8.3 Indexation of AE (including deemed AE)

Where a person is in employment and earning an income by working to their full capacity, AE is adjusted in line with their actual earnings. Where AE is a notional deemed amount, the amount should be increased annually on 1 July by the WPI increase amount. 

In some cases a person may have been deemed based on their actual earnings. If the deemed AE has been indexed beyond those earnings and no longer represents what the person is actually able to earn (i.e. the person is working to their full capacity), then the deemed amount may be adjusted in line with actual earnings instead. A decision to adjust the deemed AE amount should be recorded.

Under the SRCA, NWE is also increased at the same rate at the same time (1 July) as a person’s deemed AE.