AWE relates to the client's pre-injury earnings, but has a more limited role under the 1971 Act than does NWE under the SRCA. In practice, delegates only need to establish an AWE where:
- the rate of specified compensation is likely to exceed pre-injury remuneration
- the client was receiving Commonwealth superannuation whilst incapacitated
- the client is 'partially incapacitated' but has some earnings (30.4.6 and 30.4.7).
Section 25 of the 1971 Act specifies how AWE is to be calculated. Although quite different in form from S8 of the SRCA, the principles involved in computing AWE are very similar to those for determination of Normal Weekly Earnings (NWE) under the SRCA. The construction of AWE admits of both civilian and military income in the case of reservists, for example. The main difference between the pre-injury datum used by each of these two Acts is that, S25 (1971 Act) does not specify the pre-injury period (from which the average is to be taken) with the same rigour as that imposed by Ss9 and 8 of the SRCA. Other provisions are however very similar, or the same.
For this reason, delegates should treat AWE under the 71 Act as identical to NWE under the SRCA for all practical purposes. Delegates needing to establish AWE during the calculation of pre-88 incapacity should simply apply the method and principles relating to NWE set out in chapter 31.