Lonergan and Repatriation Commission

[2004] AATA 659

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 659

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No T2003/129

GENERAL ADMINISTRATIVE DIVISION		)
Re		BARRY MAXWELL LONERGAN

Applicant

And COMCARE

Respondent

DECISION

Tribunal Miss Mary Imlach (Senior Member)

Date25 June 2004

PlaceHobart

Decision The decision under review is affirmed.

[Miss Mary Imlach]

Senior Member  

CATCHWORDS

Compensation - eligibility - whether incapacitated for work when retired

Safety, Rehabilitation and Compensation Act 1988 – ss.19, 21A

Hammerton and Comcare (1995) 21 AAR 204

Sullivan and Comcare (1998) AATA 907

REASONS FOR DECISION

25 June 2004   Miss Mary Imlach (Senior Member)         

1. The applicant is seeking weekly payments of compensation pursuant to S19 of the Safety, Rehabilitation and Compensation Act 1988 (“the Act”). A delegate of the respondent made a determination on 26 May 1998 deciding that the applicant was entitled to compensation. The incapacity benefit had been calculated pursuant to s21 of the Act taking into consideration the lump sum Government funded superannuation benefit which the applicant had received following his voluntary redundancy.

2.      On 29 May 2003 another delegate of the respondent affirmed the decision of 26 May 1998.  The applicant has applied to this Tribunal for a review of the decision of 29 May 2003.

3. The critical provisions are in s19 and s21A of the Act which read as follows:

“(1)  This section applies to an employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies.

(2)  Subject to this part, Comcare is liable to pay to the employee in respect of the injury, for each week during which the employee is incapacitated an amount of compensation worked out using the formula:

NEW – AE

Where:

AE is the greater of the following amounts:

(a) the amount per week (if any) that the employee is able to earn in suitable employment;

(b) the amount per week (if any) that the employee earns from any employment (including self-employment) that is undertaken by the employee during that week

NEW is the amount of the employee’s normal weekly earnings.”

Section 21A reads:

“(1)  This section applies to an employee who, being incapacitated for work as a result of an injury retires voluntarily, or is compulsorily retired, from his or her employment at any time after the commencement of this section and, as a result of the retirement, receives a lump sum benefit under a superannuation scheme.

(2)  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.

(3)  the amount of compensation is an amount calculated under the formula:

AC – (SA + SC

520

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)  in the case of an employee who was not a member of the Defence Force immediately before retirement – 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 the week if he or she were still contributing to the superannuation scheme.”

4.      The applicant was retrenched involuntarily from his work with Comcare on 12 September 1997.  Upon his retirement he received a lump sum benefit under his superannuation scheme.

5. The applicant contends that at the time of his retrenchment he was not incapacitated for work as a result of an anxiety disorder, and therefore he must be entitled from the time of his retirement to weekly payments calculated pursuant to Section 19.

6. It was submitted on behalf of the applicant that (i) there must be a causative link between his incapacity and his retirement before the provisions of s21A applied to his case (ii) that he must have been incapacitated for work at the date of his retirement.

7.      The applicant gave evidence at length in relation to his periods of incapacity for work due to the accident he suffered in the course of his duties in July 1993, the relevant compensable injury.  He stated that at the time of his retirement he was not incapacitated in any way and that he was carrying out his normal duties.

8.      The applicant accepted a redundancy in September 1997 and thereafter worked in his own business until April 1998 when he again became incapacitated by reason of the original compensable injury suffered by him in 1993.

9.      In support of his submissions the applicant referred the Tribunal to the decision in Hammerton and Comcare (1995) 21 AAR 204, in particular to paragraph 56 in which Deputy President Forgie rejected the submission that there needed to be a causative link between the incapacity and the retirement. It was argued on behalf of the applicant that it could be gleaned from paragraph 56 of the decision that Hammerton supported the alternative proposition put by the applicant that there had to be a temporal link between the incapacity and the retirement.

10.     The applicant referred the Tribunal also to the decisions in:

Sullivan and Comcare (1998) AATA 907

Cobern and Comcare (1998) AATA 221 and

Huckel and Comcare (1994) 35 ALD 251

to support his contention that there must be an incapacity at the time of retirement.

11. The respondent argued that the concept of incapacity as used in Sections 20, 21 and 21A must be understood within the context of the Act. He contended that the Act focuses on “incapacity” in terms of assessment of a person’s ability to work in suitable employment and the availability of suitable employment. An incapacity whenever occurring, which entitles a person to compensation after retirement is to be paid according to the relevant formula.

12. It was submitted on behalf of the respondent that Section 19 deals with an entitlement to compensation for an employee who is incapacitated for work at any time prior to retirement. The later sections 20, 21 and 21A do not come into play until such time as the retirement has occurred. They apply to people who retire and are entitled from time to time to compensation for each week after their retirement for which they are incapacitated. Sections 20, 21 and 21A apply only to a former employee for the purposes of a continuing entitlement but by virtue of his or her retirement has gained an entitlement to one or other forms of superannuation set out in those sections. The term “being incapacitated” is used in the sense of following retirement.

REASONS

14.      the Tribunal does not accept the applicant’s first submission that a causative link must be established between his incapacity and his retirement.  The Tribunal relies upon the decision in Hammerton and Comcare 1995 21 AAR 204 at paragraph 56 where Deputy President Forgie stated:

“Looking at the words of sub-sections 20 (1) and 21 (1) it seems to me that neither is providing that there must be a causative link between the incapacity for work as a result of an injury and retirement.  Rather they are providing only a temporal link between the incapacity and the retirement.  The retirement comes after the incapacity and may be either compulsory or voluntary retirement.  The only causative link in the two provisions is between the retirement and the receipt of a pension under a superannuation scheme.  The receipt of the pension must be received because of the retirement.  This interpretation of the words of subsections 20 (1) and 21 (1) is consistent with the words of Section 19 which sets out the benchmarks, as it were, for employees who are incapacitated as a result of an injury, but does not relate to those who are provided for by sub-sections 20 and 21”.

This was also accepted as the correct interpretation by the Tribunal in its decision in Sullivan and Comcare (1998) AATA 907 at paragraph 65.

15. The second submission put by the applicant was that he was not incapacitated at the date of his retirement, therefore, section 21 could not apply to his case. The Tribunal rejects the applicant’s second submission and accepts the concept of incapacity in the Act as put forward by the respondent. Incapacity for the purposes of Commonwealth legislation involves all sorts of additional doctrines and is more concerned with a person’s ability to work in suitable employment. If a person does not have an ability to work in suitable employment or suitable employment is not available, then their lack of ability to obtain suitable employment entitles them to ongoing compensation.

16. The Tribunal finds as a question of fact that had the applicant not gone into his own business at the time of his compulsory retirement it is unlikely that he would have been able to find suitable work and would have been deemed to be incapacitated for the purposes of the Act. The word incapacity in this legislation should be construed in its broad sense and not limited to the circumstance of the actual date of retirement. It is on this basis, we find that the present applicant was incapacitated within the meaning of s4 (a) of the Act. The applicant’s entitlement to compensation remains because of his inability to obtain suitable employment.

17. The Tribunal believes that the purpose of section 21A as enacted by the Commonwealth Parliament in 1992 was to ensure that people would be treated in the same manner despite the circumstances of the timing of their incapacity provided it existed at some time after their retirement.

18.      This purpose can be gleaned from the report in Hansard at P2749, attached to the second reading speech as part of the debate in Parliament, in which the Member for Barker observed:

“The Bill contains provisions which, apart from eliminating simultaneous payments for both compensation and superannuation also limits the amount of compensation payable under the scheme”.

DECISION

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 SENIOR MEMBER IMLACH

Signed:  K L Miller (Administrative Assistant)

Date/s of Hearing  5 April 2004
Date of Decision  25 June 2004
Counsel for the Applicant         Mr S Worsley
Solicitor for the Applicant          Worsley, Darcey and Associates
Counsel for the Respondent     Mr Brian Morgan
Solicitor for the Respondent     Ms N Richards (AGS)