NWE/NE is calculated with reference to a relevant period (SRCA) or the example period (MRCA). This period is usually the latest 2 week period before the date of injury (SRCA) or the date of incapacity (MRCA) though there is discretion to determine a different period that more fairly represents the person’s normal weekly earnings i.e. a different length of period or a different period in time.
3.7.1 The Relevant Period - SRCA
The 'relevant period' is a phrase defined by Subsection 4(1) to be 'the period calculated under Section 9'. Section 9 makes reference to ‘to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation’ i.e. the 2 week period prior to the injury. Subsection 9(2) – 9(4) provide for variations in pay within the 2 week period:
- 9(2) provides that where the industrial agreement, award, law etc. governing the client's pay rates actually changed that rate during the relevant period, only the final pay rate should be taken into account.
- 9(3) operates where a pay rate variation occurs at or very near the end of the 'relevant period' and as a result, the operation of 9(2) reduces the NWE to an impractical or unrepresentative amount. In those cases, the delegate shall instead deem the pay variation to have applied from the beginning of the period and calculate the NWE on that basis.
- 9(4) provides that, if for any reason a client was not paid for an interval during the 2 week 'relevant period', that interval without income should be disregarded (i.e. disregarded when calculating average income for NWE purposes).
Subsection 8(4) allows that where a 'relevant period' is of insufficient duration to produce a meaningful NWE in a particular case, a delegate may establish NWE by reference to the employer's generic pay scales, i.e. the normal weekly earnings of other employees 'performing comparable work'. This method should also take account of the average level of allowance paid to similarly employed persons of that classification/rank.
Subsection 8(5) allows the delegate to calculate the NWE in accordance with whatever period is considered 'reasonable' i.e. a change in the duration of the period or a different period. For example if a person was (uncharacteristically) unemployed during the relevant period or was unusually busy, i.e. while generally unemployed was as an exception engaged in seasonal work (e.g. fruit picking) during that period. Where an injured employee is a shift worker the relevant period could be extended to cover the full range of shift rotations. This gives a more accurate reflection of the person’s NWE.
3.7.2 The Example Period - MRCA
There is no single definition for the ‘example period’ instead it is defined within each applicable division of the MRCA (part 3 and 4 of chapter 4) depending on whether the person is serving and the service giving rise to their injury. Each separate definition for the example period allows choosing a different period in time or adjusting the length of the period to ensure the amount calculated as NE fairly represents the person’s earnings before the onset of incapacity.