Lee and Secretary, Dept Families Housing Community Services & Indigenous Affairs

[2010] AATA 597

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 597

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/3675

GENERAL ADMINISTRATIVE  DIVISION		)
Re		Alan Lee

Applicant

And Secretary, Dept Families Housing Community Services & Indigenous Affairs

Respondent

DECISION

Tribunal M D Allen, Senior Member

Date12 August 2010

PlaceSydney

Decision The decision under review is AFFIRMED.

.................[sgd]......................

M D Allen, Senior Member  

CATCHWORDS

SOCIAL SECURITY – Preclusion period properly imposed.  Nothing so unusual in Applicant’s case so as to justify modification of the period imposed.  Workers Compensation claim included a claim for lost earnings. Decision under review affirmed.

LEGISLATION

Social Security Act 1991, sections 17, 1169, 1171, 1184K

Workers Compensation Act 1987 (NSW) sections 66, 67, 151E, 151F, 151G.

CASES

Secretary, Department of Social Services v Ellis (1996-7) 24 AAR 535

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

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

REASONS FOR DECISION

2 August 2010 M D Allen, Senior Member            

1.      By application made 7 August 2009, the Applicant sought review of a decision by the Social Security Appeals Tribunal (“SSAT”) affirming a prior determination that imposed a ban (called a “preclusion period”) upon the Applicant receiving social security benefits in the period 6 December 2007 to 28 September 2011.

2. The facts giving rise to the preclusion period are that the Applicant, on 6 December 2007, settled a claim pursuant to Division 3 of the Workers Compensation Act 1987 (NSW) (“WCA”) in the sum of $245,000.00. To that sum was added a previous payment to the Applicant of $52,500.00 paid to the Application pursuant to sections 66 and 67, WCA.

3.      Thus the total sum used to calculate the preclusion period was $297,500.00.  The correctness of the calculations which led to the preclusion period expiring on 28 September 2011 was not challenged by the Applicant in these proceedings.

4. Subsection 1169(1) of the Social Security Act 1991 (“SSA”) states:

(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.

Whereas subsection 17(1) of the SSA provides that a disability support pension is a compensation affected payment. Subsection 17(2) SSA defines “compensation” and includes a payment for damages, or a payment in settlement of claim for damages, that is made (either wholly or in part) in respect of lost earnings or lost earning capacity.

5.      In these proceedings the Applicant challenged the finding by the Respondent that the payments to him were made in respect of lost earnings or lost earning capacity.

6. The deed of release entered into by the Applicant leading to the payment of $245,000.00 is at document T9 page 31 of the documents prepared for the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“AAT”).

7.      The parties to the said Deed were the Applicant, his employer and GIO General Limited as agent for the Workers Compensation Nominal Insurer.

8.      Clauses C & D of the said Deed state:

“C.The Releasor alleges personal injuries (“the said injuries”) arising out of or in the course of the employment of the Releasor by the Employer as set out in the annexed Schedule and alleges to have been incapacitated and otherwise suffered loss and damage as a result of the said injuries.

D.The Releasor alleges that the said injuries were caused by the negligence of the Employer and/or its servants or agents or as a result of a breach of statutory duty by the Employer and/or its servants or agents.”

9. Division 3 of the WCA contains the following sections, namely:

“151E Application-modified common law damages

(1) This Division applies to an award of damages in respect of:

(a) an injury to a worker, or

(b) the death of a worker resulting from or caused by an injury,

being an injury caused by the negligence or other tort of the   worker’semployer.

(2) This Division does not apply to an award of damages to which Part 6 of the Motor Accidents Act1988 or Chapter 5 of the Motor Accidents Compensation Act1999 applies.

Note: However, this Division will generally apply in the case of an injury to a coal miner if the injury is caused by an off-road motor accident and there is no motor accident insurer on risk (see section 3D of the Motor Accidents Act 1988 and section 3B of the Motor Accidents Compensation Act1999 ).

(3) This Division applies to an award of damages in respect of an injury caused by the negligence or other tort of the worker’s employer even though the damages are recovered in an action for breach of contract or in any other action.

(4) Subsection (3) is enacted for the avoidance of doubt and has effect in respect of actions brought before as well as after the commencement of that subsection.

151F General regulation of court awards

A court may not award damages to a person contrary to this Division.

151G Only damages for past and future loss of earnings may be awarded

(1) The only damages that may be awarded are:

(a) damages for past economic loss due to loss of earnings, and
(b) damages for future economic loss due to the deprivation or impairment of earning capacity.

(2) This section does not apply to an award of damages in an action under the Compensation to Relatives Act 1897”.

10.     Given the wording of the Deed of Release entered into by the Applicant on 6 December 2007, it is clear that the sum of $245,000.00 was paid with respect to loss of earnings.

11. The payment of $52,500.00 on 28 June 2007 to the Applicant was added to the sum of $245,000.00 for preclusion period purposes as subsection 1171(1) SSA states:

(1)  If:

(a)  a person receives 2 or more lump sum payments in relation to the same event that gave rise to an entitlement of the person to compensation (the multiple payments ); and

(b)  at least one of the multiple payments is made wholly or partly in respect of lost earnings or lost capacity to earn;

the following paragraphs have effect for the purposes of this Act and the Administration Act:

(c)  the person is taken to have received one lump sum compensation payment (the single payment ) of an amount equal to the sum of the multiple payments;

(d)  the single payment is taken to have been received by the person:

(i)  on the day on which he or she received the last of the multiple payments; or

(ii)  if the multiple payments were all received on the same day, on that day.”

12. The only remaining issue is whether this Tribunal standing in the shoes of the decision maker should exercise its discretion to disregard some of the compensation payments made. Subsection 1184K(1) SSA states:

“(1)  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.”

13.     The Applicant was injured at work on 18 March 2002.  Following that injury up until 6 December 2007 he was paid weekly payments of workers compensation but as he pointed out to the SSAT these payments were less than he had been receiving as wages when in employment.

14.     The Applicant did not receive the entire sum of $245,000.00.  His solicitor’s bill was approximately $29,147.50.  The SSAT found that of the remaining monies $150,000.00 was paid towards the purchase of a townhouse and a second hand motor vehicle was bought for $19,900.00.  Other monies were expended on necessities such as household furnishings, car insurance and repairs, plus stamp duty on the purchase of the property.

15.     At document T13 the Applicant listed his assets and outgoings.  Currently he is unable to work and is qualified for Disability Support Pension (“DSP”) except for the preclusion period.  Currently the Applicant’s wife is working, earning $1,201.30 net per fortnight.  A major expense is the mortgage on the townhouse which is $408.00 per fortnight.

16.     The Applicant’s wife also receives a Carer Allowance of $105.00 per fortnight.  The SSAT calculated the Applicant’s assets and liabilities and stated:

“In any event the situation Mr Lee is now in is no doubt difficult.  He lives with chronic back pain, is significantly limited in his daily activities, both through the multiple effects of his medical condition, and through his limited financial resources.  He feels angry and betrayed by the ‘system’.  He feels he is financially dependent on his wife and her income, which causes him distress...”

The SSAT went on to point out that the Applicant and his wife were currently in a better financial position than if they were both dependent on social security benefits such as DSP, carer payment and carer allowance.

17.     In Secretary, Department of Social Services v Ellis (1996-7) 24 AAR 535, Carr J said at page 539:

“In Beadle the Director-General of Social Security (1985) 7 ALD 670, a Full Court of this court had to consider whether the Administrative Appeals Tribunal had erred in its interpretation of s 102(1)(a) A Act which provided for an extension of time in which to claim a family allowance ‘… in special circumstances…’. At 673-674 the Full Court said:

‘Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate… It would depend upon the circumstances of the particular case whether these constituted special circumstances.  We do not think it is possible to lay down precise limits or precise rules.  The matter is one for the Director-General bearing in mind the purpose for which the power is given.  The phrase ‘special circumstance’, although lacking precision, is sufficiently understood in our view not to require judicial gloss’.”

In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J, after referring to Beadle said:

‘…For present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case.  That was, I consider, the only inquiry to be undertaken in this case.  It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.  The inquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates is applied.’

Later (on the same page) Keifel J expressly approved the Tribunal’s reasoning in holding that Mr Groth’s circumstances were not out of the ordinary when Pt 3.14 of the Act (in which SS1168 and 1184 are to be found) had the same effect on him as it did on other persons qualified to receive a disability support pension.  Her Honour added:

‘It [the Tribunal] went on to find that his circumstances and those of his family, although difficult, did not constitute hardship and they could not be said to be different from other pension recipients’.”

18.     I agree with the SSAT that the Applicant is in straightened financial circumstances.  However, as pointed out in Groth supra, so are many social security recipients.  In the Applicant’s circumstances I see nothing that would take his case out of the usual or illustrate that somehow it would be unfair or unjust to continue to impose the preclusion period in its entirety.

19.     The decision under review is AFFIRMED.

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of M D Allen, Senior Member.

Signed:         ....................[sgd]........................................
  K. Lynch, Associate

Date of Hearing        02 August 2010
Date of Decision        12 August 2010
Representative for the Applicant    Mr Lee (self) 
Solicitor for the Respondent          Centrelink Advocacy Services