2.Section 8 of the Safety, Rehabilitation and Compensation Act 1988 provides for the calculation of an employee's NWE based on an annual salary amount, expressed as a weekly amount using the formula:
(NH X RP) + A
where:
NHis the average number of hours worked in each week by the employee in his or her employment during the relevant period;
RPis the employee's average hourly ordinary rate of pay during that period; and
Ais the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.
3.For the purposes of this Operational Advice, 'salary packaging' is defined as a method whereby individual employees are able to make alternative arrangements for the method of receipt of their salary, i.e. part as cash and the remainder in non-cash components, such as direct payment of school fees, car leasing, child care. This can have taxation advantages for the employee. Such an arrangement does not affect the quantum of the total annual salary.
Example:
Agency and staff enter into Certified Agreement which gives a 10% pay rise for all staff, therefore an employee on $40,000 per annum receives an increase in pay to $44,000 per annum.
The Certified Agreement provides also for employees to split their salary into cash and non-cash components.
For NWE purposes, the employee's salary is $44,000 per annum.
Any ex-employees on long term incapacity payments would be entitled also to have their NWE increased by 10% and thereby receive a proportionate increase in their weekly compensation payments.
4.It is important to note the distinction between 'salary packaging' and the situation where a group of employees, under an enterprise bargaining arrangement, agree to forego a salary increase (or part thereof) in return for non-salary benefits, such as free car parking, reimbursement of fitness expenses or one-off cash payments. The non-salary benefit never forms part of their total annual salary. This can also have taxation advantages.
Example:
Agency and staff enter into Certified Agreement which gives employees improved benefits and conditions [such as free car parking, reimbursement of fitness expenses, one-off cash payments, etc] but there is no increase to staff salaries.
In this case, there is no increase in salary arising out of the Certified Agreement and NWE would be based on an employee's actual salary (i.e. based on the pre Certified Agreement rate).
For ex-employees this would mean that they would not be entitled to an increase in their NWE and accordingly would not receive any increase in their weekly compensation payments.