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Incapacity Policy Manual
5. Method of Calculating NE/NWE by Service Type
- 5.14 MRCA - Service giving rise to injury is Continuous Full-time Service (CFTS) – Section 144 or 147-149 & Section 168 or 170-173)
Date amended:
The following formula is applicable when the person:
Was injured in CFTS
Is discharged
Last service immediately before ceasing to be a member was as a CFTS member (section 144 or 147-149) or as a part-time Reservist and the person's last FT service was as a CTFS member (section 168 or 170-173)
Note: If the person's last service was as a part-time reservist and their last FT service was as a PF member, then section 164 applies. See section 5.13.
The person has a choice to take as normal earnings either their full-time ADF earnings or their pre-CFTS earnings. The person must inform the delegate of the choice in writing and once made, it cannot be changed for that period of incapacity. A person may choose a different basis of normal earnings for further separate and discrete periods of incapacity.
5.14.1 Calculating Full-time ADF Earnings – section 144 (last service was in CFTS) or 168 (last service was in part-time Reserve)
where:
Full-time ADF earnings is the amount the Reservist would receive if he or she was still on CFTS and not incapacitated for service. The members rank and pay group at discharge is the basis for determining NE. In this scenario as the person’s CFTS and subsequent part-time Reserve service are the same service type (i.e. Reserve), any promotions in Reserve service can be applied to the calculation.
Pay-related allowances for the week is the amount of compensable pay-related allowances he or she would receive if still a Permanent Forces member and not incapacitated, as advised by Defence.
Remuneration amount is a loading included in normal earnings to compensate a member for the non-salary benefits of being a full-time serving member. It is only included in normal earnings where normal earnings are calculated by reference to a full-time ADF rate of pay and the person is no longer a full-time serving member.
OR
5.14.2 Calculating Pre-CFTS earnings – section 147-149 (last service was in CFTS) or 170-173 (last service was in part-time Reserve)
Where the person was working before beginning the last period of CFTS:
Pre-CFTS earnings = Reservists pre-CFTS pay for the week + Reserve pay for the week
Where:
Pre-CFTS pay for the week = (pre-CFTS civilian weekly hours worked x pre-CFTS civilian rate of pay) + allowances (including overtime).
Overtime is only included when the person is working regular overtime.
Example Period
The example period to calculate pre-CFTS pay is normally the last 2-week period the person was engaged in work ending immediately before the last period of CFTS. If the example period does not fairly represent the person's pay, the delegate may determine a different 2-week period or a period of different length.
If the person was not engaged in work, then pre-CFTS pay is defined as nil.
Where:
Reserve pay for the week = Reserve days x Reserve daily rate of pay plus pay-related allowances as advised by Defence. This is calculated based on the person’s history of service over a one year period, see section 5.3.2.3.
The example period to calculate Reserve pay is the 1-year period during which the person was a part-time Reservist immediately before the last period of CFTS, or such a period as the delegate determines is reasonable.
5.14.3 Normal weekly hours
Normal weekly hours for a former member whose last service was as a CFTS member or part-time Reservist is calculated as:
NWH = pre-CFTS hours + pre-CFTS overtime hours + ADF hours
where:
ADF hours are the average worked out over the Reserve example period; and
pre-CFTS hours are those used in calculating pre-CFTS pay.
5.14.3.1Example 1 – NE for a person injured on CFTSA Reservist sustains a back injury during a period of CFTS as a Sergeant. The person was subsequently medically discharged due to the back injury on 16 November 2008 while still on a period of CFTS. The former member has the choice of NE being calculated as full-time ADF rate of pay including the remuneration amount or, pre-CFTS civilian earnings plus Reserve earnings. Choice 1. If the former member chooses full-time ADF rate of pay including the remuneration amount NE is: f/t ADF rate of pay including pay-related allowances + remuneration amount $1,114.75 + $123.85 = $1,238.60 Choice 2. If the former member chooses pre-CFTS civilian earnings plus Reserve earnings then NE is: pre-CFTS pay + Reserve pay Pre-CFTS pay is the former member's civilian earnings in the 2-week period prior to the period of CFTS service, indexed according to the Wage Price Index. Reserve pay is the average of weekly Reserve earnings during the 12-months prior to the period of CFTS. Pre-CFTS pay is $786.50 per week and this is the civilian component of NE. During the 12 months prior to the period of CFTS, the former member attended for 58 days of Reserve service. This included a 14-day camp during which the former member also received Field Allowance equivalent to $26.94 per day. The daily rate of Reserve pay is $119.14 per day plus $11.72 Reserve Allowance. According to the formula: Reserve days x Reserve daily rate of pay + pay-related allowances (58 x $119.14 + $11.72) + (14 x $26.94) = $7,589.88 + $377.16 = $7967.04 This amount needs to multiplied by 6/313 to convert the annual amount to a weekly amount for NE purposes. $7967.04 x 6/313 = $152.72 per week NE would therefore be: $786.50 + $152.72 = $939.22 This weekly amount should then be adjusted by the 1 July WPI increases up to the period of incapacity. Accordingly the former member chooses to have their NE based on f/t ADF rate of pay plus the remuneration amount and they receive incapacity payments of $1,238.60 per week. For the purpose of calculating the entitlement to incapacity payments after the expiration of maximum rate weeks, it is necessary to determine normal weekly hours (NWH). As the person has chosen f/t ADF rate of pay as the method of calculating NE, NWH are 37.5 hours as per the table included in subsection 132(2). If however the member opted to receive his pre-CFTS pay and allowance plus Reserve pay and allowances his NWH would be calculated as follows: NWH is calculated according to the formula in section 174 as: pre-CFTS civilian weekly hours + Reserve hours 35 + (6 x 58 x 6/313) = 35 + 6.67 hours = 41.67 hours. |