Davidson and National Disability Insurance Agency (NDIS)
[2025] ARTA 14
•10 January 2025
Davidson and National Disability Insurance Agency (NDIS) [2025] ARTA 14 (10 January 2025)
Applicant/s: Kathleen Davidson
Respondent: National Disability Insurance Agency
Tribunal Number: 2022/4091
Tribunal:Senior Member S Webb
Place:Canberra
Date:10 January 2025
Decision: The decision under review is affirmed.
NATIONAL DISABILITY INSURANCE SCHEME – injury due to medical negligence – compensation – funding for reasonable and necessary supports – compensation reduction amount – supports obtained after compensable event and before becoming a participant – requirement to subtract amount paid for supports ‘of a kind’ funded under the Act – supports acquired outside Australia – general limit of entitlement to payment for supports acquired when absent from Australia except for grace period – consistent interpretation of rules – requirement for relevant probative material – insufficient relevant materials – estimated amount not subtractable – provision made for compensation preclusion period in respect of Age Pension – decision affirmed
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) s 42D
Administrative Review Tribunal Act 2024 (Cth) s 85
Administrative Review Tribunal (Consequential and Transitional Provisions No.1) Act 2024 (Cth) sch 16
National Disability Insurance Scheme Act 2013 (Cth) ss 4, 11, 33, 34, 35, 40, 41, 100
Social Security Act 1991 (Cth) s 1184K
National Disability Insurance Scheme (Supports for Participants) Rules 2013 rr 5.1, 5.2, 7.5National Disability Insurance Scheme (Supports for Participants – Accounting for Compensation) Rules 2013 rr 2.2, 3.1, 3.5, 3.10, 3.13
Cases
CQR17 v Minister for Immigration and Border Protection [2019] FCAFC 61
Statement of Reasons
Kathleen Davidson underwent a surgical procedure on her spine which was not successful. She suffered a spinal cord injury and sought further treatment in the United States of America (USA). She sought damages through legal proceedings in respect of medical negligence. Following her return to Australia, Ms Davidson was accepted as a participant in the National Disability Insurance Scheme (NDIS). The legal proceedings were subsequently settled by consent, and she was paid an amount of compensation. A delegate of the CEO of the National Disability Insurance Agency (NDIA) approved a statement of participant supports (SoPS), setting out reasonable and necessary supports which would be funded under the NDIS for Ms Davidson. The delegate decided the amount of funding for supports should be reduced by application of a compensation reduction amount (CRA) calculated on the basis of the amount of compensation awarded to Ms Davidson. Ms Davidson requested internal review of this decision. The reviewer varied the original decision and decided to increase the supports approved for funding and to reduce the CRA. Ms Davidson lodged an application for review of this decision by the Tribunal.[1]
[1] The application for review was lodged with the Administrative Appeals Tribunal (AAT) under the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). The AAT Act has been repealed and the AAT has been replaced by the Administrative Review Tribunal (ART). Under the transitional provisions set out in Schedule 16 of the Administrative Review Tribunal (Consequential and Transitional Provisions No.1) Act 2024 (Cth), from 14 October 2024, the ART has jurisdiction to conduct the review under the Administrative Review Tribunal Act 2024 (ART Act).
In the course of the proceedings, the application was remitted for reconsideration under s 42D of the AAT Act. In response to the order of remittal, the NDIA issued new ‘plan’ documents for Ms Davidson reflecting a reconsideration decision to increase the supports approved for funding under the NDIS. Ms Davidson is satisfied with the approval of reasonable and necessary supports in this decision, but she cavils with the calculation and application of the CRA to reduce the funding for the supports she requires.
Initially Ms Davidson argued that the CRA should be reduced in the special circumstances of her case. Prior to the hearing, however, in her Statement of Facts, Issues and Contentions, Ms Davidson explained she no longer pressed for reduction of the CRA on the ground of special circumstances. She asserted the CRA should be recalculated to account for expenses she incurred obtaining supports of a kind that would be funded under the NDIS after the injurious surgery and before becoming a participant in the NDIS.
It was on this narrowed basis the parties prepared and presented their respective cases at the hearing. After the hearing, Ms Davidson again sought to raise issues relating to special circumstances.
Facts
On 6 December 2012, Ms Davidson underwent a surgical procedure on her spine at the L3/L4 level. The surgery was not successful. She sustained a cauda equina injury which led to significant neurogenic impact on her bladder and bowel function, as well as stage 3 kidney disease and other related symptoms.[2]
[2] Exhibit 1, 44-45.
On Ms Davidson’s evidence, in or about June 2013, she closed her dental consulting business in Sydney and moved to Hawaii, where she resided for a time with her younger sister. Documents she provided suggest it was in July 2014 she was first diagnosed with a cauda equina syndrome or injury by a doctor in Hawaii.[3]
[3] Ibid, 289, 419.
Ms Davidson moved from Hawaii to Boston, USA, in order to obtain further rehabilitative treatment, where she was supported by a cousin, Ralph Crowley, and a support worker, Mary Racicot. When this occurred is not entirely clear. Ms Davidson has given inconsistent accounts on this point. In August 2022, she alleged she lived in Boston from August 2014 to October 2016.[4] She subsequently alleged she resided in Boston until November 2016.[5] In her Statement of Facts, Issues and Contentions, she asserts she resided in Boston from October 2013 to October 2016. On 9 January 2023, Ms Racicot stated that Ms Davidson was “under my care from October 2013 to October 2016”.[6]
[4] Ibid, 289, 290.
[5] Ibid, 419.
[6] Ibid, 297.
It is possible Ms Davidson moved from Hawaii to Boston in or about October 2013 and then returned to Hawaii in 2014, perhaps following a trip to Sydney to visit her husband, as she alleges. There is no evidence from Ms Davidson’s sister or from Mr Crowley, and there is no objective evidence of Ms Davidson’s travel arrangements or trans-border movement records.
Ms Racicot was not called to give oral evidence, so the contents of her statement have not been tested. This is problematic because there are unexplained inconsistencies, including her statement that she was “with [Ms Davidson] 24 hours a day because even when asleep I was listening for her in case she needed something”.[7] While this aligns with Ms Davidson’s statement that Ms Racicot provided support “24/7”[8], it is not consistent with Ms Davidson’s oral evidence that Ms Racicot was not live-in and she would only stay over occasionally.
[7] Ibid, 300.
[8] Ibid, 419.
Doing the best with the available materials and evidence, it is probable Ms Racicot generally provided daily support to Ms Davidson, 7 days per week, and she stayed with Ms Davidson in times of need, when Ms Davidson was undergoing surgical procedures for example. In all likelihood, this arrangement was effective from August 2014 to October 2016, although it is possible it commenced in October 2013. The arrangement may well have been interrupted during periods in which Ms Davidson travelled to Australia or to Hawaii (or elsewhere), but the present evidence is not sufficient to determine when such interruptions occurred.
On Ms Davidson’s evidence, it was Mr Crowley who arranged for Ms Racicot to provide support services to Ms Davidson. The arrangement was that Ms Racicot would be paid US$1,000 each week. Ms Davidson explained that, initially, she used her own money to pay Ms Racicot but, when this ran short, Mr Crowley provided an amount of $300,000 to assist with these and other costs Ms Davidson incurred while in the USA obtaining rehabilitative treatments. Ms Davidson intended to repay the $300,000 to her cousin on settlement of her medical negligence claim.
On 24 March 2021, consent orders were made in settlement of Ms Davidson’s medical negligence proceedings in the Supreme Court of NSW. The consent judgment was filed in the Tribunal on 24 September 2024. Ms Davidson was awarded $1.5 million in compensation plus party/party costs attributable to the defendants.[9] As the consent orders do not specify the specific heads of damage, the NDIS component of the compensation is not objectively identifiable. From the compensation amount, the following repayments were made:
(a)$52,443.00 under a Medicare Notice of Charge;
(b)$29,741.16 under a BUPA Notice of Charge[10]; and
(c)$134,378.29 under an NDIA Recovery Notice.[11]
[9] Ibid, 52.
[10] Ibid, 41
[11] Ibid, 53.
On 23 August 2021, the NDIA sent Ms Davidson an estimated CRA. This document has not been given to the Tribunal. It is not clear if Ms Davidson provided further information in response.
Nevertheless, on 16 November 2021, a delegate of the NDIA CEO issued a decision in respect of the CRA which was applicable.[12] The delegate applied rule 3.13 of the National Disability Insurance Scheme (Supports for Participants – Accounting for Compensation) Rules 2013 (Rules) and set out the following calculation:
[12] Exhibit 3.
NDIS Rule application 3.13
Figure
Compensation settlement
$1,500,000.00
Subtract Medicare repayment
$52,442.40
Subtract Centrelink repayment
$0.00
Subtract value of any period of preclusion from a statutory scheme of entitlements, for example Centrelink (or 50% if a preclusion period has not been applied and economic loss has been awarded)
$750,000
SUBTOTAL
$697,557.60
Subtract any amount recovered by the NDIA from the compensation judgment
$134,378.29
Total Estimated Compensation Reduction Amount calculated under Rule 3.13
$563,179.31
Subtract the Compensation Amounts that would have been applied to earlier NDIS plans but have been ignored by applying Special Circumstances under Rule 3.10
$33,739.36
Total Estimated Compensation Reduction Amount
$529,439.95
The delegate stated “the total CRA is $529,439.95 and will be divided over 7 years. A CRA of $156,771.74 will be applied to your current 24 month plan and will be reassessed at each future plan review”.[13]
[13] Ibid, 1.
Also on 16 November 2021, the delegate approved a SoPS under s 33(2) of the National Disability Insurance Scheme Act 2013 (Cth) (NDIS Act) (primary decision) with a review date on 16 November 2023.[14] A total amount of $15,355.71 was approved to fund reasonable and necessary supports in the period from 16 November 2021 to 16 November 2023.[15] This amount was calculated by applying a CRA of $156,771.74 ‘to the total 24-month plan’.[16]
[14] Exhibit 1, T16.
[15] Ibid, 87.
[16] Ibid, 88.
On 22 February 2022, Ms Davidson requested review of the primary decision under s 100 of the NDIS Act.[17] She requested approval of additional supports, including a 1:1 support worker and related funding, and recalculation of the CRA on the basis that the following amounts should be subtracted:
(a)non-recoverable solicitor-client costs in the amount of $130,000 under rule 3.10[18];
(b)BUPA repayment pursuant to a Notice of Charge in the amount of $29,741.16 under paragraph 3.13(f)[19]; and
(c)an amount “to reflect the significant extent by which total damages were discounted in her case due to the risk of a finding of pre-existing condition” under rule 3.10[20].
[17] Ibid, T12.
[18] Ibid, 52-55.
[19] Ibid, 55.
[20] Ibid, 57.
On 26 April 2022, a reviewer issued an internal review decision[21] in respect of which a new ‘plan’ document was issued for the period from 22 April 2022 to 21 April 2024[22].
[21] Ibid, T1B.
[22] Ibid, T1A, T17.
The reviewer recalculated and reduced the CRA. The detailed calculations of the reviewer have not been given to the Tribunal and it is not possible to determine the basis on which the CRA was recalculated. The overall CRA was determined to be $484,052.47 and this was applied over a seven-year period ($76,577.50 each year).[23] A reduction of $153,155 was applied to the funding of supports under the ‘new’ 24 month ‘plan’.
[23] Ibid, T1B, 24.
The reviewer considered additional supports and related funding for a 1:1 support worker, consumables, assistive technology and transport were reasonable and necessary under s 34 of the NDIS Act but concluded they did not meet the thresholds set out in s 34(1)(c) and (d) and for this reason they could not be funded.[24] A total amount of $17,779.36 was approved to fund reasonable and necessary supports in the period from 22 April 2022 to 21 April 2024.[25]
[24] Ibid, T1B, 24-27.
[25] Ibid, 16, 104.
On 13 May 2022, Ms Davidson lodged an application in the AAT for review of the internal review decision by the Tribunal.
On 26 February 2024, by consent, the Tribunal ordered remittal of the application for reconsideration under s 42D of the AAT Act within the period of 21 days.
On 7 March 2024, the NDIA issued a ‘plan’ document setting out varied funding for reasonable and necessary supports for Ms Davidson under the NDIS. A total amount of $105,884.96 was approved to fund reasonable and necessary supports over the period from 7 March 2024 to 5 September 2024.[26] A CRA in the amount of $36,983.18 was applied to the ‘total plan’.[27]
[26] Ibid, 411.
[27] Ibid, 412.
On 23 August 2024, by consent, the Tribunal made a further order to remit the decision under review to the NDIA’s CEO for reconsideration under s 42D of the AAT Act on or before 6 September 2024.
On 30 August 2024, a delegate of the NDIA CEO decided to vary the decision under review in order to provide additional funding for supports for a further 6-month period commencing on 30 August 2024.[28] A CRA of $36,938.18 was applied to the ‘total plan’.
[28] Davidson and National Disability Insurance Agency 2022/4091, 30 October 2024.
On 10 September 2024, the NDIA issued a further ‘plan’ document, with an ‘NDIS plan start date’ of 6 September 2024.[29] A total amount of $125,755.17 was approved to fund reasonable and necessary supports for Ms Davidson over the period from 6 September 2024 to 7 March 2025.
[29] Exhibit 2.
On 20 November 2024, the application was heard. Ms Davidson gave oral evidence at the hearing but declined to call oral evidence from Ms Racicot (who I understand was unavailable for medical reasons). No evidence was tendered from Mr Crowley as Ms Davidson did not want him involved in any way.
During the hearing, an issue of procedural fairness arose in respect of the CRA calculation set out in the Compensation Reduction Amount Outcome letter dated 16 November 2021. This document was produced at the hearing and placed into Exhibit 3 even though Ms Davidson asserted she had not previously seen the document. In order to ensure fairness to her, it was appropriate to allow Ms Davidson to make further submissions after the hearing, but only in respect of the CRA decision letter, with provision for the NDIA to reply. Accordingly, I ordered Ms Davidson to lodge all further submissions by 27 November 2024, with the NDIA being allowed until 4 December 2024 to make any further submissions in reply.
On 27 November 2024, Ms Davidson sent 3 emails to the Tribunal, including the following further submissions:
With regards to my Compensation Reduction Amount I would like to make the below comments:
a. Although I am unsure where the discrepancy in the amount of funds that I received from my medical negligence law suit …, I was awarded $1,500,000. and after my lawyer, Ms. Fiona Campbell deducted $300,000. I received the amount of $1,200,000. In my calculations, there is a discrepancy of $113,199.31.
b. I feel consideration should be considered for my out of pocket expenses for:
i. Prescribed medications not covered by PBS. I attach copies of my bank statements. In 2023 it amounted to $
ii. My husband, Greg Davidson was not considered in any way in my medical negligence compensation. In applying for Aged Pension we were eligible as far as age, income, savings, etc. We were knocked back until 11/26 due to my medical negligence payout. That is at the current rate, as of September 24, 2024 of $44,855. per annum. So, not only am o supporting myself, I am also supporting my husband.
iii. Due to my current medical conditions caused by my surgery December 6th 2012, I see a number of specialists; Nephrologist, Urologist, Pain Management, Infection Disease. These specialist order examinations and procedures for me which may be covered to some extent by Medicare. Some procedures are not covered by Medicare.
c. I have left an email for Mary Racicot asking her about the dates she looked after me and about her note of minding me for 24 hours per day.
d. I have talked to my youngest sister, Valentina McKellar Nash who lives in Kapa’a, Kaua’i, Hawai’i USA about the time frame that I spent with her. She said that I arrived on July 1st 2013 and then traveled to Boston in October 2013. I did return to Sydney in 2014 for a wedding and an HCCC meeting. I stayed with Tina on the return trip to Boston. She will send a confirmations email. I do apologize that this discrepancy was missed by my legal aide representative and myself previously.
On 2 December 2024, Ms Davidson sought additional time to obtain and give to the Tribunal further documentary materials relating to the purchase and renovation of a house. This was not pressed or granted.
On 4 December 2024, the NDIA lodged written submissions in reply.
The below brief submissions forms the Respondent’s submissions in reply, in accordance with Order 2.
The ‘discrepancy’ of $113,199.31 (comment (a))
It is unclear what the nature of the ‘discrepancy’ is that the Applicant refers to, or how that amount has been calculated.
However, the Respondent’s view is that the Compensation Reduction Amount Outcome letter dated 16 November 2021 (CRA Letter) correctly states the amount of compensation which was fixed under the Applicant’s settlement.
The Applicant states that she was awarded $1,500,000, which is accurately reflected in the first row of the table on page 2.
The remaining matters
The Respondent notes that the Tribunal indicated its view to the parties that leave to address further matters beyond the day of hearing was quite limited – and was directed to the CRA letter. The Respondent considers that each of comments (b)-(d) in the Applicant’s emails likely falls outside of the scope of what the Tribunal had intended. They raise issues quite unrelated to the matters explored at hearing, which related to amounts that the Applicant asserts she paid for supports in the United States of America during 2013-2016 and rule 3.13(f) of the National Disability Insurance Scheme (Support for Participants – Accounting for Compensation) Rules 2013 (CRA Rules).
However, in the event the Tribunal would be benefited by a brief response on those issues, the Respondent provides further brief submissions in response.
Further out of pocket expenses (comment (b))
Rule 3.13(f) of the CRA Rules is directed to amounts which meet the following three criteria:
They were amounts that were paid;
They relate to supports of a kind funded under the NDIS Act;
They fall within the period between the compensable event and the date that the Applicant became a participant (2019).
In relation to (b)(i) and (iii), each of the items raised by the Applicant are not expenses of a type funded under the NDIS. For example, diagnosis and treatment of health conditions (including chronic conditions), as well as medications are items which are not funded under the NDIS (see, for example, the National Disability Insurance Scheme (Getting the NDIS Back on Track No. 1) (NDIS Supports) Transitional Rules 2024, Schedule 2, Items 12(a) and (d). Moreover, Rule 3.13(f) is concerned with expenses prior to becoming a participant; PBS medications in 2023 could not be applied under Rule 3.13(f).
In relation to (b)(ii), Rule 3.13(f) cannot apply in respect of eligibility for age pension or the rate of the pension. They are plainly not supports of a type funded under the NDIS. In any event, the Applicant describes a preclusion period applied to her in respect of the age pension due to the medical negligence payout – that is expressly addressed in the third line of the table, where $750,000 (half of the compensation amount) is deducted. Rule 3.13(c) of the CRA Rules does make account of that.
The Applicant’s request for further time
It appears that the Applicant seeks further time to provide bank statements relating to payments for her house and renovations (see Applicant’s email of 2 December 2024, provided to the Tribunal by the Respondent). Those payments do not go to the issue of the CRA letter or to the issues which were the subject of the hearing. On that basis, the Respondent considers that additional time would not be warranted to obtain those documents, given they could not assist the issues that were addressed at hearing.
On 5 December 2024, Ms Davidson lodged further submissions:
NDIS Rule Application 3.13
Compensation settlement was indeed $1,500,000.
My attorney, Fiona Campbell deducted $300,000. before passing on the compensation settlement to me for $1,2000,000. in June 2021.
With NDIS subtracting Medicare $52,422.40 and NDIS $134,378.60 for a total of $186,820.69. That leaves an unaccounted amount of $113,179.31. This amount, I believe should be deducted from the Total Estimated Compensation Reduction Amount calculated under Rule 3.13.
Also, there has been no consideration for the fact that Centerlink also uses the CRA and have rejected my husband, Gregory Davidson and my application for Aged Pension for five years until 10/26 due to the same CRA. The current rate for Aged Pension for a couple is $44,855. per annum for a total of $224,275.00.
I feel this is should have been considered by NDIS.
I also feel that NDIS should consider the other medical expenses in the CRA.
Currently, my medications are over $10,000. p/y. I also see specialists every one to six months. They include Pain Management (monthly), Urologist (every six months), Infectious Disease (every three months), Nephrologist (every four to six months), Continence Advisor (annually). The specialist fees, after Medicare payments, for last year were over $8,000.
Legislation
The power to approve a SoPS and NDIS funding for reasonable and necessary supports is set out in s 33(2) of the NDIS Act. Exercise of the power is subject to the obligations set out in s 33(5):
In deciding whether or not to approve a statement of participant supports under subsection (2), the CEO must:
(a) have regard to the participant’s statement of goals and aspirations; and
(b) have regard to relevant assessments conducted in relation to the participant; and
(c) be satisfied as mentioned in section 34 in relation to the reasonable and necessary supports that will be funded and the general supports that will be provided; and
(d) apply the National Disability Insurance Scheme rules (if any) made for the purposes of section 35; and
(e) have regard to the principle that a participant should manage his or her plan to the extent that he or she wishes to do so; and
(f) have regard to the operation and effectiveness of any previous plans of the participant.
As can be seen, the decision-maker must apply rules made for the purposes of s 35, which is in the following terms:
(1) The National Disability Insurance Scheme rules may make provision in connection with the funding or provision of reasonable and necessary supports or general supports, including but not limited to prescribing:
(a) methods or criteria to be applied, or matters to which the CEO is to have regard, in deciding, the reasonable and necessary supports or general supports that will be funded or provided under the National Disability Insurance Scheme; and
(b) reasonable and necessary supports or general supports that will not be funded or provided under the National Disability Insurance Scheme; and
(c) reasonable and necessary supports or general supports that will or will not be funded or provided under the National Disability Insurance Scheme for prescribed participants.
(2) The National Disability Insurance Scheme rules referred to in subsection (1) may relate to the manner in which supports are to be funded or provided and by whom supports are to be provided.
(4) The National Disability Insurance Scheme rules referred to in subsection (1) may relate to how to take into account:
(a) lump sum compensation payments that specifically include an amount for the cost of supports; and
(b) lump sum compensation payments that do not specifically include an amount for the cost of supports; and
(c) periodic compensation payments that the CEO is satisfied include an amount for the cost of supports.
(5) The National Disability Insurance Scheme rules referred to in subsection (1) may relate to how to take into account amounts that a participant or prospective participant did not receive by way of a compensation payment because he or she entered into an agreement to give up his or her right to compensation.
The Rules are made for these purposes and state:
2.2 These Rules are about how compensation payments in respect of an injury suffered by a participant are taken into account by the CEO in determining the reasonable and necessary supports that will be funded under the NDIS.
The word ‘compensation’ has the same meaning as set out in s 11 of the NDIS Act, relevantly:
(1) In this Act:
compensation means a payment (with or without admission of liability) in respect of:
(a) compensation or damages in respect of personal injury; or
(b) personal injury, 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) personal injury, in settlement of a claim for damages or a claim under such an insurance scheme;
that is wholly or partly in respect of the cost of supports that may be provided to a participant (whether or not specifically identified as such). It does not matter whether the payment is made directly to the person who sustained the personal injury or to another person in respect of that person.
(2) A payment referred to in subsection (1) may be:
(a) in the form of a lump sum or in the form of a series of periodic payments; and
(b) made within or outside Australia.
…
Part 3 of the Rules is applicable where the thresholds set out in rule 3.1 are met, relevantly:
This Part applies in relation to a person who is a participant, or who later becomes a participant, if the impairment of the person was caused to any extent by a personal injury, and one of the following cases applies:
(a) the person received compensation under a judgement or settlement in respect of the injury in which:
(i) it is possible to identify the NDIS component of the amount of compensation (NDIS component is defined in paragraph 4.4); and
(ii) the component is either fixed by a non-consent judgement or is objectively identifiable (eg commutation of benefits under a statutory scheme); or
(b) the person received compensation under a judgement or settlement in respect of the injury that:
(i) does not satisfy paragraph (a) and
(ii) fixes an amount of compensation in respect of the injury; or
…
As the compensation fixed by the consent judgment does not identify the NDIS component, the threshold in paragraph 3.1(b) is met and rules 3.5 and 3.13 apply. Rule 3.5 is in the following terms:
In considering whether or not to approve a statement of participant supports in a plan for the participant (whether the first plan or a revised plan), the CEO is to take account of the compensation by reducing the funding for reasonable and necessary supports that would otherwise be approved by the appropriate compensation reduction amount under paragraphs 3.11 to 3.21.
Rule 3.13 sets out the calculus for determining the applicable CRA:
In the case of a judgement or settlement mentioned in paragraph 3.1(b), the CEO is to identify the compensation reduction amount as follows:
(a) calculate the amount of compensation fixed under the judgement or settlement;
(b) subtract the sum of the amounts (if any) payable in respect of the amount of compensation under the following:
(i) the Health and Other Services (Compensation) Act 1995;
(ii) the Health and Other Services (Compensation) Care Charges Act 1995;
(iii) Part 3.14 of the Social Security Act 1991;
(iv) a law of the Commonwealth, a State or a Territory, prescribed by the National Disability Insurance Scheme rules;
(c) subtract an amount that the CEO considers reflects the value of any period of preclusion:
(i) that arises from a Commonwealth, State or Territory statutory scheme of entitlements (for example, the Social Security Act 1991); and
(ii) is in respect of the injury;
(d) if no preclusion period has arisen for the purposes of paragraph (c) and the CEO is satisfied that:
(i) the participant claimed damages in relation to lost earnings or lost capacity to earn; and
(ii) the amount of compensation fixed under the judgement or settlement included an amount in respect of those damages;
subtract 50% of the amount of compensation;
(e) if the amount after applying paragraphs (a) to (d) is greater than the value of the reasonable and necessary supports that the CEO considers would have been provided to the participant and funded under the Act over the participant’s expected lifetime, had the participant been a participant from the time of the compensable event—replace the amount by that value;
(f) subtract an amount that the CEO considers equivalent to the total of the amounts that were paid by the participant for supports, being supports of a kind funded under the Act, after the compensable event and before becoming a participant;
(g) subtract any recoverable amount payable by the participant in respect of the compensation amount pursuant to section 106 or section 107 of the Act;
(h) subtract any amounts deducted by the Agency under section 105B of the Act;
(i) subtract the amount of any reduction in funding under paragraph 3.5 that occurred in relation to a previous plan of the participant.
The calculation under paragraph 3.13(e) must be in accordance with any applicable actuarial model published by the NDIA at the time the calculation is undertaken.
Provision is made for flexibility to take account of special circumstances under rule 3.10:
For the purposes of paragraph 3.5, the CEO may ignore the whole or part of a compensation reduction amount that would otherwise arise under this Part if the CEO thinks it appropriate to do so in the special circumstances of the case (which may include financial hardship suffered by the participant).
Issues and submissions
Considering the respective cases of the parties and the materials before the Tribunal, the issue for determination is the correct calculation of the CRA applied in the SoPS approved in the primary decision under s 33(2) of the NDIS Act, as varied in the internal review decision under s 100 of that Act and in the reconsideration decisions made under s 42D of the AAT Act, most recently the reconsideration decision made on or about 30 August 2024. This is the sole issue of disputation remaining between the parties. Issues relating to the approval of reasonable and necessary supports, and management arrangements, have been resolved by agreement, which I accept is reasonable, appropriate and consistent with the available evidence.
In respect of the CRA calculation, the NDIA submits the NDIS legislation should be read as a whole, in a harmonious and consistent manner. The NDIA argues, when determining if the supports Ms Davidson obtained in the USA are ‘of a kind funded under the Act’, regard should be had to what kind of supports she might have obtained were she in the NDIS at the time. Supports she obtained when she was absent from Australia, so the argument goes, are not supports which could be funded under the NDIS Act. The NDIA alleges this is the proper approach to s 40 of the NDIS Act.
Furthermore, the NDIA asserts there is insufficient evidence of the alleged services Ms Racicot provided and the amount Ms Davidson has calculated she paid to Ms Racicot for support services. The NDIA observes there is no documentary or cogent evidence to support the proposition Ms Davidson paid Ms Racicot US$1,000 each week from October 2013 to October 2016. Furthermore, in the NDIA’s submission, there is insufficient material of probative value to establish the relationship between the amounts allegedly paid to Ms Racicot and the support services she allegedly provided.
Relying on CQR17 v Minister for Immigration and Border Protection[30], the NDIA argues adverse inferences should be drawn from Ms Davidson’s failure to lead relevant material and to call relevant witnesses who could give direct evidence about such matters, including Ms Racicot and Mr Crowley.
[30] [2019] FCAFC 61, [32].
Ms Davidson asserts the costs she incurred for NDIS type supports when living in Boston from October 2013 to October 2016 for the purposes of obtaining rehabilitative treatment for her spinal injury should be deducted from the CRA calculated by the NDIA under paragraph 3.13(f).
Ms Davidson argues the CRA should be reduced by the cost of supports she obtained from Ms Racicot. She alleges Ms Racicot supported her with personal care (dressing, toileting, bathing, meal preparation and walking for example), cleaning and community access (including exercise, shopping and transport to and from rehabilitative and medical treatment appointments for example). Supports of these kinds, she argues, are aimed at facilitating her participation in daily activities and they are ‘of a kind’ funded under the NDIS consistent with the CORE categories of ‘Assistance with Daily Life’ and ‘Assistance with Social Economic and Community Participation’ set out in the NDIS Pricing Arrangement and Price Limits.
Ms Davidson asserts an amount of $187,951.80 should be subtracted for the support services Ms Racicot provided. She alleges she paid Ms Racicot US$1,000 per week for 3 years, an amount of $156,000 in US dollars. Ms Davidson argues the average exchange rate based on historical exchange rate data over the period from 2013 to 2016 is 0.83, that is 1 Australian dollar equates to 0.83 US dollars. Applying this average rate of exchange, Ms Davidson calculates Ms Racicot was paid $187,951.80 Australian dollars for support services.
Ms Davidson asserts this figure is a reasonable estimate. In her submission, the average wage for a personal services worker in the USA in 2013 was US$11.88 per hour and Ms Racicot worked well in excess of 12 hours each day, 7 days per week. On this basis, Ms Davidson argues the amount paid to Ms Racicot, US$1,000 per week, is within expected parameters at the time, and it represents a conservative amount as Ms Racicot provided 24-hour care, well in excess of 12 hours per day.
In Ms Davidson’s submission, the Tribunal can be positively satisfied on the available evidence that the reduction of $187,951.80 is a reasonable estimate of an equivalent amount paid for support services for NDIS type supports. She notes, consistent with guiding principles under s 4(4) and s 4(5) of the NDIS Act, her decision to exercise choice to obtain necessary support services while obtaining rehabilitative treatment in the USA should be supported. She argues the supports she obtained are ‘supports of a kind funded under the Act’ and it is not to the point of paragraph 3.13(f) that they were obtained while she was outside Australia prior to becoming a participant in the NDIS. Paragraph 3.13(f), Ms Davidson asserts, is not directed to reasonable and necessary supports which may be funded in a plan or to the circumstances in which the person will have access to funding for supports under a plan. In her submission, the rule is for the purposes of taking account of the costs of NDIS type supports the person obtained outside the NDIS scheme before becoming a participant.
Ms Davidson argues the requirement for a participant in the NDIS to reside in Australia and the provision in s 40 of the NDIS Act for suspension of the participant’s plan during periods in which they are temporarily absent from Australia do not assist interpreting paragraph 3.13(f). She argues paragraph 3.13(f) applies to NDIS type supports which were obtained outside the NDIS framework and the relevant considerations are when the support was obtained and what kind of support it was. The consideration of actual supports obtained, so the argument goes, is not assisted by speculation about supports which might have been funded under the NDIS had the person been a participant at the time.
Consideration
Two key considerations arise. The first is one of statutory construction and the second is one of probative material.
In respect of the statutory construction issue, it is necessary to note that the Rules are for the purposes of s 35 of the NDIS Act. The Rules must be construed in this context.
Paragraph 3.13(f) of the Rules poses 2 questions:
(a)after the compensable event and before becoming a participant, did the participant pay for supports of a kind funded under the Act; and if so
(b)what is the total amount paid for such supports?
The phrase ‘supports of a kind funded under the Act’ is not given any special meaning. Applying the ordinary meaning of the words used, it can be understood to refer generally to the kinds of supports that could be funded for a participant under the NDIS Act. The phrase does not include supports which could not be funded under the NDIS Act.
Supports which can be funded under the NDIS Act are ‘reasonable and necessary supports’ which meet the thresholds set out in s 34 of the NDIS Act:
(1) For the purposes of specifying, in a statement of participant supports, the general supports that will be provided, and the reasonable and necessary supports that will be funded, the CEO must be satisfied of all of the following in relation to the funding or provision of each such support:
(a) the support will assist the participant to pursue the goals, objectives and aspirations included in the participant’s statement of goals and aspirations;
(b) the support will assist the participant to undertake activities, so as to facilitate the participant’s social and economic participation;
(c) the support represents value for money in that the costs of the support are reasonable, relative to both the benefits achieved and the cost of alternative support;
(d) the support will be, or is likely to be, effective and beneficial for the participant, having regard to current good practice;
(e) the funding or provision of the support takes account of what it is reasonable to expect families, carers, informal networks and the community to provide;
(f) the support is most appropriately funded or provided through the National Disability Insurance Scheme, and is not more appropriately funded or provided through other general systems of service delivery or support services offered by a person, agency or body, or systems of service delivery or support services offered:
(i) as part of a universal service obligation; or
(ii) in accordance with reasonable adjustments required under a law dealing with discrimination on the basis of disability.
(2) The National Disability Insurance Scheme rules may prescribe methods or criteria to be applied, or matters to which the CEO is to have regard, in deciding whether or not he or she is satisfied as mentioned in any of paragraphs (1)(a) to (f).
As can be seen, regard is to be had to rules prescribing the matters the decision-maker is to consider. Such matters are set out in the National Disability Insurance Scheme (Supports for Participants) Rules 2013 (Supports Rules). Under the Supports Rules, general criteria include:
5.1 A support will not be provided or funded under the NDIS if:
(a) it is likely to cause harm to the participant or pose a risk to others; or
(b) it is not related to the participant’s disability; or
(c) it duplicates other supports delivered under alternative funding through the NDIS; or
(d) it relates to day-to-day living costs (for example, rent, groceries and utility fees) that are not attributable to a participant’s disability support needs.
5.2 The day-to-day living costs referred to in paragraph 5.1(d) do not include the following (which may be funded under the NDIS if they relate to reasonable and necessary supports):
(a) additional living costs that are incurred by a participant solely and directly as a result of their disability support needs;
(b) costs that are ancillary to another support that is funded or provided under the participant’s plan, and which the participant would not otherwise incur.
More specific criteria apply in respect of health treatments, namely:
7.5 The NDIS will not be responsible for:
(a) the diagnosis and clinical treatment of health conditions, including ongoing or chronic health conditions; or
(b) other activities that aim to improve the health status of Australians, including general practitioner services, medical specialist services, dental care, nursing, allied health services (including acute and post-acute services), preventive health, care in public and private hospitals and pharmaceuticals or other universal entitlements; or
(c) funding time-limited, goal-oriented services and therapies:
(i) where the predominant purpose is treatment directly related to the person’s health status; or
(ii) provided after a recent medical or surgical event, with the aim of improving the person’s functional status, including rehabilitation or post-acute care; or
(d) palliative care.
The funding of reasonable and necessary supports is subject to approval of a SoPS under s 33(2) of the NDIS Act. Under s 37, this is instrumental in the coming into effect of a plan for the participant. A participant’s plan and the SoPS is subject to suspension under s 40(3) and s 41(1) where the participant is temporarily absent from Australia for a period greater than the ‘grace period’ under s 40(2):
(1) A participant for whom a plan is in effect may be temporarily absent from Australia for the grace period for the absence without affecting the participant’s plan.
(2) The grace period for a temporary absence of a participant is:
(a) 6 weeks beginning when the participant leaves Australia; or
(b) if the CEO is satisfied that it is appropriate for the grace period to be longer than 6 weeks—such longer period as the CEO decides, having regard to any matters and applying any criteria prescribed by the National Disability Insurance Scheme rules for the purposes of this paragraph.
(3) If a participant for whom a plan is in effect is temporarily absent from Australia after the end of the grace period for the absence, the participant’s plan is suspended from the end of the grace period until the participant returns to Australia.
(4) For the purposes of this section, a person’s absence from Australia is temporary if, throughout the absence, the person does not cease to reside in Australia (within the meaning of paragraph 23(1)(a)).
The effect of suspending the participant’s SoPS is set out in s 41(2):
(2) The effect of suspension of a statement of participant supports in a participant’s plan is that the plan remains in effect but, during the period of suspension:
(a) a person is not entitled to be paid NDIS amounts so far as the amounts relate to supports that are acquired or provided during that period; and
(b) the Agency is not required to provide or fund other supports under the plan, but is not prevented from doing so if the CEO considers it appropriate; and
(c) the participant is not entitled to make a request under subsection 47A(2) for a variation of the plan or make a request under subsection 48(2) for a reassessment of the plan.
Thus, a participant whose SoPS is suspended during a period in which they are temporarily absent from Australia for longer than the ‘grace period’ is not entitled to be paid NDIS amounts for supports that are acquired during the absence. The allowance of a ‘grace period’ under s 40(2) in respect of a temporary absence from Australia reinforces the general limit of entitlement which otherwise applies to the funding of reasonable and necessary supports when a participant is absent from Australia.
Paragraph 3.13(f) of the Rules must be construed in a manner consistent with this limit on entitlement. Just as a participant is not entitled to be paid for supports that are acquired or provided while they are outside Australia for more than the grace period, supports acquired by a compensation recipient during a period in which they were outside Australia after the compensable event and before they became a participant, are not ‘supports of a kind funded under the Act’.
I do not accept the proposition that a construction of this kind is inconsistent with or undermines the guiding principles set out in s 4(4) and s 4(5) of the NDIS Act. The guiding principles have an over-arching quality which informs, but does not override, the interpretation of specific provisions within the legislative framework the Act and the rules provide.
I also do not accept the general proposition Ms Davidson advances that this construction undermines the purpose of paragraph 3.13(f), which is to account for money already spent on supports, regardless of where the support was acquired. Quite plainly, the question of whether a support is acquired during a period of extended absence from Australia is a determinant of entitlement to funding for the support under the NDIS. The combined operation of s 40(3) and s 41(1) and (2) limits entitlement to funding for supports acquired during a period of absence from Australia in excess of the ‘grace period’. This is directly relevant to the proper construction of the term ‘support of a kind funded under the Act’.
The construction Ms Davidson prefers would lead to inconsistency. Supports obtained by a compensation recipient while outside Australia for an extended period before becoming a participant in the NDIS would be treated as supports of a kind funded under the NDIS Act, whereas identical supports would not be funded if they are obtained by a participant in the NDIS during a period of absence from Australia longer than the ‘grace period’. Without express authority for inconsistency of this kind, I am not persuaded it is the correct or preferable construction of paragraph 3.13(f) of the Rules.
With regard to the issue of probative material, even if an alternative, more generous interpretation is open, and I am not persuaded of this, it would not assist Ms Davidson’s case. The available evidence is not sufficient to properly determine the nature, extent and cost of services she obtained from Ms Racicot and the total amount paid.
There is insufficient reliable material on which to determine if the supports Ms Racicot provided solely related to the disability underlying Ms Davidson’s subsequent acceptance as a participant in the NDIS. There is also insufficient material of probative value to determine if some or all of the support services Ms Racicot provided are within the terms of rule 5.1 or rule 7.5 of the Supports Rules.
It is probable rule 7.5 is applicable to the rehabilitation treatment services Ms Davidson obtained while she was residing in Boston. For this reason, it is likely such treatment is not support of a kind funded under the NDIS Act.
Furthermore, the total amount of payments Ms Davidson made to Ms Racicot cannot accurately be determined on the present evidence. This is for the simple reason, even on her own evidence, the period or periods Ms Davidson allegedly paid for Ms Racicot’s support services cannot be determined with any precision or reliability. Without a reasonable basis supported by relevant probative material, it is not appropriate to estimate or guess a total amount for the purposes of calculating the applicable CRA under rule 3.13 of the Rules.
There is no cause to speculate about the kinds of supports which might or would have been funded for Ms Davidson had she been a participant at the time she was residing in Boston or the applicability of any grace period under s 40. Paragraph 3.13(f) of the Rules does not authorise or require any such assessment.
The test is whether the amounts Ms Davidson paid for supports, were amounts paid for supports ‘of a kind funded under the Act’. These are factual matters about which findings are required on the basis of relevant probative material. It is not to the point to consider whether the specific supports acquired are reasonable and necessary supports which might have been approved for funding had the person been a participant.
The threshold in paragraph 3.13(f) of the Rules operates at a higher level of generality in respect of the kinds of supports funded under the NDIS Act. Generally, supports obtained during a period in which the person is absent from Australia are not supports of a kind funded under the NDIS Act. The conception of a ‘grace period’ in s 40(2) of the NDIS Act reinforces the limit on entitlement to payment for such supports. The ‘grace period’ is exceptional to the general limit on entitlement to funding for supports obtained during such an extended (albeit temporary) absence from Australia with otherwise applies.
For these reasons, I am not satisfied an amount of $187,951.80 should be subtracted from the CRA calculated under rule 3.13.
Other matters
Ms Davidson has raised three other matters which I will briefly address.
Firstly, she alleges a discrepancy of $113,119.31 in the accounting for the compensation payment which should be subtracted from the CRA.
The basis on which the alleged discrepancy has been calculated is not at all clear. Ms Davidson accepts the total compensation amount is $1,500,000 plus party/party costs. Of this, she alleges she received $1,200,000 and her lawyer deducted $300,000.
Without more, it is not possible to know what to make of the alleged discrepancy. It is conceivable an amount of non-recoverable solicitor/client costs and disbursements was deducted from the compensation payment with Ms Davidson’s purported agreement.[31]
[31] Exhibit 1, T12, 53.
Even if that is the source of the alleged discrepancy, there is not sufficient material before the Tribunal to determine if any additional related amount should be subtracted from the CRA.
Secondly, Ms Davidson refers to her out-of-pocket medical and pharmaceutical treatment expenses in 2023, and contends these should be taken into account and deducted from the CRA amount.
Generally, medical and pharmaceutic treatment costs are not supports of a kind funded under the NDIS Act. The expenses Ms Davidson is referring to arose after she became a participant in the NDIS and they are not within the period referred to in paragraph 3.13(f) of the Rules. To the extent Ms Davidson asserts expenses of this kind should be considered under rule 3.10 in respect of special circumstances, and no such assertion has been clearly expressed, there is not sufficient material to make any positive finding.
If Ms Davidson is of the opinion that expenses relating to treatment and pharmacological expenses are reasonable and necessary NDIS supports which meet the thresholds in s 34 of the NDIS Act, and they are most appropriately funded under the NDIS, it is open for her to seek approval of funding by the NDIA.
Thirdly, Ms Davidson contends that she and her husband have been precluded from obtaining Age Pension as a result of the compensation lump sum she received. For this reason, she is presently supporting herself and her husband and, in Ms Davidson’s submission, this should be taken into account and the CRA should be reduced accordingly.
Provision was made in the CRA calculation under paragraph 3.13(c) to reduce the compensation amount by 50%, and an amount of $750,000 was deducted on this basis.
Once again, there is very scant material to go on when addressing this submission. The extent to which, if at all, Ms Davidson is raising the issue with respect to paragraph 3.13(f) and the period prior to becoming a participant in the NDIS is very far from clear. If Ms Davidson is attempting to raise this issue for the purposes of rule 3.10 despite the way in which her case was run, the deduction of $750,000 factored into the calculation and issues of procedural fairness would arise. On the present materials, it is not possible to go any further with the issue and no positive finding can be made.
Where a compensation preclusion period applies under Part 3.14 of the Social Security Act 1991 (Cth), s 1184K of that Act provides the Secretary with discretion to disregard all or part of a compensation payment where the Secretary is satisfied it is appropriate to do so in the special circumstances of any case. Whether or not Ms Davidson has approached the Secretary for relief under this provision and the outcome of such an enquiry is not established. These are matters for her.
Conclusion
Reasonable and necessary supports for Ms Davidson have been determined on reconsideration by the NDIA. These are not in dispute and can be accepted.
The sole issue in dispute is the correctness of the CRA applied to the funding of supports for Ms Davidson.
On the available materials, Ms Davidson’s request for subtraction of $187,951.80 from the CRA on the basis of estimated amounts she paid to Ms Racicot is not made out. I am satisfied no positive finding can be made that such an amount should be subtracted under paragraph 3.13(f) of the Rules. I am satisfied no other additional amount should be subtracted in respect of or relating to costs Ms Davidson incurred when living in Boston.
I am not persuaded, and I have not found, there is an error in the other calculations under rule 3.13 of the Rules.
The other matters Ms Davidson raised do not compel any different conclusion. I am not satisfied any part of the CRA thus calculated should be disregarded under rule 3.10 of the Rules on the basis of the present materials and related submissions.
Decision
The decision under review is affirmed.
I certify that the preceding 91 (ninety-one) paragraphs are a true copy of the reasons for the decision herein of Senior Member Webb.
.............................[SGD]..........................................
Tribunal Officer
Dated: 10 January 2025
Date(s) of hearing:
20 November 2024
Applicant’s Representative
J. Clancy, Spinal Cord Injuries Australia
Counsel for the Respondent:
Solicitor for the Respondent:
N. Swan, Jeffcott Chambers
J. Klisaris, Mills Oakley Lawyers
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