Zhao v Allianz
[2022] NSWPICMR 10
•14 February 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Zhao v Allianz [2022] NSWPICMR 10 |
| CLAIMANT: | Zilu Zhao |
| INSURER: | Allianz |
| MERIT REVIEWER: | Katherine Ruschen |
| DATE OF DECISION: | 14 February 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; dispute about payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (MAI Act); meaning of pre-accident weekly earnings (PAWE) schedule 1, clause 4(3) and 4(2)(b) of the MAI Act; PAWE; change of circumstances; COVID-19 disaster payments; whether PAWE impacted by COVID-19; whether adjustment for COVID-19 allowed; calculation of PAWE; Held – the reviewable decision is set aside. |
| 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 Act 2017 (the MAI Act). 1. The reviewable decision is: (a) set aside, and (b) the claimant’s pre-accident weekly earnings figure is $1,787.20. |
Issued under section 7.13(4) of the Motor Accident Injuries Act2017
BACKGROUND
There is a dispute between Zilu Zhao (the claimant) and 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 21 October 2021.
The claimant made an application for personal injury benefits under the MAI Act.
At first instance, the insurer determined the claimant’s pre-accident weekly earnings (PAWE) were $640.54.
The claimant requested an internal review of the insurer’s initial PAWE decision.
On 10 December 2021 the insurer issued their internal review decision in which the insurer varied the claimant’s PAWE to $712.70.
The claimant seeks a merit review of the insurer’s internal review decision dated 10 December 2021.
SUBMISSIONS
The claimant submits the insurer failed to include COVID-19 disaster payments received pre-accident in the calculation of his PAWE. The claimant further submits that pursuant to Schedule 1, clause 8EA of the Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020 the number of weeks during the period 23 March 2021 to 27 September 2021, when his ability to earn was impacted by COVID-19, should be excluded from the pre-accident period when calculating his weekly average earnings.
The claimant also submits that whilst he has the physical capacity to return to work, he does not have the mental capacity and, on this basis, submits he should be entitled to weekly benefits beyond the first 13 week post-accident period.
The insurer submits COVID19 disaster payments are excluded from PAWE on the basis they do not fall within the definition of “income from personal exertion” in Schedule 1, clause 3 of the MAI Act. The insurer submits the claimant’s total earnings during the
12-month period before the accident are to be calculated from the date on which earnings are first demonstrated until the day before the date of the accident. This period is from 14 March 2021 to 20 October 2021 and is 31 weeks.
REASONS
Legislation
The insurer accepts the claimant has established he is an earner within the meaning of Schedule 1, clause 2. However, it is relevant to note the definition of earner applicable to the claimant under schedule 1, clause 2, as follows:
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) …,
and, at the date of the motor accident, had not retired permanently from all employment.
Once the claimant is determined to be an earner within the meaning in Schedule 1, clause 2, the starting point as to whether he is entitled to weekly benefits is sections 3.6 and 3.7 of the MAI Act.
Sections 3.6 and 3.7 relevantly provide that “an earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits under” these sections.
Accordingly, there must first be a loss of earnings as a result of the motor accident.
“Loss of earnings” is defined in Schedule 1, clause 3 as follows:
(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.
(emphasis added)
Pursuant to Schedule 1, clause 4 PAWE means:
(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.
(emphasis added)
The insurer’s internal review decision accepts clause 4(3) of Schedule 1 applies to the claimant on the basis there has been a significant change in earnings circumstances that resulted in the claimant regularly earning, or becoming entitled to earn, more on a weekly basis than he was earning before the change occurred (see paragraph 18 of the internal review decision dated 10 December 2021).
It is also apparent from the documents that there was a significant change in circumstances as a result of the claimant commencing employment with Sonic Health Plus. The first payslip from Sonic Health Plus dated 16 September 2021 shows earnings over the proceeding fortnight as the same as the year-to-date earnings at that time, indicating the claimant commenced employment with Sonic Health Plus on or around the commencement of fortnight pay period relevant to this first payslip. The payslip indicates the claimant commenced with Sonic Health Plus on 1 September 2021 at which he became entitled to earn an hourly rate of $26 together with overtime rates of $39 and $52 per hour for time and a half and double time respectively, travel allowances and casual loading.
Based on the available evidence the claimant did not earn during the period immediately prior to this from 24 April 2021 to 30 August 2021. Accordingly, the commencement of employment with Sonic Health Plus is a significant change in the claimant’s earnings circumstances that resulted in him regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred. Based on the claimant’s employment history with Sonic Health Plus from 1 September 2021 to the date of the accident on 21 October 2021 I am satisfied that this change resulted in the claimant becoming regularly entitled to earn more. Payslips in this period also demonstrate not only did the claimant become entitled to regularly earn more than he had been earing immediately before commencing this employment, which was nil, but that he regularly became entitled to earn more than he was earning in his previous employment prior to 24 April 2021 with Tech Century Pty Limited.
Accordingly, the claimant’s PAWE is to be assessed under clause 4(3) of Schedule 1.
Pursuant to Schedule 1, clause 4(2)(b), if subclause (3) applies the claimant’s PAWE is “the weekly average of the gross earnings received by the [claimant] as an earner during the period from when the change of circumstance referred to in [clause 4(3)] occurred to immediately before the day of the motor accident.
On the balance of probabilities, based on the material before me, I am satisfied the change of circumstances for the purpose of clause 4(3) occurred on 1 September 2021 noting this date is referred to in the first payslip.
The motor accident occurred on 21 October 2021. As the relevant pre-accident period for the purpose of clause 4(3), as set out in clause 4(2)(b), is from the date of the change in circumstance until the day before the motor accident the period over which the claimant’s PAWE is to be calculated is 1 September 2021 to 20 October 2021.
Accordingly, I am of the view the insurer has incorrectly calculated PAWE over a 31-week period from 14 March 2021 to 20 October 2021. The correct period is 1 September 2021 to 20 October 2021 pursuant to Schedule 1, clauses 4(3) and 4(2)(b).
Are COVID-19 disaster payments earnings as an earner for the purpose of clause 4?
The claimant achieves earner status for the purpose of the MAI Act by reason of being in receipt of earnings from employment or self-employment as per the definition of earner in Schedule 1, clause 2. Pursuant to clause 4(3) and 4(2)(b) only earnings received by the claimant “as an earner” can be included in calculation of PAWE.
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.
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]”.
The claimant received disaster payments from July to September 2021. Payments made in July and August 2021 fall outside the relevant pre-accident period for the purpose of clause 4(3), which I have found commences 1 September 2021 and would therefore be excluded in any event even if they were categorised as earnings.
It is unclear how or why the claimant qualified for the disaster payments paid to him in September 2021, after he commenced employment with Sonic Health Plus. However, as I have found above these payments are not earnings received by the claimant as an earner, they are also excluded from calculation of his PAWE over the period 1 September 2021 to 20 October 2021.
Does the Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020 apply?
The claimant relies on the Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020 (the WC COVID amendment) to submit that his PAWE should not include those weeks in which his earning capacity was impacted by COVID-19. The WC COVID amendment allows pre-injury average weekly earnings (PIAWE) for the purpose of the Workers Compensation Act 1987 (NSW) to be adjusted where COVID-19 has impacted pre-injury earnings. However, a similar amendment has not been introduced for the purpose of the motor accident/compulsory third party (CTP) scheme.
The matter at hand is a claim for statutory benefits under the motor accident scheme. It is not a claim for workers compensation statutory benefits. The claimant’s entitlement to statutory benefits, if any, falls under the MAI Act which is distinct from workers compensation legislation. The motor accident and workers compensation schemes are distinctly separate schemes. The workers compensation legislation, including the Workers Compensation (WC) COVID amendment covers persons injured in the course of their employment whereas the motor accident legislation covers persons injured in motor accidents.
The distinct and separate application of each of the schemes is made clear in the provisions of their specific legislation, including in the definition and application provisions. There is nothing in the Workers Compensation Act or any other legislation that extends the provisions of the Workers Compensation Act and workers compensation regulations, including the WC COVID amendment to injured persons making a claim under the MAI Act.
If the claimant considers the injury sustained in the motor accident is also a work-related injury, he might be entitled to make an application for workers compensation statutory benefits. If the claimant is entitled to workers compensation in respect of the motor accident, however, he has no entitlement to statutory benefits under the MAI Act. Pursuant to section 3.35 of the MAI Act an injured person is not entitled to statutory benefits (including weekly benefits) if compensation is payable under the Workers Compensation Act in respect of the same injury. It is apparent from section 3.35 alone that the workers compensation scheme is a separate scheme and none of the workers compensation legislation applies to a claim for statutory benefits under the MAI Act, as pursuant to section 3.35 if the Workers Compensation Act applies the MAI Act does not apply. Accordingly, the WC COVID amendment is not applicable to the claimant’s claim for statutory benefits under the MAI Act.
As noted above, there is no comparative amendment under the MAI Act or MAI regulations that would allow an adjustment of the claimant’s PAWE to account for the impact of COVID-19 on the claimant’s pre-accident earnings.
The claimant does not make any alternative submission as to why his PAWE should be adjusted by reason of the impact of the COVID-19 pandemic on his ability to earn.
For completeness, however, whilst the decision dealt with different circumstances and raised different issues I refer to and repeat my minority reasons in the merit review panel determination of Shahmiri v Allianz Australia Insurance Limited [2021] NSWPICMRP 2 (9 August 2021) (Shahmiri). In Shahmiri I found no basis upon which the MAI Act permits an adjustment under Schedule 1, clause 4(1) to calculation of an earner’s PAWE by reason of the COVID-19 pandemic and I remain of this view. The majority in Shahmiri found an adjustment can be made and the decision is currently the subject of an appeal to the Supreme Court.
I accept the possibility that COVID-19 may have had some impact on the claimant’s ability to earn from the commencement of the Sydney lockdown on 26 June 2021 until the claimant commenced employment with Sonic Health Plus on 1 September 2021 (although the evidence suggests the claimant was not working at this time in any event and had not worked since April 2021). However, the evidence does not establish COVID-19 had any impact after 1 September 2021. The claimant became entitled to earn more not only than he had been earning immediately prior (nil), but he became entitled to earn more than he was earning in his most recent employment before this with Tech Century Pty Ltd, which was prior to lockdown on 26 June 2021. It is therefore apparent COVID-19 did not have any impact on the claimant’s earnings from 1 September 2021. Accordingly, even if I were of the view the MAI Act allows for adjustment to an injured person’s PAWE by reason of COVID-19 and/or followed the majority decision in Shahmiri, there would be no adjustment in this particular case because the evidence does not establish COVID-19 had any impact on the claimant’s earnings in the relevant pre-accident period from 1 September 2021 to 20 October 2021. Any disaster payments made in respect of any period after 1 September 2021 possibly should not have been made given the claimant was by then in gainful employment.
Calculation of the claimant’s PAWE
Having determined the relevant pre-accident period under clause 4(3) above as being from 1 September 2021 to 20 October 2021 it is necessary to determine the earnings received by the claimant as an earner during this specific period and average those earnings over the number of weeks in the period.
The number of weeks from 1 September 2021 to 20 October 2021 is 7.14 weeks. During this 7.14 week period the claimant received the following gross earnings from Sonic Health Plus:
Date earnings received
Gross earnings
16/09/21
$1,714.28
30/09/21
$4,225.30
14/10/21
$2,615.42
14/10/21
$24.75
17/10/21
$1,596.54
20/10/21
$1,596.54
TOTAL
$11,772.83
The final payslip covers a period until 24 October 2021, which is after the relevant pre-accident period and states earnings were received by the claimant on 28 October 2021 which is eight days after the end of the relevant pre-accident period, which ends 20 October 2021. Only earnings “received” by the earner in the period 1 September 2021 to 20 October 2021 are to be included in PAWE under clause 4(3) and 4(2)(b). As the claimant did not receive these earnings until 28 October 2021, which is after the end of the pre-accident period, the payment of $5,640.17 received on 28 October 2021 is excluded from the claimant’s PAWE.
In addition to earnings from Sonic Health Plus the claimant received gross earnings of $987.80 from self-employment during the period 1 September 2021 to 20 October 2021, as follows:
(a) $750.20 on 6 October 2021, and
(b) $237.60 on 12 October 2021.
This brings the claimant’s total gross earnings to $12,760.63 in the period 1 September 2021 to 20 October 2021 ($11,772.63 plus $987.80).
$12,760.63 divided by 7.14 weeks = $1,787.20, which is therefore the claimant’s PAWE.
I note this figure for PAWE is consistent with the claimant’s statement in his verified claim form that pre-accident he earned $3,500 per fortnight, which is $1,750 per week. The variation between this and my PAWE calculation of $1,787.20 is only $37.20. Accordingly, I am comfortably satisfied on balance that on this basis and based on my analysis of the evidence and legislation and reasons set out above that the claimant’s PAWE is $1,787.20.
Period over which the claimant is entitled to weekly benefits
The claimant raises an issue in his submissions as to the period over which he is entitled to receive weekly benefits and when they ought to cease.
It is not clear the basis upon which payments might cease in the near future. The MAI Act sets out, for example, maximum payment periods for injured persons most at fault or for minor injuries in section 3.11. Section 3.12 sets out maximum payment periods in other circumstances.
Whether section 3.11 arises has not been the subject of a decision by the insurer to my knowledge. Accordingly, it is premature for there to be a merit review. Those issues must first be the subject of an internal decision by the insurer and, if disputed, an internal review by the insurer before application can be made to the Commission to resolve the dispute.
Further, matters under section 3.11 are not merit review matters under Schedule 2, clause 1 of the MAI Act. Whether an injured person was most at fault is a miscellaneous claims assessment matter under Schedule 2, clause 3(d) and whether an injury is a minor injury is a medical assessment matter under Schedule 2, clause 2(e) of the MAI Act.
As a merit reviewer I do not have jurisdiction to determine matters under section 3.11 of the MAI Act.
To the extent payments might cease in the alternative because the claimant has regained full capacity to earn this must also be the subject of an internal decision by the insurer and if disputed, an internal review by the insurer before the claimant may make an application for a merit review. The only internal review decision before me is the insurer’s internal review decision dated 10 December 2021 in relation to calculation of PAWE. Accordingly, that is the only decision I can consider in this merit review.
CONCLUSION
The reviewable decision is:
(a) set aside, and
(b) the claimant’s PAWE figure is $1,787.20.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· The application, reply and supporting documentation;
· Motor Accident Injuries Act 2017 (NSW) (the MAI Act);
· Motor Accident Guidelines;
· Motor Accident Injuries Regulation 2017, and
· Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020.
Katherine Ruschen
Merit Reviewer
Personal Injury Commission
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