Findlay and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2011] AATA 933

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 933

ADMINISTRATIVE APPEALSTRIBUNAL       )

)          No 2011/3423

GENERAL ADMINISTRATIVE DIVISION		)
Re		ELIZABETH FINDLAY

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS  

Respondent

DECISION

Tribunal Dr P McDermott, RFD, Senior Member

Date23 December 2011   

PlaceBrisbane

Decision The Tribunal affirms the decision under review.  

.................[Sgd].............................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Parenting payment – Preclusion period – Receipt by applicant of lump sum compensation payment – Preclusion period correctly calculated – No special circumstances allowing compensation payment to be disregarded – Decision under review affirmed

Social Security Act 1991 (Cth) ss 17, 1169, 1170, 1184, 1184A

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

23 December 2011    Dr P McDermott, RFD, Senior Member  

INTRODUCTION

1.      I have to decide whether Ms Elizabeth Findlay (the applicant) is precluded from receiving parenting payment for a period because of her receipt of compensation for an injury.

BACKGROUND

2.      The applicant was in receipt of parenting payment single from 9 May 2008 to 9 October 2008. She is now in receipt of disability support pension.

3.      On 1 January 2008 the applicant was injured during the Woodford Folk Festival. She was later injured in a car accident on 9 May 2008.

4.      On 17 December 2008 a letter was sent to the applicant requiring her to advise Centrelink within 7 days of receiving any compensation payment. Letters were also sent to Schultz Toomey O'Brien Lawyers and Allianz Australia requiring them to advise Centrelink if a compensation payment was made. This correspondence gave the parties notice of the interest of the Commonwealth in any settlement.

5.      On 22 November 2010 Centrelink received a letter from Schultz Toomey O'Brien Lawyers confirming a settlement amount of $32 500 plus $2500 for costs.

PRIOR DECISIONS

6.      On 25 November 2010 Centrelink advised Schultz Toomey O'Brien Lawyers to confirm a compensation charge of $6144.13, being the amount Centrelink calculated the applicant was required to repay from her lump sum settlement, with a preclusion period from 9 May 2008 to 9 October 2008 (the relevant period). A similar letter was sent to Allianz Australia.

7.      On 25 November 2010 the applicant was notified that a request had been made to Allianz Australia for payment of $6144.13.

8.      On 24 January 2011 the applicant sought review of Centrelink’s decision by an authorised review officer (ARO), who affirmed the decision under review on 14 April 2011.

9.      On 14 June 2011 the applicant sought review of the decision by the Social Security Appeals Tribunal (SSAT). The SSAT affirmed the decision on 13 July 2011.

10.     On 23 August 2011 the applicant made an application to this Tribunal for review of the decision.

ISSUES

11.     The issues I must decide are:

(a)Whether a lump sum preclusion period applies in respect of the applicant’s parenting payment for the relevant period; and

(b)If so, whether the preclusion period has been correctly calculated; and

(c)Whether there are any special circumstances which would allow the discretion to disregard the lump sum payment to be exercised.

CONSIDERATION

12.     This relevant legislation in this application is the Social Security Act 1991 (Cth) (the Act).

13. During the relevant time the applicant was in receipt of parenting payment. This is a “compensation affected payment” under s 17(1) of the Act.

14. “Compensation” is defined in s 17(2) of the Act. It states:

(2)       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.

15.     The evidence of the applicant and reports to her solicitor confirm that prior to the accident she was working as a swimming coach for up to 30 hours a week, and after her injury she was unable to work for a period.

16. There has not yet been any settlement of the accident at the Woodford Folk Festival. In evidence is a release, discharge and indemnity form relating to personal injury which refers to the accident date of 9 May 2008, the date of the car accident. The evidence of the applicant is that although she was given this form to sign she did not “fully understand its implications”. This may be so, but correspondence between Centrelink and Schultz Toomey O'Brien Lawyers and Allianz Australia confirms that the settlement was for lost earnings or capacity to earn. The release, discharge and indemnity form provides that the payment is made in “full settlement” of her claim. I am satisfied that this payment of $35 600, which included a component for lost earnings or capacity to earn resulting from a personal injury, is “compensation” as defined by s 17(2) of the Act.

17. Under s 17(3) of the Act, the compensation part of a lump sum compensation payment is calculated to be 50% of the payment where it is received in settlement of a claim that relates to an injury.[1] The applicant received a payment of $35 600 for the injury that she sustained in the car accident. Therefore, the compensation part of that lump sum compensation payment is deemed to be $17 800. Under s 1169 of the Act, if a person receives a lump sum compensation payment (which includes parenting payment) and they receive a lump sum compensation payment, “the compensation affected payment is not payable to the person in relation to any days in the lump sum preclusion period”.

[1] Social Security Act 1991 (Cth) s 17(3)(a)(i).

18. The length of the preclusion period is calculated in accordance with s 1170(4) as being the compensation part of the lump sum divided by the income cut-out amount. The applicable income cut-out amount at the time was $789.10. When the compensation part of the lump sum ($17 800) is divided by the income cut-out amount of $789.10, the number worked out is 22.56. This number worked out represents a preclusion period of 22 weeks; where the number of weeks is not a whole number it is to be rounded down to the nearest whole number, in accordance with s 1170(5) of the Act.

19. Under s 1170(3) of the Act, the preclusion period is taken to begin on the day on which the loss of earnings or loss of capacity to earn began. In this case, it began on 9 May 2008, the date of the injury.

20. I am satisfied that the preclusion period has been properly calculated as being a period of 22 weeks, commencing on 9 May 2008. Under s 1169(1) of the Act, the applicant was not entitled to receive a compensation affected payment (which in this case is parenting payment) on any day or days in the lump sum preclusion period.

21. In the period of 9 May 2008 to 9 October 2008, the applicant received parenting payment. The amount of this payment, being $6144.13, is recoverable by the Commonwealth under ss 1184 and 1184A of the Act.

22.     I have considered whether there are special circumstances which warrant the preclusion period being shortened. Essentially the applicant states that she requires an MRI and a consultation with a private specialist, which she contends will cost $6000. In these reasons, which are a matter of public record, there is no need to describe the nature of this procedure, which is investigatory in nature. It is sufficient to say that the prognosis of the applicant has been difficult. There is a suggestion that there may be some neurological impairment but there is no evidence of such impairment. There is no evidence that this investigation will be beneficial to the applicant and would result in an improvement of her condition. The applicant has not sought this treatment in the public sector; this is surprising in view of her contention that the procedure is necessary.

23.     In relation to the meaning of ‘special circumstances’, it has been said that the circumstances must be markedly different from the usual run of cases, and that special circumstances “looks to circumstances that are unusual, uncommon or exceptional” (see Re Beadle and Director-General of Social Security (1984) 6 ALD 1).[2] I am not satisfied that the health conditions of the applicant are special circumstances. Even if there were special circumstances present in this case, it is important for me to bear in mind that the applicant was in possession of sufficient funds at a time when she was aware of the availability of the procedure. The fact that the applicant has spent some of these funds on what may be regarded as discretionary expenditure would incline me not to exercise the discretion to shorten the preclusion period.

[2] See also Groth v Secretary, Department of Social Security (1995) 40 ALD 541 per Kiefel J.

DECISION

24.     I affirm the decision under review.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member

Signed: .............[Sgd]...............................................................
  Research Associate

Date/s of Hearing  11 November 2011
Date of Decision  23 December 2011
The applicant was self-represented    

Counsel for the Respondent          Jasmine Forsyth, departmental advocate