Non-Cash Benefits: Included In Your Weekly Earnings?

Where a person has suffered a work injury and is unable to return to work, the worker’s average weekly earnings are determined and the they are paid accordingly for any time off work in accordance with a supporting Prescribed Medical Certificate.

The Return to Work Act 2014 allows for a maximum of two years average weekly payments to be made. If the injured person returns to work earlier, the income maintenance payments may cease or reduce earlier. The only exception is that of a seriously injured worker, where a worker has been assessed with over 30% whole person impairment, then their entitlement to income maintenance will continue until retirement age and medical expenses for life.

The calculation of a worker’s average weekly earnings is normally calculated based on the amount the worker earned during the period of 12 months preceding the relevant date of injury in a relevant employer. This is normally the employment with the employer from where the injury arose.

If the worker at the time was employed by two or more employers, the income earned over a period of 12 months from the other employers will also be considered when calculating average weekly earnings.

If over the 12 month period the worker was on annual leave or sick leave these earnings will also be taken in to account.

Non-cash benefits

Section 13 (b)For the purpose of determining the average weekly earnings of a worker –

(b) any non-cash benefit of a prescribed class provided to the worker by an employer –

1. will be taken in to account if the worker does not retain the benefit of the non-cash benefits;
2. will not be taken in to account if the worker retains the benefit of the non-cash benefit.

A prescribed class of non-cash benefits is set out in the Return to Work Regulation 2015, paragraph 9 and included:

1. Access to a discounted rate of interest on a loan;

2. Payment of school fees;

3. Payment of health insurance premiums;

4. Payment of medical benefits;

5. A computer for personal use;

6. Access to the internet;

7. Accommodation;

8. Payment of, or towards, housing costs;

9. Motor vehicle and payment of costs associated with running or maintaining the vehicle;

10. A telephone and payment of costs associated with using or maintaining the telephone;

11. A staff discount program;

12. A credit card.

If for example during the course of your employment you have been provided with a company car, mobile phone and/or computer/internet which has been provided for work and personal use you may be entitled to claim the benefit of the non-cash benefit when assessing average weekly earnings.

The key case in this issue is Cooke v Employers Mutual Limited (WorkCover Corporation) (2007) SA WCT 16.

This case was an appeal from a determination rejecting a worker’s claim for an increase in his income maintenance entitlement to reflect the value to him of the benefit of an unlimited private use of the motor vehicle:

1. In this case the worker had a company vehicle through a salary sacrifice arrangement. Although through the salary sacrifice arrangement the worker was paying a sum of $8,00.00, the worker argued that the true value of the provision of the vehicle was much higher and more like $498.71 per week therefore seeking to increase his average weekly earnings by that amount;

2. It was held that “the amount of the salary sacrifice in exchange for a non cash benefit, that amount is not necessarily to be taken as the value for the non cash benefit for the purpose of calculating an income maintenance entitlement. Each case must be determined by reference to its own facts and the worker is to be compensated for the value of the benefit as supplied”.

In this case the amount paid by way of salary sacrifice was not the value of the unlimited private use of Mr Cooke’s vehicle.

It was held by the Court that “non-cash benefit to be valued is that of unlimited private use of the vehicle, not the total use of the vehicle including work related use”.

Need help in calculating your earnings and benefits, or with your claim in general?

Contact the team at your nearest TGB location to arrange a free initial interview.