Edwards; Department of Family and Community Services

[2000] AATA 752

DECISION AND REASONS FOR DECISION [2000] AATA 752

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2000/323

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Applicant
           And    DEAN EDWARDS
  Respondent

DECISION

Tribunal       Mr. D.W. Muller, Senior Member Captain E.T. Keane, RAN Rtd, Member  

Date28 August 2000

PlaceBrisbane

...............(Signed)...............................
  D.W. MULLER
  SENIOR MEMBER
CATCHWORDS
SOCIAL SECURITY – Disability Support Pension – damages for personal injuries - preclusion period – no causal connection – special circumstances
Social Security Act 1991: s 1163(9), 1184(1)

REQUEST FOR WRITTEN REASONS FOR DECISION

Mr. D.W. Muller, Senior Member Captain E.T. Keane, Member                    

1. This is an application by the Secretary, Department of Family and Community Services for a review of a decision of the Social Security Appeals Tribunal, dated 3 March 2000, to treat the whole of a compensation payment made to Dean Edwards, as if it had not been made, and that Dean Edwards is not precluded from receiving disability support pension for any period.

2. Mr. Dean Edwards was born on 13 September 1968.  Mr. Edwards has been in receipt of disability support pension since April 1989, that is, since he was 20 years of age.  He suffers from the psychiatric illness, schizophrenia.

3. Mr. Edwards left school when he was 16 years of age.  He has never had full-time employment but he has had an occasional lawn mowing job since leaving school.  He has never received a pay slip, nor has he ever filed a tax return.

4. Mr. Edwards is currently doing some University study.  He hopes to be free of being dependant on the disability support pension or at least to rely only partially on the pension.  The reality is that his chances of ever being employed are fairly minimal.

5. On 4 September 1996, Mr. Edwards was hit by a car whilst he was riding his bicycle.  He suffered physical injuries to his shoulder, hip, knee and back.  He also suffered an exacerbation of his psychiatric condition.

6. Through his solicitor he sued the driver of the vehicle that ran into him for damages, for pain and suffering and for loss of income that he otherwise would have earned.  The fact of the matter, of course, is that Mr. Edwards has earned very little money by way of work, because of his affliction.

7. Mr. Edwards' claim was settled on 5 July 1999.  He received $27,500.  It had been agreed between the parties that Mr. Edwards had suffered no past economic loss because he had not been working.  His claim was really for pain, suffering and loss of amenities.  Nevertheless, a figure of $5,000 was included in the $27,500 as a "nominal amount" to cover the remote possibility that at some time in the future Mr. Edwards may get some work and that if he should do so, his injuries may reduce some of his capacity to work.

8. Centrelink calculated a preclusion period from the date of the accident based on the so-called 50 per cent rule contained in section 17 of the Social Security Act 1991 (the Act). This led to the compensation component of the lump sum payment being set at $13,750, which resulted in a preclusion period of 32 weeks. Consequently, Centrelink demanded from Mr. Edwards a refund of $6,369.30, which equated to the disability support pension he had received during the 32 week preclusion period.

9. Upon review, the Social Security Appeals Tribunal decided that none of the $27,500 lump sum compensation payment should be taken into account in calculating a preclusion period.  The Social Security Appeals Tribunal decided that there were circumstances in Mr. Edwards' case which were sufficiently special to warrant that decision.  Those circumstances included:

   (a)There was no causal relationship between the reasons for Mr. Edwards receiving his disability support pension, namely his schizophrenia and the basis upon which he received damages, namely orthopaedic injuries;  and

   (b)There was only a very minor portion of the damages which could be related to economic loss, which could only be characterised as a "possibility", many years prospective to the date of injury.

1. It was submitted on behalf of the Secretary that the Social Security Appeals Tribunal failed to take account of sub-section 1163(9) of the Act, and that the said sub-section prevented the Social Security Appeals Tribunal from concluding that "special circumstances" could arise when there was no causal link between the circumstance under which the applicant received the disability support pension and the reasons for the damages payment. The relevant legislation is:

   "1163(9)  [Connection between circumstances giving rise to qualification and compensation unnecessary]  This part operates in certain specified circumstances to affect a person's compensation affected payment because of compensation received by the person or the person's partner.  This Part is not intended to contain any implication that, in addition to those specified circumstances, there needs to be some connection between the circumstances that give rise to the person's qualification for the payment and the circumstances that give rise to the person's or the partner's compensation.
   SECTION 1184  SECRETARY MAY DISREGARD SOME PAYMENTS
   1184(1)  [Special circumstances]  For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
   (a)       not having been made;  or
   (b)       not liable to be made;
   if the Secretary thinks it is appropriate to do so in the special circumstances of the case."

1. Sub-section 1163(9) was inserted to clarify the situation which arose where there was no causal link between the circumstances of the receipt of pension and the circumstances which gave rise to the compensation payment. Prior to the inclusion of sub-section 1163(9), there had been some AAT decisions which suggested that there had to be a causal link between the two before a compensation payment could affect a pension, or, alternatively, that if there was no causal connection, the provisions of section 1184 should be automatically invoked. Sub-section 1163(9) provides that there does not have to be a connection between the two sets of circumstances for a pension to be affected by a payment of compensation, and that an absence of causal connection does not automatically lead to the conclusion that the circumstances are "special" within the meaning of that term in section 1184.

2. The Social Security Appeals Tribunal was not prevented from finding "special circumstances" existed when it found that there was no causal connection between the two sets of circumstances which gave rise to the payments of pension and damages.

3. The object of the legislation surrounding this particular matter, that is, the legislation relating to preclusion periods upon receipt of lump sum compensation amounts, is to prevent what is known colloquially as double-dipping.  It is to prevent a situation arising whereby a person could receive a social security pension and, at the same time, be compensated for the same period by way of compensation from an insurance payout or workers' compensation.  It is expected that if a person receives payment of compensation for a specific period then the person should not get social security payments for that same period.

4. In Mr. Edwards' case it is clear that he was not paid compensation for any past economic loss because he was not working.  So it could not be said there was double-dipping for any period prior to settlement.   The $5,000 nominal damages relate to the possibility that in the future he may be able to earn a living and that the injuries he received from the car may in some way impede him from earning as much as he otherwise might earn.  The $5,000 is to compensate for that remote possibility.

5. If he does work in the future, and is slightly impeded, the $5,000 will cover that possibility.  He will not, of course, get any social security benefits if he happens to get employment.  Not only has there been no double-dipping in the past, there may never be any double-dipping in the future.  In our view the justice of the case demands that none of the amount of $27,500 be included in the calculation for preclusion period purposes.

6. The Social Security Appeals Tribunal came to the right decision, even if it did not specifically refer to sub-section 1163(9).

7. The decision is affirmed.

   I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member, and Captain E.T. Keane, Member

   Signed:         .....................................................................................
              R. Hayes, Associate

   Date/s of Hearing  23 June 2000
   Date of Decision  23 June 2000
   Request for Written Reasons  28 August 2000
   Applicant  Mr. R. McQuinlan, Departmental Advocate
   Respondent  Mr. Edwards, in person