Motor Accident Injuries (Premiums and Administration) Regulation 2019

This section applies to an amount to be AWE indexed (an AWE indexed amount) on an indexation day for the amount under the following sections of the Act:

section 96 (Amount of income replacement benefits—first payment period);

section 97 (Amount of income replacement benefits—second payment period);

section 103 (Income replacement benefits—interim weekly payments).

The AWE indexation factor for an AWE indexed amount on an indexation day is the factor worked out using the following formula and applying subsections (4) and (5):

AWE¹ means the AWE published for the period ending immediately before the indexation day.

AWE² means the AWE published for the period ending 6 months before the indexation day.

However, if, on an indexation day for an AWE indexed amount, the effect of a negative adjustment is to be offset against an increase in line with an adjustment in the AWE, the AWE indexation factor for the amount is worked out using the following formula and applying subsections (4) and (5):

AWE¹ means the AWE published for the period ending immediately before the indexation day.

AWE³ means the AWE published for the period ending 6 months before an indexation day when a negative adjustment that has not been offset first occurred.

Example—offsetting of negative adjustment

The following AWE amounts are published in 2020, 2021 and 2022:

for May 2020—$1 680;

for November 2020—$1 700;

for May 2021—$1 690;

for November 2021—$1 695;

for May 2022—$1 750.

For the indexation day on 1 October 2021, the AWE indexation factor is $1 690/$1 700. Because the AWE indexation factor would be less than 1, the AWE indexation factor for 1 October 2021 is 1.

A negative adjustment applies for the indexation day on 1 April 2022. The indexation factor is $1 695/$1 700. Because the AWE indexation factor would be less than 1, the AWE indexation factor for 1 April 2022 is 1.

A negative adjustment also applies for the indexation day on 1 October 2022. The indexation factor is $1 750/$1 700. The negative adjustment is now fully offset and the AWE indexation factor for 1 October 2022 is 1.02941 rounded to 1.029.

Note The Act, s 18 sets out what happens if an amount to be AWE indexed would, if adjusted in line with a negative adjustment to the AWE, become smaller.

The AWE indexation factor for the AWE indexed amount must be—

worked out to 3 decimal places; and

if the 4th decimal place is 5 or more—rounded up.

If the AWE indexation factor worked out under subsection (2) or (3) would be less than 1, the AWE indexation factor is 1.