CHRISTINE BRETT and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2009] AATA 323
•8 May 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 323
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/5608
GENERAL ADMINISTRATIVE DIVISION ) Re CHRISTINE BRETT Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Deputy President P E Hack SC Date8 May 2009
PlaceBrisbane (Heard in Townsville)
Decision The Tribunal affirms the decision under review.
............Signed..................
Deputy President
CATCHWORDS
SOCIAL SECURITY – disability support pension – receipt of lump sum compensation in settlement of claim – preclusion period – special circumstances not found to exist – decision affirmed
Social Security Act 1991 (Cth) s 1184K(1)
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
REASONS FOR DECISION
8 May 2009 Deputy President P E Hack SC Introduction
1.In June 2008 the applicant, Mrs Christine Brett, settled a claim for compensation against her employer. On the basis of the amount paid to Mrs Brett in settlement of the claim Centrelink determined on 15 July 2008 that Mrs Brett was precluded from receiving disability support payments from 7 April 2008 to 7 December 2008.
2.Mrs Brett seeks a review of that decision.
The legislation
3.The scheme of the legislation in issue here is to preclude persons from receiving both social security benefits and compensation for economic loss in respect of the same period of time. The operative provision is s 1169 of the Social Security Act 1991 (Cth). It provides:
“(1) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person receives a lump sum compensation payment;
the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.”
4.Disability support pension, which is the payment in issue in Mrs Brett’s case, comes within the definition of “compensation affected payment” in s 17(1) of the Act. “Lump sum compensation payment” is not defined, however the term “compensation” is explained in s 17(2) in these terms:
“Subject to subsection (2B), for the purposes of this Act, compensation means:
(a) a payment of damages; or
(b) a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c) a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.”
5.The “lump sum preclusion period” is dealt with by s 1170 of the Act in these terms:
“(1) Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:
(a) begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(2) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:
(a) begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(3) If neither of subsections (1) and (2) applies, the lump sum preclusion period is the period that:
(a) begins on the day on which the loss of earnings or loss of capacity to earn began; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number. “
6.It is necessary also to notice the meaning of the “compensation part of a lump sum compensation payment” which is defined in s 17(3) of the Act, so far as is presently material, as being:
“(a)50% of the payment if the following circumstances apply:
(i)the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise;”
7.Finally, and by virtue of s 1184K(1) of the Act, the Secretary, or the Tribunal in her stead, may treat all or part of a compensation payment as not having been made if it is appropriate to do so “in the special circumstances of the case”.
Factual background
8.There is no dispute about the underlying facts. Mrs Brett was employed on a part-time basis by Queensland Transport as a school crossing supervisor. Over the period of her employment she gradually sustained injuries to her upper limbs that required her to stop work in May 2007. Thereafter she received weekly payments of compensation.
9.Mrs Brett instructed solicitors to bring a claim against her employer, the Crown in right of Queensland. In January 2008 those solicitors sought from Centrelink estimates of the amounts repayable to Centrelink and the preclusion period if Mrs Brett’s claim were to be settled. Estimates were sought at three figures - $50,000, $75,000 and $150,000, in each case clear of the refund to WorkCover Queensland – but it is only necessary to have regard to the response provided for a settlement at $50,000. That response, provided on 18 January 2008, was that it was estimated that Mrs Brett would be precluded from receiving benefits in the period from 15 December 2007 to 15 August 2008 and that, as a result, it was likely that she would be required to repay $992.52.
10.The solicitors request was accompanied by a print-out from WorkCover Queensland showing the benefits that been paid to Mrs Brett to 15 January 2008. That included weekly compensation payments paid to that point up to and including 14 December 2007. It was from that date which the commencement date of the preclusion period was determined. It appears from the WorkCover Queensland document that Mrs Brett was not paid weekly compensation during periods of school holidays. I infer that that was because she was employed on a casual basis. Mrs Brett’s weekly compensation payments were resumed on 29 January 2008 and continued until 6 April 2008.
11.On 5 June 2008 Mrs Brett’s solicitors made a further request for estimates of the amounts repayable to Centrelink and the preclusion period if Mrs Brett’s claim were to be settled. It appears from the material forwarded by those solicitors to the Tribunal after the hearing that these requests were accompanied by the 15 January 2008 printout from WorkCover Queensland. That document did not record the payments made to Mrs Brett after 15 January 2008 and thus was inaccurate.
12.By letter dated 12 June 2008 Centrelink advised Mrs Brett’s solicitors that if Mrs Brett’s claim were to be settled at $50,000 clear of the refund Mrs Brett would be precluded from receiving benefits in the period from 15 December 2007 to 8 August 2008 and that, as a result, it was likely that she would be required to repay $7,046.95. But the preclusion period, which, by virtue of s 1170(1) of the Act, begins on the day following the last day of the periodic payments period, was wrong because Centrelink had not been informed, as was the case, that Mrs Brett had received periodic payments up until 6 April 2008.
13.Following receipt of this information the solicitors negotiated a settlement of Mrs Brett’s claim that is recorded in a deed dated 23 June 2008. The deed records that WorkCover Queensland (the statutory insurer) would pay the sum of $50,000 to Mrs Brett in full and final settlement of her claim. Additionally, WorkCover Queensland acknowledged that it was not entitled to the refund of benefits paid to Mrs Brett totalling $6,527 which would otherwise have been payable by her to WorkCover Queensland by operation of law. The deed recorded the agreement of the parties that Mrs Brett was not entitled to any costs in relation to the claim.
14.After settlement Centrelink undertook the calculation of the preclusion period and the amount to be repaid. By that stage the then current print out from WorkCover Queensland had been obtained. By reference to the statutory formula Centrelink determined that Mrs Brett was precluded from receiving disability support pension from 7 April 2008 to 7 December 2008 and that she would be required to repay $3,692.82. It is this decision, made on 15 July 2008, which is the subject of Mrs Brett’s application.
Consideration
15.I do not understand Mrs Brett to take issue with the calculations undertaken by Centrelink of the preclusion period and the amount repayable and they seem to me to be correct. Rather, I understood Mrs Brett to be contending that her circumstances are “special” such that all or part of the compensation payment ought be treated as if it had not been made.
16.It is sufficient for present purposes to note that what amounts to “special circumstances” is not capable of definition but ordinarily one would look for something about the case that distinguishes it from others, that takes it out of the usual or ordinary case[1].
[1]Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 per Kiefel J.
17.There are, in my view, three matters that fall to be considered under this head – the inaccuracy of the Centrelink estimate of the preclusion period, the relatively small amount received by Mrs Brett from the settlement and Mrs Brett’s personal circumstances.
18.Whilst the estimates provided in June 2008 were inaccurate it cannot be said that the material inaccuracy, that of the preclusion period, was the fault of Centrelink. The estimate of that period was accurate on the material provided by the solicitors; it was that material that was inaccurate. While Centrelink might have the legal capacity to request up to date information from WorkCover it would be unreasonable to require that to be done, all the more so when solicitors acting for Mrs Brett provided information regarding this detail. It seems, prima facie, that the solicitors were at fault in not obtaining, and providing to Centrelink, an up to date print out from WorkCover Queensland. In the result I do not regard the error on the part of Mrs Brett’s solicitors as amounting to, or contributing to, special circumstances.
19.Moreover it needs to be borne in mind that the amount recovered by Centrelink from the settlement was considerably less than the estimate provided in June 2008. Thus any misapprehension arising from the greater preclusion period ought to have been abated to some extent by the realisation that the recovery amount had reduced from $7,046.95 to $3,692.82.
20.During the hearing Mrs Brett seemed to suggest that she notified Centrelink of the compensation payments as part of her general obligation to inform Centrelink of the amount of her earnings. The material provided by Centrelink following the hearing demonstrates that Mrs Brett’s recollection on this score is not accurate, as her letter of 30 March 2009 appears to accept.
21.What has caused me some concern is the relatively modest amount that Mrs Brett received from the settlement. From a net sum of $50,000 she received $16,884. More than $29,000 was expended on costs and disbursements in circumstances where the settlement made no provision for costs. However, as the correspondence from Mrs Brett’s solicitors’ points out, the costs were in accordance with the Queensland legislation which prescribes the maximum that may be recovered for costs from a client. Ultimately I reach the view that the level of costs and disbursements, whilst appearing to be quite high, is not unusual such that would take the present case out of the ordinary.
22.Finally, Mrs Brett relied upon her personal circumstances, particularly her health and the costs to her of medications. Mrs Brett’s sole source of income is a disability support pension, she is not working (seemingly due to significant health constraints), has no savings and has the sole care of one fully dependant and one partly dependant child. During the preclusion period it also appears that Mrs Brett was ineligible for the Health Care Card that she had previously used, meaning that she no longer received her medicines at dramatically discounted rates and the monthly cost of her medicines rose to three or four hundred dollars a month. These financial limitations have meant that Mrs Brett spent the settlement sum on the expenses of day to day living during the preclusion period, which include of course her essential medication. The result has been that Mrs Brett was unable to afford the operation on her hands and the rehabilitation that, to her mind, the settlement monies where intended for.
23.While one may have considerable sympathy for Mrs Brett, and admiration for what she has achieved despite considerable adversity in her life, her circumstances are common to many in a similar position. I am unable to conclude that Mrs Brett’s circumstances are “special” in the requisite sense. By definition, all recipients of disability support pension suffer considerable health difficulties and many face financial limitations that require them to turn to the public health system for medical procedures and other assistance. I am unable to conclude therefore that her circumstances are special such as would warrant treating all or part of the settlement as not having been paid to her.
24.It follows that I would affirm the decision under review.
The “without prejudice” correspondence
25.In Mrs Brett’s submissions after the hearing she made reference to, and provided a copy of, a “without prejudice” offer by the Secretary to resolve the matter prior to the hearing. Ordinarily such matters would not be put before the Tribunal and no comment about such offers would be called for. But because Mrs Brett seems genuinely perplexed at the apparent inconsistency between the Secretary’s positions it may assist to record that it is quite common, and a commendable practice, for the Secretary to seek to resolve matters in advance of the hearing in this manner. A resolution prior to the hearing will invariably result in savings of public money and a reduction of anxiety for unrepresented applicants. The apparent inconsistency in the Secretary’s positions is explicable on the basis that an offer to settle is not necessarily an acknowledgement of weakness in a party’s case; rather, it will generally be recognition that resolution will produce a certain result with savings in public and private resources.
I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC
Signed: ...............Signed…...................................
Melissa Hamblin, AssociateDate of Hearing 20 March 2009
Date of last submissions 28 April 2009
Date of Decision 8 May 2009
The Applicant was self represented
Advocate for the Respondent Advocate, Centrelink Legal Services
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