Szczerban and Secretary, Department of Family and Community Servi Ces

[2003] AATA 823

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 823

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No T2003/3

GENERAL ADMINISTRATIVE  DIVISION		)
Re		ANDREW SZCZERBAN

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Associate Professor B W Davis AM (Part-time Member)

Date22 August 2003

PlaceHobart

Decision The decision under review is affirmed.

[Sgd B W Davis]

Part-Time Member

CATCHWORDS

Social Security – preclusion period – benefits – accident or injury – loss of earnings – loss of earning capacity – special circumstances – date of commencement.

Legislation

Social Security Act 1991 – ss1148, 1170, 1184

Social Security (Administration) Act 1999\

Guide to Social Security Law.

Authorities

Re Nixon and Secretary, Department of Family and Community Services (1998) 52 ALD 19

Re Secretary, Department of Family and Community Services and Cocks (2002) AATA 1179

Re Robinson and Secretary, Department of Family and Community Services (1999) 29 AAR 274

Re Secretary, Department of Family and community Services and Nielsen (2002) AATA 807

Workcover Corporation of SA and Marina (1996) 66 SASR 24

REASONS FOR DECISION

22 August 2003 Associate Professor B W Davis AM (Part-time Member)   

The Application

1.      The applicant, Andrew Szczerban, seeks review of a decision of the Social Security Appeals Tribunal (SSAT) made on 28 November 2002, affirming a decision of Centrelink made on 19 August 2002 to impose a compensation preclusion period from 10 June 2000 to 17 May 2002.

The Issue

2.      On what day did the applicant suffer a loss of earnings or loss of capacity to earn?

Background

3.      On Friday 25 September 1998 Mr Szczerban was injured in a motor vehicle accident, suffering severe whiplash, pain and discomfort and associated disabling symptoms, but returned to work soon after.

4.      Because of the injury Mr Szczerban lost time from work at Aberfoyle Resources Pty Ltd on various occasions between late September 1988 and the time of his retrenchment in mid 2000.   He used sick leave, annual leave and rostered days off in order to cope with his injury and receive treatment.

5.      He was not able to work at the same capacity as before, claiming he had to operate at a slower pace and had lost quality performance with the employer unhappy about the amount of time taken off.   His employment was terminated on 9 June 2000.

6.      He appears to have continued to receive the same wage as prior to the accident, up to the time of redundancy, but claims he did not receive anticipated wage increases or prospects of promotion.

7.      On 11 July 2002 a consent judgment was entered in the Supreme Court for $120,000 in favour of Szczerban and this was notified to Centrelink.

8.      The applicant was advised through his solicitor on 16 July 2002 that he would be subject to a compensation preclusion period from 10 June 2000 to 17 May 2002.

9.      The decision to impose the compensation preclusion period was affirmed by an authorised review officer on 12 September 2002 and the applicant subsequently appealed to the Social Security Appeals Tribunal (SSAT).   The SSAT disallowed the appeal heard on 28 November 2002, affirming the original Centrelink decision.

10.     The applicant lodged an application for review by the Administrative Appeals Tribunal on 7 January 2003.

Legislation

11.     The following sections of the Social Security Act 1991 (“the Act”) are applicable to this case:

s17(1)            re definitions of compensation

s17(2)           compensation

s17(3)            compensation part of a lump sum

s1165(2AA) person member of a couple payment received on or after 20 March 1997.

s1165(5)       et seq. new lump sum preclusion period.

S1170           when a lump sum period commences.

S1184           Secretary may disregard some payments.

12.     These provisions will be further analysed, but in brief summary can be described thus:

The social security law provides that where a person receives compensation, which is wholly or partly in respect of, lost earnings or lost capacity to earn, then a person is precluded from receiving social security payments during the lump sum preclusion period.   The preclusion period commences on the day that the loss of earnings occurs or on the day following the cessation of period compensation payments, whichever is later, 50% of the lump sum is disregarded but the remaining 50% is divided by the income cut-off amount (being the amount of income which would produce a nil rate of pension under the income test) to establish the length of preclusion period.

13.     The principle behind the compensation preclusion provisions is to ensure that a person is not compensated twice for loss of earnings, and that a person is not able to access taxpayer funded social security payments at the same time as he/she receives compensation for loss of income.    It is important to maintain integrity of the social security system and ensures social security expenditure is directed to those who are most in need.

14.     Further explanation is provided in the Guide to Social Security Law under the heading “Commencement of Lump-sum Preclusion Period”.

the SSAT Hearing

15.     At the SSAT hearing conducted in Launceston on 28 November 2002, Mr Szczerban was in attendance and spoke to the Tribunal.   He was represented by Mr Chris Bartlett his solicitor and Mr Bartlett’s colleague Ms Simone Flint.

16.     Mr Szczerban gave evidence of his employment record and injuries and tendered medical documents from a Dr Andreas Ernst, who specialises in occupational health.   The Tribunal had access to Centrelink’s file, as well as copies of papers, which included various medical reports and submissions from the solicitors.   Mr Bartlett handed the Tribunal copies of further reports including a summary of appointments with Dr Ernst, a letter and certificates from Dr Kulinski, as well as a summary of Dr Kilov’s notes and confirmation regarding massage and other treatments.

17. Centrelink argued that the preclusion period for Mr Szczerban should pursuant to s1170(3) of the Act run from the date on which the applicant ceased work, that being the day on which he lost capacity to earn. Mr Bartlett argued that notwithstanding the applicant had continued working after injury, he missed days due to his condition, was in much pain and his capabilities diminished, so that, within the meaning of the section, his capacity was severely impaired or lost from the day of the accident, therefore the preclusion period should run from that date.

18.     Mr Bartlett also pointed out no issue was taken with calculation of the period or the repayment of benefits as set out by Centrelink, the argument revolved solely around when the preclusion period should commence.

19.     The Tribunal examined the evidence in considerable detail, but noted four important points.   First, the applicant went back to work very soon after the accident and continued to work, albeit with difficulty.   Secondly, apart from having to provide a medical certificate after only two days absence from work, there was no problem with sick leave, it was regarded as a legitimate expense by the employer.   Third, Mr Szczerban admitted he lost no wages, although he did not receive an anticipated pay rise, but  there was no firm link to the accident.   Fourth, the Tribunal noted that during the 16 month period between his accident and ceasing employment because of redundancy, he had only 17 days off, which did not seem an excessive amount.

20.     The Tribunal accepted that Mr Szczerban’s injuries were sufficient and enduring enough to have had a deleterious effect on his work.   He had used intermittent sick leave, annual leave and rostered days off, in order to cope with his disabilities and need for treatment.    On his own evidence he was an extremely determined gentleman, anxious to meet employment requirements, but believing he would get better and working towards this.   He had persevered when a lesser person may well have given up work and sought some disability payment.   Nonetheless he chose his path and it is that which had led to disputation over commencement of the preclusion period.

21. In considering his case the SSAT noted he had relied upon wording of s1170(3) of the Act, in particular the day upon which “the loss of earnings or loss of capacity to earn began”. The SSAT also noted that in Robinson and Secretary, Department of Family and Community Services (1999) AATA 398 it was held that a person could have a loss of earning capacity notwithstanding the fact that an individual remained in employment. The Tribunal considered some differences existed from the Robinson case, nonetheless the key point was that Mr Szczerban had managed to maintain employment up to the time of redundancy and there was clear evidence he continued to earn income, without serious loss of earning capacity.

22.     Having weighed all evidence and indicating sympathy with the applicant, the SSAT decided it must adhere to the legislation and therefore affirmed the original decision.   The applicant subsequently lodged an application for review of the decision with the Administrative Appeals Tribunal on 7 January 2003.

Facts and Contentions

23.     Both parties filed Statements of Facts and Contentions prior to the AAT hearing.

24.     Counsel for the applicant argued that he had lost considerable time of from his employment at Aberfoyle Resources Pty Ltd, but this was masked in some degree because of his use of sick leave, annual leave and rostered days off in order to cope with the situation of injury and receive treatment..   He was not able to work at the same capacity as before, this therefore reflected a loss of earning capacity and the date which should be used as commencement of the preclusion period should be the date of the motor vehicle accident, 25 September 1998.

25.     The respondent noted that despite brief and intermittent periods of sick leave the applicant had continued work until retrenched in June 2000.  At all times he received the same wage as he received prior to the accident and there was no evidence he suffered any loss of income as a result.   To seek a preclusion period when he remained at full earning capacity was tantamount to double dipping and should be rejected.   The respondent contended the day he ceased employment, namely 10 June 2000, was the day when the compensation preclusion period should commence to operate.

The AAT Hearing

26.     The AAT hearing was conducted at Devonport on 24 June 2003.  The applicant was represented by Ms Simone Flint of Bartletts Barristers and Solicitors and the respondent by Mr Brian Sparkes.

27.     Mr Szczerban was sworn and gave evidence about his injuries and subsequent employment record.   Under questioning, he stated he was not operating at full capacity after injury, it distressed him and was not welcomed by his employer.  He did not receive an anticipated increase of salary, but he was not advised of any reason.    His employer also sent him to a doctor, wanting evidence about reasons for decreased performance.   Mr Szczerban detailed the kinds of physiotherapy and massage he had pursued, trying all ways to get better, but admitted that if he had not been made redundant, it was doubtful he would still be working.

28.     Counsel for the respondent noted the substantial gaps between sick leave and the short period of them; overall the available medical certificates only covered some 21 days between the days of injury and redundancy.   Under cross-examination Mr Szczerban stated not all certificates had been located by the employer (their admission) and there was supportive evidence of his disabilities via the records of chiropractors and others.

29.     The respondent then introduced financial records demonstrating that far from losing income, Mr Szczerban had earned more in 1999-2000 than 1998-1999.  Mr Szczerban said the figurers could not be taken at face value, since he had made personal judgments about how much salary should be contributed to superannuation funds.   He did admit the figures tended to show earnings had been maintained.

30.     In closing submissions counsel for the applicant said the medical certificates for 21 days sick leave were misleading, she considered that the evidence provided by Mr Szczerban from a variety of sources indicated the true figure was probably nearer a hundred days.   Mr Szczerban had genuinely suffered a loss of earning capacity and it was only his fortitude that had decided him to remain in employment and not seek disability payment.

31.     Counsel for the respondent stated there was no evidence of real loss of earnings, indeed the salary records indicated otherwise.   The medical evidence did not support a conclusion Mr Szczerban suffered an inability to work or that his capacities were so reduced a significant loss of earnings had occurred.

32.     Counsel also argued that the preclusion period should commence only from the date actual loss of earnings occurred and not necessarily from the time of injury, citing Nixon and Secretary, Department of Family and Community Services (1998) 52 ALD 19 as authority. In Secretary, Department of Family and Community Services and Cocks (2002) AATA 1179 the Tribunal held it appropriate to have regard to government policy, which in social security law was aimed at preventing double dipping. Robinson and Secretary, Department of Family and Community Services (1999) 29 AAR 274 was sometimes cited as a situation where loss of earning capacity was accepted, even though the individual continued working; however the circumstances were different from the current case. Overall, on the basis of evidence available, the decision of the SSAT dated 28 November 2002 should be affirmed.

Analysis

33.     The Tribunal is required to stand in the shoes of the original decision-maker, examining all evidence anew, but taking into account statutory provisions and any relevant case authorities.

34. The issue to be decided is on what day did the applicant’s loss of earnings or loss of earning capacity occur, since this determines the date on which the compensation preclusion period commences (see section 1170(3)) of the Act.

That section of the Act states:

“… 1170(3) … the lump sum preclusion period is the period that:

(a) begins on the day on which the loss of earnings or loss of capacity to earn began; and

(b) ends at the end of the number of weeks worked out under subsections (4) and (5).

1170(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:

-   compensation part of lump sum

-   income cut-out amount

1170(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number.”

35.     The applicant contends that from the date of motor vehicle accident (25 September 1998) he suffered not only painful disabilities requiring ongoing treatment, but sufficient loss of work performance to cause difficulties for himself and his employer.    However, the Tribunal notes according to the evidence, the employer continued to employ him and met all wages and sick leave commitments until a restructuring of the firm let to his redundancy in June 2000.

36.     At the AAT hearing Mr Szczerban appeared a hesitant but truthful witness, carefully explaining his injuries and concern at loss of job performance, as well as his determination to continue working at the time.   But the latter could be construed as an indication no significant loss of earning capacity had initially occurred.   Even if some loss of personal ability and work performance did occur, the key question to be answered is whether it was of sufficient magnitude to constitute incapacity to earn or resulted in actual loss of earnings from the date of the accident.   According to evidence presented to the Tribunal, neither was the case.   Salary was maintained and Mr Szczerban continued in employment with the consent of the employer until redundancy in mid 2000.

37.     Turning more directly to medical evidence there are a number of reports and diagnoses but not all are helpful, some coming two years after the accident and at a time when Mr Szczerban had already ceased employment.   The Tribunal does accept, however, that the applicant’s injuries were of such a nature as to have a deleterious effect on his work.   He is an intelligent and skilled man and the combination of pain, mental stress and functional limitation clearly took a toll, as comment by physiotherapist, Anitra Wilson indicates.   As Dr Sands put it “… he was able to get back to work but he was never the same”.     As Dr Kulinski points out, he has been attending various therapists on a regular basis and may be suffering from depression and may not be in a situation to work again, but all of this has come after a period between September 1998 and June 2000 when he was maintaining his earning capacity.

38.     Counsel for the applicant relies upon support from Robinson and Secretary, Department of Family and Community Services (1999) AATA 398 as evidence that a person can have a loss of earning capacity, notwithstanding they remain in employment. But that depends on the circumstances and having examined the Robinson decision, the Tribunal finds there are considerable differences from Mr Szczerban’s case.   He was in a situation to maintain earnings, whereas in the Robinson case, the individual suffered complications from the outset, sought compensation for many workdays lost and was on sick leave at the time of retirement.

39.     Counsel for the applicant also relies upon Workcover Corporation of SA and Marina (1996) 66 SASR 24, to argue loss of earnings can occur, while employment is maintained. However in the Marina case, the applicant went back to work, but not in the same employment as previously.

40.     Counsel for the respondent drew attention to Nixon and Secretary, Department of Social Security (1998) 52 ALD 129, where at pp136-137, Senior Member S D Hotop found that there was no specific evidence regarding any loss of earnings or earning capacity, nor had any special circumstance been found to warrant exercise of discretion conferred by s1184(1) of the Act. The decision was therefore affirmed. The Tribunal agrees the Nixon case is much more analogous to Mr Szczerban’s situation.

Decision

41.     Having examined all evidence anew and for the reasons outlined above, the Tribunal finds that:

(a)Andrew Szczerban suffered a motor vehicle accident on 25 September 1998, which caused disabilities of an ongoing nature, affecting his work performance

until redundancy on 9 June 2000.

(b)He made a personal choice to continue in employment during this period and was supported by his employer continuing to meet wage and sick leave payments.

(c)There is no evidence that he was materially incapacitated during this period or suffered any tangible loss of earnings.

(d)Centrelink and the SSAT correctly applied provisions of s1170(3) of the Act, in deciding that a compensation preclusion period from 10 June 2000 to 17 May 2002 should be applied.

42.     The decision under review is affirmed.

I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor B W Davis AM (Part-time Member)

Signed: K L Miller (Administrative Assistant)

Date/s of Hearing  24 July 2003
Date of Decision  22 August 2003
Counsel for the Applicant         Ms Simone Flint
Solicitor for the Applicant          Bartletts
Counsel for the Respondent     Mr Brian Sparkes
Solicitor for the Respondent     Centrelink