Income support
Earning capacity is your capacity to earn an income from your personal physical or mental exertion, whether you were working or not, at the time of your motor vehicle accident.
The
Motor Accidents (Compensation) Act 1979 set out the detailed eligibility criteria for Loss of Earning Capacity benefits.
What is the loss of earning capacity benefit?
The loss of earning capacity benefit is income support paid each fortnight to eligible claimants when their capacity to earn an income has been reduced because of a motor vehicle accident.
Eligibility
To be eligible for loss of earning capacity benefits, you must meet all of the following requirements
- have had an earning capacity prior to your accident;
- have had a reduction in your earning capacity resulting from your motor vehicle accident injuries;
- be over the age of 15 and under 67 (the pension age from 1 July 2023) at the date you were injured (if you were still employed after age 67 you may be entitled to benefits for up to 104 weeks); and
- live in Australia.
To help assess the right amount of loss of earning capacity benefits, TIO MAC may request evidence of your pre-accident earning capacity, such as Centrelink records, tax returns, pay slips or other evidence.
Benefit reductions or exclusions
In some situations, a
benefit reduction or exclusion may apply, depending on the circumstances of the accident.
MAC medical certificate of work capacity
To receive loss of earning capacity benefits, a MAC medical certificate of work capacity must be completed by your doctor or medical specialist certifying your work capacity.
All sections of the MAC medical certificate of work capacity need to be completed by your doctor including your accident-related injuries, stating whether you are fit or unfit to work and your working capacity.
Please ask your doctor to give you a copy of the completed certificate so that you can provide this to your TIO case manager.
During your recovery phase, you will need to provide a MAC medical certificate of work capacity periodically and whenever requested by your TIO MAC case manager.
To avoid your fortnightly payments being suspended, please provide a
MAC medical certificate of work capacity whenever it is requested.
How are loss of earning capacity benefits calculated?
To determine your loss of earning capacity benefits, TIO MAC will consider the number of hours per week, that you are medically assessed, as being capable of working, whether the work is available or not.
The benefits are calculated on the total average weekly earnings
for the Northern Territory as published by the Australian Statistician and not on your individual earnings at the time of the accident.
Maximum benefit available
If you are medically assessed as having lost all earning capacity because of your injuries, the maximum loss of earning capacity benefit payable is calculated as a percentage of the total average weekly earnings for the Northern Territory as published by the Australian Statistician and not on your individual earnings at the time of the accident.
Loss of earning capacity benefits are reviewed twice a year on 1 January and 1 July. See the
amount of benefits table for current rates
Partial benefit
If you are medically assessed as having a partial work capacity for a certain number of hours per week, your loss of earning capacity benefits will be paid for the number of hours to make up the difference to a 38 hour week.
For example, if you are medically assessed as having an earning capacity of 20 hours per week, your loss of earning capacity benefits payable will be for 18 hours per week (calculated at 85% of average weekly earnings).
Full-time students
If you are a full time student and aged between 15 and 21 years old with no dependants, you may be entitled to a reduced rate of loss of earning capacity benefits if you are unable to attend to your educational studies because of your injuries.
To be eligible you must have earned 25 per cent or more of the average weekly earnings for three consecutive months prior to your motor vehicle accident.
If you are assessed as being capable of working full time, or your weekly earnings are equal to or greater than the maximum loss of earning capacity benefit amount, you are not entitled to loss of earning capacity benefits.
Capacity to work full time
If you are medically assessed as being capable of working full time, or your weekly earnings are greater than the maximum loss of earning capacity benefit, you will not be eligible to receive payments.
How and when will I receive my fortnightly payments
After your eligibility for loss of earning capacity benefits have been assessed and approved by your TIO MAC case manager will call you to confirm the amount you will receive and when payments will commence.
As prescribed by the legislation, your fortnightly payments will commence within 2 weeks of approval. The payments will be back dated to the first business day after your motor vehicle accident.
Payments will be made on the same day each fortnight, in arrears, directly to your nominated account with any financial institution.
Taxation reporting
Loss of earning capacity benefits are not considered to be income by the Australian Tax Office. However, you are required to declare the period (not the amount) that you received loss of earning capacity benefits and quote Australian Tax Office Ruling Number IT2193 when you complete your tax return.
MAC does not issue payment summaries for loss of earning capacity benefits as the payments are not subject to income tax.
When to contact your TIO MAC case manager
If your circumstances change, please contact your TIO MAC case manager as soon as possible as this may change your entitlement to the loss of earning capacity benefit payable.
Please advise your TIO MAC case manager when:
- you return to paid or unpaid work
- your capacity to work changes
- you travel outside Australia
- you have received or are receiving income protection insurance payments or benefits from Centrelink or other source.
If you have been asked to provide a
MAC medical certificate of work capacity and are unable to do so, please contact you TIO MAC case manager as soon as possible to avoid any interruption to your payments.
Related information
MAC Scheme
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