Watkins and Secretary, Department of Family and Community Services

[2002] AATA 1200

DECISION AND REASONS FOR DECISION [2002] AATA 1200

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/286

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

DECISION

Tribunal       Mr B J McCabe, Member  

Date22 November 2002

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.         

(Sgd)  B J McCabe
  Member
CATCHWORDS
SOCIAL SECURITY – imposition of compensation charge - lump sum compensation payment – compensation for future economic loss - whether special circumstances exist to warrant treating all or part of the compensation payment as having not been made

Social Security Act 1991

Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Secretary, Department of Family and Community Services and Doyle [2002] AATA 676

Re Edwards and Secretary, Department of Family and Community Services [2000] AATA 752

Re Secretary, Department of Social Security and Hill (AAT No 10566, 4 December 1995)

REASONS FOR DECISION

22 November 2002 Mr B J McCabe, Member              

Introduction

1. The applicant, Ms Suzanne Watkins, seeks review of a decision of the Social Security Appeals Tribunal affirming the respondent's decision to exact a compensation charge. The Secretary says the compensation charge was payable because Ms Watkins received a lump sum settlement for personal injuries that included a component for economic loss. The applicant disagreed that her settlement included any component in respect of economic loss. She also claimed there were special circumstances that justified the decision-maker disregarding any payment of compensation in respect of economic loss.

2. The applicant did not dispute the Secretary's arithmetic in the calculation of the compensation charge.
   The Material Before the Tribunal

3. The Tribunal was provided with the documents required under s 37 of the Administrative Appeals Tribunal Act 1975. The hearing in the matter was held in Southport. The applicant appeared in person. Ms Wallis-Dunn appeared on behalf of the respondent.
   The Facts

4. Ms Watkins injured her ankle while shopping on 7 February 1997. She commenced legal proceedings against the occupier seeking damages for, amongst other things, loss of income. Her doctor had told her she would require surgery on her ankle as a result of the accident, and that she would be unable to work when that occurred for a period of 10-12 weeks.

5. The matter was settled out of court on 4 August 2001. The applicant received a lump sum payment of $44,000. Ms Watkins described the settlement process during her testimony. She said she was surprised at how the barrister and lawyers worked. She said they sought over $47,000 on her behalf but convinced her she should settle for the lower amount. She said her lawyer told her it would be difficult to succeed in a claim in respect of the future economic loss. It was her understanding at the time that the final settlement figure was reached after she had given ground on the future economic loss issue.

6. The Authorised Review Officer within Centrelink spoke with the lawyers for the applicant and the insurer in connection with the settlement. Both lawyers confirmed that an amount in respect of economic loss was factored into the settlement, although they disagreed on the figures: see T20, p 70. Ms Watkins said in her evidence that she contacted the lawyers for the insurer. They confirmed the Authorised Review Officer's understanding.

7. I am satisfied on the evidence that the settlement did include a component in respect of economic loss, although it is difficult to be precise as to the amount.

8. Ms Watkins was already in receipt of sickness benefits following a bout of depression. Benefits were paid to her from 23 September 1996 and December 1997. She had been hospitalised for about six weeks in 1996. At the time of her accident, she had returned to work in a pharmacy on a part-time basis. She insisted the accident did not affect her work routine and she did not suffer a loss of income as a result of her injury over and above what she had already sustained as a result of her illness.

9. The Secretary was advised of the settlement by the applicant's solicitors. The respondent decided to recover a compensation charge in the amount of $5,042.28 from the applicant because the lump sum settlement included an amount in respect of economic loss. The amount of the charge was equal to the amount of benefits paid to the applicant during the lump sum preclusion period calculated in accordance with s 1165. The amount was recoverable under s 1166.

10. The applicant says she has decided against having the surgery on her ankle.  I note Ms Watkins has changed her mind on this point since the hearing before the SSAT. She says she has learned to cope with effects of the injury. She does not wear high heels, for example, and is careful when she walks on uneven surfaces. Ms Watkins also says she requires other surgery that will put her out of action for a lengthy period of time. That surgery has a higher priority. She says she cannot contemplate taking time off for ankle surgery and the other surgery as well. She continues to work four days each week. She does not work full-time because she wishes to spend time with her grandchildren.
    The Relevant Law

11. I have already concluded that Ms Watkins's settlement included a component in respect of economic loss. Since there was no dispute as to the way in which the amount of the compensation charge was calculated, it is unnecessary for me to explain the operation of the legislative scheme in detail.

12. In this case, it was not disputed that the lump sum preclusion period was 38 weeks. It was also accepted that benefits were paid during that period in the amount of $5,042.28.

13. The Secretary has the discretion to effectively waive the charge in special circumstances. The discretion is conferred by s 1184K, which says:

    "For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
    (a) not having been made; or
    (b) not liable to be made;
    if the Secretary thinks it is appropriate to do so in the special circumstances of the case."

1. The concept of special circumstances was considered in Groth v Secretary, Department of Social Security (1995) 40 ALD 541. In that case, Kiefel J explained (at 545) it was necessary to identify something in the applicant's circumstances that set the case apart from the usual or ordinary.

2. Ms Watkins did not refer to any particular financial hardship arising out of the application of the rule in her case. She said she would not have settled for such a low amount if her lawyers had advised her she might be liable to repay any money to the respondent. While poor legal advice or representation might in some circumstances constitute special circumstances, the Tribunal has generally been reluctant to exercise the discretion in s 1184K on this basis. The applicant should look to her solicitor and its insurers if she is dissatisfied with the quality of her representation: see, for example, Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464; Re Secretary, Department of Family and Community Services and Doyle [2002] AATA 676.

3. The applicant also says the fact she is not planning to proceed with the surgery on her ankle amounts to special circumstances. She says – and I accept – the economic loss component of the settlement was paid in respect of the time she was to take off work to have her ankle surgery. She says the legislative scheme permitting recovery of benefits under s 1166 is designed to prevent 'double-dipping'. The 'double dipping' concept was explained by the Tribunal in Re Edwards and Secretary, Department of Family and Community Services [2000] AATA 752. Senior Member Muller said (at par13):

   "The object of the legislation surrounding this particular matter, that is, the legislation relating to preclusion periods upon receipt of lump sum compensation amounts, is to prevent what is known colloquially as double-dipping. It is to prevent a situation arising whereby a person could receive a social security pension and, at the same time, be compensated for the same period by way of compensation from an insurance payout or workers' compensation. It is expected that if a person receives payment of compensation for a specific period then the person should not get social security payments for that same period."

1. Ms Watkins says if she does not have the surgery and lose the income, there is no double dipping as that concept was explained in Edwards. 

2. The applicant referred to the decision of the Tribunal in Re Secretary, Department of Social Security and Hill (AAT No 10566, 4 December 1995). In that case, Senior Member Eyre accepted there was no double dipping and found for the injured person.

3. The situation here is distinguishable from Hill. Ms Watkins may yet change her mind about the surgery. She may have no choice. While I have no doubt about the sincerity of her claim that she has decided against the surgery, circumstances might change. If she were to go ahead with the surgery she would be entitled to seek income support payments at that point. 
   Conclusion

4. For the reasons given, I affirm the decision under review.

   I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Member

   Signed:          S Oliver

   Associate

   Date of Hearing  12 November 2002
   Date of Decision  22 November 2002
   Applicant Represented Herself
   Solicitor for the Respondent    Ms Wallis-Dunn, Departmental Advocate