Towndrow and Secretary, Department of Employment and Workplace Relations

[2006] AATA 342

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 342

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2005/1003

GENERAL ADMINISTRATIVE DIVISION

Re:LUCAS RICHARD TOWNDROW

Applicant

And:         SECRETARY,

DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             11 April 2006

Place:            Melbourne

Decision:The Tribunal affirms the decision under review. 

(sgd) Regina Perton

Member

SOCIAL SECURITY ‑ lump sum compensation – arrears of weekly compensation - preclusion period – overpayment - whether special circumstances exist – decision affirmed.

Administrative Appeals Act 1975  s 37

Social Security Act 1991 Part 3.14, ss 17(1), (2), (3), (4A) 1169, 1170, 1181, 1184, 1184K

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

April 2006  Regina Perton, Member

1.      Lucas Towndrow was injured at work on 23 September 1991.  He was granted workers’ compensation.  His weekly workers’ compensation payments were stopped in 1998.  Mr Towndrow successfully challenged the cessation of payments.  In 2003, he was paid arrears of weekly compensation payments from 4 May 1998 to 26 February 2003.  In a separate action, which was settled on 18 December 2001, Mr Towndrow received $20,000 from the Tasmanian Motor Accident Board as compensation for nervous shock arising out of the consequences of witnessing the aftermath of a motor vehicle accident which occurred on 18 February 2000. 

2.      Mr Towndrow was paid Newstart allowance (NSA) and disability support pension (DSP) from 4 May 1998 until 26 February 2003.  As a result of the payment of the lump sum compensation and the arrears of weekly workers’ compensation, Mr Towndrow was required to reimburse the social security payments he had received during that period.  The lump sum payment resulted in the imposition of a compensation preclusion period between 18 February 2000 and 15 June 2000.  Centrelink was reimbursed $2,843.20 out of the lump sum compensation for payments made during the preclusion period.  Upon receiving the arrears of workers’ compensation payments, Mr Towndrow was required to repay $16,435.55, being the social security benefits he received between 4 May 1998 and 17 February 2000 and $31,949.00, being the social security benefits he received between 16 June 2000 and 26 February 2003.  These amounts were paid directly to Centrelink by the insurers with Mr Towndrow receiving the residual amount of the arrears.

3.      Mr Towndrow believes that the amounts calculated by Centrelink are wrong.  He sought review by an authorised review officer (ARO), who on 30 August 2005 decided that the calculations and dates were correct.  The Social Security Appeals Tribunal (SSAT) affirmed the decision on 21 October 2005.    Mr Towndrow lodged an application for review with the Tribunal on 8 November 2005.

4.      The issue before the Tribunal is whether the compensation affected payments were correctly calculated and subsequently appropriately deducted from the lump sum compensation award and the arrears of workers’ compensation.

EVIDENCE

5. Centrelink provided the Tribunal with documents pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (T1-T59).  These included the text of letters sent to Mr Towndrow and his insurers; copies of court records; details of individual social security payments made to Mr Towndrow; and manual and computerised calculations of the total amounts to be reimbursed.

6.       In his application to the Tribunal, Mr Towndrow indicated that the information supplied to the SSAT was incorrect and had been fraudulently manipulated to deny me of civil rights & liberties. 

7.      In his oral evidence, Mr Towndrow stated that he did not believe that he received in excess of $51,000 (the total is, in fact, $51, 227.75) in social security payments from 4 May 1998 to 26 February 2003.  He described the difficulties he had experienced in his dealings with QBE Insurance and Centrelink.  He indicated his belief that there had been inappropriate influence exerted by his former partner’s relative who had links with the insurer.   He expressed concerns about the timing of his workers’ compensation arrears payment which has impacted on his child support payments and taxable income. 

8.       Mr Towndrow provided a handwritten sheet which he stated had been copied from a screen he was shown at a Centrelink office in mid-2005.  The figures show taxable income in the financial years relevant to this matter.  The amounts shown are $8518.71 for 1999/2000; $5675.51 for 2000/2001; $7073.84 for 2001/2002; $7468.36 for 2002/2003.  Mr Towndrow stated that these were the figures that should have been used in calculating how much should be reimbursed to Centrelink.

9.      The Tribunal asked Mr Towndrow if he had reconciled the figures used by Centrelink in its calculations with the deposits by Centrelink into his bank account, which would appear on his bank statements.  He said that he had not done so.  The Tribunal indicated its preparedness to allow him the opportunity to check his banking records but he declined to do so. 

CONSIDERATION OF THE ISSUES

10. Section 17(1) of the Social Security Act 1991 (the Act) provides that compensation affected payment includes NSA and DSP.  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.

11.     Under s 17(3) of the Act, 50 per cent of a lump sum settlement payment is held to be the compensation part of the payment.  Section 1170 of the Act sets out the method of calculating a compensation preclusion period, which commences on the day following the last day of periodic payments (s 1170(1)(a)).  Section 1170(1)(b) provides that the length of the preclusion period is calculated by dividing the compensation part of the lump sum payment by the income cut-out amount (s 1170(4) and (5)).  Income cut-out amount is defined in s17(1), according to a complex formula set out in s17(8). The Tribunal finds that the compensation received by Mr Towndrow falls within the definition of compensation in s 17(2) of the Act. Under s 17(3) of the Act, 50 per cent of the lump sum settlement is the compensation part of the payment. The Tribunal is satisfied that the delegate and previous review bodies correctly calculated the preclusion period, namely from 18 February 2000 to 15 June 2000, during which time no DSP was payable to Mr Towndrow. Centrelink records indicate that the amount paid to Mr Towndrow during that period was $2,843.20. Mr Towndrow did not specifically challenge that amount. The Tribunal is satisfied that Centrelink was entitled to reimbursement of $2,843.20 for social security benefits paid to Mr Towndrow during the preclusion period.

12.     Arrears of weekly workers’ compensation payments are treated differently to lump sum compensation under the Act.   Section 17(4A) of the Act provides:

17.(4A)  For the purposes of this Act, a payment of arrears of periodic compensation payments is not a lump sum compensation payment.

13. Division 4 of Part 3.14 of the Act provides that if a person receives arrears of weekly compensation payments covering a period during which he had been paid NSA, DSP and certain other Centrelink payments, the Commonwealth is entitled to be reimbursed what it paid to the person when the amount received as compensation exceeds the social security benefit. The policy behind the legislation is to prevent a person from being entitled to a social security payment if he receives workers’ compensation for the same period. If the person receives more in workers’ compensation than he did as a social security payment, all of the social security benefit is repayable. If the workers’ compensation is less than the social security benefit, then only the difference is required to be paid back.

14.     Section 1184 of the Act allows the Commonwealth to seek the recoverable amount directly from the compensation payer (Victorian Workcover Authority via QBE Insurance).  Centrelink did so to recover the social security payments received  from 4 May 1998 to 17 February 2000 and 16 June 2000 to 26 February 2003.

15.     The Tribunal was provided with a printout which shows, on a weekly basis, the amount payable in workers’ compensation payments less the amount received in social security benefits and the residual payable to Mr Towndrow, if any (T47).  Those weekly figures have then been totalled.   The calculations show that from the total amount of arrears of weekly compensation paid, Centrelink received $48,384.55 for repayment of social security benefits and Mr Towndrow, $21,368.20.  There are several other documents with calculations (T39, T40 and others) undertaken by Centrelink as well as by the Victorian Workcover Authority and QBE Insurance.

16.     The Tribunal was initially perplexed about the origin of the figures provided to it by Mr Towndrow in the handwritten note.  However, it is now satisfied that the handwritten figures, copied down for Mr Towndrow at the Centrelink office last year and which total $21,368.20, represent the difference, recorded on a yearly basis, between what Mr Towndrow’s gross compensation payments were for that year and what he had been paid in social security benefits (which Centrelink had recovered). 

17.     As indicated earlier, the Tribunal invited Mr Towndrow to reconcile the Centrelink records of his income with his bank statements, as evidence to support         his submission that the computer records of Centrelink’s payments to him were incorrect.  He declined to do so.  There is no evidence before the Tribunal to suggest that the Centrelink computer-generated figures are wrong.  The Tribunal is satisfied that the amounts sought and obtained by Centrelink from the arrears of weekly compensation were payable to the Commonwealth.

18.     Section 1184K(1) of the Act gives the decision‑maker discretion to treat the whole or part of a lump sum compensation payment as not having been made or not liable to be made, if the decision‑maker thinks it is appropriate to do so in the special circumstances of the case.  For the Tribunal to use the discretion provided in             s 1184K  it must be satisfied that there is something to make the case stand out from the usual or the ordinary.  In Re Beadle and Director‑General of Social Security (1984) 6 ALD 1 the Tribunal held that: the special circumstances referred to in the Act, must be unusual, uncommon or exceptional.  The Tribunal accepts that Mr Towndrow has ongoing health and financial problems.  However, he has received compensation payments as a result of those injuries and the trauma of the aftermath of the accident.  After considering all relevant matters and viewing Mr Towndrow’s case in its entirety, the Tribunal is satisfied that his circumstances, while difficult, are not special circumstances.  Therefore, it is not appropriate for the Tribunal to exercise the discretion under s 1184K of the Act, to disregard the compensation received.   

19.     The Tribunal finds that the Commonwealth was entitled to recover social security payments of $2,843.20 between 18 February 2000 and 15 June 2000, of $16,435.55 between 4 May 1998 and 17 February 2000 and of $31,949.00 between 16 June 2000 and 26 February 2003.

DECISION

20.     The Tribunal affirms the decision under review.

I certify that the twenty [20] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Catherine Lake

Clerk

Date of hearing:  27 March 2006
Date of decision:  11 April 2006
Advocate for applicant:                Self-represented.
Advocate for respondent:            Mr D Perdon, Centrelink Legal Services Branch