30.1.3 Where client's post-45 week compensation is less than 'minimum earnings'
This topic is also discussed at chapter 36.
Subsections 19(6) to (14), provide a financial 'safety net' for clients who are:
- still incapacitated, in the period after the initial 45 weeks of incapacity, and
- are in fact wholly incapacitated (i.e. worked 0 hours in the week), and
- the $ value of 75% of (NWE – AE) + A is less than statutory 'minimum earnings'.
'
Minimum earnings' is a statutory dollar-value defined by S19(8) and is the total of:
- a specified amount per week in respect of the client, plus
- another specified value per week in respect of each 'prescribed person', plus
- yet another specified value per week in respect of each 'prescribed child'.
Current $ values declared for each of these statutory amounts are subject to annual indexation increases. Current and historical rates are tabled at 36.1.3. 'Prescribed person' and 'prescribed child' are defined in detail at 36.2 to 36.6.
Thus, where a totally incapacitated client's '75% of NWE' entitlement falls below the 'minimum earnings' computed in his or her case, that entitlement is adjusted upwards to the amount of minimum earnings which applies (via S19(7) to 19(14)) in his/her case.
Furthermore, in cases where reservists are paid on the basis of 19(6), – either on the basis of their known NWE or as a form of 'interim payment' (see 30.6.1) – there is no distinction between compensation for reserves or civilian income.
- Note that all incapacity payments, including the statutory rates provided by S19(6), represent income replacement and are not made on the same basis as a veteran's pension. They are therefore taxable at the current marginal tax rate prior to payment to the client.
Therefore, this means that where S19(6) payments are made to reservists, the whole amount of that payment is taxable.
See Part 30.6 for a more detailed discussion of this whole topic.
See 36.1.3 for a table of current and past statutory amounts re: 'minimum earnings'.
Source URL: https://clik.dva.gov.au/military-compensation-srca-manuals-and-resources-library/incapacity-handbook/ch-30-determining-rate-compensation-incapacity/301-overview-srca-client-not-receiving-superannuation/3013-where-clients-post-45-week-compensation-less-minimum-earnings