3.5.4 Reduction in CWE

From 5 April 2010, Agents may decide not to take into account a voluntary reduction in CWE Current Weekly Earnings for reasons not related to the injury, when determining entitlement periods for weekly payments. In certain situations where the worker voluntarily removes themselves from employment or their CWE are reduced for reasons not related to the injury, the Agent has discretion not to alter (increase) the worker’s weekly payments, or not pay compensation in the form of weekly payments.

Note: Before 5 April 2010, notional earnings was used to determine reductions in a worker's weekly payments by:

• the weekly earnings an Agent determined a worker was capable of earning, or could earn from time to time in employment

• the CWE the worker actually received

The definition of ‘notional earnings’ was removed from the legislation effective 5 April 2010. From then, a worker’s weekly payments may only be reduced by the worker’s CWE from employment.

Making a determination

The following table outlines factors Agents should consider when assessing whether to apply a reduction in CWE:

Step	Considerations
Determine whether the relevant precondition has been met	the worker is no longer living in Victoria employment was terminated due to the worker’s misconduct the worker resigned from employment or reduced work hours for reasons unrelated to their incapacity for work resulting from their work-related injury. Note: this does not apply where a worker is entitled to weekly payments after the second entitlement period and there is a permitted fluctuation in hours or income in accordance with the legislation.
Determine whether discretion should be exercised	The Agent when deciding to exercise discretion, must consider: the objectives of the Act the worker’s circumstances, such as: severity of misconduct (e.g. calculated, deliberate or wilful) whether misconduct has been proven compliance with RTW and rehabilitation their employment record and duration the employer’s conduct, such as: whether principles of procedural fairness followed the harshness of the dismissal the nature and extent of the worker’s injury and prognosis

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Circumstances where a determination cannot be made

A determination not to increase weekly payments due to decreased CWE or to no longer pay weekly payments cannot be made if the:

• employer has failed to provide suitable employment, and
• worker is complying with their RTW Return to Work obligations under the legislation.

A determination not to increase weekly payments cannot be made for any of the following reasons:

• the worker reduces their hours or leaves their employment due to their incapacity from their work-related An injury/disease is work related if it arose out of or in the course of employment and the scope of employment. injury
• the employer reduces the worker's hours or terminates the worker's employment for reasons other than the worker’s misconduct
• the worker’s CWE are reduced because the worker is on paid annual leave or long service leave.

A determination to cease weekly payments after the second entitlement period cannot be made if:

• there is a fluctuation in hours or income within the acceptable criteria.

Agent notification requirements

Agents must provide written notice to the worker when a determination is made not to increase weekly payments due to a reduction in CWE. This notice is effective from the date upon which the worker's CWE were reduced or on any later date specified in the notice.

Agent determinations not to pay compensation in the form of weekly payments must follow the usual process for termination of weekly payments under the legislation.

See: Terminate or alter weekly payments

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3.5.5 Annual leave & long service leave

Effective from 1 January 2010, the legislation provides that weekly payments are not to be reduced where a worker receives payment in lieu of accrued annual leave or long service leave.

Effective from 1 January 2010, if the current weekly earnings of a worker are reduced because the worker is on paid annual leave or long service leave, WorkSafe must not, by reason only of that reduction, alter the amount of compensation in the form of weekly payments.

WorkSafe and Agents should not advise employers whether a worker is entitled to the payment or accrual of leave. Agents should advise employers and workers to refer to the appropriate employment agreement and/or the Fair Work Act 2009 (Cth).

Payment in lieu of leave

Where workers receive a payment in lieu of accrued annual leave or long service leave their weekly payments will not be affected.

Where a worker takes paid leave

If a worker with a CWC Current Work Capacity takes paid annual leave or long service leave which causes a reduction in their current weekly earnings, weekly payments are not to be increased because of the CWE reduction and continue to be paid at the same rate as previously.

Access annual or long service leave or pay other types of leave

If a worker is receiving weekly payments, employers and workers are to be advised to refer to the Fair Work Act 2009 (Cth) and/or the applicable industrial award or agreement or arrangement before:

• accessing annual leave or long service or
• paying other types of leave.

Certificates of capacity

Workers who take leave while receiving weekly payments must provide Certificates of Capacity for the leave period to receive weekly payments whilst on leave.

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3.5.6 Paid parental leave

Eligible working parents of children born or adopted from 1 January 2011 may be entitled to Commonwealth Government funded payments at the National Minimum Wage via their employer under the Paid Parental Leave (PPL Paid Parental Leave) Scheme.

There may be some instances where a worker who is receiving weekly payments may concurrently be eligible to receive PPL.

PPL payments not considered CWE

Payments made under the PPL scheme are not to be included in the definition of current weekly earnings and do not have any effect on a worker’s weekly payments.

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