CERTIFICATE OF DETERMINATION OF MERIT REVIEWER	

Citation:	
Patel v AAI Limited t/as AAMI [2023] NSWPICMR 46	
		
Claimant:	Jyoti Chirag Patel	
		
insurer:	AAMI	
		
Merit Reviewer:	Ray Plibersek	
		
DATE OF DECISION:	8 September 2023	
		
CATCHWORDS:	MOTOR ACCIDENTS -  Motor Accident Injuries Act 2017; pre accident weekly earnings (PAWE); dispute over calculation of the claimant’s PAWE; whether a pay rise can be included when calculating earnings;  two decisions of the Fair Work Commission on 4 November 2022 and 21 February 2023 awarded the claimant a 15% pay rise; the pay rise commenced ten days after the date of the claimants motor vehicle accident; claimant’s action was sufficient to satisfy the definition in sub-clause 4(3) and resulted in the claimant being entitled to earn more on a weekly basis; Towers v GIO referred to; Held – remitted to the insurer for reconsideration and recalculation of the claimant’s PAWE to include the 15 % pay rise; claimant’s PAWE to be calculated in accordance with sub-clauses 4(2)(b) and 4(3) of Schedule 1. 
	
determinations made:	Certificate of Determination
Issued under s 7.13(4) of the Motor Accident Injuries Act 2017

The certificate of this review determination is as follows:
1.	The reviewable decision is set side.
2.	For the period from 20 June 2023 until 30 June 2023 the claimant’s pre-accident weekly earnings (PAWE) is determined under Division 3.3 and sub-clauses 4 (2) and 4(3) of Schedule 1 of the Motor Accident Injuries Act 2017 (the MAI Act) to be $922.86 per week. 
3.	For the period from 1 July 2023 and ongoing the claimant’s PAWE is to be determined under Division 3.3 and sub-clauses 4 (2) and 4(3) of Schedule 1 of the MAI Act and calculated based upon the new higher rate pay specified in the claimant’s payslips.
The matter is remitted to the insurer for reconsideration and recalculation of the claimant’s entitlement to weekly payments of statutory benefits in accordance with these reasons and Division 3.3 of the MAI Act	

REASONS FOR DECISION
BACKGROUND
1.	On 19 June 2023, Ms Jyoti Patel, (the claimant) was injured in a motor vehicle accident when the car she was driving collided with another car on Richmond Road.
2.	The claimant’s application for personal injury benefits claim form is dated 
20 June 2023. Her reported injuries included to the chest, spine, and leg.
3.	In the 12-month period before the accident the claimant was employed in two jobs. She worked part-time as an allied health assistant with RSL Lifecare. She also worked part-time as an allied health assistant with the Westmead Rehabilitation Hospital.
4.	The dispute is is a merit review application about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
5.	By letter dated 20 July 2023 the claimant wrote to the insurer regarding the effect of her pay increase upon her claim for weekly benefits payment.
6.	By email dated 25 July 2023 the claimant applied for an internal review of the insurer’s decision.
7.	By letter dated 4 August 2023 the insurer determined its internal review with a decision to maintain the original decision that the claimant’s pre-accident weekly earnings (PAWE) is calculated to be $922.86 for the purposes of the MAI Act.
8.	The claimant continues to dispute the way the insurer has calculated her PAWE requesting that it be calculated to take into account her increased pay from 
1 July 2023.  
9.	The claimant seeks a merit review of the insurer’s decision over her PAWE. 
10.	The parties appeared before the Commission at a teleconference on 29 August 2023.
DOCUMENTS CONSIDERED
11.	The documents I have considered are those referred or attached to the application for merit review and the insurer’s reply including the following documents: written submissions, payslips and financial records produced by the claimant and the insurer. I’ve also considered the extra documents supplied by the claimant to the insurer which were forwarded to me through the portal by the insurer on 7 September 2023.
SUBMISSIONS
12.	The claimant wrote to the insurer by email dated 20 July 2023. She advised that she had received a pay increase which was to take effect from 1 July 2023 and asked whether the insurer would calculate her claim based upon her new pay rate. The claimant wrote that her previous annual pay rate was $41,371.20 which was equivalent to $26.52 per hour. She wrote that her new annual pay rate was $50,312.65 which was equivalent to $32.25 per hour.
13.	In her email the claimant wrote:
 “As previously discussed over the phone a couple of weeks ago, I want to inquire about the status of my pay increase, which was supposed to take effect from 1st July.
I have received my latest payslip for the month of July, which reflects the updated pay with the proposed increase.
I wish to discuss the possibility of considering my current payment review based on the new pay increase. If I hadn't been involved in the accident, my earnings would have been based on the new pay rate starting from 1st July 2023.
To provide some context, here are the details:
Old Annual Payrate: $41,371.20, equivalent to $26.52 per hour.
New Annual Payrate: $50,312.65, equivalent to $32.25 per hour.
I kindly request a review of attached my last payslip for June, showing the old annual pay rate, and July, indicating the new annual pay rate.”
14.	In her application to the Personal Injury Commission (Commission) the claimant wrote as follows:
“I was provided with the PAWE calculation, which was based on my earnings up to 19th June 2023 and was accurate until 30 June 2023. Subsequently, on 24th March 2023, the Fair Work Ombudsman announced a 15% pay increase for healthcare workers, effective from 1st July 2023, which was implemented by my current employer from 1 July 2023 hence my pay increased as following, Old Annual Payrate: $41,371.20, equivalent to $26.52 per hour, New Annual Payrate: $50,312.65, equivalent to $32.25 per hour. 
Unfortunately, due to an accident, I couldn't benefit from the pay increment that other employees received. If I hadn't been in the accident, my pay rate would have been adjusted to the new rate, and any employee involved in an accident after that date would have their PAWE calculated based on the newer rate. 
I believe that the current AAMI policy has led to discrimination against my situation, as the internal review outcome suggests that PAWE situation can allow for pay increase under certain circumstances. These circumstances include situations where employees had entered into an arrangement to start a new job, received a promotion, transitioned from part-time to full-time, or got a pay increase for achieving performance standards. I feel that my situation is no less deserving of consideration, as the pay rise given to healthcare employees by the Fair Work Ombudsman is a reflection of industry-wide performance appreciation.”
15.	In oral submissions from the claimant herself at the teleconference on 29 August 2023 she made a number of further submissions. The claimant said that she had worked for more than 12 months prior to the accident in her two nominated jobs. She said that her injuries were improving and that she currently was unfit to work. She expected to return to work in October 2023. The claimant also said that her job with RSL was permanent part-time and that her work with Westmead was on a casual basis. The claimant also advised that she had supplied details of the Fair Work Commission decision and 
12 months of her payslips to the insurer.
16.	In submissions dated 24 August 2023 the insurer adopts the earlier internal review decision made by the insurer dated 4 August 2023. The insurer denies that sub-clauses 4(2)(b) and 4(3) of Schedule 1 to the MAI Act apply to the calculation of the claimant’s PAWE. The insurer argues that sub-clauses 4(2)(b) and 4(3) only apply if, during 12 months immediately before the day of the motor accident, there was a change of earnings circumstances. The insurer argues that because the increase in the claimant’s pay became effective on 1 July 2023 this occurred after the accident on 
19 June 2023 thus the significant change in the claimant’s earnings circumstances did not occur in the 12 months immediately before the day the motor accident. According to the insurer, sub-clause 4(3) does not therefore apply in this claimant’s case.
17.	The insurer also argues that sub-clauses 4(2)(b) and 4(3) do not apply in this claimant’s case because the increase in her pay after 1 July 2023 did not arise in circumstances attributable to “any action taken by the earner”. The insurer’s argument is that any pay increase was not through any action taken by the claimant. To support their argument the insurer highlights the comments of Merit Reviewer Ruschen’s in Towers v GIO [2022] NSWPICMR 2, that, ‘these are all circumstances that arise from an action taken by the earner rather than the result of matters outside the earner’s control’. 
18.	The insurer submits that the new pay rate increase was not as a result of any action taken by the claimant. Rather, as she is paid in accordance with an award, that pay increase is directly and solely attributable award rate negotiations between her industry as a whole, and the Fair Work Ombudsman. In circumstances where the rate increase did not arise in the 12-month period preceding the accident, and did not arise as a result of action taken by her, clauses 4(2)(b) and 4(3) do not apply, and the rate increase cannot be taken into account for the purposes of assessing her PAWE. 
19.	Finally the insurer also rejects any imputation that it has ‘discriminated’ against the claimant as she has asserted in her application, or that it abides by any policy that would endorse such ‘discrimination’. Rather, it is abundantly clear that the insurer’s decisions have been premised on its interpretation of the law as it applies to her claim. 
20.	In oral submissions from the insurer’s representative at the teleconference on 
28 August 2023 he confirmed that the insurer had made its PAWE calculations based upon eight weeks of payslips supplied by the claimant for the period immediately prior to the motor accident. The insurer’s representative did say that insurer had received about 12 months of payslips from the claimant.
REASONS
21.	This is a dispute between the claimant and the insurer about the calculation of the claimant’s PAWE and whether any increase in the claimant’s pay from 1 July 2023 should be reflected or take into account when calculating the claimant’s PAWE.
Nature of merit review
22.	This matter is a merit review of the decision of the insurer about the amount of weekly payments of statutory benefits in accordance with s 7.13 of the MAI Act. This decision is a reviewable decision as it is listed in Schedule 2, sub-clause 1 (a) of the MAI Act. This review is not a review of the insurer’s processes in making the weekly statutory benefits and/or internal review decision. The review requires that I decide what the correct and preferable decision is having regard to the material before me including any relevant factual material and any applicable law.
Legislation
23.	In this merit review, the relevant applicable legislation commences with Division 3.3 of the MAI Act which deals with weekly payments of statutory benefits.
24.	Many of the words used in with Division 3.3 are defined in Schedule 1 of the MAI Act. Schedule 1 defines: “earner”; “loss of earnings”; “pre-accident weekly earnings”; “pre-accident earning capacity” and “post-accident earning capacity”. The terms “gross earnings” and “earning capacity” is not separately defined in Schedule 1.
Definition of earner and PAWE
25.	The terms “earner” and “loss of earnings” are defined in Schedule 1, cls 2 and 3 as follows: 
“2  Meaning of ‘earner’
A person who is injured as a result of a motor accident is an earner if the person is at least 15 years of age and who—
(a) 	was employed or self-employed (whether or not full-time)—
(i) 	at any time during the 8 weeks immediately preceding the motor accident, or
(ii) 	during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii) 	during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,
and, at the date of the motor accident, had not retired permanently from all employment, or
(b) 	before the motor accident, had entered into an arrangement (whether or not an enforceable contract)—
(i) 	with an employer or other person to undertake employment, or
(ii) 	to commence business as a self-employed person, at a particular time and place, or
(c) 	was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987.
3  Meaning of ‘loss of earnings’
(1) 	Loss of earnings means a loss incurred or likely to be incurred in a person’s income from personal exertion.
(2) 	A person’s income from personal exertion is—
(a) 	the amount that is the income of the person consisting of earnings, salaries, wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered, and
(b) 	the proceeds of any business carried on by the person either alone or in partnership with any other person, and
(c) 	any amount received as bounty or subsidy in carrying on a business.
(3) 	A person’s income from personal exertion does not include—
(a) 	interest, unless the person’s principal business consists of the lending of money, or unless the interest is received in respect of a debt due to the person for goods supplied or services rendered by the person in the course of the person’s business, or
(b) 	rents or dividends, or
(c) 	any employer superannuation contributions, or
(d) 	the monetary amount of any annual, sick or other leave entitlement.”
26.	There is no dispute between the parties that the claimant is an ‘earner’ as defined in Schedule 1, cl 2 of the MAI Act. 
27.	On the facts of this case I find that the claimant satisfies the definition of ‘earner’ as defined in Schedule 1, cl 2 of the MAI Act. The basis for my findings are the payslips which shows that the claimant was employed for a period or periods during the year immediately preceding the motor accident. 
28.	PAWE is defined in cl 4 of Schedule 1 of the MAI Act as:
“4  Meaning of ‘pre-accident weekly earnings’—general
(1)	Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.
(2)	In the following cases, pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means—
(a)  if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months—the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,
(a1)  if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period—the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,
(b)  if subclause (3) applies—the weekly average of the gross earnings the earner received as an earner, or could reasonably have been expected to receive, during the 12 months after the change of circumstance referred to in the subclause occurred,
(c)  if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person—the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.
(2A)  The pre-accident period, in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.
(3)	This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred. 
Note— 
Examples of a change of circumstances to which this subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards. 
(4)	 For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day. “
29.	Based on the evidence before me and for the reasons set out below I am satisfied that in this claimant’s case sub-clauses 4(2)(b) and 4 (3) apply. Accordingly, the claimant’s PAWE must be calculated under Schedule 1 sub-clauses 4(2)(b) and 4 (3).
Calculation of weekly benefits
30.	Having made my finding that the claimant meets the definition of earner under Schedule 1, cl 2 of the MAI Act the issue that remains in dispute is about the calculation of the claimant’s PAWE.
31.	Based on written submissions from the claimant and the insurer it seems that both parties dispute the calculation of the claimant’s income. The claimant says that her PAWE should be increased to reflect the 15% increase in her wages from 1 July 2023. The insurer responds that the wage rate increase did not arise in the 12 month period preceding the accident, and did not arise as a result of action taken by her, cls 4(2)(b) and 4(3) do not apply, and the wage rate increase cannot been taken into account for the purposes of assessing her PAWE
32.	On 4 November 2022, the Fair Work Commission issued a decision to grant a 15% interim increase in minimum wages for affected aged care employees in the 3 awards. In the Stage 1 decision, the Full Bench decided that an interim increase of 15% to modern award minimum wages applying to direct aged care workers was ‘plainly justified by work value reasons’, pursuant to s 157(2)(b) of the Fair Work Act 2009 (the Act). The Commission confirmed this increase by issuing a final decision on 
21 February 2023. In the stage 2 decision the Commission confirmed its view that the evidence establishes that the relevant existing minimum wage rates in the Awards do not properly compensate direct care workers in either residential or in-home aged care settings, for the value of the work performed. The Commission was satisfied that the requirements of s 157(2) of the Act are met in relation to direct care workers. The Commission determined that the interim increase will take effect from 30 June 2023. Pursuant to s 166(2) of the Act, the Commission were satisfied that it is appropriate to specify this date.
33.	Thus the effect of initial decision of the Fair Work Commission on 4 November 2022 was to grant a 15% interim increase to a large number of health care and aged care workers which included the claimant. The effect of the final decision of the Fair Work Commission on 21 February 2023 was to confirm the interim increase and to extend it to a number of other workers in the industry and also to set the operative date that the interim increase will take effect which was from 30 June 2023.
34.	Based upon the evidence provided by the claimant and the calculations referred to in the insurer’s internal review it seems that neither the claimant nor the insurer attempted to calculate the claimant’s income over a 12-month period immediately preceding the motor accident.  Accordingly, the insurer did not calculate the claimant’s PAWE in accordance with sub-clause 4(1) of schedule 1 to the MAI Act. Given the incomplete set of payslips provided by the claimant to the insurer this is an understandable approach. At the teleconference on 29 August 2023 both parties indicated that they accepted the claimant’s PAWE could be calculated using eight weeks of payslips for the period immediately preceding the motor accident. Even though the claimant worked for many months prior to the motor accident and had evidence of several months of payslips, I’m not prepared to overturn the insurer’s calculation of the claimant’s PAWE for the period of 20 June until 30 June 2023.
35.	Accordingly, I find that the correct and preferable figure for the claimant’s PAWE for the period of 20 June until 30 June 2023 is $922.86 as was calculated by the insurer and affirmed on internal review. The insurer calculated that PAWE as follows: 
“-Pay period 10/04/2023 - 04/06/2023. 
- Gross earnings $7382.89 divided by 8 weeks. 
- PAWE - $922.86.” 
36.	Regarding the period from 1 July 2023 and ongoing I’ve determined that the claimant’s PAWE should be calculated in accordance with Schedule 1 sub-clauses 4(2)(b) and 4 (3). Under sub-clause 4(2)(b) the earnings of a claimant who is injured means the weekly average of the gross earnings the earner received as an earner, or could reasonably have been expected to receive, during the 12 months after the change of circumstance referred to in subclause 4 (3) occurred. In this claimant’s case the change in circumstances occurred on 4 November 2022 when the Fair Work Commission issued a decision to grant a 15% interim increase in minimum wages for affected aged care employees. From that date the claimant could reasonably have been expected to receive the pay rise which the Fair Work Commission had decided to grant sometime. It wasn’t until the second decision of the Fair Work Commission that the Commission made it clear that the pay rise would take effect after 30 June 2023. The key point to note is that for the purposes of sub-clause 4(2)(b) sometime within the ensuing 12 months from 4 November 2022 the claimant could reasonably have been expected to receive her pay rise. 
37.	Sub-clause 4 (3) applies where, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred. The insurer strongly argues that sub- clause 4 (3) does not apply in the claimant’s case because the increases in her wages were not “…as a result of any action taken by the earner..” which is the requirement in the subclause. 
38.	There is no direct evidence before me as to what action the claimant took to get a pay rise. It may be that the claimant was participating or voting in meetings at work; consulting with her management and workplace; possibly joining or contributing to or voting for her unions campaign to increase wages. In my view it is open to me to infer that the claimant took some actions either herself or as part of a collective bargaining process which may have led to the pay rise awarded in November 2022. Any such action is in my view sufficient to satisfy the definition in sub- clause 4 (3) and resulted in the claimant being entitled to earn more on a weekly basis.
39.	Accordingly, the insurer should recalculate and pay the claimant’s PAWE for the period from 1 July 2023 and ongoing based on the 15% higher wages the claimant became entitled to from 1 July 2023 as a result of the two Fair Work Commission decisions referred to above. 
CONCLUSION 
40.	The reviewable decision is set aside and is remitted to the insurer for reconsideration and recalculation of the claimant’s entitlement to weekly payments of statutory benefits in accordance with Division 3.3 of the MAI Act.
41.	The insurer is to calculate the amount of the weekly payments based on the claimant’s PAWE for the period of 20 June until 30 June 2023 as $922.86 and then at the higher rate with the 15 % increase from 1 July 2023 and ongoing.