Emery and Comcare
[2001] AATA 510
•30 April 2001
DECISION AND REASONS FOR DECISION [2001] AATA 510
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2000/73
GENERAL ADMINISTRATIVE DIVISION )
Re IAN DOUGLAS EMERY
Applicant
And COMCARE
Respondent
DECISION
Tribunal Mr. D.W. Muller, Senior Member Miss A.M. Brennan, AM, Brennan Dr. K.P. Kennedy, OBE, Member
Date30 April 2001
PlaceBrisbane
............(Signed)..................................
D.W. MULLER
SENIOR MEMBER
CATCHWORDS
WORKERS' COMPENSATION – retrenchment package - applicant seeking re-calculation of entitlement – whether applicant received proper advice or counselling prior to accepting retrenchment package
Safety Rehabilitation and Compensation Act 1988: s 19, 20, 21, 24
REQUEST FOR WRITTEN REASONS FOR DECISION
Mr. D.W. Muller, Senior Member Miss A.M. Brennan, AM, Brennan Dr. K.P. Kennedy, OBE, Member
This is an application to review two decisions:
(i)To not change the financial arrangements made between the applicant and the Australian Taxation Office (ATO) when he ceased work with the ATO in May 1994.
(ii)To calculate the applicant's ongoing entitlements to workers' compensation in accordance with the formulae set out in sections 19 and 21 of the Safety Rehabilitation and Compensation Act 1988 (the SRC Act).
Mr. Emery claims that he was not given proper advice nor any counselling in early 1994, prior to his acceptance of a retrenchment package. He claims that the uninformed choice he made in 1994 has left him worse off than he otherwise might have been.
Mr. Emery also claims that the formulae used in the SRC Act should be ignored because they do not give him proper compensation.
The material placed before the Tribunal reveals the following facts:
(i)The applicant became ill in March 1989.
(ii)He was absent from work from March 1989 to October 1990.
(iii)On 8 August 1989, liability was accepted in respect of a generalised anxiety disorder deemed to have been sustained on 17 March 1989.
(iv)On 28 December 1989, the applicant was awarded –
$9,288.05 pursuant to s.24 of the SRC Act for 10% whole person impairment,
$6,617.74 pursuant to s.27 of the SRC Act.
(v)From October 1990 the applicant received workers' compensation on an ongoing weekly basis.
(vi)On 23 June 1993, the applicant made an enquiry of Comcare as to various options possibly available to him. In reply to his telephone call, Comcare sent him the following letter on 24 June 1993.
"I refer to our telephone conversation of 23/6/93.
Generally the benefits of invalidity retirement are a government financed pension of (maximum) 50% of final salary (unless reduction is required because of a Benefit Classification Certificate or insufficient years of prospective service), plus an additional pension of (maximum) 20% of final salary. This is made up of your compulsory contributions (you may opt not to receive the additional pension, and may request instead that it be paid as a lump sum. This will mean that the pension is made up only of government financed benefit of (maximum) 50% of final salary), plus any accumulated supplementary contributions (payable as a lump sum).
Sections 20 and 21 (copies enclosed) of the Compensation Act 1988 provide for consideration of superannuation payments when assessing entitlement to incapacity payments. In general terms, the effect is that the combined amount of compensation and superannuation which will be payable, will represent approximately 70% of your Normal Weekly Earnings.
In order to calculate entitlements under section 20 or 21 it is necessary to know the government financed portion of any relevant superannuation or lump sum. This information is obtained from the Australian Government Retirement Benefits Office (AGRBO). The government financed portion of the superannuation is the only component which can be taken into account in the assessment of compensation entitlement.
Superannuation payments are now taken into account from the date of effect of the pension/lump sum. This will be the date of separation in most cases. The entitlement to incapacity payments cannot be calculated until the super benefit is known.
The SC (superannuation contributions) referred to in the formulae for sections 20 and 21 is the compulsory basic contribution (normally 5% of salary for superannuation purposes) that all permanent officers are required to contribute. Superannuation contributions must increase on an employee's birthday and are adjusted to 5% of the salary for superannuation purposes as at that date each year.
The SA (superannuation amount) referred to in the formulae for sections 20 and 21 is the pension that you receive from AGRBO. Superannuation pensions are indexed annually in June. The increase to the pension (based on the previous year's CPI) is applied only to the Government Financed Portion of the pension. This means that an increase in your superannuation amount (pension) will result in a corresponding decrease in your compensation payment.
Similarly, a National Wage Increase would increase your compensation entitlement until the factors described in the two preceding paragraphs take effect.
Obviously, AGRBO are the best people to advise you of your superannuation entitlements, and I would suggest that you contact them in this regard.
Yours Sincerely
John Dacey
For Comcare Australia
24/6/93"
(vii)On 27 July 1993, the applicant was awarded $8,933.94 (less $4,876.23 which he had previously been paid).
(viii)On 30 December 1993, the applicant was awarded –
$24,822.31 (less $9,288.05 previously paid) pursuant to s.24 of the SRC Act for 25% whole person impairment.
$14,086.66 (less $10,675.45 previously paid) pursuant to s.27 of the SRC Act.
(ix)On or about 24 March 1994 the applicant notified the Deputy Commissioner of Taxation of the ATO, Townsville, that he wished to accept a voluntary retrenchment package.
(x)On 25 March 1994 the Deputy Commissioner (Bruce Quigley) wrote the applicant, who was then living in the Philippines, the following letter:
"I acknowledge receipt of your request for voluntary retrenchment of 24 March 1994 and note your requirement that your retirement date be 20 May 1994.
For your information I enclose a statement of your financial entitlements as at 9 March 1994 and advise you that financial counselling can be arranged for you. Should you not wish to take up this offer of assistance please sign the attached letter and return it to me.
Total monies payable upon separation
Superannuation Lump Sum $174,407
Salary in lieu of Unused Leave $ 9,808
Severance Pay $29,365
Minus
Overpayment Outstanding $11,532
Total $ 27,641
$202,048
All FRM and RBO working papers are attached to the back of this submission.
Compensation
The ongoing weekly benefit payable will be subject to calculation under Section 21 of the Safety Rehabilitation and Compensation Act 1988.
Section 21(2) states "Comcare is liable to pay compensation to the employee, in respect of the injury, in accordance with this section for each week after the date of the retirement during which the employee is incapacitated."
Section 21(3) states "The amount of compensation is an amount calculated under the formula"
AC-(SA divided by 520 +SC)
Where:
AC is the amount of compensation that would have been payable to the employee for a week if:(a)section 19, other than subsection 19 (6), had applied to the employee; and
(b) the week were a week referred to in subsection 19(3);
SA is the superannuation amount; and
SC is the amount of superannuation contributions that would have been required to be paid by the employee in that week if he or she were still contributing to the superannuation scheme.
This calculation will be undertaken by Comcare Australia subsequent to payment of superannuation lump sum and the result notified to officer"
(xi)The applicant signed the attached letter which read:
"Re: Voluntary Retirement as an excess officer under Section 76W
Public Service Act 1922 in accordance with the APSRedeployment and Retirement (Redundancy) Award 1987
I wish to acknowledge that I understand and accept the terms of voluntary retirement as an excess officer and how they have been applied to me. I also acknowledge that I have been offered financial counselling as to my financial entitlements under the above process and that as I do not wish to take up this offer I am accepting of the financial entitlements as described on the attached document."
The applicant crossed out the words "described on the attached document" and he inserted "at 20/5/94".
(xii)The applicant also added the following:
"Bruce Quigley,
Bruce,
I understand & accept the conditions of voluntary retirement. I am accepting financial entitlements as accrued at 20/5/94 and would appreciate an updated statement reflecting what I will receive at that date. The main reason I am not accepting financial counselling is my location. Perhaps you might like to send Mick Jones over for 4 days.
Seriously, the majority of my payout will be invested and the fortnightly ongoing payments from Comcare (under review) will assist me in the months ahead. The only request I have is that once the $11,532 is deducted a portion of that will be refundable through Instalments, I would like to know the amount and how quickly this can be ….".
(xiii)On 1 June 1994, Mr. Mark Ayton for Comcare wrote the following letter to Mr. Emery.
"Mr Ian D. Emery
c/- Villa Modesto Hotel
Angeles City
The PhillipinesDear Mr Emery
Re: claim for compensation
The State Manger, Queensland has asked me to acknowledge your letter of 14 May 1994 and to advise you in relation to the relevant outstanding issues concerning your compensation claim and ongoing entitlements. I note that with effect from close of business 20 May 1994 you officially separated from your employment with the Australian Taxation Office on the grounds of involuntary (retrenchment) retirement.
Your weekly entitlement to compensation post 20 May 1994 will be assessed under the provisions of section 20 or 21 of the Safety Rehabilitation and Compensation Act 1988. Section 20 relates to compensation for injuries resulting in incapacity where the employee is in receipt of a superannuation pension whilst section 21 relates to compensation for injuries where an employee is in receipt of a lump sum benefit. In order to assess your entitlement I have this day contacted Comsuper who advise that as at 30 May, no election has been made in terms of the options outlined in the Comsuper advice to you of 27 April. I have asked Comsuper to notify this office immediately upon receipt of this information so your correct entitlement can be assessed.
As you may be aware your weekly entitlement to compensation after 20 May will be assessed by the application of the relevant formula.
Where pension is received, the amount of compensation is calculated under the formula:
AC – (SA + SC)
where:
AC is the amount of compensation that would have been payable to the employee for a week if:
(a) section 19, other than sub section 19(6) had applied to the employee and
(b) the week were a week referred to in sub section 19(3)
SA is the superannuation amount (employer funded portion) and
SC is the amount of superannuation contributions that would have been required to be paid by the employee in that week if he or she were still contributing to the superannuation scheme.
Where a lump sum only is received the formula is:
AC – (SA/520 + SC)
I have ascertained from your ex employer that your rate of contributions immediately prior to separation was $35.15 per week. As you were contributing the minimum of 5 per cent of salary under the CSS, this figure will be applied to SC in the formula. In addition the weekly amount assessed under either section 20 or 21 will be varied each year on the anniversary of your birth in order to reflect the anniversary adjustment of superannuation contributions based on salary for superannuation purposes on that day.
As you are no longer employed by the Commonwealth and therefore not in receipt of payments through the Department of Finance pay system, payments will be made direct to you by Comcare Australia. To facilitate payment through this system you will need to complete the attached forms:
Employment Declaration Form
Pay start information – change to personal information
Please complete and return to this office so that you can be promptly put on to the direct pay system. You should note that there is no facility to pay compensation into overseas bank accounts. Payments can only be made into a bank account maintained and operated in Australia.
As you will be aware ongoing payments of compensation are reviewed from time to time. In this regard periodic medical reviews may be required to satisfy this office that any condition experienced by you remains related to your employment. Similarly reasonable medical expenses will continue to be paid where this link to the employment can be demonstrated.
As you are currently domiciled in the Phillipines and may be there for some period (perhaps until August), I note your letter to Mr Dacey of 7 March 1994. In that letter you advised that your medical advisers considered that the trip would be beneficial to your condition and that the appropriate precautions ie referral letters and access to medication if necessary, had been arranged. This would indicate that appropriate arrangements have been temporarily made for you to access reasonable medical treatment in respect of your condition locally."
The proposition put by the applicant that he was not given proper advice, nor offered counselling, prior to his acceptance of the conditions upon which he severed his employment with the ATO in May 1994, is clearly false. The Tribunal sees no proper basis upon which the circumstances under which Mr. Emery left the ATO should be re-visited, nor any reason why re-calculations of his various entitlements under alternative scenarios should be undertaken.
As far as the applicant's proposition that the Tribunal should ignore the provisions of sections 19 and 21 of the SRC Act, and produce a formula which gives Mr. Emery more money to live on, it is such an absurd submission that the Tribunal declines to treat it seriously.
The decisions under review are affirmed.
I certify that the 7 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member; Dr. K.P. Kennedy, OBE, Member and
Miss A.M. Brennan, Member.Signed: .....................................................................................
R. Hayes, AssociateDate/s of Hearing 30 April 2001
Date of Decision 30 April 2001
Request for written reasons 8 June 2001
Applicant Mr. Emery, himself
Counsel for the Respondent Ms. L. Gabriel
Solicitor for the Respondent Phillips Fox
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