Rorke; Secretary, Department of Family and Community Services

[2006] AATA 138

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 138

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2005/942

GENERAL ADMINISTRATIVE  DIVISION

Re:         SECRETARY,

DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And:       LESLEY ANNE RORKE

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             20 February 2006

Place:            Melbourne

Decision:The Tribunal sets aside the decision under review and finds that the lump sum bereavement payment of $2112.60 is a compensation affected payment.

(sgd) Regina Perton

Member

SOCIAL SECURITY ‑ preclusion period – lump sum compensation – compensation affected payment - amount of recoverable debt – lump sum bereavement payment – payment nor bereavement allowance but carer payment ‑ decision set aside  

Social Security Act 1991 ss 17(1), (2), (3), 21(2) 235(1), 236A, 315(1), 1184K, Part 2.5

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 18 ALR 639

REASONS FOR DECISION

20 February 2006  Regina Perton, Member

1.      Lesley Anne Rorke was injured in a motor vehicle accident in December 2001.  At that time she was receiving widow allowance and carer payment.  Mrs Rorke had been in receipt of carer payment since 16 May 2001 as she was looking after her mother.  Mrs Rorke’s mother died on 17 June 2002.  On 1 July 2002, Mrs Rorke received a lump sum bereavement payment of $2,112.60, an amount equivalent to 14 weeks carer payment.  Her carer payment subsequently ceased.  

2.      On 19 May 2005, Mrs Rorke settled a compensation claim arising out of the December 2001 motor vehicle accident for $40,000.  Centrelink, which administers carer and other family payments for the Department of Family and Community Services, determined that as a result of the compensation award, Mrs Rorke was subject to a preclusion period.  When a person receives a lump sum payment of compensation, part of the payment is considered to be for lost earnings or lost capacity to earn, during which time the recipient would not have been eligible for certain social security benefits, including carer payment.  Centrelink calculated the preclusion period to be between 7 December 2001 and 4 July 2002.  On 28 June 2005, Centrelink wrote to Mrs Rorke informing her that the Motor Accident Commission (in South Australia) had been asked to pay Centrelink $8,443.44 of the $40,000 settlement. 

3.      On 12 July 2005Mrs Rorke, through her solicitor, Phillip Smith of Downs Lawyers, wrote to Centrelink arguing that the bereavement payment was not a compensation affected payment and hence should not be included as a payment received during the preclusion period.  On 16 August 2005, an authorised review officer (ARO) decided that the original decision was correct.  The ARO found that the bereavement payment was a compensation affected payment.

4.      On 3 October 2005, the Social Security Tribunal (SSAT) set aside the ARO’s decision and determined that the bereavement payment was not a compensation affected payment and therefore not to be included in the amount recoverable from Mrs Rorke.  The SSAT determined the recoverable amount to be $6330.84.  The applicant lodged an application for review of the SSAT’s decision on 21 October 2005

5.      The issue before the Tribunal is whether the bereavement payment made on 1 July 2002 is a compensation affected payment

CONSIDERATION OF THE ISSUES

6. Section 17(1) of the Act provides a long list of payments defined as compensation affected payments. Carer payment is specifically mentioned at s17(1)(f). There is no mention of any type of bereavement payments or bereavement allowances as being compensation affected payments.

7.      Section 17(2) of the Act provides:

17.(2)  Subject to subsection (2B), for the purposes of this Act, compensation means:

(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.

8.      Under s 17(3) of the Act, 50 per cent of a lump sum settlement payment is held to be the compensation portion of the payment. 

9.      The SSAT determined that the payment made on 1 July 2002 was a bereavement allowance. Bereavement allowances are exempt from the compensation provisions.  However, Centrelink contended that Mrs Rorke was not paid a bereavement allowance as she did not qualify for such a payment.  Section 315(1) of the Act sets out the qualifications for bereavement allowances.  Such an allowance is only available to a person on the death of a partner.  It is not available to a person caring for her parent.  The Tribunal finds that the payment made to Mrs Rorke on 1 July 2002 was not a bereavement allowance.

10.     Part 2.5 of the Act concerns carer payments.  Division 9 of Part 2.5 concerns bereavement payments.  Bereavement period is defined in s 21(2) of the Act as a period of 14 weeks.  Section 235 of the Act provides for continuation of carer payment for a bereavement period where the person being cared for dies:

235(1) If:

(a) a person is receiving a carer payment because he or she ordinarily cares for a care receiver or care receivers; and

(b) the person is caring for the care receiver or care receivers or has temporarily ceased to care for the care receiver or care receivers; and

(c) the care receiver or any of the care receivers dies;

(d) the care receiver who dies is not the person's partner; and

(e) because of the death, the person would, apart from this subsection, cease to be qualified for the carer payment;

the person remains qualified for the carer payment during the bereavement period as if the death had not occurred.

11.     Section 236A provides that if a person remains qualified for carer payment under s 235(1), a lump sum is payable.  The section also sets out how the lump sum is to be calculated.  Both parties agreed that Mrs Rorke had been paid a lump sum payment of $2112.60 pursuant to s 236A of the Act.

12.     Mr Smith argued that a lump sum payment made pursuant to s 236A is not a continuation of carer payment or a commutation of any such payments.  He submitted that it is a separate and independent entitlement.  He cited the High Court case of Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 18 ALR 639 as authority for the proposition that an unambiguous provision cannot be given some unnaturally confined meaning because of the heading to that part of the Act in which it is located. He also submitted that:

…

Either a social security payment is a “compensation affected payment” or it is not.  Parliament has chosen not, for whatever reason, to include a s 236A payment within the definition, and it should not accordingly have been used in the recovery calculation.

13.     Mr Todd, the advocate representing Centrelink, submitted that a lump sum bereavement payment made under s 236A(1) of the Act cannot be taken out of the context of the qualification and payability provisions of carer payment.  Mr Todd stated that payment of a carer payment for a bereavement period is dependent on a person remaining qualified under s 235 for the bereavement period.  He submitted that the carer payment lump sum bereavement paid to Mrs Rorke was part of her carer payment rather than a discrete payment.  

14.     Both s 235(1) and s 236A are in Part 2.5 of the Act which concerns carer payment.  The Tribunal is of the view that the principles set out in the Hornsby case are not applicable to this case, as section 235(1) and 236A are linked, not discrete.  Section 235(1) is headed continuation of carer payment for bereavement period where person cared for dies.  Section 236A establishes that the person who qualified for carer payment under s 235(1) receives the payment for the bereavement period as a lump sum up front, rather than over seven fortnights.  That lump sum is not payable unless the person would have continued as a carer to the deceased person had they still been alive.  The Tribunal finds that the bereavement payment made to Mrs Rorke constitutes carer payment.  As carer payment is a compensation affected payment, the lump sum of $2112.60 is payable out of Mrs Rorke’s compensation payout.

15.     Section 1184K(1) allows for part or all of a preclusion period to be disregarded if there are special circumstances.  It has not been argued that this provision is applicable to Mrs Rorke nor is the Tribunal satisfied that this provision applies in Mrs Rorke’s circumstances.

DECISION

16.     The Tribunal sets aside the decision under review and finds that the lump sum bereavement payment of $2112.60 is a compensation affected payment.

I certify that the sixteen [16] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Angela Dennis

Clerk

Date of hearing:  21 December 2005
Date of decision:  20 February 2006
Advocate for applicant:                Mr M. Todd
Solicitor for the applicant:            Centrelink Legal Services Branch
Advocate for respondent:            Mr P. Smith
Solicitor for respondent:              Downs Lawyers