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B63/1995 NATIONAL OFFICE CONTACT POINT FOR AVERAGE WEEKLY EARNINGS (AWE) FIGURES
DATE OF ISSUE: 1 DECEMBER 1995
NATIONAL OFFICE CONTACT POINT FOR AVERAGE WEEKLY EARNINGS (AWE) FIGURES
The purpose of this Departmental Instruction is to inform staff of the establishment of a National Office contact from whom Average Weekly Earnings and related figures can be obtained.
2.Two initiatives recently implemented by Income Support Branch require State Office staff to use Average Weekly Earning figures (or variants thereof) in certain calculations. These are in the calculation of foregone wages and in the calculation of preclusion periods for lump sum compensation payments.
3.It is evident that there exists some variation in the figures used by State Office staff in these calculations. The establishment of a contact point in National Office will ensure that staff have access to correct and up-to-date figures for these calculations.
Calculation of Foregone Wages
4.The value of foregone wages will need to be calculated in situations where a farm or business is transferred to a relative who has worked on the farm or in the business without receiving wages (ie has foregone wages). The value of the wages foregone is deducted from the amount held as a disposed asset in the pensioner's assessment. In this way, that portion of the value of the asset transferred as recompense to the relative for foregone wages, is exempt from assessment for service pension purposes.
5.The Average Weekly Ordinary Time Earnings (AWOTE) figure used in this calculation should be that which was current at the date of disposal.
Lump Sum Compensation Payments
6.Under the compensation recovery provisions of the Veterans' Entitlements Act 1986 (VEA) a preclusion period may be applied to a person who receives a lump sum compensation payment that is settled on or after 1 January 1995. The value of the payment is divided by an amount that represents the average weekly earnings for all Australian employees, to determine a number of weeks over which the average person could have been expected to earn the amount comprising the lump sum. Payment of the compensation affected pension is then precluded for that period.
7.It should be noted that the AWE figure used in this calculation differs to the AWOTE figure used in calculating foregone wages.
8.There is a legislative requirement under subsection 5NB(1) of the VEA to specifically use AWE figures in calculating the preclusion period for lump sum compensation payments. The VEA states:
"5NB. (1) In this Act, unless the contrary intention appears:
“average weekly earnings”, in relation to a lump sum preclusion period, means the amount:
(a)estimated as the average total weekly earnings, during a particular month, of all employees (all persons) in Australia; and
(b)last published by the Australian Statistician before the lump
sum compensation payment became payable".
NATIONAL OFFICE CONTACT POINT
9.Current AWE and AWOTE figures and those from previous quarters can be obtained by contacting:
TELEPHONE: (06) 289 6629
10.When requesting AWE and AWOTE figures from the contact officer, staff will be required to have the following information in order to obtain the correct figures:
Foregone wages: the date of disposal of the asset against which the value of the foregone wages will be offset.
Lump Sum Compensation Payments: the date on which the lump sum compensation payment became payable.
11.If you have any questions regarding this instruction please contact Laurie Howell, Policy Officer, Policy Administration and Advice section, on (06) 289 6706.
R J HAY