PAWE and Recent Employment Changes: Ensuring an Accurate Average
A standard 52-week average can be unfair if you recently received a promotion or started a higher-paying job. The NSW CTP legislation includes specific rules (Schedule 1, Clause 4) to ensure your weekly payments reflect your current earnings, not your old ones. General information only.
1) The "Change in Circumstances" Rule
The Motor Accident Injuries Act 2017 recognizes that using a 52-week average is inappropriate if your earnings permanently changed shortly before the accident. If you had a "change in circumstances," the insurer is required to calculate your PAWE based only on the period after that change occurred.
2) What qualifies as a change?
To trigger this rule, the change must be a permanent or significant shift in your employment status, such as:
- Starting a completely new job with a different employer.
- A formal promotion within your current company.
- A permanent increase in your contracted hours (e.g. moving from part-time to full-time).
- A significant pay rise unrelated to standard CPI increases.
3) Common insurer errors
Insurers frequently ignore this rule and default to a 52-week average because it results in a lower PAWE and lower weekly payments. They may argue the change wasn't "permanent" or that you haven't provided enough evidence of the new rate.
4) How to protect your rate
If you recently changed jobs or received a raise, do not accept a PAWE based on old earnings. You should provide the insurer with your new contract or a letter from your HR department. If they refuse to adjust the calculation, contact us to discuss an Internal Review based on Schedule 1 Clause 4.
Frequently asked questions
- What happens to PAWE if I just got a promotion?
- Under Schedule 1 Clause 4 of the Motor Accident Injuries Act 2017, if your employment circumstances changed shortly before the accident (e.g., a promotion or new job), the insurer should use a shorter, more relevant averaging period that reflects your new salary.
- What counts as a "change in circumstances"?
- This includes starting a new job, receiving a promotion, a permanent increase in hours, or a significant pay rise. It ensures your PAWE reflects your actual earnings at the time of the accident, not a lower historical average.
- How do I prove a recent pay rise?
- An employment contract, a letter from your employer confirming the new rate, or recent payslips showing the increased amount are essential evidence.