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31.3.3 Adjustments to NWE in respect to increased allowances
If the client's NWE is to include an allowance, (i.e. if 'A' >0 in the formula at S8(1)) those allowances must also be adjusted in line with the method of adjustment to salary.
Note, however, that allowances may only be taken into account in NWE if it can be demonstrated that the client would have continued to receive the allowance but for the injury.
Important: see discussion re: which Allowances to include in NWE at 31.11
Thus, the method of adjustment to allowances included in NWE is as follows:
- For periods prior to 1 October 2001, the adjusted allowance component of NWE (i.e. 'A' in the formulae at 31.2.1 to 31.2.3) is always equal to the current amount of allowance payable under the award (etc.) applicable at that time.
- For periods after 1 October 2001, the NWE is increased annually on 1 July by reference to a statutory indexation rate (the Wage Cost Index) under S8(9B). Reference is no longer made to the movement of allowance for serving members.
- Naturally, where the injury was prior to 1 October 2001 but the delegate is calculating a current NWE in relation to a period of incapacity following 1 October 2001:
- the allowance component of the initial NWE is first advanced to that current as at 1 October 2001 and then
- every subsequent annual % indexation applied in turn to the whole NWE.
Note that update of allowances included in NWE is essentially the same process that applies to update of pay rates also included in that NWE. Read 31.3.2 on the previous page.