LEEANNE KENNEDY and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2012] AATA 389

[2012] AATA 389  

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2011/4513
Re	LEEANNE KENNEDY
APPLICANT
And	SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT

DECISION

Tribunal	Dr P McDermott, RFD, Senior Member
Date	27 June 2012
Place	Brisbane

The Tribunal affirms the decision under review.

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Dr P McDermott, RFD, Senior Member

CATCHWORDS

SOCIAL SECURITY – Pensions, benefits and allowances – Disability support pension- Lump sum compensation payment – Preclusion period – No special circumstances – Decision under review affirmed

LEGISLATION

Social Security Act 1991 (Cth) ss 1170, 1184K

CASES

Department of Social Security v Banks (1990) 95 ALR 605

Secretary, Department of Family of Family and Community Services v Chamberlain [2002] FCA 67

Secretary, Department of Social Security v Cunneen (1997) 149 ALR 665

REASONS FOR DECISION

Dr P McDermott, RFD, Senior Member

27 June 2012

INTRODUCTION

1. Ms Leanne Kennedy (the applicant) has received a settlement for a workplace injury. She seeks the review of a decision of Centrelink to apply a lump sum compensation preclusion period in respect of that settlement. I have to determine whether Centrelink reached the correct decision in applying a lump sum compensation preclusion period in these circumstances.

   BACKGROUND

2. On 10 October 2008, the applicant was injured when she attempted to open a roll-a-door at her workplace. She received weekly compensation payments for the period 20 August 2009 to 23 December 2009. On 30 August 2010, she settled her compensation claim for a lump sum of $786,199.97, from which she received some $586,777.00. From the proceeds of the settlement she has purchased a home and has invested a substantial sum of money.[1]

   [1] Exhibit B. In these reasons, which are a matter of public record, it is not necessary for me to specify what sum of money has been invested.

   PRIOR DECISIONS

3. On 13 September 2010, Centrelink decided to apply a compensation lump sum preclusion period for the period 24 December 2009 to 10 July 2019. On 21 January 2011, this decision was reviewed and remained unchanged. On 18 May 2011, an Authorised Review Officer (ARO) affirmed the decision.

4. On 8 August 2011, the applicant appealed to the Social Security Appeals Tribunal (SSAT) which, on 8 September 2011, decided to affirm the decision of Centrelink.

5. On 20 October 2011, the applicant made an application to this Tribunal for further review of the decision.

   ISSUES FOR DETERMINATION

6. One issue that I have to determine is whether the lump sum compensation preclusion period has been correctly calculated. The remaining issue for me to determine is whether there are any “special circumstances” within the meaning of s 1184K of the Social Security Act 1991 (Cth). If I find that special circumstances are present then some or all of the compensation payment could be disregarded to reduce the preclusion period.

   CONSIDERATION

7. The applicant claims that the funds she has received will not be sufficient to meet her medical and living expenses until 2019. I accept that the applicant has a significant back injury which will require the use of aids. She has provided an estimate of her future needs in the form of a detailed schedule of expected requirements and expenses:[2] however, at the hearing the applicant agreed that she was not expending funds on some of those items in the schedule. I appreciate that the applicant will incur significant expenditure for her medical needs in the future. However, I questioned the applicant as to whether she followed the suggestion of the ARO that she apply for a low income Health Care Card or other assistance through one of the Medicare assistance schemes which would provide her with assistance.[3]At the hearing she stated that she had not applied for such assistance. In these circumstances it would, in my view, be premature to grant her application.

   [2] Exhibit A, T-document 11, folios 57 - 65.

   [3] Exhibit A, T-document 15, folio 77.

8. The solicitors who acted for the applicant in her settlement with WorkCover Queensland have confirmed that a component for economic loss was included in the settlement.[4] The applicant does not dispute that her claim included a component for economic loss but asserts that a larger part of her settlement relates to medical costs, not economic loss. However, I pointed out to the applicant that there is no evidence before me of what proportion of the settlement represented the economic loss of the applicant. In cases such as this, there is no basis for me not to apply the formula in s 1170 of the Act, which is used to calculate the preclusion period. Indeed, the Federal Court of Australia has confirmed that a lump sum payment cannot be divided into constituent parts.[5] In any event, it would be inappropriate to undertake such an exercise when there is no evidence before me of what part of her settlement relates only to economic loss.

   [4] Exhibit A, T-document 11, folio 66.

   [5] Department of Social Security v Banks (1990) 95 ALR 605; Secretary, Department of Social Security v Cunneen (1997) 149 ALR 665.

9. The applicant does not take issue with the calculation of the preclusion period. I have reviewed the calculation of the preclusion period by the ARO[6] and am satisfied that the preclusion period has been correctly calculated as being a 498 week period.

   [6] Exhibit A, T-document 15, folio 76.

10. Having reviewed the material before me I do not find that there are any “special circumstances”, under s 1184K of the Act, present in this case. In Secretary, Department of Family and Community Services v Chamberlain,[7] Kiefel J, at [19], indicated that there must be circumstances “apart from the usual or ordinary case”. The applicant raised an issue concerning her support of a grandchild. However, she does not have parental-like responsibilities for that grandchild. She also raised the issue of the fact that she will face significant medical expenses in the future. But many recipients of compensation settlements are in a similar position. The applicant has not raised any other circumstances which to my mind would warrant the exercise of the discretion under s 1184K of the Act. There are no other circumstances which could reasonably justify a reduction in the preclusion period. The fact that the applicant owns her own home and still has significant funds is a factor which would incline me against the exercise of the discretion even if special circumstances were present under s 1184K of the Act.

    [7] [2002] FCA 67.

11. The advocate who appeared for the Secretary has quite properly advised the applicant that she is at liberty at any time to make an application for the shortening of the preclusion period. While the applicant is managing her funds prudently, she has not availed herself of all possible supports in the community. I would recommend that the applicant be referred to a local social work team so that she is aware of what assistance is available in the community, particularly in regard to assistance with her medical expenses.

    DECISION

12. I affirm the decision under review.

13.       I certify that the preceding 12 (twelve) paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member.

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Associate

Dated 27 June 2012

Date(s) of hearing	13 June 2012
Applicant	In person
Advocate for the Respondent	Simon Letch