Methods of determining Reserve NWE
This method deems NWE as 7 x the Reservist client's daily rate of Reserve pay (eg. 7 x $60 = $420, where the daily rate is $60.).
Generally it is used in two situations:
- where the Reservist client has no civilian earnings;
- where the Reservist client has civilian earnings from part-time employment, but these are so low that NWE would be less than 7 x Reserve rate.
NOTE: Where NWE has been deemed at “7 x daily rate”, all of the weekly incapacity payment is taxable.
Long-term incapacity - current year of service
Long-term incapacity refers to “cases in which the injured Reserve force member is unable or unlikely to return to Reserve service as a consequence of the compensable condition”.
There are two options for calculating the Reserve component of NWE in long-term incapacity cases:
- Current Year of Service, where the calculation is based on an estimate of the actual Reserve service which the client would have undertaken in the year of injury; or
- History of Service, where the calculation is based on the number of days of Reserve employment undertaken by the client in the 12 months before the injury.
Current Year of Service is the recommended method unless the client's Unit cannot provide the required information.
Current Year of Service Calculation
Reserve Component of NWE = [(PA + EP) x DP] x 6/313
PA =number of parades attended between beginning of the year and day before period of incapacity for work
EP =number of parades the member would reasonably have been expected to attend for the remainder of the year (as verified by the member's unit) but for the injury and incapacity for work
DP =average daily rate of pay per day/parade for rank and pay level based on the average number of hours of attendance per parade
Example
PA=5 parades
EP=65 parades (ie. 70 - 5 parades)
DP=$54
ARes NWE
={(5 + 65) x $54} x 6/313
=$3780 x 6/313
=$72.46
The assessment must not be based solely on the client's assertion. Unit commanders have the responsibility and authority to decide the number of training days and events for which individual members would have been required during the financial year. Advice must therefore be obtained from the Unit commander. Whilst clients may make assertions about possible yearly attendances, but for the injury, this is a management decision taken by the unit commander and not the client.
Long-term incapacity - history of service
Long-term incapacity refers to “cases in which the injured Reserve force member is unable or unlikely to return to Reserve service as a consequence of the compensable condition”.
There are two options for calculating the Reserve component of NWE in long-term incapacity cases:
- Current Year of Service, where the calculation is based on an estimate of the actual Reserve service which the client would have undertaken in the year of injury; or
- History of Service, where the calculation is based on the number of days of Reserve employment undertaken by the client in the 12 months before the injury.
Current Year of Service is the recommended method unless the client's Unit cannot provide the required information.
History of Service Calculation
Reserve component of NWE = (NP x DP) x 6/313
NP =number of days/parades attended by the member during the previous 12 months
DP =average daily rate of pay per day/parade for rank and pay level based on the average number of hours of attendance per parade
Example
NP =DEFPAC advise that Pte Jones attended 65 days/parades during FY 1993/94.
DP =based on DEFPAC advice that Pte Jones' daily rate of pay is $54.
ARes NWE
=(65 days x $54) x 6/313
=$3,510 x 6/313
=$67.28
Short-term incapacity refers to “cases in which the injured Reserve Force member has intermittent periods of incapacity, but is able to continue Reserve service, ie. where the incapacity is not likely to be ongoing or continuous, preventing further Reserve service”.
The objective in short term incapacity cases is to ensure, wherever possible, that compensation paid reflects the Reserve earnings lost during the particular week. Adopting the methodology described above for long-term cases (discussed above) would not necessarily so reflect lost earnings in individual short-term cases.
For these reasons, the following methodology should be applied to short term incapacity cases for Reservists:
- obtain details of the parades the client would have been expected to attend during the period of incapacity from the Unit commander.
- obtain details of client's rate of pay per parade relevant to the period of incapacity from Reserve Pay Section, DEFPAC.
From this information, the actual lost Reserve earnings can be calculated. See DCI 6 (paragraph 13.3) for examples of calculations.
If the Reservist client was on full-time service at the time of the injury (eg. service in the Ready Reserve), NWE is based on the full-time military salary and allowances only; no account is taken of civilian earnings.
Subsection 8(3) of the SRC Act applies to employees injured during part-time or unpaid Commonwealth employment. Subsection 8(3) therefore must not be utilised to combine any earnings a client may have from other employment with Ready Reserve earnings where the client is injured in full-time Reserve employment.
Once a client's NWE has been established based on full-time Reserve service, the NWE figure remains the basis for all future weekly compensation entitlements (allowing, of course, for wage increases, etc.). NWE based on full-time Reserve service is not to be reduced after the date on which the Reservist completed or would otherwise have completed their full-time service and proceeded to part-time service.
See DCI 6 (paragraphs 25 - 32) for discussion of the Full-time Rate method in relation to the Ready Reserve.
NOTE: where NWE is calculated on a full-time rate basis, the whole of the salary is taxable.
The Assessor should choose “None of the above” where the client has suffered no loss in Reserve earnings as a result of the injury. When this choice is selected, the Calculator proceeds to investigate whether there has been any loss of civilian earnings.