Singh and Secretary to the Department of Family and Community Services - [2002] AATA 1308

DECISION AND REASONS FOR DECISION [2002] AATA 1308

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2002/580
GENERAL ADMINISTRATIVE DIVISION

Re:MOHINDER SINGH
Applicant

And:SECRETARY TO THE DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent

DECISION

Tribunal:       G.D. Friedman, Member
Date:             17 December 2002
Place:            Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) G.D. Friedman
Member

SOCIAL SECURITY - arrears of periodic compensation payments - whether compensation affected payments - lump sum preclusion period
Accident Compensation Act 1985 (Vic) s98
Social Security Act 1991 s17, 1165, 1166, 1167, 1168, 1169, 1170, 1174
Secretary, Department of Social Security v Cunneen (1997) 48 ALD 251

REASONS FOR DECISION

17 December 2002 G.D. Friedman, Member

This is an application by Mohinder Singh (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 13 May 2002. The SSAT affirmed a decision of a Centrelink delegate to recover a compensation debt of $88,633.34 from MMI Workers Compensation (the insurer), being the sickness allowance, disability support pension (DSP) and wife pension paid to the applicant and his partner, Ms Amarjit Kaur, from 28 October 1991 to 26 October 1999.
At the hearing of this matter on 9 October 2002 the applicant represented himself and Mr T. Baker, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (the respondent).
The Tribunal received into evidence the documents (T1 to T35) lodged under s37 of the Administrative Appeals Tribunal Act1975.
BACKGROUND
On 2 January 1991 the applicant was injured at work. At that time neither the applicant nor Ms Kaur were in receipt of a compensation-affected social security payment. The insurer paid the applicant weekly compensation until 30 November 1993. From 28 October 1991 to 14 October 1992 the applicant was paid sickness allowance in the amount of $262.80 by Centrelink. From 11 December 1993 to 26 October 1999 the applicant was paid DSP totalling $44,185.27 and Ms Kaur was paid the same amount as wife pension by Centrelink.
The applicant commenced proceedings in the County Court of Victoria when weekly compensation payments ended. On 20 October 1999 the Court made an order requiring the insurer to pay to the applicant an arrears amount of weekly compensation totalling $129,382.92. On 4 November 1999 Centrelink advised the insurer that a compensation debt of $88,633.34, comprising $262.80 in sickness allowance and $44,185.27 in DSP paid to the applicant and the same amount paid to Ms Kaur, was owed by the applicant for the period 28 October 1991 to 26 October 1999. The insurer repaid this amount to Centrelink. On 4 November 1999 Centrelink advised the applicant of the decision to recover the compensation debt of $88,633.34, directly from the insurer. Centrelink also cancelled the applicant's DSP and Ms Kaur's wife pension because the applicant's weekly compensation precluded any such payment.
The applicant and Ms Kaur sought review of the decision on the basis that they were separated under one roof from about 1996. On 23 December 1999 Centrelink decided that they were to be treated as members of a couple, and on 21 January 2000 an authorised review officer affirmed the decision. The applicant sought review of the decision and on 15 March 2000 the SSAT set aside the decision to recover the amount representing the wife pension as the applicant and Ms Kaur had not been members of a couple since 1996.
Both the applicant and Ms Kaur sought review by the Tribunal and Ms Kaur subsequently withdrew her application. On 30 October 2000 the Tribunal set aside the decision of the SSAT and found that the applicant and Ms Kaur were members of a couple. Following further unsuccessful representations, the applicant lodged an application with the SSAT on 19 February 2002, and after the decision of the SSAT on 13 May 2002 the applicant lodged an application to the Tribunal on 30 May 2002.
EVIDENCE
The applicant gave oral evidence and confirmed the facts as set out above.
CONSIDERATION OF THE ISSUES
The relevant sections of the Social Security Act 1991 (the Act) are:
17.(1) In this Act, unless the contrary intention appears:
compensation affected payment means:
(a)      a disability support pension; or
…
(e)      a disability support wife pension; or
…
Compensation (as at 1991)
17.(2) 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, other than a payment to which the recipient has contributed;
(whether the payment is in the form of the whole or part of a lump sum or in the form of a series of periodic payments) that is :
(e)      made wholly or partly in respect of lost earnings or lost capacity to earn; and
(f)       made within or outside Australia.
…
17.(4A) For the purposes of this Act, a payment of arrears of periodic compensation payments is not a lump sum compensation payment.
…
1170.(1) If:
(a)      a person receives a series of periodic compensation payments; and
(b)the person receives payments of a compensation affected payment for the periodic payments period; and
(c)the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, receiving a compensation affected payment; and
(d)the payments referred to in paragraph (b) have not been reduced under section 1168;
the Secretary may, by written notice to the person, determine that the person is liable to pay to the Commonwealth the amount specified in the notice.
…
1170.(4A) Subject to subsection (4B), if:
(a)       the person is a member of a couple; and
(b)the person's partner receives a compensation affected payment, or a compensation affected pension under the Veterans' Entitlements Act, for the periodic payments period;
the recoverable amount is equal to the smaller of the following amounts:
(c)       the sum of the periodic compensation payments;
(d)      the sum of:
(i)the payments of the compensation affected payment made to the person for the periodic payments period; and
(ii)the payments of the compensation affected payment and (if applicable) the payments of a youth training allowance or compensation affected pension under the Veterans' Entitlements Act made to the person's partner for the periodic payments period.
1170.(4B) If:
(a)      the person is a member of a couple; and
(b)the person's partner is receives a parenting payment for some or all of the periodic payments period;
the recoverable amount is equal to the smaller of the following amounts:
(c)      the sum of the periodic compensation payments;
(d)      the sum of:
(i)the payments of the compensation affected payment made to the person for periodic payments period; and
(ii)the payments of any compensation affected payment (excluding any payments of parenting payment) and (if applicable) payments of youth training allowance made to the person's partner for the periodic payments period; and
(iii)any payments of parenting allowance in excess of the maximum basic component of parenting payment made to the person's partner during the periodic payments period.
The applicant submitted that the Act sets out provisions that apply where a person's periodic compensation payments stand alone (not applicable in this case), and that different provisions apply where periodic compensation payments are caught by a lump sum preclusion period. He said that the original decision-maker (as affirmed by the SSAT) should have taken into account the effect of the payment of $80,000 that was made for the applicant's lost earnings or lost capacity to earn, so that the application of s1168, 1169 and 1170 of the Act to calculate and recover the compensation-affected payments was incorrect. He said that the payment of $80,000 was caught by the lump sum preclusion period (s17(2)(e) of the Act) and that s1165 of the Act (as at 1991) applies.
The applicant stated that the compensation payment ordered by the County Court on 20 October 1999 was received after the amendment to the Act which took effect on 20 March 1997, so that his partner was not required to repay any pension income that was paid to her during the preclusion period. He said that the recovery of compensation affected payments for the periodic payment period is contrary to the calculation of the new lump sum preclusion period because the wife pension of $44,228.80 was included in the recovery of the compensation affected payments. He said that the relevant provisions of the Act are s1165, 1166 and 1167, and not s1168, 1169 and 1170.
The Tribunal was told that the contention by the respondent that the amount paid in wife pension was recoverable from the periodic payments of compensation of the applicant was contrary to s1165 of the Act.
The applicant stated that the payment of $80,000 received by him under s98 of the Accident Compensation Act 1985 (Vic) affects the arrears of weekly payment of compensation because the payment to him was based on an assessment by a medical panel. He said that otherwise he would not have been eligible for arrears of weekly payments from the insurer. He stated that under s1167 of the Act the lump sum payment of $80,000 cannot be treated as ordinary income of the recipient of the compensation payment. The applicant submitted that for these reasons the decision under review to recover from him periodic payments of compensation was incorrect for the new lump sum preclusion period.
Mr Baker submitted that Part 3.14 of the Act provides a legislative scheme that directs the manner in which compensation payments will be treated for social security purposes, and that the compensation provisions of the Act aim to ensure that persons compensated for their incapacity to work are not doubly compensated by also receiving payments under the Act.
Mr Baker said that under the order made in the County Court the applicant received a lump sum, which was for arrears of weekly payments. He submitted that where a person is in receipt of a pension, benefit or allowance while awaiting settlement, and the claim is settled, Centrelink is entitled to recover either the amount paid as pension, benefit or allowance, or the amount of settlement, whichever is the lesser amount. He said that the payment received by the applicant was a compensation payment under s17(2) of the Act. Mr Baker stated that the arrears payment was made in the form of a lump sum, and that under s17(4A) of the Act arrears of periodic compensation payments was not a lump sum compensation payment.
In respect of the two lump sums received by the applicant, Mr Baker stated that one was made wholly or partly in respect of lost earnings arising from injuries sustained in the same event. He said that the specific provisions of s17(4A) of the Act override the more general provisions in other subsections.
Mr Baker stated that amendments to legislation affecting compensation preclusion periods affecting partners came into effect in March 1997, but that the sum received by the applicant was for arrears of periodic payments. He said that s1168 of the Act provides a rate reduction for certain compensation-affected payments as defined in s17(1) of the Act.
In respect of the sum included in the recovery notice, Mr Baker submitted that the wife pension is an included payment, and that s1168, s1169 and s1170 allow recovery because the alleged compensation debt was an arrears payment of weekly compensation.
In reaching its decision the Tribunal takes into account the evidence and the submissions made by the parties.
The Tribunal finds that the decision of the County Court in relation to the Workcover appeal resulted in the liability of the defendant to make weekly payments totalling $129,382.92, which represented arrears of weekly payments to the applicant. The Tribunal accepts that in some circumstances settlements take into account loss of past earnings as a well as loss of future earnings. The Tribunal accepts the submission by Mr Baker that in this case the arrears payment made to the applicant was received as a periodic compensation payment wholly or partly in respect of lost earnings or capacity to earn (s17(2)(e) of the Act). The decision of the Federal Court of Australia in Secretary, Department of Social Security v Cunneen (1997) 48 ALD 251 is authority for the proposition that arrears of periodic compensation do not lose their character merely because they are paid as a total amount. Therefore the Tribunal accepts Mr Baker's submission that the specific provisions of s17(4A) of the Act override the more general provisions in other subsections, and payment of the arrears is not a lump sum compensation payment.
In respect of amendments to compensation preclusion periods, the Tribunal finds that as at the date of decision compensation affected payment in s17(1) of the Act included DSP and wife pension, so that payments received by the applicant and Ms Kaur were subject to adjustment after arrears of periodic payment were received. The sum paid to Ms Kaur as wife pension is an included payment, recoverable under s1170(4A) and s1174(6) of the Act. The Tribunal rejects the submission by the applicant that wife pension could not be recovered after March 1997. From that date the receipt of a lump sum only affected the entitlement to social security of the person receiving compensation, not that person's partner. However these legislative changes did not affect the recovery of periodical compensation, whether or not received as arrears.
The Tribunal does not accept the submission by the applicant that s1165, s1166 and s1167 apply. These sections refer to the manner in which preclusion periods operate, whilst s1168, s1169 and s1170 provide for the recovery of relevant amounts. In particular s1170 allows recovery where both periodic compensation payments and payments of compensation-affected payments have been received.
DECISION
The Tribunal affirms the decision under review.
I certify that the twenty-three [23] preceding paragraphs are a true copy of the reasons for the decision of:
G.D.Friedman, Member
(sgd)       Olympia Sarrinikolaou
              Clerk
Date of hearing:  9 October 2002
Date of decision:  17 December 2002
Advocate for applicant:               Self-represented
Advocate for respondent:            Mr T. Baker, Advocate with Centrelink