Magrath; Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and
[2008] AATA 380
•12 May 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 380
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4173
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS Applicant
And
ROBERT JOHN MAGRATH
Respondent
DECISION
Tribunal Ms A F Cunningham (Senior Member) Date12 May 2008
PlaceHobart
Decision The Tribunal sets aside the decision of the Social Security Appeals Tribunal made on 27 July 2007 and substitutes therefore a decision that the respondent is subject to a compensation preclusion period commencing 9 July 2007 and ceasing 22 January 2010, which means that the respondent had no entitlement to DSP on 17 April 2007.
[Sgd A F Cunningham]
Senior Member
CATCHWORDS
SOCIAL SECURITY - disability support pension - preclusion period - whether medical rehabilitation and other expenses constitute part of the lump sum compensation payment - whether special circumstances exist to deem part of the payment as not having been made
Social Security Act 1991 (Commonwealth), sections 17(2), 17(3), 1164, 1168, 1169, 1170, 1171, 1184
Workers Rehabilitation and Compensation Act (1988) (Tas), section 75
Social Security and Family Assistance Law (Second Edition)
Re Broad & Secretary, Department of Family & Community Services (2007) 77 ALD 523
Re Navrital and Secretary, Department of Family & Community Services (2002) 69 ALD 777
Secretary, Department of Social Security v Banks (1990) 23 FCR 416
Re Beadle and Director-General, Department of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security 1985 60 ALR 225
Re Maloney and Secretary, Department of Family and Community Services [2002] AATA 320
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67
Re Groth and Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Employment and Workplace Relations and Savage (2007) AATA 1477
REASONS FOR DECISION
12 May 2008 Ms A F Cunningham (Senior Member) 1. The applicant has appealed a decision made by the Social Security Appeals Tribunal (SSAT) on 27 July 2007 which set aside Centrelink's decision to reject the respondent's claim for disability support pension (DSP) due to a compensation preclusion period applied from 9 July 2006 to 22 January 2010. The SSAT remitted the matter to Centrelink for reconsideration in accordance with a direction that the compensation preclusion period be calculated on the basis of a lump sum settlement amount of $171,050.00.
2. The respondent, Robert Magrath, sustained neck and shoulder injuries during the course of his employment with National Foods Milk Ltd Tasmania in or about 1999/2000. The injuries affected Mr Magrath's ability to perform his employment duties and he received weekly workers compensation payments between 9 December 2001 and 10 July 2006 totalling $102,897.24.
3. By agreement dated 28 June 2006 Mr Magrath's compensation claim was settled for a lump sum amount of $171,050.00. The agreement further provided that Mr Magrath's employment be terminated by way of resignation effective 10 July 2006. In addition a total sum of $87,377.25 was paid on account of Mr Magrath's medical and other costs during the period December 2001 until June 2006. These costs were paid directly to the service providers.
4. Having expended the total amount of the lump sum workers compensation payment, Mr Magrath lodged a claim for DSP which was rejected by Centrelink on 23 April 2007 on the basis of the application of a compensation preclusion period between 29 June 2006 and 4 November 2009. This period was subsequently varied to 22 January 2010 on the basis of additional medical costs which had not been included in Centrelink's calculation. Centrelink's original calculation of the preclusion period was based on an entitlement to a lump sum compensation payment of $361,324.49. This included the lump sum payment pursuant to the settlement agreement of $171,050.00, the periodic weekly payments of $102,897.24 and the amount paid for medical and other costs in the sum of $87,377.25. The authorised review officer determined that $102,897.24 should be deducted from the total figure as it represented the weekly payments. Further that the preclusion period should be reassessed on the basis of a figure of $258,427.25 which comprised the lump sum compensation payment and the medical and other costs.
5. The SSAT considered that the medical and other benefits totalling $87,377.25 did not form part of Mr Magrath's lump sum compensation payment but rather constituted periodic payments and should be deducted from the lump sum payment upon which the preclusion period is calculated.
6. Accordingly the issues for this Tribunal to determine are whether the medical and other costs in the form of rehabilitation, hospital and pharmaceutical costs constitute compensation within the meaning of the Act. Further, whether Mr Magrath's circumstances are sufficiently special to warrant a reduction of the compensation preclusion period.
Legislation
7. The relevant legislation is the Social Security Act 1991 (Commonwealth) (the Act). The DSP claimed by Mr Magrath is included under section 17 of the Act as a compensation affected payment. The provisions relating to the impact of compensation payments are contained in Part 3.14 of the Act. Section 1168 states:
"A provision of this Division that refers to a person receiving or claiming a compensation affected payment and receiving a lump sum compensation payment has effect regardless of whether the lump sum compensation payment was received before or after the person received or claimed the compensation affected payment".
8. Section 1169 provides:
"(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.
(2) In this section:
lump sum compensation payment does not include a lump sum payment:
(a) to which section 1164 applies; or
(b) that relates only to arrears of periodic compensation payments".
9. Section 1164 provides:
"If:
(a) a person was entitled to periodic compensation payments under a law of a State or Territory; and
(b) the person’s entitlement to the periodic payments was converted under the law of the State or Territory into an entitlement to a lump sum; and
(c) the lump sum was calculated by reference to a period;
this Part applies to the person as if:
(d) the person had not received:
(i) the lump sum; or
(ii) if the lump sum was to be paid in instalments—any of the instalments; and
(e) the person had received in each fortnight during the period a periodic compensation payment equal to:
where:
lump sum amount is the amount of the lump sum referred to in paragraph (b);
number of fortnights in the period is the number of whole fortnights in the period referred to in paragraph (c)".
10. There was no evidence before the Tribunal that payments made to Mr Magrath with respect to medical and other expenses were converted into an entitlement to a lump sum as provided for in this section.
11. Sub-section 17(2) defines compensation as follows:
"(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".
Consideration
12. Mr Magrath's compensation settlement payment was made pursuant to the Workers Rehabilitation and Compensation Act (1988) (Tas) which relevantly provides at section 75:
"1) Where an employer of a worker is, pursuant to section 25, liable to pay compensation in accordance with this Act, the employer is, subject to this section, liable to pay as compensation to the worker or his dependants –
a) the reasonable expenses necessarily incurred by the worker as a result of is injury for medical services, hospital services, nursing services, constant attendance services, rehabilitation services, and ambulance services"
13. Mr Bartl submitted on behalf of Mr Magrath that it is not appropriate to class the medical costs as a lump sum payment received by Mr Magrath for whilst he received the rehabilitation and medical treatment, he did not benefit financially from the treatment. Mr Bartl contended that the medical costs are more appropriately categorised as periodic payments which are specifically excluded from the formula for deeming the compensation part of the lump sum payment. The mere fact that such statutory benefits are considered compensation under section 75 of the Tas Workers Rehabilitation and Compensation Act 1988, does not imply that they should be included as a lump sum settlement figure. The reason for their inclusion is that a worker should not be responsible for medical costs arising as a result of the injury. Mr Bartl argued that periodic payments are specifically excluded from the formula for deeming the compensation part of a lump payment. The relevant section is 1170 and in particular sub-section 1 which states:
"(1) Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:
(a) begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5)".
14. The definition of compensation in sub-section 17(2) refers to a payment either in the form of a lump sum or in the form of a series of periodic payments but goes on to state that they be made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury. Mr Bartl submitted that the payment of medical expenses made to the service providers could not be classed as having been made in respect of lost earnings or lost capacity to earn. They were paid directly to the providers over a period of four years and eight months as they were incurred. The total number of these payments was in the order of 395. Mr Bartl argued that if the medical treatment costs are included in the lump sum compensation amount, Mr Magrath would effectively be penalised and set back further due to the workplace injury he suffered. Mr Bart contended that:
"it is unfair and unjust for Robert Magrath to be penalised and precluded from a pension due to the rehabilitation process that all injuries must take before settlement. Further that the concept of double dipping could not be applied to the circumstances of Mr Magrath's case".
15. The compensation part of a lump sum compensation payment is provided for in sub-section 17(3) which reads as follows:
"(3) Subject to subsection (4), for the purposes of this Act, the compensation part of a lump sum compensation payment is:
(a) 50% of the payment if the following circumstances apply:
(i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(ab) 50% of the payment if the following circumstances apply:
(i) the payment represents that part of a person’s entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and
(ii) the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and
(iii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(b) if those circumstances do not apply—so much of the payment as is, in the Secretary’s opinion, in respect of lost earnings or lost capacity to earn, or both".
16. Similar issues were considered by the Tribunal in Re Broad & Secretary, Department of Family & Community Services (2007) 77 ALD 523, where the Tribunal concluded that although the payments for hospital, medical and rehabilitation expenses were not actually for lost earnings or incapacity to earn, they were deemed as having been received for that purpose by virtue of the provisions of section 1171(1). In Broad's case the applicant had contended that an amount of $50,419.45 which related to payments for hospital, medical, rehabilitation and disability expenses should not have been taken into account because it had not been included in the amount consented to in his settlement agreement. At paragraph 19 the Tribunal said:
"The purpose behind the introduction of the application of a formula to lump sum payments made in the settlement of a claim, as in this case, for common law damages, has been frequently stated and, in Department of Social Security v Banks (1990) 23 FCR 416 ; 20 ALD 19 ; 95 ALR 605, von Doussa J referred to the abuses of earlier compensation recovery provisions by manipulation of settlements to obscure the economic loss component in the compensation payment. The effect of the provisions of the Act outlined above is to deem 50% of a lump sum payment to be the compensation part and to have been made in respect of lost earnings or capacity to earn".
17. The Tribunal in that case noted that section 17(2) requires that a payment be made wholly or partly in respect of lost earnings or lost capacity to earn. The Tribunal then referred to the decision in Re Navrital and Secretary, Department of Family & Community Services (2002) 69 ALD 777, where the Tribunal concluded that payments for hospital, medical and rehabilitation expenses are better characterised as being a discharge of the statutory obligations of work cover rather than lost earnings or lost capacity to earn. The Tribunal concluded that this does not mean however, that they fall outside the ambit of consideration when calculating a preclusion period. The Tribunal in Navrital's case was concerned with the construction of the since repealed section 17(2)(b) which was the former equivalent of section 1171(1). The section refers to multiple payments in relation to the same event. Sub-section (b) requires that at least one of the multiple payments be made wholly or partly in respect of lost earnings or lost capacity to earn thereby implying, that the other payments for the same event, need not have been paid wholly or partly in respect of lost earnings or lost capacity to earn.
18. Member Kenny in Broad's case referring to the Re Navrital decision said at paragraph 24:
"Despite the difference in the wording between the former provision and s 1171(1) of the Act, I am satisfied that the effect of the provisions is the same: see the Explanatory Memorandum to the Family and Community Services Legislation (Simplification and Other Measures) Bill 2001. Once the various payments are taken to be a single lump sum compensation payment, it is a single sum to which the formula in s 1170(4) of the Act must be applied. Therefore, even though the payments for hospital, medical, and rehabilitation expenses were not actually for the purpose relating to lost earnings or capacity to earn, they will be deemed to have been received for that purpose by s 1171(1) of the Act".
19. The SSAT found that the payment of medical expenses fell into the category of periodic payments rather than a lump sum payment and therefore outside the consideration of the provisions of section 1170 for the lump sum preclusion period. The references in the Act to periodic payments are to periodic compensation payments generally paid pursuant to a State or Territory law during the person's entitlement to workers compensation and prior to any lump sum settlement if awarded. The fact that Mr Magrath's medical and other expenses were paid on a periodic basis and not in the form of one lump sum does not exclude their consideration under section 1171 which provides that separate payments can be deemed a lump sum payment.
20. The Tribunal rejects Mr Bartl's submission that by including the amounts paid on account of medical and other expenses and treating them as part of the lump sum compensation payment, Mr Magrath is penalised. The effect of section 17(3) is that only one half of the lump sum compensation payment is taken into account in determining the compensation part for the purposes of ascertaining the preclusion period. The reason being as identified in the Second Reading Speech, is to prevent the former mischief whereby lump sum settlements were manipulated to obscure the economic loss component.
21. Von Doussa J in Secretary, Department of Social Security v Banks (1990) 23 FCR 416 referred to the former section 152(2)(c) noting that the words "lump sum" are not defined. He referred to the Macquarie Dictionary definition of lump sum as a sum "including a number of items taken together or in the lump". As he noted, the words used in Pt XVII of the Act distinguish between "lump sum payments by way of compensation" and "periodical payments by way of compensation". His Honour found:
""a lump sum" payment is simply one which includes a number of items. Where a payment by way of compensation consists of the aggregate of several amounts which could have been paid separately or at different times the payment is one of a lump sum. A payment the total of which is arrived at by adding amounts for different heads of loss would also be a lump sum payment". (page 422)
22. His Honour stated that:
"A "payment by way of compensation" as defined in section 152(2) (a) includes periodic payments". (page 423)
and concluded that the term "lump sum payment" encompasses the total amount paid in settlement of the claim.
23. The findings of His Honour in the Banks' decision are applicable to the current facts where the amounts used by Centrelink to calculate the lump sum preclusion period (including the medical and the expenses paid to the service providers) were all paid in settlement of Mr Magrath's compensation claim arising out of his injury. The amount referred to in the settlement agreement, namely $171,050.00 was paid in full and final settlement of all claims arising out of the injury sustained to Mr Magrath's cervical spine and left shoulder and did not distinguish between past or future economic loss, costs, future medical or other expenses or pain and suffering. The effect of section 17(3) is to provide an arbitrary measure whereby 50% of the compensation payments received are deemed lost earnings and includes a lost future capacity to earn. It was Mr Magrath's evidence that prior to the settlement of his workers compensation claim he had been informed by his doctors that he would never be able to work again. He understood that any future source of income would be from his wife's earnings. He was also aware at the time of the settlement that his wife had a series of medical conditions, although he said that he was not aware of the particulars of the conditions.
24. Despite this knowledge Mr Magrath chose to fully expend his workers compensation monies as follows: the purchase of a home for $107,000.00, Mazda car $32,453.00, Toyota Ute $24,150.00, heat pump $2,700.00, washing machine $725.00.
25. For the above reasons and in accordance with the authorities referred to the Tribunal concludes that Mr Magrath's medical and other expenses were correctly deemed by Centrelink as part of the lump sum payment pursuant to the provisions of section 1171.
26. In the event that the Tribunal agreed that Mr Magrath's medical and other expenses in the sum of $87,377.25 are to be considered as part of the deemed lump sum payment with respect to the calculation of the lump sum preclusion period, it was conceded that the preclusion period had been correctly calculated by Centrelink.
Special Circumstances
27. The next issue that arises is whether because of the special circumstances of Mr Magrath's case, the whole of part of the compensation payment should be treated as not having been made pursuant to the provisions of 1184K of the Act which reads as follows:
"1184K Secretary may disregard some payments
(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.
(2) If:
(a) a person or a person’s partner receives or claims a compensation affected payment; and
(b) the person receives compensation; and
(c) the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person’s or the person’s partner’s receipt of, or claim for, the compensation affected payment;
the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsection (1)".
28. The term "special circumstances" was considered by the Court in Re Beadle and Director General, Department of Social Security (1984) 6 ALD 1 where Toohey J said at page 3 that the circumstances in question must be:
"unusual, uncommon or exceptional".
The term was further considered by the Full Court on appeal which held that:
"... special circumstances in this context must include events which would render the (strict application of the rule in question) unfair or inappropriate".
(Beadle v Director-General of Social Security 1985 60 ALR 225 at 228).
29. It was submitted by Mr Bartl that financial hardship can be a relevant consideration in the overall circumstances of a particular case. The Tribunal has held however that financial hardship must go beyond "straitened circumstances" and be truly exceptional (see Re Krzywak and SDSS (1988) 15 ALD 690, Re SDSS and Winterbotham [1990] AATA 6499, Re SDSS and Kirwan (1990) 22 ALD 280, Re Martin and SDSS [1990] AATA 6482, Re Kulakov and SDSS (1991) 63 SSR 879 and Re Zaccardi and SDSS (1995) 40 ALD 760 as referred to in Peter Sutherland's, Social Security and Family Assistance Law (Second Edition)).
30. As noted by Sutherland in his text Social Security and Family Assistance Law in considering financial hardship, the cases suggest that it should be in the context of an assessment of the person's assets, the nature of the expenditure of the lump sum and the health of the person reflecting on their capacity to work in order to relieve the hardship.
31. It was not disputed that Mr Magrath is unable to work and that he and wife rely on Mrs Magrath's income to meet their living expenses. Whilst Mrs Magrath currently works as a cleaner she has been advised by her doctor to cease working due to her own illness. It was contended that in the event that Mrs Magrath ceases work, it is unlikely that the couple would be able to meet their day-to-day expenses from Mrs Magrath's Centrelink payments alone. Despite these circumstances Mr and Mrs Magrath decided to expend the total amount of the compensation payment on the acquisition of the items outlined in paragraph 24 above.
32. The Tribunal in Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716 recognised that financial hardship has been considered as a possible component of special circumstances in a number of occasions but does not on its own amount to a special circumstance (Re Beadle and Director-General, Department of Social Security (1984) 6 ALD 1 at 4). In addition the financial circumstances identified must be more than straitened, they must be exceptional (Re Colaiacolo, Unreported, 24 April 1985, No. 1209 (19).
33. The Tribunal in the Re Hajar decision found that it was impossible to ignore the existence of the house which was then valued at approximately $175,000.00 and free of encumbrances.
34. Mr Bartl referred the Tribunal to the decision Re Maloney and Secretary, Department of Family and Community Services [2002] AATA 320 where the preclusion period was reduced on the basis of special circumstances being found with respect to the poor and deteriorating health of the applicant's wife. In that case there was medical evidence which supported the wife's medical conditions. The Tribunal found that the applicant's wife required constant care and attention, being unable to look after herself. She was totally dependent on her husband who provided her with 24 hour care. Mr Maloney had used his compensation settlement monies towards paying out the mortgage on the home, home improvements, a new car, a holiday and invested the balance in an allocated pension plan. The Tribunal found that the special circumstances of the case justified the preservation of a substantial portion of these monies as one of the purposes was to provide for Mrs Maloney's future care if Mr Maloney was unable to continue to look after her.
35. There are several distinguishing features between that case and the present where Mrs Magrath is still in employment and no medical evidence was produced to confirm her medical conditions nor the recommendation that she cease work. She is currently 50 years of age. A further relevant fact is that the compensation monies were used to purchase the home at Primrose Sands which the parties would not have but for the receipt of these monies. The balance of the funds was used largely in the purchase of two motor vehicles which the parties still own.
36. Whilst the Tribunal in the Maloney decision shortened the preclusion period it did so by 18 months and not the full period sought on the basis that the Maloney's had not reached a financial crisis that would require the liquidation of assets. They still had some savings. The Tribunal concluded that is was reasonable that they call on some of the money invested in the pension plan whilst recognising that there were special circumstances which justified the preservation of a substantial amount of that money.'
37. Nor could it be said in the current case that the Magrath's financial circumstances are at crisis stage. There has not been a significant change of circumstances from those which existed at the time of settlement of Magrath's compensation claim. The preclusion period was calculated on the basis that 50% of the lump sum compensation was deemed to be in respect of economic loss. It is now contended that the preclusion period which the Tribunal has concluded was correctly calculated in accordance with the relevant provisions of the Act, has given rise to circumstances that constitute financial hardship. Such an argument was considered by von Doussa J in Secretary, Department of Social Security v Smith (1991) 30 FCR 56 where he said at 61-62:
"It is contended on the appellant's behalf that "the circumstances of the case" should be confined to matters which arise external to the operation of the scheme. An example of such a matter given in argument is where the payment by way of compensation is not received by the plaintiff because of a defalcation by an agent to whom the money is paid on his behalf. I do not think a distinction can meaningfully be drawn between matters external to the operation of the scheme and matters which are the product of the strict application of ss 152 and 153. The facts peculiar to a particular person cannot be considered in isolation from the operation of the provisions of ss 152 and 153. The operation of those sections in the light of the facts surrounding the person concerned is part of the circumstances of the case. The circumstances of a particular case will give rise relevantly to an unreasonable or unjust result only if the operation of Pt XVII, apart from the ameliorating provisions of s 156, produces that result."
38. The above was quoted by Kiefel J in the decision Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67 when considering the Secretary's submission that the Tribunal had treated the application of the Act as itself producing an unjust result. It was argued that the result following the strict application of the statutory calculation provided in the Act cannot be equated with special circumstances which are referred to in section 1184(1). His Honour referred to one of his previous decisions in Re Groth and Secretary, Department of Social Security (1995) 40 ALD 541 where at page 545 he had expressed the view that the words special circumstances require something which distinguishes a persons case from others, that is something that sets it apart from the usual or ordinary case. In that case Kiefel J agreed with the findings of the Deputy President in the decision under review that the circumstances in which Mr Groth found himself resulted from the level of pension set by the legislation.
39. The authorities make it clear that it is not open for Mr Magrath to suggest that the strict application of the 50% rule which includes the amount paid on account of his medical and other expenses, produces a result which constitutes financial hardship such as to fall within the meaning of special circumstances under section 1184.
40. The Tribunal in the decision under review in the Chamberlain decision considered the components of the compensation award and found that the application of the formula was unfair because the applicant would have had to pay more than she had received by way of compensation for economic loss, in fact twice as much. As Kiefel J noted at paragraph 33:
"That factor will however be present in most cases and is an aspect of the application of the formula. In my view it cannot, by itself, amount for special circumstance, one out of the ordinary".
And at paragraph 34:
"The basis for the Tribunal's view was its acceptance of what the parties to the settlement said had been offered and accepted for the economic loss component. It was far less than the statute assumed to be the case in applying a formula. Again, however, this will be so in many, if not most, cases to which the Act applies. Further, the extent of the difference from the basis upon which the parties acted could not provide the necessary "special circumstances". The statute has selected a figure which may operate in an arbitrary way".
41. It is clear from this decision and those considered by Kiefel J that an argument based on a strict application of the formula is unlikely to succeed, even where in that case, the outcome was that the economic loss component of the settlement was much less than 50% of the total award. This is not the situation in the present case where the amount paid on behalf of the medical and other expenses represents under 34% of the total amounts considered in calculating the preclusion period. As the Tribunal commented in Secretary, Department of Employment and Workplace Relations and Savage (2007) AATA 1477:
"The Chamberlain decision" is based on the fact that economic loss considerations are not relevant in considering a compensation amount because the statutory formula has surplanted those considerations". (paragraph 29)
42. The circumstances advanced on behalf of Mr Magrath that arguably constitute special circumstances within the meaning of section 1184(1) of the Act are that he will not be able to work again, that due to his wife's medical conditions she may not be able to continue to work, and the inclusion of the medical and other costs in the lump sum amount failed to reflect what was actually received.
43. Mr Magrath has already been compensated for his injury on the basis that he could not work again. Reducing the preclusion period would mean that Mr Magrath would be compensated twice with respect to the same claim. Whilst it is contended that Mrs Magrath's medical conditions may mean that she is forced to give up work, this is not the current situation. No medical evidence was produced in support of this contention and it is not appropriate for the Tribunal to speculate and make a decision on possible future circumstances. There was insufficient evidence to persuade the Tribunal that the financial circumstances of Mr Magrath and his wife are so dire that they constitute straitened financial circumstances.
44. For the above reasons the Tribunal has no basis upon which it could conclude that Mr Magrath's circumstances are sufficiently special in that a strict application of the legislation produces a result which is unfair, unintended or unjust (Groth v Secretary, Department of Social Security (1996) 40 ALD 541 and 545)
45. For these reasons the Tribunal determines to set aside the decision of the Social Security Appeals Tribunal made on 27 July 2007 and substitute therefore a decision that the respondent is subject to a compensation preclusion period commencing 9 July 2007 and ceasing 22 January 2010, which means that the respondent had no entitlement to DSP on 17 April 2007.
I certify that the 45 preceding paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham (Senior Member)
Signed: R Hunt (Administrative Assistant)
Date/s of Hearing 14 March 2008
Date of Decision 12 May 2008
Counsel for the Applicant Mr B Dube
Solicitor for the Applicant Sparke Helmore Lawyers
Solicitor for the Respondent Mr B Bartl, Ms K Layne, Hobart Community Legal Service
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