This instruction applies when the client is a 'Former Employee' within the meaning of S123 of the SRCA. i.e. the client was actually in receipt of incapacity payments on 1 December 1988 (i.e. the SRCA's commencing day).
Compensation paid to 'Former Employees' under the transitional provisions in Division 3, Part X of the Act is calculated using NWE in some circumstances. The NWE may, in such cases, interact with the Average Weekly Earnings computed for the purposes of payment under the 1971 Act.
Under the 1971 Act, Average Weekly Earnings (AWE) provided a ceiling for incapacity benefits. As such, AWE was not required to be calculated in every case where a client was incapacitated, and the procedures for calculation were complex and time consuming.
Therefore, the following policy has been adopted for establishing NWE on 1 December 1988, the commencing day of the SRCA.
Where AWE was calculated
Where Average Weekly Earnings figure (AWE) had been calculated under the 1971 Act, this amount is deemed to be the NWE under the SRCA from 1 December.
Where AWE was not calculated
Where the client was no longer employed by the ADF on 1 December 1988, the NWE figure is the salary according to the military pay scales (at 1/12/1988) for the rank of the client at discharge.
Note: This policy must be applied using common sense. Where it is known, or it can be established by evidence, that the client received additional special allowances or regular overtime payments, these should be taken into account in the usual manner for calculating NWE under the 1988 Act.