Policy

When a person accesses paid leave while in employment i.e. annual leave or long service leave, the hours and earnings they receive payment for are considered AE. They will receive payment as if they were actually working those hours. 

It is longstanding policy to offer veterans receiving incapacity payments a period of twelve (12) weeks maternity leave for the birth or adoption of a child.

Incapacity payments continue to be paid during maternity leave for a period of 12 weeks (generally six weeks either side of the expected/actual birth date), if payments would have continued if not for the maternity leave. Payments continue at the established rate of compensation i.e. payment calculations continue to include hours and earnings as if the person was actually working during the period.

A person may receive an advance payment for writing a book or a similar endeavour i.e. a commissioned artwork, over a set time-frame. The advance can be used as actual earnings averaged over the designated period. Following completion of the book etc. the person may be deemed in a similar field i.e. as a journalist and the deemed earnings applied to future periods of payment.

Entitlement to commissions is payment in return for labour, where that labour results in a sale (i.e. of a car, a mortgage, insurance etc.). Commissions are often paid at a later date than the date of the sale i.e. paid on a monthly basis.  These amounts are considered to be actual earnings and should be included in calculations in the period that the labour the commission was derived from was undertaken.

The method to calculate earnings from self-employment is used for both calculations of Normal Weekly Earnings/Normal Earnings and AE (actual earnings/able to earn). There are multiple methods to calculate earnings from self-employment and discretion should be used to pick the method that best represents the person’s earnings.  The same method should be used to calculate both the person’s NE/NWE (see chapter 3) and the person’s AE.

8.5.1 Establishing a notional AE based on prior periods of employment

Where income is not earned at a constant or clearly recognisable rate and the delegate is satisfied that employment is continuing, there is an established method to average the variable earnings over a specific period to obtain a notional actual earnings (AE) amount.

Any income that a person actually earns by his or her labour is considered to be an amount earned in suitable employment and is to be included as AE. This includes earnings from self-employment and commissions, see section 8.6 and 8.7.

AE for a serving member includes any amount earned in employment with the ADF as well as earnings or what the person is able to earn from civilian employment for part-time reservists.

To establish a person’s AE on the basis of actual earnings, the following information is required:

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. 

Actual Earnings (AE) are defined in sections 92, 101, 105 and 115 for serving members.

AE refers to the person’s post-injury earning capacity. AE may be either an 'actual' amount that the person is currently earning, or a deemed amount in accordance with the person's ability to earn (for example in cases where the person is unemployed or underemployed for reasons other than the accepted injury).

AE is defined in Section 19(2) of the DRCA as the greater of the following amounts: