How do I make a claim for loss of earnings? (Vic)

If you have been injured at work, it is possible to claim for your loss of earnings.

Generally speaking, there are two ways that the WorkCover system can compensate you for your loss of earnings.

This article will explain further.

You need to have a WorkCover claim accepted to claim

The first thing that must be done to make a claim for loss of earnings is to lodge a WorkCover claim if you’ve suffered an injury.

This page explains how to lodge a claim.

This page explains the WorkCover claim process in detail.

Once your claim has been accepted, if your ability to work has been impacted as a result of the injury you can claim compensation for some of your lost earnings from the WorkCover insurer.

You can get paid weekly payments of compensation

It is important to note however that the WorkCover insurer will not compensate you 100% for your loss of earnings.

Weekly payments works like this.

The insurer will take an average of your earnings over the 12 months prior to the injury.

If you have not been employed with this employer for 12 months, then they will take an average of the period of time that you have worked with them.

So if you’ve been there for four months, then they will take the average of what you earned with that employer over that four months.

For the first 13 weeks, you will be paid at the rate of 95% of this figure.

There after you’ll be paid at the rate of 80%.

You’re entitled to be paid weekly payments for 130 weeks and sometimes you can get payments in addition to 130 weeks if you have no work capacity and that’s likely to continue into the future.

Overtime and shift allowances are included in the average figure calculation for the first 52 weeks only.

If you want to read more about how weekly payments work, you should read this page.

If you want to read about the calculation of the average earnings, you can visit this page.

So you can see that there will be a gap between what you were earning and what WorkCover will pay you by way of weekly payments.

For example, let’s say that week in week out you were earning $1000 before you suffered the injury.

By way of weekly payments from WorkCover, you may be entitled to $950 per week for the first 13 weeks that you’re off work and thereafter $800 per week.

It’s important to note that you will be entitled to weekly payments if your ability to work is completely impacted or if it is partially impacted.

Top up pay

In some cases, some employees will be entitled to top up pay.

This is usually the case if you have an enterprise bargaining agreement (EBA) that covers your employment and top up pay or accident make up pay as it’s sometimes referred to is in there.

For example your EBA may say that you’re entitled to top up pay, bringing your total payments up to 100%, for a fixed period of time. For example, 40 weeks.

Loss of earnings claim via common law 

The second way under the WorkCover system that a person can make a claim for loss of earnings is via a common law claim.

• In a nutshell, a person is entitled to common law damages if:
• The injury is considered to be a ‘serious injury’
• The injury resulted from someone else’s negligence.

Via a common law claim, a person may be able to claim damages for pain and suffering and loss or earnings suffered to date and into the future.

Calculating loss of earnings into the future is often a very difficult exercise.

Those involved in calculating (lawyers) will rely heavily on medical material to determine what your incapacity might be into the future.

So the opinion of your treating doctors and any doctors that have assessed you, particularly those that maybe vocational assessors or occupational physician’s, will be important.

Your lawyers will need to determine whether you are likely to be partially incapacitated for work, or completely incapacitated for work and for how long.

So for example, are you likely to be incapacitated for just the next few years, or for the next twenty years all the way to retirement age?

Often in common law matters where there is a claim for loss of earnings this issue will be in dispute.

And oftentimes doctors will not agree with each other in terms of the likely incapacity into the future.

The other issue worth noting is that your loss of earnings under a common law claim is not calculated on a dollar for dollar basis.

So let’s say for example that you calculate that as a consequence of the injury to date you’ve lost $40,000 for the last two years and you calculate that for the next twenty years you will not be able to work and therefore you’ll be losing $80,000 per year.

You therefore conclude that on a dollar for dollar basis, your loss of earnings should roughly calculate at out at $880,000.

However, this is not how the law in Victoria works when it comes to these matters. 

You will not get compensated dollar for dollar for your loss of earnings.

There is a certain way that loss of earnings is calculated which takes into account the risks of life.

For example, had you not been injured, you may because of some unrelated issue, not have worked until retirement age in any event.

Also taken into account is the fact that you are getting the entirety of your ‘earnings’ in one lump sum rather than having it paid over the course of a number of years and so therefore you get the use of the money now.

And therefore, any amount for loss of earnings is discounted.

40% loss is required to succeed in a common law loss of earnings claim

The other thing worth mentioning in relation to a common law claim and making a claim for loss of earnings is that not everyone who pursues a common law claim is entitled to make a claim for loss of earnings.

In order to do so, you need to show that you have a 40% loss of earning capacity as a consequence of the injury.

So using the example above where you are earning $1000 a week, week in week out, prior to the injury, in order to be entitled to claim loss of earnings you would need to show that as a consequence of the injury there is no job out there that you could now do where you would earn $600 or more per week.

That is, you’ve lost 40% of your earning capacity.

There are some exceptions to this.

If you want to know more about the 40% test, you can read this page.

Conclusion

If you suffer a work related injury, the WorkCover scheme in Victoria does allow you to make a claim for your loss of earnings.

There are two avenues to claiming loss of earnings, the first being via weekly payments if your ability to work is impacted in the second is a common law claim with part of that claim being a claim for loss of earnings.

The first step is to lodge and have accepted a WorkCover claim. You can then claim weekly payments for your loss of earnings, provided you obtain certificates of capacity.

Keep in mind that there will likely be a difference however between what you were earning pre injury and what WorkCover will pay you.

In some limited instances, you may be entitled to top up pay bringing your weekly payments up to 100%.

The second avenue to claiming loss of earnings is via a common law claim. You will be entitled to pursue a common law claim if you have a ‘serious injury’ and if your injury was caused by someone else’s negligence. 

In order to be entitled to claim loss of earnings, you’ll need to show that you have a 40% loss of earning capacity as a consequence of the injury.