McCormick and Secretary, Department of Social Services (Social services second review)

The Administrative Appeals Tribunal (AAT) considered the dispute between McCormick and the Secretary, Department of Social Services concerning McCormick's eligibility for a Disability Support Pension and Carer’s Payment. The central issue was whether an insurance benefit received by McCormick constituted "ordinary income" for the purposes of assessing her entitlement to these social security payments.

The Tribunal was required to determine the meaning of "ordinary income" as defined by the relevant social security legislation and, specifically, whether an insurance benefit, paid as compensation for a loss, fell within that definition. The Tribunal also had to consider whether the insurance benefit qualified as an "exempt lump sum" under the legislation, which would preclude it from being treated as ordinary income.

In its reasoning, the Tribunal applied the principles of statutory interpretation to the definition of ordinary income. It concluded that the insurance benefit, being a payment intended to compensate for a specific loss rather than a periodic gain or reward, did not constitute ordinary income. Furthermore, the Tribunal found that the insurance benefit met the criteria for an exempt lump sum, as it was a payment made in consequence of a loss or damage, thereby exempting it from being counted as income for social security purposes. The Tribunal therefore determined that McCormick was not disentitled to the payments on the basis of receiving this insurance benefit.