Notional Ability To Earn Vs Notional Hours Able To Work

Example 1

An employee is totally incapacitated for work.

His NWE is $500 and his NWH are 40 per week.

When totally incapacitated, the employee is paid:

75% NWE (75% of $500, or $375) - AE ($0)  =  compensation ($375)

Evidence obtained indicates the employee has regained some capacity for employment.  Suitable employment is currently clerical work at 12 hours per week.

The Commonwealth makes a genuine offer of suitable employment, which the employee unreasonably refuses.

Using section 19 (4) (b), an AE of 12 hours  x  $12.50 ($150) is added to the employee's incapacity calculation.

75% NWE ($375)  -  AE ($150)  =  $225 per week

Example 2

Rather than suffer a reduction in income, the employee in Example 1 decides to return to work for the 12 hours per week.

As he is working 30% NWH (12  ÷  40  x  100), his entitlement to compensation alters to 19 (3) (c).(see later in this part)

85% NWE ($425)  -  AE ($150)  =  compensation ($275)

Evidence is later received which supports that the employee is capable of working 22 hours per week.  The employee refuses to undertake further hours, even though the Commonwealth offers it.

Section 19 (4) (b) is again invoked, increasing the AE to 22  x  $12.50 or $275 per week.

Even though the employee is fit to work 22 hours a week, or 55% of his NWH, section 19(3)(b) is still applied as the employee is only actually working 12 hours a week.  If section 19(3)(d), which relates to employees working between 50% and 75% of NWH were applied, the percentage of his NWE the employee is entitled to would rise (to 90%).

85% NWE ($425)  -  AE ($275)  =  compensation ($150)