Thursday 25 May 2023
Income Support Issues
The legislation requires the level of income support to be calculated on a weekly basis, commencing from the day that the injured worker has some level of incapacity for work. However, the income support amounts do not have to be paid at the end of each such weekly period.
An employer is permitted to pay income support in accordance with its pay periods. By doing so, the amount payable in respect of each pay period must reflect the period of incapacity that falls within the relevant pay period. Paying income support in accordance with pay periods, rather than incapacity weeks, causes the following practical problems:
- The first pay period that falls after incapacity for work commences may contain some days where there is no potential income support payable.
- The pay period that falls after incapacity for work ceases may contain some days where there is no potential income support payable.
- If the period of incapacity for work extends beyond 52 weeks, the first pay period that falls after the 52nd week of incapacity will contain some days where income support will be at the 100% level, and some days where it will be at the 80% level.
To correctly calculate the amount of weekly income support, the employer must be familiar with the legislation’s definition of earnings. Some amounts paid to an injured worker cannot be counted as earnings. Other amounts require “AWE” to be adjusted and can also not be counted as earnings.
Calculator
Professional Financial Consulting has developed a calculator that can calculate the income support that should be paid in respect of each relevant pay period and whether any shortfall has arisen. However, in order to do so, some information must first be provided to it, such as: the first day of incapacity, AWE, the days of the week that the injured worker normally works, the day of the week that pay periods end, the earnings over each relevant pay period, which count, the annual/long service leave that was taken over each relevant pay period, and the amount of income support that has already been paid in respect of each relevant pay period.
The calculator can undertake these calculations in respect of either past pay periods or future pay periods. In relation to future pay periods, the calculator would be used for a new claim where income support is payable (for such a case, there would not be income support amounts already paid).
In relation to past pay periods, the calculator can be modified to use the past amounts that the employer has determined to be the correct ones, rather than calculate them. In this scenario, the past amounts must be provided to the calculator.
The calculator can also be instructed to determine the interest that needs to be paid on the income support shortfall amounts, in accordance with the rules that are specified in the legislation.
Professional Financial Consulting warrants that all of the calculations produced by its calculator are compliant with the requirements of the legislation.
Service Offered
Professional Financial Consulting is happy to undertake an employer’s calculations on a case-by-case basis. For each such calculation a fee would be charged, which is calculated on a time-cost basis.
If you wish to utilise this service, please contact Chris Papanicolas, on either 0413 666 74 or 8242 6088.