Ward and Secretary, Department of Family and Community Services

[2000] AATA 1012

DECISION AND REASONS FOR DECISION [2000] AATA 1012

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q00/538

GENERAL ADMINISTRATIVE  DIVISION       )       
           Re      RODNEY WARD    
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Deputy President DP Breen, Presidential Member      

Date20 November 2000   

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.

(Sgd)             DP BREEN   PRESIDENTIAL MEMBER

CATCHWORDS
SOCIAL SECURITY – compensation charge – purpose of compensation – payments in respect of lost earnings – past and future economic loss – interest payment.

Social Security Act 1991 ss 1161(1)
Re Baker and Secretary, Department of Social Security (1990) 11 AAR 361 at 365
Secretary, Department of Social Security v Sword (1991) 23 ALD 52

REASONS FOR DECISION

20 November 2000           Deputy President DP Breen, Presidential Member                  

1. This was an appeal against a decision of the Social Security Appeals Tribunal dated 8 May 2000 which determined that a compensation charge of $13,696.33 was recoverable from the applicant.

2. The matter was heard by me in Ballina on 16 October 2000.  Mr Rodney Ward, the applicant, represented himself.  Mr N Foster, Departmental Advocate, represented the respondent Department.  Mr Ward gave oral evidence and the "T" Documents were taken into evidence.

3. Mr Ward suffered two injuries whilst working in 1991.  The first injury was suffered on 5 October 1991 whilst he was doing community service work for Corrective Services.  The second injury occurred 13 days later when Mr Ward had returned to his usual place of employment.  The claim for the second injury was settled in 1994.  The claim for the first injury proceeded to judgement and Mr Ward was awarded over $43,000.  $9,036 was in respect of future economic loss, $31,034 for past economic loss and $3,847 in interest.

4. Mr Ward has not worked since 18 October 1991 and is still unfit for work.  He has received various allowances from Centrelink since 1991, including sickness allowance, job search and newstart.  On 20 May 1999 a Centrelink delegate decided to require Mr Ward to repay Centrelink a compensation charge amount of $13,696.33.

5. The relevant legislation under which this charge can be raised is subsection 1166(1) of the Social Security Act 1991 which is in the following terms:

   "(1)     If:
             (a)       a person receives a lump sum compensation payment; and

   (b)the person receives payments of a compensation affected payment for the lump sum preclusion period;

   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."

1. Section 17 of the Act defines "compensation affected payments" as including sickness benefits and job search allowances.  "Compensation" is defined to include a payment of damages.  The "compensation part of a lump sum compensation payment" is defined as being so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn.

2. The issue before the Tribunal is whether a compensation charge should be raised and, if so, on what amount it should be assessed.

3. Mr Ward received a lump sum compensation payment in the form of damages and while he was awaiting the outcome of his case he received payments from Centrelink which were liable to be recovered after compensation was awarded.  As such, the discretion under Section 1166 is enlivened.

4. The case of Re Baker and Secretary, Department of Social Security (1990) 11 AAR 361 at 365 stated that "the purpose of compensation is to put the worker in the same position he would have been in had his physical integrity not been impaired in the course of his employment".

5. To not recover Centrelink payments would be to grant Mr Ward a windfall, in that he would receive monies for loss of income as well as Centrelink payments – in effect, a double payment.  As such, the Tribunal can see no reason to interfere with the exercise of the discretion under Section 1166.

6. In terms of the amount on which the compensation charge should be calculated, the Federal Court case of Secretary, Department of Social Security v Sword (1991) 23 ALD 52 makes it clear that the phrase "payments …. in respect of lost earnings" includes both past and future economic loss. 

7. When the applicant lodged his appeal with the Social Security Appeals Tribunal, he had solicitors put in submissions which raised the issue of the manner in which Judge Ducker had explained his calculation of past and future economic loss.  His Honour had said that he had based the calculation on the difference between what the applicant would have earned before the accident and what he was capable of earning after the accident, namely, $20 per week for past loss and $25 per week for future loss.  The applicant's solicitors submitted that as Mr Ward would be entitled to earn over $25 a week before his pension was affected, he should be entitled to keep that money.

8. The fact that His Honour explained the procedure by which he calculated the lump sum is irrelevant for the purposes of Section 1166.  The lump sum itself is all that is taken into account.  Both future and past economic loss components of a damages award are payments in respect of lost earnings.  The interest component is inextricably linked to the other two payments as it endeavours to put the applicant in the position he would have been in if he had received his compensation monies at the date he was entitled to them.  As such, all three amounts are assessable for the purpose of calculating the compensation charge under Section 1166.

9. For the above reasons, the Tribunal affirms the decision under review.

   I certify that the 14 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President DP Breen, Presidential Member

   Signed:         Emma Oettinger
     Associate

   Date/s of Hearing  16.10.00
   Date of Decision  20.11.00
   Rep. for the Applicant              Applicant appeared in person
   Solicitor for the Respondent    Mr N Foster, Departmental Advocate