How are weekly workers compensation benefits calculated?

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By Alison Martens, Senior Associate

 

If you have suffered a work injury and you are entitled to weekly payments, you might be wondering how these payments are calculated…

Under the Return to Work Act 2014 (‘the Act’), if you suffer a compensable work injury and are unable to work due to your injury, you may have an entitlement to weekly payments of compensation. Often a complex and overwhelming area of law, these weekly payments are usually calculated with reference to your ‘average weekly earnings’. But what does this mean exactly?

Under the Act, ‘average weekly earnings’ is defined as the average weekly amount that you earned during the period of twelve months preceding your injury date. Importantly, for the purposes of the calculation, earnings are not confined to wages. So, what else could be included? 

Earnings can include any amount paid while you were on annual, sick, or other leave. They might also include a voluntary salary sacrifice for superannuation purposes (paid by you) or a non-cash benefit provided to you by an employer.

Sometimes this calculation method can produce unfair outcomes. The Act recognises that at times, basing your entitlement on the average weekly amount that you earned during the period of twelve months preceding your injury, will not produce a fair outcome.  Accordingly, the Act contains provisions as an alternate means to calculate your average weekly earnings. The purpose of these provisions is to ensure your average weekly earnings will not be based on earnings that are less than your lawful entitlement. 

What do these provisions cover? The provisions cover circumstances where you have suffered a gradual onset work injury and it appears that your level of earnings have been affected by your injury. You might have also had unplanned time off in the 12 months prior to your injury. In circumstances where you were predominantly in full-time employment prior to your injury or you regularly worked overtime, this will be factored in too. Exceptions for apprentices and injured workers under the age of 21 years also exist.

If at the time of suffering your injury, you were covered by an award or industrial agreement, your average weekly earnings will not be less than the weekly wage to which you were entitled to be paid. If there is no industrial instrument, then you are entitled to be paid no less than the Federal Minimum Wage.

If you have suffered a work injury and need advice with regards to what you are entitled to, Boylan Lawyers can assist you with navigating what is often a complicated and overwhelming area of the law. Contact us today on 08 8632 2777 or email hello@boylanlawyers.com.au. 

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