ACTUARIAL CALCULATORS

Terms & Conditions

Application: The application is aimed at Australian lawyers familiar with the practice of calculating the future or deferred loss of a monetary value, by the use of actuarial tables and applicable discount rates, together with contingency principles and superannuation. It is not designed to replace complex calculations required but as a simple ‘ready reckoner’. Understandably, in such circumstances, any calculation should be independently verified – Terms and Conditions.

Discount rate: Legislation in various jurisdictions throughout Australia prescribes the applicable rate, most commonly 5%, by which a prospective loss is to be discounted to account for its present-day value. The basis for the discount is the benefit of being able to invest the lump sum and attract compound interest. To bring the value of the notional investment sum forward into today’s value, the amount is discounted each year by the applicable rate to offset the benefit of compound interest over the prospective loss period.

Multiplier: To account for the lump sum being brought forward a multiplier has been calculated by the actuaries. The greater the period of prospective loss, the higher the multiplier is. For instance, in the multiplier actuarial tab, the multiplier for 1 year (5% discount) is 51, but for 60 years, it is 1012. For example, a weekly loss of $10.00 for 1 year is calculated: $10.00 x 51 = $510.00, but over 60 years it is $10.00 x 1012 = $10,120.00. Similarly, for the deferred lump sum tab, the multiplier is 0.952 for 1 year, but 0.054 for 60 years. The calculation: $10 x 0.952 = $9.52 and $10 x 0.054 = $0.54, respectively.

Rounding: Figures are rounded to the nearest whole number, including the actuarial multipliers and averaged superannuation charges.

Contingencies: When calculating a loss of damages for a future event, courts commonly discount the figure for contingencies or the vicissitudes of life. This depends on the personal circumstance of the person claiming the loss and the probability of an event happening. Commonly, this figure is 15%, but it can be nil or a lesser or higher figure.

Superannuation: The Superannuation Guarantee (Administration) Act (Cth.) 1992 regulates superannuation in Australia and the incremental increases to the superannuation charge. The application of the flat rate avoids the more complex calculation of accounting for investment growth, costs associated with the fund and tax. A feature of the calculator is to provide for an average superannuation charge at defined years of the loss. The calculation is based on calculating the loss using the deferred method, by way of example – $100.00 net loss per week:

YEAR OF LOSS

RATE

5% MULTIPLIER

LOSS

1

9%

51

$459.00

2

9.25%

48 (99-51)

$444.00

3

9.5%

47 (146-99)

$446.50

4

10%

44 (190-146)

$440.00

5

10.5%

42 (232 -190)

$441.00

6

11%

39 (271 -232)

$429.00

7

11.5%

38 (309 – 271)

$437.00

8

12%

37 (346 – 309)

$444.00

9

12%

34 (380 – 346)

$408.00

10

12%

33 (413 -380)

$396.00

Total loss

$4,344.50

Accordingly, the loss of superannuation of $4,344.50 can be averaged by dividing it by the total lost net income ($100.00 x multiplier 413 = $41,300), and converting it into a percentage, $4,344.50/$41,300.00 x 100/1 = $10.5193704%.

Understandably, this is a simplified calculation to account for each incremental change every year and is not a substitute for the complex calculation.

Actuarial Multiplier Calculator: This is designed for net weekly income losses or other losses that can be converted into a weekly loss, such as loss of weekly earnings.

Lump Sum Deferred Calculator: this is designed for lump sum amounts deferred into the future, such as the cost of surgical procedures.

Terms and Conditions: this application is owned by David Cormack (ABN 35 939 977 275). By using the application, you agree to the terms and conditions of use. The terms and conditions may be changed without notice to you.

Disclaimer: The content and use of the application does not constitute legal or professional advice and it is not intended to provide advice as to the means of the calculation or the law regarding specific circumstances. If you require legal advice or verification of the calculation, you should always seek professional legal advice in relation to your circumstances. To the extent permitted by law, David Cormack or any third party referred to in the application will not be responsible for any loss or damage alleged to arise from or in connection with the information contained in this application or its use.

Copyright: Unless otherwise referred to, David Cormack (ABN 35 939 977 275) owns the copyright to this application’s content and use.

Jurisdiction: Unless otherwise referred to the jurisdiction is Queensland, Australia.

Con

Contact Info

Level 7, Tank Tower
702/30 Tank Street
Brisbane Qld 4000

(07) 3211-2393
david@barristerdirect.com.au

Liability limited by a Scheme approved under professional standards legislation