application). The applicant seeks review of a decision made by the Nominal Defendant of the Australian Capital Territory on 5 February 2023 (the reviewable decision). That decision determined the applicant was entitled to income replacement benefits (IRB) pursuant to the provisions of the Motor Accident Injuries Act 2019 (the MAI Act) for the period 19 May 2022 to 9 November 2022 (inclusive) (the relevant period) in the sum of $4,322.50.
After the application was lodged with the tribunal, Insurance Australia Limited trading as NRMA Insurance (the respondent) was identified as the insurer for the motor vehicle most at fault in respect of the motor accident (the relevant insurer) which caused the applicant an injury which resulted in income loss. Initially, the applicant lodged an application for IRB with the Nominal Defendant of the ACT. He did so because the insurer of the motor vehicle most at fault for the motor accident could not be identified at that time. After NRMA Insurance was identified as the relevant insurer, NRMA Insurance was substituted for the Nominal Defendant as the respondent in these proceedings.

Agreed Facts

Many of the relevant facts are agreed between the parties.
The applicant’s claim arises out of a motor accident which occurred on Hindmarsh Drive in the Australian Capital Territory on 19 May 2022 (the date of the motor accident). The applicant’s son, Matthew, was driving a vehicle which collided with another vehicle driven by a driver who was speeding and driving on the wrong side of the road. That vehicle had been stolen. Matthew’s vehicle was hit head on at speed and, tragically, he was killed. The applicant was not present at the scene of the accident; however, he developed psychological injuries as a result of the trauma and grief he experienced following his son’s death.
At all relevant times, the applicant was employed as an information technology contractor on a fixed term contract.
As a result of the psychological injuries, the applicant suffered following the motor accident, he required time off work which resulted in income loss. He therefore applied for IRB.

The dispute

There is no dispute between the parties that the applicant is entitled to IRB for the relevant period. However, there is a dispute in relation to the calculation of the amount of IRB payable for that period. The respondent determined that the amount payable is $4,322.50. The applicant claims that he is entitled to $5,520.[1]
[1] Applicant’s statement of facts and contentions filed 5 May 2023, page 2
The dispute has been narrowed to two issues. The first, and principal, dispute is about the day a period of a week starts for the purposes of calculating the “weekly amount payable” for IRB under Division 2.4.3 of the MAI Act.
Both parties agree that the issue which needs to be determined by the Tribunal is as follows:
Whether under Division 2.4.3 of the MAI Act, which deals with income replacement benefits, the word ‘weekly’ in the term ‘weekly amount payable’ should be interpreted as meaning for the period Monday to Friday, or for a period of a week commencing on the day of the motor accident.[2]
[2] Respondent’s further submissions dated 31 August 2023 at [2]; Applicant’s response to respondent’s further submissions filed 5 September 2023 at [2]
The applicant submits that the term ‘weekly amount’ means the amount, as calculated under the MAI Act, for a period, commencing on a Monday and ending on a Friday, of any week he was unable to work his pre-injury hours, because that is his normal working week. The respondent submits that ‘weekly amount’ means the amount, calculated under the MAI Act, for a period of a week, or seven days, starting on the day of the motor accident and continuing, thereafter, for the period that the Act provides IRB is payable.
The second issue raised by the applicant is a disagreement about the calculation of his pre-injury weekly income (PIWI). The applicant did not initially raise a dispute in relation to the calculation of his PIWI when he sought internal review of the initial decision dated 21 November 2022 (the internally reviewable decision), however, he has put in issue that calculation in documents he filed in these proceedings.[3]

When and how is IRB payable – introduction

[3] Applicant’s statement of facts and contentions filed 5 May 2023, page 1 at [4]

Part 2.4 of the MAI Act deals with IRB. The provisions for payment of IRB are set out in Division 2.4.3 of that Act.
Section 89 of the MAI Act relevantly states that a person injured in a motor accident is entitled to IRB if, on the date of the motor accident, the person was at least 15 years old and in paid work. As noted above, there is no dispute that the applicant is entitled to IRB.
In simplified terms, IRB is calculated by deducting from a person’s PIWI the person’s post-injury earning capacity for each week the person is entitled to IRB and then multiplying the result of that calculation by a numerical factor (N), which is defined in the MAI Act. This factor varies depending on the person’s income and on whether the IRB falls in the first payment period or the second payment period of entitlement. The first payment period is 13 weeks starting on the date of the motor accident. The second period is the day after the first period finishes and extends for five years from the date of the motor accident. The dispute in this case concerns how each week should be defined when assessing the applicant’s post-injury earning capacity and his IRB.
Section 100 of the MAI Act requires the insurer to make a decision about an injured person’s post-injury earning capacity by having regard to a list of factors set out in the section and in the MAI Guidelines.[4] The respondent in this matter has decided that the applicant’s post-injury earning capacity for each week that he is entitled to IRB is the amount of his PIWI less the income he lost for each hour he has been unable to work due to the injury he sustained as a result of the motor accident. His income earning capacity is, therefore, the income the applicant has received from engaging in his employment, post-injury. Section 100(2)(c) of the MAI lists such income as a matter that the insurer must consider in assessing a person’s post-injury earning capacity. I note at this juncture that, though it is not disputed that this was a reasonable way for the respondent to assess the applicant’s post-injury earning capacity, the sum derived for each weekly calculation is dependent upon the two issues in dispute in this application. That is, the determination of the applicant’s PIWI, and the start and end day of each week period over which the calculation is made.

The legislative provisions relevant to payment of IRB

[4] MAI Act s 487: “the MAI commission may make guidelines about any matter required or permitted by this Act to be included in the guidelines. MAI (IRB) Guidelines 2021 at 8.2.1 set out all the matters that an insurer must take into account in deciding post-injury earning capacity.

Section 93 of the MAI Act defines terms which are relevant in ascertaining how payments to people entitled to IRB are to be calculated. The section defines the periods over which a claimant can be paid IRB. There are two periods over which payments can be made. The first is a period of 13 weeks beginning on the date of the motor accident. The second is a period of five years beginning on the day after the end of the first payment period and ending five years after the date of the motor accident.
Section 93 also defines the phrase “post-injury earning capacity” for the purposes of Division 2.4.3 of the MAI Act. That definition is as follows:
post-injury earning capacity, of an injured person, means the weekly amount the person has the capacity to earn in paid work for which the person is reasonably suited because of the person’s education, training and experience, based on the person’s fitness for work in that paid work as decided by the relevant insurer under section 100 (1) (Injured person’s post-injury earning capacity). (Emphasis added)
Sections 96 and 97 of the MAI Act set out the formula which must be applied in calculating the amount of IRB payable to a claimant each week for the first and second payment periods, respectively. Sub-section (1) of section 96 states:
An injured person entitled to income replacement benefits is entitled to the amount each week worked out as follows for the first payment period:
(Emphasis added)
The formula is the same in both sections, that is (P−A) × N. However, because N is defined differently in each of those sections, the amount payable for IRB in the second payment period is lower than the amount payable during the first payment period.
The three factors in the formula above are defined in sections 96 and 97 of the MAI Act:
(a)P is the injured person’s PIWI.
(b)A is “the amount of the injured person’s post-injury earning capacity.”[5]
(c)N is a different figure depending on the injured person’s PIWI.[6] It is agreed that the multiplier applicable to calculate the applicant’s IRB is 0.95 for the first payment period and 0.8 for the second payment period.
[5] MAI Act ss 96(1), 97(1)
[6] See MAI Act ss 96(1), 97(1)
Sections 96 and 97 cap the maximum PIWI which can be attributed to an injured person to $2,250 AWE (average weekly earnings) indexed, regardless of the person’s actual PIWI.[7] The indexed maximum amount for the relevant period in this matter is $2,470 per week. Because of this provision, the maximum amount the applicant can be awarded for IRB is $2,470 per week. The applicant’s PIWI far exceeds this amount. There is no discretion for a decision-maker to increase the maximum amount payable for IRB under the MAI Act.
[7] See the definition of ‘average weekly earnings’ in MAI Act s 17: “the series of average weekly earnings issued by the Australian statistician, prescribed by regulation.”
Section 101 deals with the period IRB is payable. The relevant part of section 101 to this application provides as follows:
101 Income replacement benefits—period payable
(1)This section applies if—
(a)a relevant insurer accepts liability under section 65 (Relevant insurer must decide liability for defined benefits) for an application for defined benefits for a person injured in a motor accident; and
(b)the injured person is entitled to income replacement benefits.
(2)The period for which income replacement benefits are payable—
(a)starts on the start date for the injured person; and
(b)ends—
…
(B) 5 years after the date of the motor accident.
(3)The start date for an ongoing employee or fixed term contractor, self‑employed person, casual worker or person receiving workers compensation is—
(a)for an application made during the application period—the date of the motor accident;
Section 102 states that IRB payments are payable to an injured person every 14 days after the start date for the injured person.

What do the terms “each week” and “weekly” refer to?

Sections 96 and 97 require the entitlement to IRB to be worked out “each week”. The terms ‘week’ and ‘weekly’ are not defined in those sections.
In my view, the words “each week” in sections 96 and 97, read in conjunction with sections 101 and 102, can only mean the same weekly periods mentioned in the definitions of the first and second payment periods in section 93. In other words, the words “each week” refer to each week of the first payment period and the second payment period. The first week of the first payment period commences on the day of the motor accident and ends seven days later. The first week of the second payment period commences on the day after the end of the first payment period and ends seven days later.
This interpretation is reinforced by the provisions of sections 101 and 102, which state that the start date for IRB for a fixed term contractor is the date of the accident, and payments are to be made every 14 days after the start date. This timetable supports that the calculation is to be made by reference to a week starting on the date of the motor accident.
The scheme for IRB payments set out in division 2.4.3 of the MAI Act outlines when the weeks for each of the two payment periods during which IRB is payable begin and end. The insurer is required to calculate any entitlement the injured person has to IRB for each of those weeks. The term “each week” in sections 96 and 97 must be read as having the same meaning as each week of the payment periods as defined in section 93 of the MAI Act.
As observed by both parties in their respective submissions, the MAI Act makes no reference to “working week”. The fact that the applicant’s working week extends from Monday to Friday does not enable a decision-maker to displace the way IRB is to be calculated as set out in division 2.4.3 of the MAI Act, that is, by calculating IRB on a weekly basis for each week starting on the date of the motor accident and continuing payments fortnightly thereafter. The ordinary meaning of a week is seven days. If the legislature wanted to change that ordinary meaning to five days, or to a “working week” of Monday to Friday, they would have needed to expressly define the term “week” or “weekly” to state that they meant something different from the ordinary meaning of those words. The actual language used in the sections of division 2.4.3 confine the meaning of the words “week” and “weekly” to the periods of payment defined in section 93. There is no reference, express or implied, to the injured person’s working week in the MAI Act. Even in beneficial legislation, the interpretation of words must “be restrained within the confines of ‘the actual language employed’ and what is ‘fairly open’ on the words used”.[8] In this case, I do not consider that it is open to me to interpret the words “week” and “weekly” as referring to the injured person’s working week.
[8] Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622, 638 citing, Kebby v Waldron (1943) 43 SR (N.S.W.) 342, 346 and Butler v Fife Coal Co Ltd [1912] AC 149, 178-179
Further, though I accept the applicant’s submission that the MAI Act is beneficial legislation, I do not accept that interpreting the terms “week” or “weekly” by reference to the injured person’s working week would result in a benefit to injured persons. For example, some persons do not have regular working weeks. They work different days in each week. If the subjective approach put forward by the applicant was to be adopted, it would be difficult to work out how a week should be interpreted in those cases.

Information and support provided to the applicant during the application process

In a letter, provided in support of the applicant’s position during the internal review process, it was submitted on the applicant’s behalf that if he had been informed by the Nominal Defendant of the meaning of “weekly amount” when he first applied for IRB then, in consultation with his GP, he would have sought to take different periods of time off work[9]. He has submitted further that the Nominal Defendant did not provide him with any advice to explain why they considered the applicable period for calculating the weekly amount of IRB to be different from his normal working week.[10]
[9] Document 10 – ‘Letter to Allison Munro, Victim Support ACT’ dated 8 December 2022 to Respondent’s index of documents filed 22 March 2023, page 71
[10] Applicant’s statement of issue filed 16 April 2023 at [8]
Section 20(4)(a) of the MAI Act imposes a duty on the insurer:
[T]o disclose as soon as practicable, all information that an applicant or claimant may reasonably need to understand the process for applying for defined benefits or making a motor accident claim.
I have some sympathy with the applicant’s submission on this issue. The sections of the MAI Act which set out how IRB is assessed and payable, are complex. Working out what “each week” or “weekly” means in division 2.4.3 of the MAI Act requires analysis and cross referencing of several sections. Injured persons cannot recover legal costs for obtaining legal advice in relation to applying for defined benefits. In my view, where insurers have a clear understanding of the effect of complex legislative provisions in the MAI Act, they have a duty under the Act and the MAI Guidelines to help applicants understand the process set out in the legislation. Failure by an insurer to act in good faith when processing a claim may amount to procedural unfairness and may constitute an error of law which could lead to the insurer’s decision being set aside, amended or substituted by the Tribunal.
However, in this matter, I do not consider that the lack of advice provided to the applicant constitutes an error of law which can be remedied by amending or setting aside the decision. There are two reasons for this.
First, setting aside the decision cannot remedy the disadvantage suffered by the applicant by taking leave for his injuries in the “wrong” weeks. Nor can the decision be amended by redefining the weeks during which the applicant had time off.
The tribunal’s powers on review of an insurer’s decision are set out in section 197(1) of the MAI Act. The tribunal can affirm the decision, amend the decision, or set aside the decision and either make a substitute decision or remit the matter to the insurer to reconsider the decision in accordance with any directions of the tribunal. The tribunal can only amend or remit a decision for reconsideration if it finds that the decision is affected by an error of fact or an error of law.[11] To amend the decision, there must be evidence on which the tribunal can rely to make the amendment in accordance with the provisions of the Act. The evidence before me is that the applicant took leave on the days set out in the reviewable decision. Similarly, if the decision was to be remitted for reconsideration, the evidence available to the respondent of leave taken by the applicant would be the same. The fact that leave was taken on certain days and not others between 30 June 2022 and 9 November 2022 cannot be changed.
[11] Williams v AAI Limited [2021] ACAT 100 at [49]-[50] and [94]

Secondly, though in retrospect it would have been helpful for the Nominal Defendant to inform the applicant that the calculation of IRB is based on a weekly period which starts on the day of the motor accident and continues for each week thereafter of the two payment periods, I am not convinced that an insurer’s duty to act in good faith extended to the provision of such advice to the applicant at the time he lodged his application for defined benefits.
In addition to the obligation an insurer has to act in good faith by providing information to an applicant set out in section 20(4)(a), the MAI Act provides that the MAI Guidelines may make provision for information and support that the relevant insurer must give applicants for defined benefits.[12] The Motor Accident Injuries (Income Replacement Benefit) Guidelines 2021 (MAI (IRB) Guidelines) provide, at clause 8.1.1, that an insurer is to develop and follow procedures for making decisions about an injured person’s post-injury earning capacity. The MAI (IRB) Guidelines states that procedural fairness must be afforded to the injured person and examples of what constitutes procedural fairness are provided. The MAI (IRB) Guidelines states that the injured person should be provided with all information the insurer has considered in making the decision, regardless of whether the information supports the decision or not. No reference is made in the MAI (IRB) Guidelines to information or advice which should be provided by the insurer on statutory interpretation.
[12] MAI Act s 52
I have not been provided with the procedures the Nominal Defendant had in place when assessing the applicant’s post-injury earning capacity (PIEC). I assume that whatever those procedures were, they made no reference to the construction of the term “weekly” in the definition of PIEC in section 93 of the MAI Act. In my view, the insurer’s duty to provide information to applicants does not extend to provision of advice on the effect of the construction of the legislation on the circumstances of their claim, unless it is clear that the applicant is unaware of obvious legislative requirements, they must meet for their application to be assessed. In this case, I doubt that the Nominal Defendant could foresee, at the time that the applicant lodged his application for defined benefits, that arranging to have time off in one week and not another was open to him, or that it would make a difference to the outcome of his application.
For the reasons outlined above, I consider that the reviewable decision is correct in as far as the meaning the decision attributes to the terms “weekly” and “each week” in Division 2.4.3 of the MAI Act.

Calculation of pre-injury weekly income

In considering the calculation of the applicant’s PIWI, it should be said at the outset that the amount of PIWI the applicant has submitted as the correct amount is unlikely to make a material difference to the outcome of the calculation of his entitlement to IRB for the relevant period. Despite this, I consider that it is necessary to determine whether the applicant’s PIWI has been calculated correctly, as the amount of the PIWI may make a difference to future assessment of the applicant’s entitlement to IRB. Review of the method which should be adopted in the assessment of PIWI may also be of assistance to the respondent in the assessment of PIWI in other applications.
At the time of the motor accident, the applicant was employed as a fixed-term contractor. In support of his employment status, the applicant provided to the respondent an agreement of supply of services dated 25 March 2022 between Insitec Pty Ltd (Insitec) and Achieve Corp Payroll Management Pty Ltd (Achieve Corp), (the Insitec Agreement). Pursuant to that agreement, the applicant is engaged to provide services to Insitec’s clients, as directed by Insitec through Achieve Corp. Achieve Corp appears to be a contractor payroll company through which Insitec pays $200 per hour, or $1,600 per eight-hour day, for the applicant’s services. The term of the Insitec Agreement is two years, and the maximum hours that the applicant can work during the term of the agreement is 460 days.
The applicant has also provided his payslips, which he receives from Achieve Corp, as evidence of the income he was earning at the time of the motor accident. Those payslips show that he was paid $197 per hour by Achieve Corp, and that income tax and superannuation payments were deducted from the amount earned by the applicant each pay cycle. Though it is not evident from the papers I have available, it is likely that Achieve Corp kept the difference between the $200 per hour paid by Insitec for the applicant’s services and the $197 per hour it paid to the applicant as its fee, or perhaps part of its fee, for providing payroll services.
The applicant has nominated his employer as Insitec. No issue has been raised by the respondent in relation to the identity of the employer or the status of the applicant’s employment as a contractor of Insitec .Accordingly, I consider that it is the amount paid by Insitec which is the relevant amount to consider when calculating his PIWI.
As the parties agree that the applicant is a fixed term contractor, his pre-injury weekly income must be calculated pursuant to the provisions set out in section 81 of the MAI Act.
That section relevantly states that PIWI for an ongoing employee or a fixed term contractor means:
[T]he average weekly amount of the sum of the following amounts from all paid work undertaken by the person in the 52 weeks immediately before the date of the motor accident:
(i)The person’s gross income as an employee;
(ii)The person’s net income as a self-employed person …[13]
[13] MAI Act s 81(1)(a)
The term ‘gross income’ for an employee is defined in section 76 of the MAI Act. Relevantly, that section provides “gross income” does not include “any contribution paid or payable on behalf of the person by the person’s employer to a superannuation scheme for the benefit of the person.”[14]
[14] MAI Act s 76(b)(i)
Section 76 refers to gross income of an injured person who is an employee. Though the MAI Act does not expressly state so, in my view, the word “employee” in section 76 must be construed as including both fixed term contractors and on-going employees. My reasons for reaching this view are as follows.
Section 81(1)(a) of the MAI Act defines the PIWI of a fixed term contractor or an ongoing employee and refers to the gross income earned by this class of persons as “the person’s gross income as an employee”.
Section 81(2) states that, in section 81, ongoing employee or fixed term contractor means “a person injured in a motor accident who was, on the date of the motor accident engaged in ongoing employment or under a fixed term contract.” This definition denotes employees who are either ongoing or engaged for a fixed term under a contract. Curiously, section 81(2) also defines the term “eligible fixed term contractor” for section 81, though this term does not appear anywhere else in section 81.
A further reason I consider the definition of gross income in section 76 applies to both fixed term contractors and ongoing employees is that this is the only definition of gross income in Part 2.4 of the MAI Act, which deals with IRB. There is no separate definition of gross income of a fixed term contractor or an on-going employee.
So far as the treatment of superannuation contributions is concerned, section 12(2) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act) provides:
If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other person to the contract.
The Insitec Agreement is wholly for the labour of the applicant. Though the Agreement is between Insitec and Achieve Corp, the applicant is the only key personnel who can provide services under that agreement and is a signatory to the agreement. The applicant is therefore an employee of Insitec for the purposes of the SGA Act and superannuation payments must be made on his behalf pursuant to that Act.
The superannuation payments paid on behalf of the applicant by Achieve Corp which provides the payroll services, should therefore be deducted from his PIWI.
The definition of PIWI set out in section 81(1)(a) of the MAI Act is qualified by section 81(1)(b) which states that, if the person had a recent change in employment circumstances, then PIWI is the average weekly amount of the person’s gross income for the period starting on the date of the change and ending on the date before the date of the motor accident.
The applicant had a recent change of employment circumstances. The Insitec Agreement, pursuant to which he earned his income at the date of the motor accident, was entered into on 25 March 2022. The calculation period for his PIWI is therefore the period 25 March 2022 to 18 May 2022, being the day before the date of the motor accident.
The MAI (IRB) Guidelines give guidance to insurers on how PIWI should be calculated. Clause 5.1.4 states:
5.1.4 If a person is an ongoing employee or a fixed term contractor an insurer may estimate their pre-injury weekly income over the calculation period, based on their last PAYG summary or their annual salary (pro-rata for a part-time employee) set out in their employment contract, an award or agreement at the time of the accident … The estimated amount is to be used to calculate the person’s pre-injury weekly income unless the person is able to substantiate (through the provision of other evidence such as payslips) that their actual gross income over the calculation period was higher. (emphasis added)
In this case, the applicant’s income for the calculation period has been estimated, by the respondent, in the reviewable decision, to be $200 per hour or $8,000 per week based on the income he earns pursuant to the Insitec Agreement.
The applicant submitted that his pre-injury annual income should be assessed at $368,000 because he is contracted by Insitec to work 460 days over two years which equates to 46 weeks per year on a weekly income of $8,000 for 40 hours of work per week. Averaged over 52 weeks, this equates to $7,076.92 per week.
The Insitec Agreement provides that the maximum number of days the applicant can be paid for the term of his fixed term contract is 460 days. That is an average of 230 days per year at $1,600 per day, or an annual income of $368,000. Pursuant to clause 5.1.4 of the MAI (IRB) Guidelines, the estimate of the applicant’s annual income is $368,000 before superannuation payments are deducted.
The applicant has submitted that, from this amount, the superannuation payments paid on his behalf should be deducted, as provided for in section 76(b)(i) of the MAI Act. He has submitted that, during June 2022, he was paying superannuation at 13.5% of his salary, but, since June 2022, he has been paying the maximum allowable amount, which is taxed at the concessional rate, that is $27,500 per annum. I agree that in order to work out his gross income in accordance with the definition of section 76 of the MAI Act, the superannuation amount paid or payable by the employer ought to be deducted from the annual salary. Once the sum paid by the employer for superannuation of $27,500 is deducted from the annual salary of $368,000, the pre-injury annual income is $340,500, and when averaged over 52 weeks it is $6,548.07 per week.
The applicant has submitted in the alternative that superannuation payments of $43,200 should be deducted because, up until June 2022, he was paying 13.5% of his salary in superannuation. I do not consider that this is a preferable alternative. His PIWI has been estimated over 52 weeks based on the information contained in the Insitec Agreement in force at the time of the motor accident. It is therefore appropriate to deduct from that gross income the superannuation payments the applicant has submitted will be deducted from his gross income over the same 52-week period, rather than the higher amount he chose to contribute up until June 2022.
The respondent initially calculated the applicant’s pre-injury weekly income at $5,323.08 in a determination dated 22 August 2022.[15] This was based on the hourly rate of $200 and the daily rate of $1,600 nominated for the supply of services in the Insitec Agreement. The applicant had nominated Insitec as his employer in the Defined Benefits Application of 26 July 2022. The insurer’s assessment was also based on a 5 day/40-hour week for a 40-week period. The Insitec Agreement supports that the amount paid by Insitec for the applicant’s services is $1,600 per day, based on an 8-hour day at $200 per hour.[16] It is not clear on the documents available to the Tribunal why the respondent relied on a 40-week period in reaching the determination of 22 August 2022. The Insitec Agreement states that the term of the agreement is for two years and that during that term, the applicant is to work a maximum of 460 days.[17] This supports the applicant’s submission that he only gets paid for working 46 weeks per year.[18]
[15] Document 6 – ‘Notice of IRB assessment’ dated 22 August 2022 to respondent’s index of documents filed 22 March 2023, pages 42-44
[16] Respondent’s submission filed 25 October 2023 – ‘Supply of Services Agreement between Insitec Pty Ltd and Achieve Corp Payroll Management Pty Ltd’ dated 25 March 2022 (Insitec Agreement), page 5, schedule item 8
[17] Insitec Agreement, pages 4-5, schedule items 1, 8
[18] Based on 230 days per year or 46 weeks of 5 days
Consistent with section 76(b)(i) of the MAI Act, the superannuation contributions deducted from the applicant’s income and paid on the applicant’s behalf to a superannuation scheme were not included in the calculation of his pre-injury income in the determination of 22 August 2022.
The determination of IRB entitlement dated 22 August 2022 appears to have been amended by the Nominal Defendant on 21 November 2022 after receiving some correspondence from the applicant. The decision of 21 November 2022 then became the internally reviewable decision. By contrast to the decision of 22 August 2022, the internally reviewable decision dated 21 November 2022, and the decision which is the subject of the application in these proceedings dated 5 February 2023, assessed the applicant’s PIWI at $8,000. No explanation is offered in the two later decisions as to the reasons the earlier assessment of the PIWI of the applicant that was set out in the determination of 22 August 2022 was amended.
The decision assessing the applicant’s pre-injury income at $8,000 is based on work performed by the applicant for a 40-hour week at $200 per hour. It does not consider that the applicant only gets paid for a maximum of 230 days or 46 weeks per year, and that his annual salary should be averaged over the 52 weeks of the year, as provided for in clause 5.1.4 of the MAI (IRB) Guideline. The assessment of $8,000 also fails to deduct the amount of superannuation which is paid on his behalf and shown on his payslips.
I consider that the calculation of the applicant’s PIWI by the respondent in the decision of 5 February 2023 is erroneous because it has not been carried out in accordance with the method set out in section 81 of the MAI Act or the guidance provided by clause 5.1.4 of the MAI IRB Guideline. I accept the applicant’s submission on the issue of how his PIWI should be calculated. That is, his estimated annual income of $368,000 for 46 weeks of work, less superannuation payments of $27,500, which is $340,500, should be averaged over 52 weeks to derive his PIWI of $6,548.07.
As noted earlier in this decision, the maximum PIWI for the relevant period in this application is capped at $2,470.[19] Both the PIWI calculated in the reviewable decision, and the PIWI of $6,548.07, exceed the capped amount. Consequently, even though I have determined that the calculation of his PIWI in the decision under review is incorrect, the amount used for factor P in the formula set out in sections 96 and 97 of the MAI Act for calculating IRB remains at $2,470.
[19] MAI Act ss 96-97
The applicant’s PIWI is also relevant in the calculation of his post-injury earning capacity, that is factor A in the IRB calculation formula. To determine his post-injury earning capacity, the respondent deducted from the applicant’s PIWI the income he lost for each hour he was unable to work in each week he was entitled to claim IRB. In that calculation, the PIWI of $6,548.07 should be used rather than the amount used in the reviewable decision of $8,000. Consistent with the reduced PIWI, the hourly rate for each hour of work the applicant is unable to perform should be reduced from $200 to $163.70, that is $6,548.07 divided by 40 hours, which is the average number of hours the applicant gets paid for each week. There are three periods which the applicant has nominated as the weeks for which he considers he is entitled to a higher amount for IRB. These are 15- 19 August 2022, 26-30 September 2022, and 3-7 October 2022. As I have determined that the weekly periods for the calculation of IRB have to start on a Thursday, being the anniversary day of the date of the accident, those weekly periods have to be adjusted in accordance with the periods set out in the decision under review. That is the weeks of 18-24 August 2022, 22-28 September 2022 and 6-12 October 2022.
Though it is unlikely that recalculation of the applicant’s IRB based on a PIWI of $6,548.07 and an hourly rate of pay of $163.70 will alter the result of the applicant’s entitlement to IRB for the relevant period, the calculation for the IRB for the weeks set out in the decision under review should be recalculated based on these weekly and hourly amounts.

Costs

The respondent has offered to reimburse the applicant for the filing fee he paid for the application to the Tribunal, even if the applicant is unsuccessful. This offer was in recognition of the difficult task the applicant faced in dealing with the complexities of the relevant sections of the MAI Act. In any event, the applicant has been partly successful in his application in his challenge of the PIWI calculation in the decision under review. I will therefore order that the respondent pay the applicant the cost of the filing fee for the application

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Acting Presidential Member T Kyprianou

Date(s) of hearing	On the papers
Applicant:	Self-represented
Solicitor for the Respondent:	Mr Chase Deans, Moray and Agnew