Wehby v Insurance Australia Limited t/as NRMA Insurance
[2022] NSWPICMR 49
•22 August 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Wehby v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 49 |
| ClaimanT: | Hussein Wehby |
| Insurer: | Insurance Australia Limited t/as NRMA Insurance |
| Merit Reviewer: | Kriesen Seeneevassen |
| DATE OF DECISION: | 22 August 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS - Merit review; dispute about payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (2017 Act); considered meaning of pre-accident weekly earnings (PAWE); clause 4(1) of schedule 1 to the 2017 Act; whether COVID-19 disaster payments are earnings as an earner; whether PAWE is to be adjusted by reason of the COVID -19 pandemic. |
| Determinations made: | Issued under section 7.13(4) of the Motor Accident Injuries Act 2017 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 Act 2017. 1. The reviewable decision is: a. Varied b. The claimant’s pre-accident weekly earnings are determined to be $885.93 |
Background
There is a dispute between Hussain Wheby (the claimant) and the NRMA (the insurer) regarding the amount of statutory benefits payable to the claimant under Part 3 Division 3.3 of the Motor Accident Injuries Act (2017) (the Act).
The claimant was employed as a full-time hairdresser/barber when he was involved in a motor vehicle accident on 4 December 2021. He lodged an application for Personal Injury Benefits with the insurer on 14 December 2021.
On 20 December 2021, the claimant 's employer provided the insurer with copies of his payslips for the period 4 December 2020 to 4 December 2021 and advised that the business was closed between 26 June 2021 and 11 October 2021 due to the COVID-19 restrictions in NSW.
On 24 December 2021, the insurer issued a Liability Notice — Benefits up to 26 Weeks accepting liability for the claim.
On 29 December 2021, the claimant advised the insurer that during the COVID-19 restrictions in NSW he received COVID-19 disaster payments from Centrelink between 26 August 2021 to 13 October 2021.
On 11 January 2022 the insurer advised the claimant by telephone that they had assessed his pre-accident weekly earnings (PAWE) to be $944.77. On the same date, the claimant requested an internal review of the PAWE decision.
The insurer conducted the internal review, and on 30 January 2022 affirmed their decision that they have correctly calculated the claimant’s PAWE.
The claimant’s Personal Injury Commission (the Commission) application seeks a review of the insurer’s PAWE determination.
Documents and information
On 27 April 2022, I advised the parties that I may proceed to make this decision on the papers. At the same time, I issued directions to the parties requesting them to lodge all the relevant material that they would like me to consider in conducting this merit review.
I have reviewed all the documents that the parties have made available.
Submissions
The claimant has not lodged a submission.
The insurer’s submissions are as follows:
(a) The claimant's PAWE is $885.93 per week before tax (gross).
(b) The relevant period is the 12 months from 4 December 2020 to 3 December 2021 when Schedule 1 cl 4(1) is applied to the claimant’s circumstances.
(c) There is no dispute that the claimant is an 'earner' under the Act.
(d) During the relevant period the claimant derived income as an employee.
(e) The claimant received COVID-19 disaster payments from between 26 August 2021 to 13 October 2021 as his employer was closed between 26 June 2021 and 11 October 2021 due to the NSW COVID-19 restrictions.
(f) In the Merit Review matter of Zhao v Allianz (2022 NSWPICMR 10 (Zhao), Merit Reviewer Katherine Ruschen found that COVID-19 disaster payments are not considered earnings by an injured person as an earner and are therefore excluded when determining an injured persons PAWE. Merit Reviewer Ruschen stated at paragraphs 26-27:
(i)The claimant did not receive Centrelink COVID-19 disaster payments as an earner. He did not perform any work for those payments. The claimant is not in a relationship of employee and employer with Centrelink and did not render services to Centrelink. Accordingly, the claimant did not receive the payments in the capacity of employee or for any services rendered, which is what the definition of loss of earnings requires.
(ii)Accordingly, COVID-19 disaster payments are not earnings received by the claimant as an earner and therefore are excluded from calculation of his PAWE. This conclusion is consistent with the article "COVID-19 hub for injured workers and road users" published by the State Insurance Regulatory Authority which states "COVID-19 Disaster Payments are not considered earnings for the purpose of (PAWE).
(g) Noting Zhao, the insurer submits that the original calculation of the claimant's PAWE of $944.77, is incorrect because the insurer, in error, had included the claimant’s COVID-19 disaster payments in the assessment of PAWE.
(h) The insurer considers that the correct PAWE figure is $885.93.
Legislation
Schedule 1 cl 4 of the Act defines PAWE 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
Prima facie, Schedule 1 cl 4(1) applies to calculation of the claimant’s PAWE, unless one of the exceptions in cl 4(2) applies to the claimant’s circumstances.
Schedule 1 cl 4(2)(a) does not apply because he was not earning continuously on the day of the motor vehicle accident. To earn continuously, Schedule 1 cl 4(4) requires a claimant to obtain earnings from either:
(a) permanent employment, or
(b) a source that, on the day of the motor vehicle accident, was likely to continue for at least six months on the same, or a similar, basis to the one on which the earnings were being provided as at the day of the motor vehicle accident.
I am not satisfied that the claimant meets the requirements of either of those two legs of cl 4(4) because:
(a) The claimant’s payslips indicate that he was in casual employment so that he does not meet the permanent employment requirement of the first leg of cl 4(4).
(b) I have not been given any evidence[1] that he meets the requirements of the second leg of the provision.
[1] The claimant’s legal representative was requested to provide me with all the documents they wished me to consider in making this determination.
For the exception under cl 4(2)(a1) to apply the claimant must have received earnings for at least 26 weeks during the first year of the two-year pre-accident period and must not have received any earnings after the first year of the two-year pre-accident period. As the claimant was in receipt of earnings in the second year of the two-year pre-accident period that is, after 3 December 2020, Schedule 1 cl 4(2) (a1) does not apply.
Schedule 1 cl 4(2)(b) applies if Schedule 1 cl 4(3) is satisfied. Schedule 1 cl 4(3) is satisfied if, during the 12 months before the date of the motor accident, the claimant took action that resulted in a significant change in his earnings circumstances that resulted in him regularly earning more. There is no evidence of any action having been taken by the claimant before the accident that resulted in him regularly earning or becoming entitled to regularly earn more than he did before the change occurred. Accordingly, Schedule 1 cl 4(2)(b) does not apply.
There is no evidence to suggest Schedule 1 cl 4(2)(c) applies. The claimant is not an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence a business as a self-employed person at a particular time pursuant to Schedule 1, cl 2(b).
As none of the exceptions under Schedule 1 cl 4(2) apply the claimant’s PAWE falls for assessment under Schedule 1 cl 4(1) where his PAWE is the weekly average of the gross earnings he received as an earner during the 12 months immediately before the day on which the motor accident occurred. This period is 4 December 2020 to 3 December 2021.
Can the claimant’s PAWE be adjusted by reason of the COVID-19 pandemic
There are no provisions under the Act, the Motor Accident Injuries Regulation or the Motor Accident Guidelines that permit adjustment of PAWE to account for the impact of the
COVID-19 pandemic on a person’s ability to earn during the pre-accident period. The reasons for this are set out by Harrison AsJ in the Supreme Court decision in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC (Shahmiri). In Shahmiri Harrison AsJ held that pursuant to Schedule 1, cl 4(1) PAWE is to be “calculated by taking ... earnings over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 reflecting the number of weeks during the whole 12-month period” and that the Act does not allow any adjustment to this by reason of the COVID-19 pandemic or other break or reduction in employment or earnings.The claimant’s PAWE cannot be adjusted under Schedule 1 cl 4(1) to account for interruption or reduction in earnings during the COVID-19 lockdown.
Covid-19 disaster payments
I agree with Merit Reviewer Ruschen’s finding in Zhao that COVID-19 disaster payments are not earnings received by the claimant as an earner for the reasons that she gives and are paraphrased in the insurer’s submission.
COVID-19 disaster payments are excluded from PAWE because the claimant achieves earner status for the purpose of the Act by reason of being in receipt of earnings from employment or self-employment as per the definition of earner in Schedule 1, cl 2. Pursuant to Schedule 1 cl 4(3) and 4(2)(b) only earnings received by the claimant “as an earner” can be included in the calculation of PAWE.
Calculation of the claimant’s PAWE
Pursuant to Schedule 1 cl 4(1) the claimant’s PAWE is the weekly average of the gross earnings received by him as an earner during the 52-week period from 3 December 2020 to 4 December 2021.
Pursuant to the decision of Harrison AsJ in Shahmiri, the claimant’s earnings are to be averaged over the whole of this 52-week period, regardless of any break or reduction in earnings because of the pandemic, including any lockdown period.
The claimant’s PAWE is $885.93, being his earnings (adjusted for COVID-19 payments) of $46,068.18 for the 12 months ending 4 December 2021, divided by 52.
Conclusion
The reviewable decision is:
a.Varied.
b.The claimant’s PAWE are determined to be $885.93.
Legislation and guidelines
29. In making this decision, I have considered the following:
· The application, reply and supporting documentation
· Motor Accident Injuries Act2017 (NSW) (the Act)
· Motor Accident Guidelines
· Motor Accident Injuries Regulation 2017
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