Leave periods and ordinary earnings
How is PAWE calculated after parental leave or unpaid leave?
Leave is not automatically deleted from the PAWE period
If parental, caring or other unpaid leave falls within the pre-accident earnings period, the insurer must still apply the Motor Accident Injuries Act Schedule 1 definition to the actual circumstances. A claimant cannot simply replace every unpaid week with the wage they hoped to earn. Evidence of the leave, employment continuity, return date, resumed hours, pay rate and any qualifying significant earnings change is needed to decide whether the general rule or a statutory alternative applies.
A low average caused by leave can feel artificial when the claimant had returned to ordinary work before the crash. Equally, one post-leave payslip may not prove that the higher pattern would have continued. The file should show why the leave period was temporary and what the employment arrangement was on the accident date.
Parental leave, long service leave without pay, study leave and a voluntary career break can have different facts. Avoid relying on a general phrase such as “non-representative period” without linking it to a Schedule 1 category and contemporaneous employment evidence.
Reviewed by Herman Chan, Stephen Young Lawyers
What details about the leave matter?
Record when the leave began and ended, whether employment continued, whether any paid component was received, the agreed return date and the ordinary role, hours and rate on return. Keep the leave approval and return-to-work correspondence rather than relying only on a later recollection.
If the claimant reduced hours permanently after leave, the pre-accident arrangement may be different from a temporary phased return. If hours were increasing under an agreed plan, the plan and completed stages may be relevant to what could reasonably have been expected.
Can a post-leave earnings change affect the statutory period?
Schedule 1 contains an alternative where action taken by the earner produced a significant change in earnings circumstances that resulted in the person regularly earning, or becoming entitled to earn, more each week. Whether a return from leave satisfies that wording is fact-sensitive and should not be assumed.
A signed variation, promotion, new role, increased contracted hours or return to the pre-leave rate may be important. The insurer should identify the statutory provision and factual change relied on. Merely stating that the year was “unusual” does not calculate PAWE.
What if part of the leave was paid?
Identify who paid the amount, its legal character and the pay period. Employer-paid leave, government parental leave and an ordinary wage payment should not be assumed to be identical gross earnings for PAWE purposes. Keep the payment statements and ask the insurer to explain their treatment.
Also separate pre-accident leave from paid sick or annual leave used after the crash. The latter belongs in the post-accident earnings and weekly-payment chronology and may raise employer adjustment issues.
Practical next steps
Prepare the leave-to-work chronology
Show the employment arrangement before, during and after leave, then test the statutory category.
Document the leave
Collect the approved dates, paid or unpaid status and evidence that employment continued or ended.
Document the return
Keep the return agreement, role, hours, rate, phased arrangement and actual rosters or payslips.
Identify any earnings change
Record a promotion, new contract, increased hours or other action that changed regular weekly entitlement.
Separate payment types
Distinguish wages, employer-paid leave, government benefits and reimbursements.
Ask for the statutory reasoning
The insurer calculation should state the Schedule 1 provision, period, gross earnings and divisor used.
Evidence
Parental or unpaid leave checklist
The evidence should establish continuity, temporary absence and the real earning arrangement on the accident date.
- Employer leave approval and exact dates.
- Employment contract before leave and any later variation.
- Return-to-work agreement or correspondence.
- Rosters and payslips before leave and after return.
- Evidence of permanent or phased changes to hours.
- Records identifying employer and government leave payments.
- Any promotion, rate increase or new-role documentation.
- Insurer PAWE worksheet and stated Schedule 1 category.
What not to do
- Do not automatically remove all unpaid weeks from the average without a statutory basis.
- Do not use one unusually high post-leave pay period as the ordinary pattern without supporting records.
- Do not describe government parental leave and employer wages as the same payment without checking their character.
- A planned future increase needs more than an informal expectation.
- Do not confuse pre-accident leave with post-accident leave used because of injury.
Timing
Raise the leave issue early
The employer may hold the clearest evidence of an agreed return arrangement.
- Request leave and return records while payroll and managers can still retrieve them.
- Lodge the statutory benefits claim promptly even if the correct PAWE category remains under review.
- Keep the PAWE decision date and use the decision-specific review information if leave was treated incorrectly.
- A request for extra payroll material does not automatically pause an internal-review or PIC period.
Frequently asked questions
- Can the insurer average a year that includes unpaid parental leave?
- The insurer must apply Schedule 1. The general rule may produce that result unless a defined alternative applies; the leave is not automatically excluded merely because it lowers the average.
- What if I returned to full-time work one week before the accident?
- The signed return arrangement and actual entitlement matter, but one week alone may not prove the applicable statutory alternative. The full facts and Schedule 1 wording must be assessed.
- Does paid parental leave count as wages?
- Do not assume. Identify the payer and character of the payment and ask the insurer to explain whether and how it is included in gross earnings.
- What if I planned to increase my days later?
- A formal agreed schedule or contract is stronger than an intention. The legislation determines when expected earnings can be used.
- Can annual leave before the accident affect PAWE?
- Paid employment leave may appear in gross earnings records. Check the source and calculation rather than deleting or double-counting it.
- Is this the same as a work-capacity dispute?
- No. PAWE concerns pre-accident earnings. Work capacity concerns what the injury allows after the accident, although both figures can affect the weekly payment.
Related NSW CTP guides
Official sources
- Motor Accident Injuries Act 2017 (NSW), current in-force version
- Motor Accident Injuries Regulation 2017 (NSW), current in-force version
- SIRA Motor Accident Guidelines, current published version
- SIRA Motor Accident Guidelines Part 4: claims
The legislation and official guidance linked above are the source basis for this page. PAWE and weekly-payment outcomes depend on the statutory category, complete earnings evidence, accident-related loss and the decision applying to the individual claim.
Leave-period PAWE review
Has unpaid or parental leave reduced the insurer’s PAWE figure?
Send the leave approval, return arrangement, payslips and insurer worksheet. We can identify whether the statutory category and earnings period need review.
General information only: This page provides general NSW CTP information, not legal, financial, employment or tax advice. It does not calculate an individual entitlement, promise payment or extend a claim or review deadline.