Two Different Earnings Caps: How the Motor Accidents Compensation Act Differs From the Civil Liability Act

There is a common misconception that all personal injury earnings caps in NSW work the same way. They do not.

The Civil Liability Act 2002 and the Motor Accidents Compensation Act 1999 each impose a limit on the earnings that can be taken into account in a loss of income assessment, but they approach that limit in fundamentally different ways. The basis of the calculation, the figure used, and the result for a high-income plaintiff can differ considerably between the two.

For legal teams and forensic accountants working across different types of personal injury claims, understanding which cap applies and how it operates is essential.

The Civil Liability Act Cap: Gross-Based, Linked to Average Weekly Earnings

Under Section 12 of the Civil Liability Act 2002, the court must disregard any amount by which the claimant's gross weekly earnings would have exceeded three times the average weekly earnings of all persons in NSW, as published by the Australian Bureau of Statistics.

The operative word is gross. The cap applies to gross pre-tax earnings, before income tax and the Medicare Levy are deducted.

As at 16 May 2025, the NSW All Persons Total Weekly Earnings figure was $1,592.70. Multiplied by three, the gross earnings cap was approximately $4,778.10 per week.

This means that for a plaintiff earning more than $4,778 per week in gross wages, the excess is excluded from the loss of earnings calculation. The assessment proceeds as if their gross earnings were capped at that maximum figure, and the net wage is then calculated from that capped gross amount.

The Motor Accidents Compensation Act Cap: Net-Based, With Its Own Fixed Amount

The Motor Accidents Compensation Act 1999 takes a different approach entirely. Under Section 125, the cap applies to net weekly earnings rather than gross earnings.

The court must disregard the amount by which the injured person's net weekly earnings would have exceeded the prescribed maximum. That maximum is a fixed indexed figure, updated periodically.

As at 1 October 2025, the net weekly earnings cap under the Motor Accidents Compensation Act was $6,334 per week.

Because this cap applies to net earnings, the comparison point for a high-income plaintiff is different from the Civil Liability Act approach. Under the MACA, the question is whether the plaintiff's after-tax earnings exceed $6,334 per week. Under the CLA, the question is whether their before-tax earnings exceed approximately $4,778 per week.

Why the Difference Matters

These two mechanisms can produce quite different outcomes for the same plaintiff.

Consider a plaintiff earning $6,000 per week gross. Under the Civil Liability Act, their earnings exceed the cap of $4,778, so only $4,778 gross is taken into account. Net wages are then calculated from that capped gross figure.

Under the Motor Accidents Compensation Act, the question is whether their net earnings exceed $6,334. At a gross wage of $6,000, the net weekly wage after tax would typically fall well below $6,334, meaning the MACA cap does not bite at all for this plaintiff. Their full net earnings would be taken into account.

For a higher earner — say someone earning $10,000 per week gross — the position under both Acts changes, but the gap between the two frameworks remains. The Civil Liability Act cap will apply at approximately $4,778 gross. The MACA cap will apply only if net earnings exceed $6,334.

In practical terms, the MACA cap is less likely to affect a plaintiff's damages than the Civil Liability Act cap, except in the case of very high earners. But the distinction is important and must be correctly identified before any earnings assessment is prepared.

Applying the Right Cap to the Right Claim

The applicable cap depends entirely on which legislation governs the claim. Road accidents involving registered vehicles and occurring before 1 December 2017 will typically fall under the Motor Accidents Compensation Act 1999. General negligence claims, public liability matters, and certain other personal injury claims fall under the Civil Liability Act 2002.

Applying the CLA cap to a motor accident claim, or vice versa, will produce an incorrect assessment.

At DB Forensic, we identify the correct legislative framework and apply the appropriate earnings cap from the outset. Where a plaintiff's income is close to or above the relevant cap, we document clearly how the cap has been applied and what effect it has on the net weekly wage calculation.

Questions About Which Earnings Cap Applies to Your Matter

If you are preparing an economic loss assessment and are unsure which earnings cap applies, or if you are reviewing a report and want to confirm the right cap has been used, DB Forensic can help.

Speak to DB Forensic About Your Economic Loss Assessment