Section 8(9B) of the SRC Act authorises determining authorities (including MCRS) to increase normal weekly earnings (NWE) for ex-employees by reference to a prescribed index – the Wage Cost Index (WCI). The WCI is a measure of movements in hourly wage and salary rates which generally reflects the elements taken into account in calculating NWE under the Act.
Regulation 5 of the Safety, Rehabilitation and Compensation Regulations 2002 prescribes the “Wage Cost Index, Australia (Total hourly rates of pay - excluding bonuses/all Australia/all industries/all occupations) published by the Australian Bureau of Statistics” for this purpose. Regulation 6 prescribes the manner in which an increase in NWE is calculated using the WCI.
On 1 July each year, determining authorities will increase NWE for ex-employees based on any increase in the WCI for the year ending with the previous December quarter.
The ABS issued the WCI for the year ending 31 December 2001 on 20 February 2002. The percentage increase in the Index for the period was 3.4% with effect from 1 July 2002.
The Wage Cost Index is prescribed in regs 5 and 6 of the Safety, Rehabilitation and Compensation Regulations 2002 in the following terms:
5 Index — percentage of further increase in normal weekly earnings
For subsection 8(9B) of the Act, the Wage Cost Index, Australia (Total hourly rates of pay - excluding bonuses/all Australia/all industries/all occupations) published by the Australian Bureau of Statistics is prescribed.
6 Manner of calculation of further increase in normal weekly earnings
For subsection 8(9B) of the Act, the further increase in normal weekly earnings mentioned in subsection 8(9D) of the Act is the amount (if any) calculated, to 3 decimal places and rounded up to 2 decimal places, in accordance with the formula:
where:
F is the greater of the following:
(a)the number calculated, to 4 decimal places and rounded up to 3 decimal places, by dividing the index number by the previous index number;
(b)1.000.
index number is the index number of the index mentioned in regulation 5 for the quarter that ended on 31 December in the year immediately before the indexation date.
PE is the normal weekly earnings that applied immediately before the indexation date.
previous index number is the index number of the index mentioned in regulation 5 for the quarter that ended on 31 December in the previous year.
Note Under the formula above, there will be a further increase in normal weekly earnings only if F is greater than 1.000.
Historical rates for WCI are set out in the following Table:
|
Date |
WCI Increase |
|
1 July 2002 |
3.4% |