Upcoming changes to pre-injury average weekly earnings

In late 2018 the NSW Government introduced a range of changes to the NSW workers compensation system with the aim to reduce disputes and streamline the claims process.

Changes to dispute pathways were effective on 1 January 2019. Find more information on these changes.

The next phase of these changes relate to simplification of the calculation of a worker’s pre-injury average weekly earnings (PIAWE).  

These changes aim to support a simple and more efficient process to determine PIAWE for a range of working arrangements, and ensure the calculation is easier to understand, fairer and reflective of actual pre-injury earnings. The Guiding Principles behind these upcoming changes to PIAWE are: 

Simple

Logical, easy to apply to a range of working arrangements with fewer complexities than currently.

Transparent 

Clearly articulated in a way in which insurers, employers and workers can understand and explain.

Fair and equitable

Consistent outcomes for injured workers (where practicable).

The key expected changes include:

  • A new PIAWE definition ­- reference to ordinary earnings, shift and overtime will be removed. PIAWE will simply mean the weekly average of the gross pre-injury earnings received by the worker in all employment at the time of injury.
  • A simpler calculation - PIAWE will be calculated as gross earnings divided by the relevant earning period which is the 52 weeks before injury unless an adjustment applies. Gross earnings include income from all employment at time of injury and the cash value of non-monetary benefits that have been withdrawn after injury but excludes compulsory superannuation, workers compensation and/or other compensation payments.
  • A simpler calculation of the amount of weekly payments - deductions will no longer be considered.
  • A new agreement - in certain circumstances, an insurer will be allowed to give effect to an agreement between a worker and employer about a worker’s PIAWE.

These changes will be made under Schedule 3 of the Workers Compensation Legislation Amendment Act 2018 (the PIAWE provisions), and have yet to commence.

The State Insurance Regulatory Authority (SIRA) continues to consult with icare and other key stakeholders on the development of supporting regulatory instruments, including regulation and guidelines, in relation to these upcoming changes.

While we await the final content of the regulation/guidelines and a commencement date, icare has been sharing information about the expected changes with our agents, providers and customers in preparation for implementation before the end of 2019.

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