What are Normal Weekly Earnings (NWE)?
Sections 8 and 9 of the SRC Act provide for the calculation of normal weekly earnings (NWE). Essentially, the NWE provisions are a re-enactment of s 25 of the Compensation (Commonwealth Government Employees) Act 1971 (the 1971 Act), and allow for the calculation of a weekly amount that is a fair representation of what a client would have earned but for their compensable injury. The provisions also allow for the updating of NWE from time to time so that it continues to be a fair representation of what the client would have earned but for the injury, throughout the lifetime of the claim.
Note that, on and after 1 October 2001, the NWE of a discharged member is increased annually on 1 July by reference to a statutory indexation rate (the Wage Cost Index) under s 8(9B); reference is no longer made to comparable wage movements for serving members.
The NWE figure provides a reference point for the calculation of the weekly incapacity compensation entitlement for a client under the SRC Act.
NWE – ss 8(9)-(9B) (on and after 1 October 2001)
The SRC Act was amended on 1 October 2001 by Part 2 of the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 to provide for a new method of calculating NWE for discharged employees. Section 8(9) was repealed and substituted by new ss 8(9)-(9D) in the following terms:
8(9) The normal weekly earnings of an employee before the date of the employee's injury, as calculated under the preceding subsections, must, while the employee continues to be employed by the Commonwealth or a licensed corporation, be increased or reduced by the relevant percentage.
8(9A) For the purposes of subsection (9), relevant percentage means the same percentage as the percentage of increase or reduction in the minimum amount per week payable in respect of employees included in a class of employees of which the employee was a member at the date of the injury as a result of:
(a)the operation of a law of the Commonwealth or of a State or Territory; or
(b)the making, alteration or operation of an award, order, determination or industrial agreement or the doing of any other act or thing, under such a law.
8(9B) The normal weekly earnings of an employee before injury, as calculated under subsections (1) to (8) and as increased or reduced under subsection (9) must, if the employee has ceased, or ceases, to be employed by the Commonwealth or a licensed corporation, be further increased, with effect from each indexation date in relation to that cessation, by reference to the percentage of increase (if any) of an index that is prescribed for the purposes of this subsection over the year ending on the 31 December preceding each such indexation date.
8(9C) For the purpose of subsection (9B), the indexation date, in relation to a cessation of employment, is:
(a)the 1 July next following:
(i) the date on which this Act receives the Royal Assent; or
(ii) the date of that cessation of employment;
whichever last occurs; and
(b)each subsequent 1 July.
8(9D) For the purpose of subsection (9B), the regulations may specify the manner of calculating the further increase referred to in that subsection by reference to the movement of the index that is prescribed for the purposes of that subsection.