Employer leave and CTP income support
What happens to sick leave or annual leave used after the accident?
Keep the leave record and do not assume the insurer or employer will automatically restore it
Using paid sick leave or annual leave after a crash can affect the earnings chronology, but it does not create a universal rule that the insurer must repay the leave balance or that weekly benefits are unavailable. The CTP insurer calculates statutory payments under the Motor Accident Injuries Act, while the employer administers leave under employment law and workplace arrangements. Obtain the payroll and leave records, identify the covered dates and ask each party to state any adjustment in writing.
Many injured people use leave before a CTP claim is accepted or while PAWE is being determined. Later arrears may cover the same dates. Without a clear reconciliation, the claimant may not know whether the employer retained the leave deduction, reversed payroll, recovered wages or expected an insurer payment.
Schedule 1 clause 3(3)(d) excludes the monetary amount of annual leave, sick leave or another leave entitlement from personal exertion income. That rule is about the value of the leave entitlement in the PAWE definition; it does not itself decide how wages actually paid as leave after the accident affect a weekly-benefit period or whether an employer must restore a leave balance. The correct outcome depends on the payment made, employment instrument and statutory weekly-benefit calculation. This page does not promise leave recrediting and does not give employment-law advice.
Reviewed by Herman Chan, Stephen Young Lawyers
Start with a week-by-week payroll map
List ordinary wages, sick leave, annual leave, unpaid leave and CTP benefits for each week after the accident. Use gross payroll records and insurer schedules. A bank statement alone may hide whether the deposit was wages, leave or insurer arrears.
Identify whether the employer paid the claimant and was later reimbursed, whether the insurer paid the claimant directly or whether no adjustment occurred. Do not assume the arrangement from the fact that both parties have the same medical certificate.
Worked scenario: an employee uses two weeks of paid sick leave while the CTP claim is being assessed. The insurer later accepts a statutory weekly-benefit period covering those same two weeks. The employee should not assume either that the insurer must credit two weeks back to the leave ledger or that the arrears can simply be kept without payroll adjustment. The insurer schedule, employer policy and week-by-week gross payments must be reconciled first.
Will the employer recredit the leave?
That question may depend on the award, enterprise agreement, contract, payroll arrangement and whether the employer receives or recovers an equivalent amount. Ask payroll for the policy and a written calculation. The CTP insurer does not control the employer’s leave ledger merely because it later pays statutory benefits.
If the employer proposes to reverse wages or recover an overpayment, obtain the basis before agreeing to deductions. Separate employment advice may be needed. The CTP task is to ensure the insurer schedule accurately reflects earnings loss, PAWE and the relevant weeks.
Can paid leave affect weekly-payment entitlement?
Weekly benefits depend on statutory earnings loss and the applicable formula. Paid leave can be relevant to what the claimant received during the period, but it should be characterised accurately. Ask the insurer to show how the leave payment was treated rather than accepting an unexplained reduction.
If the insurer later pays arrears, compare the covered weeks with payroll adjustments. One issue may be a PAWE error, another may be post-accident earnings, and a third may be an employer leave-account question. They should not be bundled into one vague objection.
Practical next steps
Reconcile leave and weekly benefits
Use a single chronology but keep insurer and employer decisions separate.
Download the leave ledger
Obtain dates, hours deducted, leave type and remaining balance.
Collect payroll records
Keep gross payslips showing ordinary wages, leave and any later reversal or adjustment.
Obtain the insurer schedule
Ask for covered weeks, PAWE, statutory rate, post-accident earnings and arrears.
Ask payroll about recrediting
Request the applicable workplace rule and proposed adjustment in writing.
Challenge the correct decision
Use CTP review for an insurer calculation issue and obtain employment advice for a separate leave-ledger dispute.
Evidence
Leave and payment checklist
Each week should show what was paid, by whom and how it was characterised.
- Sick and annual leave ledger.
- Payslips showing leave hours and gross pay.
- Certificate of Fitness for the same period.
- Employer policy, award or agreement information if relied on.
- Insurer weekly-payment and arrears schedules.
- PAWE and capacity decisions.
- Payroll correspondence about reimbursement, reversal or recredit.
- Bank records used only to reconcile actual receipt.
Common leave mistakes
- Do not assume every leave day must be recredited by the insurer.
- Do not treat annual leave, sick leave and unpaid leave as identical.
- Do not agree to payroll recovery without understanding the calculation and legal basis.
- Do not double-count wages and insurer arrears for the same period.
- A leave dispute with the employer may require separate employment advice.
Timing
Preserve both decision dates
The insurer and employer may operate under different procedures.
- Tell the insurer promptly about leave and earnings received after the accident.
- Keep the date of any insurer weekly-payment adjustment and its review rights.
- Ask payroll about recredit or recovery as soon as arrears are received.
- Employment-law time limits can be separate from CTP review periods and may require independent advice.
Frequently asked questions
- Will the insurer pay back my sick leave?
- There is no universal automatic recredit rule. The insurer calculates statutory benefits, while the employer controls the leave ledger under applicable workplace arrangements.
- Can I use annual leave while waiting for the claim?
- That may be possible under your employment arrangements. Keep the records and tell the insurer so later payments can be reconciled.
- Can I receive CTP arrears for weeks when leave was paid?
- The answer depends on the statutory calculation and how the leave payment is treated. Ask for a week-by-week insurer schedule and payroll adjustment.
- What if my employer wants the arrears?
- Request the contractual, award or statutory basis and a calculation. Obtain employment advice if needed before authorising recovery.
- Does leave change PAWE?
- Post-accident leave usually concerns the weekly-payment chronology rather than the pre-accident PAWE figure. Pre-accident leave can raise a separate PAWE-period issue.
- What if payroll and the insurer disagree?
- Get both positions in writing and reconcile covered periods. Challenge each decision through the process that applies to that decision.
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: Certificates of Fitness for motor crash injuries
The legislation and official guidance linked above are the public-source basis for this page. Weekly-payment, Centrelink and tax outcomes depend on the character of the payment, current evidence and the individual decision.
Leave-payment reconciliation
Are leave and CTP arrears being counted inconsistently?
Send the leave ledger, payslips and insurer schedule. We can identify the CTP calculation issue and whether a separate employer question remains.
General information only: This page provides general NSW CTP information, not legal, financial, employment, Centrelink or tax advice. It does not calculate an individual entitlement, guarantee a payment or extend a review deadline.