ASHE TO ASHE….. by Simon Readhead QC

The 2011 Annual Survey of Hours and Earnings (ASHE) Provisional Results were released yesterday (23 November 2011) by the Office for National Statistics.

http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/ashe-results-2011/ashe-statistical-bulletin-2011.html

ASHE provides information about the levels, distribution and make-up of earnings and hours worked for employees in all industries and occupations. The tables contain UK data on earnings for employees by sex and for both full-time and part-time workers.

 

The new information (which is updated to April 2011) will be particularly important to those drafting Schedules and Counter Schedules which include claims or responses to claims for loss of earnings and for periodical payments for future care.  

 

The key points on earnings include:

 

1.  In April 2011 median gross weekly earnings for full-time employees were £501 up 0.4% from £499 in 2010.

2.  The disparity in pay between genders has narrowed. For men full-time earnings were £539, an increase of 0.2%.

     For women the increase was greater at 1.4% per resulting in full-time earnings of £445.

3.  Median gross weekly earnings for all employees were £404, the same as in 2010.

4.  Median gross annual earnings for full-time employees were £26,200, an increase of 1.4%,   

5.  Median gross weekly earnings for full-time employees were highest in London at £651 and lowest in

     Northern Ireland at £451.

 

The important factors in relation to care include the new hourly rates applicable to ASHE 6115 which, since the decision in the Thompstone group of cases, has been the Standard  Occupational Code relevant to the calculation of future care rates in most cases.

 

There is a helpful analysis and comparison of the new rates for the 60th to the 90th percentiles on the Nestor Partnership website.

 

http://www.nestorpartnership.co.uk/

 

For the frequently adopted 80th percentile the percentile difference is -1.05%. This compares to the RPI figure of 5.4% to the end of October 2010.

As a result, when this year’s periodical payments linked to ASHE 6115 are calculated and paid on 15 December 2011 the payments are likely to decrease in most cases. By way of illustration the Nestor Partnership calculates that “A claimant who received £100,000 as a periodical payment last year on an RPI linked basis would this year receive £105,400. By contrast, an ASHE 6115 periodical payment at the 80th percentile will result in a payment of £98,950”.

This is likely to result in a number of telephone calls to solicitors by anxious clients who will need to be reassured that over many years wage inflation has historically outstripped inflation as measured by the RPI. In addition the advice of most independent financial advisers is still that ASHE 6115 remains the most appropriate match for periodical payments for care related costs in the majority of cases.

 

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