icare provides further update on PIAWE remediation

icare continues to review and rectify initial PIAWE miscalculations identified earlier this year.

icare disclosed early this year that it had identified historical problems with some initial calculations made by workers compensation scheme agents on pre-injury average weekly earnings (PIAWE) and that it had begun the process of deeper review and rectification.

The discovery of the data discrepancy followed the launch of a single IT platform in 2019, which gives much clearer insight to payments that have been made to injured workers on a consistent basis. The insurance regulator, the State Insurance Regulatory Authority (SIRA), was notified in February and the matter discussed at a NSW Parliamentary hearing in March.

icare has also kept stakeholders updated on the matter, including regular monthly meetings with SIRA, WIRO and the WCC, and sessions with union representatives (including Unions NSW) and employer representative groups.

The data discrepancy relates to initial pre-injury average weekly earnings (PIAWE) calculations made between 2012 and 2019, with the majority of cases predating the launch of icare in 2015. Calculating PIAWE has historically been recognised by all parties over many years as overly complex. This prompted the NSW Government's reform of PIAWE calculations in 2019.

Due to the complexity of the calculations involved, and the necessity to get it right, payments will commence over the coming weeks to those impacted after they have been contacted and updated information confirmed.

icare's initial estimates of $40 million to $80 million have been significantly revised down following further investigation into the actual records. icare now estimates the initial PIAWE payment will impact 5,000 to 10,000 injured workers, not the up to 52,000 workers as initially predicted. This reduces the estimated range to between $5 million to $10 million in total, but more work is still required before icare is satisfied that the remediation is fully understood.

icare has created a specialist core remediation team working on the matter which includes the former WIRO Kim Garling and PIAWE expert Mike Siomiak.

icare will not recover overpayments made but will remediate any underpayments made as each file is fully reviewed.

View more on the PIAWE reassessment process

Read the May 2020 update containing further background information on the issue