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

[2021] AATA 3811

Viscuso; Secretary, Department of Social Services and (Social services second review) [2021] AATA 3811 (19 October 2021)

Division:GENERAL DIVISION

File Number(s):      2020/3847

Re:Secretary, Department of Social Services

APPLICANT

AndSalvatore Viscuso

RESPONDENT

Decision

Tribunal:Member Reitano

Date:19 October 2021

Place:Sydney

The Tribunal sets aside the decision under review and, in substitution, decides that:

(a)Mr Viscuso’s age pension is cancelled from 21 April 2019;

(b)Mr Viscuso is precluded from receiving an age pension between 21 April 2019 and  28 March 2021; and

(c)Mr Viscuso is liable to pay to the Commonwealth the amount of $13,760.07 which is the amount of age pension that was paid to him during the period 21 April 2019 to 28 March 2021.

........................[SGD].....................................

Member Reitano

Catchwords

SOCIAL SECURITY – lump sum compensation preclusion period – age pension – whether part of unpaid settlement amount has been received within the meaning of s.1169 of the Social Security Act 1981 (Cth) – whether special circumstances exist to waive the compensation preclusion period – special circumstances do not exist – decision set aside and substituted

Legislation

Health and Other Services (Compensation) Act 1995 (Cth)

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

Workers Compensation Act 1987 (NSW)

Cases

Clark v Secretary, Department of Employment and Workplace Relations [2007] FCA 1076

Drake v Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179

Secretary Department Family and Community Services v Chamberlain [2002] FCA 67

Secondary Materials

Guide to Social Security Law

REASONS FOR DECISION

Member Reitano

1. This case is about what happens when someone who is receiving an age pension receives a compensation payment resulting from the settlement of litigation involving a claim for past or future loss of income.

What happened?

1. On 30 May 2014 Mr Viscuso suffered an injury at work when he was working at a building site. Following his injury because he was unable to work for wages, he was paid periodic payments of workers compensation by a workers compensation insurer.

2. Mr Viscuso commenced proceedings in the District Court of New South Wales (Court) against the manager and principal contractor (first defendant) and a building contractor (second defendant) who were responsible for some of the work at the site. In his statement of claim Mr Viscuso sought damages which included damages for ‘loss of income’ and for ‘loss of earning capacity and future economic loss.’ The particulars of damage said that Mr Viscuso was, due to his injuries and disabilities, unable to work in his chosen occupation ‘in the past and in the future’ and as a result would be without income.

3. On about 20 April 2019 according to Centrelink’s records, Mr Viscuso’s periodic workers compensation payments stopped because by then he qualified for, and had started to receive, the age pension which was granted to him on 29 May 2019 and paid to him with effect from 13 March 2019.

4. On 21 November 2019 Mr Viscuso settled his case by consenting to the Court making some orders. It is only necessary here to refer to five of those orders.

5. The first order was an order for Judgment in Mr Viscuso’s favour ‘against the first defendant in the sum of $225,000 inclusive of all claims for out of pocket expenses, any payback to the workers compensation insurer, Medicare, Centrelink, any payback to any private health insurer, interest and costs.’ The second order was for Judgment against the second defendant in much the same terms except the amount is $270,000. The total of these two amounts, $495,000, was referred to in the orders as the ‘Settlement Sum’.

6. The seventh and eighth orders provided that first and second defendant were ‘authorised to pay from the Settlement Sum’ amounts of $225,000 and $50,000 which were described as ‘being part of the reduced payback which [the workers compensation insurer] has agreed to accept’ or being ‘the balance of the reduced payback which [the workers compensation insurer] has agreed to accept’. The tenth order said that ‘the second defendant will pay any valid Notice of Charge or otherwise deduct ten percent (10%) of the Settlement Sum and forward this to Medicare Australia as an advance payment pursuant to s.33B of the Health and Other Services (Compensation) Act’.

7. On 26 November 2019 Mr Viscuso’s solicitors wrote to him to provide details of the settlement that had been arrived at and requesting that he complete two documents that were titled ‘DIRECTION TO PAY’ which were addressed to each of the first and second defendant, and which directed them to pay in total the amount of $275,000 to the workers compensation insurer. Mr Viscuso said that the Tribunal should proceed on the basis that the directions were in fact executed and sent. It was later confirmed by the workers compensation insurer in a conversation with an officer of Centrelink that the actual ‘wage component’ of the $275,000 repaid to the workers compensation insurer was $263,537.43.

8. On 31 January 2020 Services Australia decided to cancel Mr Viscuso’s age pension from 21 January 2020, impose a compensation preclusion period from 21 April 2019 until 15 January 2022 and issue a statutory charge for the amount of $13,760.07 to recover the amount of age pension that had been paid for the period 21 April 2019 to 20 January 2020.

9. On 13 February 2020 Mr Viscuso’s solicitors wrote to Centrelink and said, amongst other things:

   We note that of the $495,500 paid by the defendants in the recently resolved District Court proceedings for personal injury, $275,000 was paid to … Mr Viscuso’s employer’s worker’s compensation insurer as a repayment for past workers compensation benefits received by Mr Viscuso. The gross amount of damages paid to Mr Viscuso after repayment to the worker’s compensation insurer was $225,000.

   …

   As a result of a settlement conference which took place in November 2019, Mr Viscuso’s claim for compensation against [the principal contractor] and [the building contractor] was resolved, as was a related claim by the workers compensation insurer for recovery of past workers compensation benefits made to or on behalf of Mr Viscuso to date. As is set out in the Consent Judgment enclosed, and our letter to Mr Viscuso dated 13 February 2020, the breakdown of payments made by the Defendant [sic] in the District Court matter, [the principal contractor] and [the building contractor], of $495,000.00 is as follows:

   i.$275,00 as repayment to [the workers compensation insurer], agent for the workers compensation nominal insurer, for past payments of workers compensation made to Mr Viscuso.

   ii.$140,000 for legal costs and disbursements.

   iii.Repayment to Medicare for past benefits received. The amount is presently being calculated by Medicare.

   iv.Any repayments to Centrelink.

   v.Remaining balance of $80,000.00 to Mr Viscuso, from which any repayments to Medicare and Centrelink will need to be deducted.

10. In a letter to Mr Viscuso the same day the solicitors told him that the ‘Advance payment/security deposit held by Medicare’ was ‘in the sum of $49,500’ and that ‘after Medicare has processed a Notice of Charge confirming the amount repayable to them for past benefits relating to your compensable injury, they will refund the balance of the deposit directly into the bank account associated with your Medicare card.’ An example was given  in the letter that ‘if the amount repayable to Medicare is $4,500 you would receive a refund from Medicare of $45,000 from the deposit they are holding.’ The amount of $49,500 that Medicare were holding was the amount that is referred to in order ten of the orders made by consent.

11. On 21 February 2020 Services Australia changed its earlier decision so that the compensation preclusion period would end on 24 October 2020, but within a few days a review officer again changed this so that the preclusion period would end on 19 June 2021.

12. On 21 May 2020 the Social Services and Child Support Division of this Tribunal (AAT1) made a decision that set aside the decision of Services Australia and decided that there should be no preclusion period, that Mr Viscuso’s aged pension was to be restored from 21 January 2020 and the statutory charge amount that had been paid by Mr Viscuso was to be refunded.

13. On 25 June 2020, the Secretary applied to the General Division of this Tribunal for a review of the AAT1’s decision. The AAT1’s decision was stayed on 3 July 2020 until this review was determined.

14. On 24 September 2020 Mr Viscuso’s solicitor wrote to Services Australia and amongst other things said:

    (xi) The claim for economic loss damages for the personal injury claim was limited for the period between the date of injury on or around 30 May 2014 and our client’s likely retiring age had the injury not occurred, which we submit would have been by or before the point in time that the preclusion period was applied at the age of 66 ½ years.

15. On 4 May 2021 Mr Viscuso’s solicitors, in a written submission to the Tribunal informed the Tribunal that $25,000 of the settlement sum had not in fact been paid. The Secretary, in its written submission to the Tribunal on 20 May 2021, did not take issue with this although properly pointed out that it had no knowledge of the matter.

What are the issues?

1. The general issue is what is the effect of the settlement of Mr Viscuso’s personal injury claim on the age pension that he was receiving with effect from 13 March 2019. That requires an application of the rules that are laid down by the Social Security Act 1991 (Cth) (Act) that apply in circumstances such as these.

2. The issue involves determining first whether any amount paid to Mr Viscuso as part of the settlement was at least partly in respect of lost earnings or lost capacity to earn; secondly, whether a payment was made to him or received by him of any such amounts and if so what that payment was;  thirdly what any relevant preclusion period is; and fourthly whether there is any basis for departing from the rules that otherwise apply.

What are the rules that apply? 

1. Section 1169 of the Act provides:

   (1)  If:

   (a)  a person receives or claims a compensation affected payment; and

   (b)  the person receives a lump sum compensation payment;

   the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.

2. Section 1170 of the Act provides:

   (1) Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:

   (a)  begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and

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

   (2)  If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:

   (a) begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and

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

   (3) If neither of subsections (1) and (2) applies, 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).

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

   (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.

3. There was no dispute that the income cut out amount referred to in s.17(8) of the Act is the amount of $1020.40.

4. Section 1184K of the Act allows the Secretary to treat whole or part of a compensation payment as not having been made if the Secretary ‘thinks it is appropriate to do so in the special circumstances of the case.’

5. Section 17(1)(aa) of the Act defines a ‘compensation affected payment’ so that it includes an age pension.

6. Section 17(2) of the Act defines ‘compensation’ to mean:

   (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 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.

7. Section 17(3) of the Act provides:

   (3)  Subject to subsection (4), for the purposes of this Act, the compensation part of a lump sum compensation payment is:

   (a)  50% of the payment if the following circumstances apply:

   (i)  the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and

   (ii)  the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or

   (ab)  50% of the payment if the following circumstances apply:

   (i)  the payment represents that part of a person's entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and

   (ii)  the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and

   (iii)  the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or

   (b)  if those circumstances do not apply--so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn, or both.

8. Section 17(4) of the Act provides:

   (4)  Where a person:

   (a)  has received periodic compensation payments; and

   (b)  after receiving those payments, receives a lump sum compensation payment (in this subsection called the LSP); and

   (c)  because of receiving the LSP, becomes liable to repay an amount (in this subsection called the Repaid Periodic Compensation Payment -- RPCP) equal to the periodic compensation payments received;

   then, for the purposes of subsection (3), the amount of the lump sum compensation payment is:

   LSP - RPCP

9. Section 17(5) of the Act provides:

   (5)  A person receives compensation whether he or she receives it directly or whether another person receives it, on behalf of, or at the direction of the first person.

10. Section 23(2) of the Act provides that ‘…a person is taken to be receiving a payment under this Act from the earliest day on which payment is payable to the person even if the first instalment of the payment is not paid until a later day.’

11. Section 8 of the Health and Other Services (Compensation) Act 1995 (Cth) provides for the repayment to Medicare of certain amounts that are paid to someone who also receives compensation as a result of a settlement of a personal injuries claim. The amount is by s.8(4) payable by the injured person.

12. Sections 151Z(1)(b) and (d) of the Workers Compensation Act 1987 (NSW) (WC Act) provides:

    (1)  If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect:

    . . .

    (b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation,

    . . . .

    (d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),

Was the settlement amount ‘compensation’?

1. The first issue is whether the payment made to Mr Viscuso was a payment of compensation that falls within the definition in the Act. The payment was undoubtedly ‘a payment in settlement of a claim for damages.’ So much is obvious. The question then is was it made wholly or partly in respect of lost earnings or lost capacity to earn from personal injury as referred to in s.17(2) of the Act?

2. The payment was made partly in respect of lost earnings or lost capacity to earn resulting from personal injury. There are two straight forward reasons for this conclusion. First, in his claim for damages, Mr Viscuso particularised a claim for past and future economic loss and that was part of the claim that was in fact settled.  Second, the Judgments made by consent against both defendants recorded that the amount was inclusive of ‘any payback to the workers compensation insurer’. That ‘payback’ was in respect of the periodic payments that Mr Viscuso had been receiving for the wages, the lost income, that he was unable to receive by reason of his injury or disability. The subsequent advice provided by the workers compensation insurer about the payment of the amount of $263,537.43 as ‘the wage component’ confirms that it was in respect of lost income.

3. The payment being partly in respect of lost income, it is a payment of compensation to which the consequences provided for by the Act attach.

Was the compensation ‘received’?

1. It was submitted for Mr Viscuso that he had not ‘received’ the amount of $275,000, perhaps more accurately $263,537.43, because it was not paid directly to him. It was, under the orders made by consent, paid to the workers compensation insurer and was apparently not  paid ‘on behalf of’ Mr Viscuso or ‘at his direction’ as contemplated by the definition of ‘received’ in s.17(5) of the Act. Likewise, it was submitted that whatever the amounts paid to Medicare, they were not amounts received by Viscuso because they were not paid directly to him, on his behalf, or at his direction. This was because, so it was submitted, in the case of both amounts, they were not amounts for which Mr Viscuso was liable.

2. The submission fails for two reasons: first because the amounts were amounts paid on Mr Viscuso’s behalf, and in the case of the amount paid to the workers compensation insurer at his direction as well, and second, if it is necessary to say, because they were amounts for which Mr Viscuso was liable.

3. The settlement involved judgments in favour of Mr Viscuso in the amounts of $225,000 and $270,000 respectively. From those amounts Mr Viscuso authorised the first and second defendants to pay sums to the workers compensation insurer totalling $275,000 (which included the $263,537.43). Mr Viscuso did not receive those amounts directly, but the amounts were amounts he was entitled to and under the orders that were made he authorised someone else to receive them. So far as s.17(5) is concerned in giving that authority he was having another person receive those monies ‘on his behalf’. This was made even clearer because Mr Viscuso in fact gave a direction to both defendants to pay money to the workers compensation insurer.

4. In the case of the amounts paid to Medicare the reasoning is the same: Mr Viscuso told the second defendant to send some of the money, $49,500, to which he was entitled, to Medicare. It was received by Medicare on his behalf. The fact that the money was money paid on his behalf is apparent from the fact that any amounts that were paid to Medicare that exceeded what was required to be paid to Mr Viscuso would eventually be repaid to him. The letter from Mr Viscuso’s solicitor dated 13 February 2020 to Mr Viscuso made that clear.

1. The other reason why the argument fails is because it proceeds on the wrong foundation that Mr Viscuso had no liability to either the workers compensation insurer or Medicare. If liability is the foundation, and I am not persuaded that it necessarily is, of permitting someone to receive money on another’s behalf or giving a direction for someone to receive monies on another’s behalf then the argument fails for this reason as well.

2. It may be that there was a right of indemnity in favour of the workers compensation insurer from the employer under s.151(1)(d) of the WC Act but that had nothing to do with the way in which Mr Viscuso chose to spend his money. He authorised, and directed, his money to be paid to, and received by, the workers compensation insurer because he had a debt to it under s.151Z(1)(b) of the WC Act which I have referred to above. The fact that that payment also satisfied a statutory right of indemnity for someone else is beside the point of the existence of the debt that Viscuso had to repay the money. So far as his Medicare liability existed it was found in s.8(4) of the Health and Other Services (Compensation) Act 1995 (Cth) and in the fact that Medicare would refund to Mr Viscuso, not to someone else, any amount that exceeded his liability.

3. The amount paid by the workers compensation insurer and to Medicare under the consent orders were amounts paid on behalf of Mr Viscuso.

   Was the unpaid $25,000 paid or received?

4. The more complicated issue arises out of the fact that it came to light during the hearing that some of the amount referred to in the consent order had not in fact been paid to anyone, that is not to Mr Viscuso, to anyone on his behalf or to anyone at his direction.

5. Although Mr Viscuso’s solicitors told Centrelink on 13 February 2020 that Mr Viscuso was paid $495,000 that was not in fact the case; only $470,000 had been paid because the second defendant was refusing to pay the amount of $25,000. I accept the evidence despite its contradiction with the earlier evidence that $25,000 has not in fact been paid because the letter (enclosed with Mr Viscuso’s solicitor’s letter to the Tribunal of 4 May 2021) from the solicitors for the insurer of the second defendant says as much. There is no sound reason to dispute that evidence, and none was suggested.

6. It will be remembered that s.1169 of the Act says that if a person receives a compensation affected payment and the person receives a lump sum compensation payment then, and then only, does the compensation affected payment become not payable in accordance with the relevant provisions.

7. The Secretary submitted that ‘the respondent should be taken to have received the settlement amount, including the $25,000…, on the date that the funds became payable to the respondent’ (the underlined words are my own) which it said was the date of the Judgment. The Secretary also says that the $25,000 was part of the payment referred to in s.17(2)(c) where it speaks of ‘a payment ...in settlement of a claim for damages’ irrespective of the fact that it has not been paid.

8. Although the question is not free from doubt and appears not to be subject to any authority, I do not consider amounts that have not been paid under a settlement fall within the expression ‘receives a lump sum compensation payment’ as used in s.1169. There are two reasons for this.

9. First, the starting point is the ordinary English meaning of the words ‘a payment’ in s.17(2)(a) to (d). Those words in ordinary English usually mean an amount of money that is paid to extinguish a legal obligation. In particular, ‘a payment’ does not in ordinary English mean either ‘payable’ or ‘a debt’ or ‘an accrued right’. Those things are very different from the ordinary English meaning of payment. If there is no payment, then the Act does not define the object as ‘compensation’ and does not operate upon it.

10. It was suggested that the use of the word ‘payment’ as a noun rather than a verb made a difference. I do not think it does. The inquiry will always be whether the  ‘payment’ was one that fitted the relevant descriptions in s.17(2) as ‘a payment’ of ‘damages’ or ‘compensation’ or ‘in settlement of a claim for damages or a claim under such an insurance scheme’ or was ‘any other compensation or damages payment’. The point can be simply illustrated here by asking the question: what was the payment of $470,000 that Mr Viscuso received? It was a payment in settlement of a claim for damages. And so too when he receives the outstanding $25,000 that will be a payment in settlement of a claim for damages.

11. Next, the Secretary suggested that if the word ‘payment’ meant ‘payment in fact’ then the word ‘receives’ would have no work to do. The simple answer is the Act makes clear by using the word ‘receives’ that if someone gets or obtains a payment that fits a certain description then certain consequences follow. 

12. Second, s.1169(1)(b) is clear that the compensation must be ‘received’ which in ordinary English usually means ‘gets’ or ‘obtains’. Sub-section 17(5) refers to receiving ‘whether he or she receives it directly or whether another person receives it, on behalf of, or at the direction of the first person’. That suggests one way or another, directly or indirectly something must be ‘received’ or ‘got’ or ‘obtained’. There is no deeming provision or statutory fiction created about when money is received beyond extending receipt to receipt upon authority or direction.

13. The present tense of the word ‘receives’ does not change much: a person ‘receives’ something when they ‘get’ or ‘obtain’ it or in the extended definition in the Act when someone gets or obtains it at their direction or on their behalf. The Secretary referred to the definition of ‘receiving’ in s.23(2) of the Act, but that definition is not relevant because it refers to ‘receiving a payment under this Act’. The various kinds of payments referred to in s.17(2) are not payments ‘under the Act’. Also, the definition in that section pertains to ‘receiving’ and not ‘receives’. In fact, s.23(2)(2) demonstrates that where the Act intended to create a statutory fiction by having things ‘taken to be’ something they are not the Act made special provision for them. Neither s.17(1) or 17(5) makes such provision.

14. The fact is that the amount of $25,000 has not been received by Mr Viscuso unless it can be said that receipt occurred as the Secretary suggested when ‘the funds became payable…’. Apart from the tension in the Secretary’s submission evident from its recourse to the phrase ‘taken to be received’, a phrase that is not found in s.17(5), the notion that compensation is ‘received’ when a judgment is entered or an order is made strains the meaning of the words ‘a payment’ and ‘received’. When Judgment is entered a debt is created. There is no ‘payment’ in ordinary English words. Far less does anyone receive anything by way of a payment of compensation at that point.

15. Next, the Secretary suggested that this leads to a perverse outcome, but I am not at all persuaded that it does. The purpose of the compensation recovery provisions of the Act is to reduce, suspend, terminate, or require repayment of various payments that would otherwise be made under the Act ‘because of the receipt of compensation by the person or the person's partner.’[1] That object probably reinforces the fact that social security payments are made for a practical welfare related purpose, namely that for one reason or another a person needs money. The existence of a debt is not really something that is going to help someone much when they are in need, the payment of an amount of money, such as an award of damages will, naturally enough, alleviate any need. It is more than a little counterintuitive to suggest that had someone like Mr Viscuso settled their case but for some reason or rather, for example the liquidation of a defendant after Judgment is entered, received only a very small portion or in fact none of the settlement sum would nonetheless be put out of any benefits under the Act for a significant time and be subject to a payback requirement.

    [1] Section 1160 of the Act.

16. To that of course should be added that when any amount, in this case the outstanding $25,000, is paid and is received it will itself constitute a lump sum compensation payment because it will be a payment in settlement of a claim for damages to which the relevant provisions of the Act will then apply.

17. Finally, the Secretary submitted that I should have regard to the Secretary’s policy in the Social Security Guide that says that when a compensation lump sum has been settled by agreement between the parties it is deemed to be received on the date ‘the agreement has been finalised AND the funds become payable’. I would only be guided by the policy if it were otherwise consistent with the Act.[2] I do not consider that the policy in this case is consistent with the Act because the Act operates on actual payments and not choses in action or judgments or debts. I am not here considering the exercise of a discretionary power but rather the correct application of statutory provisions. That in itself makes the policy less relevant than it might otherwise be, but my main reason for disregarding it is that I consider it is at odds with, and inconsistent with, the Act.

    [2] See Drake v Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179.

18. In my view the payment that has been received by Mr Viscuso in settlement of his claim for damages is $470,000 and does not include the amount that has not been paid to him in accordance with that settlement as it is not part of the payment and nor has it been received by him. It follows it should not be included in the relevant calculation of the compensation part of the lump sum for the purpose of calculating the preclusion period in s.1170.

    What is the preclusion period?

19. The payment made in settlement of the claim was therefore $470,000. Sub-section 17(4) requires that the repaid periodic compensation payment of $263,537.43 be deducted from that amount, which leaves $206,462.57. Sub-section 17(3)(a) says that 50% of that amount is the compensation part of the payment which is $103,231,28. Sub-section1070(4) requires that that amount be divided by $1020.40 which results in a preclusion period of 101 weeks. Sub-section 1170(1) says that period runs from the day after the date of Mr Viscuso’s last periodic payment which was 20 April 2019 so that the preclusion period is 21 April 2019 to 28 March 2021.

    Are there special circumstances?

20. Finally, s.1184K of the Act allows the Secretary, in this case the Tribunal standing in the Secretary’s place, to treat the whole or part of a compensation payment as not having been made if it ‘thinks it is appropriate to do so in the special circumstances of the case’.

21. The question of whether there are special circumstances requires identification of circumstances that apply that are unusual or different from the ordinary case. In general terms this will be satisfied where the application of the Act leads objectively viewed to some unfair or unjust result. I do consider that there are special circumstances in this case. The case has all the hallmarks of the paradigm kind of case in this area.[3]

    [3] Another example of such a case is Clark v Secretary, Department of Employment and Workplace Relations [2007] FCA 1076.

22. First, it is important that the usual or ordinary feature of any matter dealing with compensation payments will involve the application of the statutory formula, as arbitrary as it may be. Specifically, the Act contemplates that it will operate upon age pensions in circumstances where compensation as defined is paid. There is nothing out of the ordinary or different about the circumstance involved in Mr Viscuso’s  or the fact that his settlement included, as I have found, a component for economic loss. That is how the Act works.[4] There is nothing special about that.

    [4] Secretary Department Family and Community Services v Chamberlain [2002] FCA 67 at [34] - [35].

23. Second, it is not appropriate to dissect the statutory formula to try to estimate or make a decision about the part or portion of the compensation payment that represents future economic loss. Quite apart from the fact that it is objectively impossible to do so, the simple fact is that the formula laid down by the Act has, in effect, made that decision. The simple fact that the outcome of applying the formula might be seen in a particular case as unjust does not provide for special circumstances. There is nothing that permits an objective identification of the fact that the compensation paid did not include past and future economic loss. In fact, the evidence suggests the opposite.

24. Third, there is, in any event, nothing in the evidence that would support a conclusion that there is any particular hardship or particular injustice that is imposed upon Mr Viscuso by reason of the application of the preclusion period. His asset position as well as his circumstances do not suggest that there is any particular hardship in his circumstances. To that end if special circumstances were established, and I do not consider they are, I would not have exercised the discretion in his favour.

25. There was a suggestion that the fact that $25,000 of the settlement amount has not been paid raised an issue about ‘special circumstances’. That has been accounted for in the application of the statutory formula itself which I have dealt with earlier and it too cannot be something that informs the existence of ‘special circumstances’.

    CONCLUSION

26. I set aside the decision under review and substitute a decision that:

    (a)Mr Viscuso’s age pension is cancelled from 21 April 2019;

    (b)Mr Viscuso is precluded from receiving an age pension between 21 April 2019 and  28 March 2021; and

    (c)Mr Viscuso is liable to pay to the Commonwealth the amount of $13,760.07 which is the amount of age pension that was paid to him during the period 21 April 2019 to 28 March 2021.

I certify that the preceding 63 (sixty-three) paragraphs are a true copy of the reasons for the decision herein of Member Reitano

...............................[sgd].................................

Associate

Dated: 19 October 2021

Date of hearing:	22 April 2021
Counsel for the Applicant:	R Francois
Solicitors for the Applicant:	T Hillyard, Sparke Helmore Lawyers
Counsel for the Respondent:	B McManamey
Solicitors for the Respondent:	G Whiffin, Turner Freeman Lawyers