Robinson and Department of Family and Community Services [1999] AATA 398 (9 June 1999)

Last Updated: 10 June 1999

DECISION AND REASONS FOR DECISION [1999] AATA 398

ADMINISTRATIVE APPEALS TRIBUNAL )

) No A1999/99

GENERAL ADMINISTRATIVE DIVISION )

Re PATRICK WILLIAM ROBINSON

Applicant

And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal Pamela Burton, Senior Member

Date 9 June 1999

Place Canberra

Decision The decision of the Social Security Appeals Tribunal of 10 September 1998 is set aside and the matter is remitted to the respondent for reconsideration with the directions that: (a) The preclusion period which applies to the applicant's compensation lump sum is to commence on 31 March 1980. (b) The debt raised of $20,039.80 was incorrectly deducted from the applicant's lump sum compensation settlement.

....................(Sgd.).........................

Pamela Burton

Senior Member

CATCHWORDS

SOCIAL SECURITY - preclusion period for benefits consequent upon receipt of lump sum compensation settlement - whether preclusion period commences when applicant is first off work after the accident on sick pay - or whether it commences the day after the applicant last worked - meaning of "loss of earnings or loss of earning capacity" - whether special circumstances exist to waive or reduce the preclusion period

Legislation

Social Security Act 1991, ss 17, 1165, 1184

Authorities

Secretary, Department of Social Security and a'Beckett (1990) 21 ALD 79

Nixon and Secretary, Department of Social Security (unreported, 26 June 1998, AAT 13022)

REASONS FOR DECISION

9 June 1999 Senior Member Pamela Burton

1. This is an application for review of a decision dated 23 September 1998 of the Social Security Appeals Tribunal (the "SSAT"). In that decision the SSAT affirmed the decision of a delegate of the respondent that the commencement date of the applicant's preclusion period was the day after he last worked, that is 26 August 1994, and that the debt raised of $20,039.80 was correctly deducted from the applicant's lump sum compensation settlement.

2. Mr Keith Carmody, solicitor, represented Mr Robinson, the applicant. Ms Patsy Hay, of Centrelink, represented the respondent ("the Department"). The tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the "T documents"), and various material tendered as exhibits by the parties. Mr Robinson and his solicitor, Mr Carmody gave oral evidence.

Background

3. The applicant, Mr Robinson is a 64 year old man. On 15 November 1979, in the course of his employment with the Harden Shire Council ("the Council") as a truck driver, Mr Robinson was required with others to attend a motor vehicle accident on a motorway near Harden, and to assist in the clean up of a spill of chemicals. A truck carrying a variety of chemicals had rolled causing the load of drums containing chemicals to spill, and many of those drums had broken open. Mr Robinson was required to clean up the debris from the road by putting the drums or the spilled chemicals into a truck by means of a mechanical loader taken by Mr Robinson to a garbage disposal area to be burnt and buried. At the garbage disposal area, the tray of the truck was tilted mechanically. On loosening the tailgate, the chemicals were spilled into the dump and ignited. In the course of this work which was carried out over several days, liquid chemicals, some of which were toxic, slopped or showered over Mr Robinson and at least one other of his colleagues, and Mr Robinson were exposed to toxic fumes and smoke. Mr Robinson and his colleague later claimed the contact with the chemicals had severely affected their health.

4. Mr Robinson continued to work for the council despite the onset of chest symptoms and a persistent cough. According to a report of Dr Carney dated 4 March 1993 (Exhibit B), in March 1980 Mr Robinson complained of headaches and dizziness and was admitted to hospital. His health deteriorated and in 1986 he ceased truck driving and remained in the employment of the Council on other duties. In November 1990 his health worsened as a consequence of developing pneumonia in his already damaged lung (Dr Carney, Exhibit B). Between 31 March 1980, the first occasion that he was off work as a consequence of the chemical spill incident, and the date of his retirement on 25 August 1994 he had further time off work. He last worked in March 1994, remaining on sick leave until his retirement.

5. Mr Robinson is suffering from lung disease which causes him respiratory problems. His condition is deteriorating. When he became aware of the seriousness of his condition he obtained legal advice from his solicitors. He and his colleague instituted separate claims against the Council for damages at common law out of the District Court of New South Wales. Mr Robinson received no periodic workers compensation payments for the time he had off work and neither the Council nor its insurer admitted liability. The causative link between Mr Robinson's illness and the chemical spill remained at issue. Establishing that link was an obstacle to successful common law proceedings. The quantum of damages for future loss of earning capacity was potentially very large.

6. Mr Robinson applied for and obtained a disability support pension from the Department, which was paid from September 1994. He was in receipt of the pension at the time his common law claim was to be heard. The Social Security Act 1991 ("the Act") provides for the preclusion of payment of certain benefits for specified periods by the Department to persons in receipt of periodical or lump sum compensation benefits. A person who has been in receipt of such benefits in a preclusion period is liable to repay some or all of those benefits from a lump sum compensation settlement or award.

The Issues

7. In Mr Robinson's case the issue arises as to the commencement date of the preclusion period applicable to him under the Act. If, as is submitted on Mr Robinson's behalf, it commenced at the time he suffered illness from the chemical spill incident at work and concluded before he was in receipt of a pension on his retirement there is no debt to the Department. If, as contended by the respondent, it commenced when Mr Robinson finally ceased work, the deduction of the amount of pension paid to him for the duration of the preclusion period from his lump sum compensation payment was correctly made.

8. If the respondent's approach is correct, the issue then arises of whether there are any special circumstances which warrant the exercise of a discretion, in effect waiving the whole or part of the preclusion period pursuant to subsection 1184(1) of the Act. It is appropriate to set out the relevant provisions of the Act in order to consider their application to Mr Robinson's situation.

The Legislation

9. The relevant sections of the Act are as follows:

Compensation part of a lump sum

17 (3) 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, on or after 9 February 1988; ...

income cut-out amount means the amount worked out using the following formula:

( Maximum basic Pharmaceutical amount ) Ordinary free

2 ( rate + for a single person ) + area limit

_______________________________________________________

52

where:

maximum basic rate means the amount specified in column 3 of item 1 in Table B in point 1064-B1.

pharmaceutical amount for a single person means the amount specified in column 3 of item 1 in the Pharmaceutical Allowance Amount Table in point 1064-C8.

ordinary free area limit means the amount specified in column 3 of item 1 in Table E-1 in point 1064-E4.

1165 Compensation affected payment not payable during lump sum preclusion period

compensation affected payment means:

(aa) an age pension; or

(a) a disability support pension; or

(b) ...

1165 (5) If periodic compensation payments are made in respect of the lost earnings or lost earning capacity, the new lump sum preclusion period is the period that:

(a) begins on the day after the last day of the periodic payment period; and

(b) ends after the number of weeks worked out under subsections (8) and (9).

periodic payments period means:

(a) in relation to a series of periodic payments - the period in respect of which the payments are, or are to be, made; and

(b) in relation to a payment of arrears of a series of periodic payments - the period in respect of which those periodic payments would have been made if they had not been made by way of an arrears payment;

1165(6) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the new 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 after the number of weeks worked out under subsections (8) and (9).

1165(7) If neither subsection (5) nor (6) applies, the new lump sum preclusion period is the period that:

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

(b) ends after the number of weeks worked out under subsections (8) and (9).

1165(8) If a compensation lump sum is received on or after 20 March 1997, the number of weeks in the preclusion period is the number worked out under the following formula:

compensation part of lump sum

Income cut-out amount

1165(9) If the number worked out under subsection (4) or (8) is not a whole number, the number is to be rounded down to the nearest whole number.

1184 Secretary may disregard some payments

1184(1) 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

The evidence

10. Mr Robinson's common law claim for damages was to be heard on 2 March 1998. Mr Carmody was acting on Mr Robinson's behalf in the claim. On 27 February 1996, Mr Carmody's secretary telephoned the Department to inquire whether there was any payback due by Mr Robinson of his pension in the event of a settlement. The evidence is that Mrs Howard of the Department advised that Mr Robinson was precluded from receiving a pension from the date of his retirement for a period to be calculated once the amount of his compensation settlement or award was known. As he had been in receipt of the pension since his retirement he was liable to repay the amount of pension he received in that preclusion period.

11. Mrs Howard's telephone note of that conversation indicates her understanding that Mr Robinson had continued to work until his retirement (T13). Mr Robinson had in fact had some time off work after the chemical spill incident before his retirement. Thus, the correctness of Mrs Howard's advice is in issue. Mrs Howard made no assessment of the amount of the repayment due, as the length of the preclusion period and the amount of the payback due could not be calculated under the Act until the amount of the award or settlement was known.

12. Mr Carmody instructed Sydney counsel to appear at the hearing. On the day of the hearing an offer of settlement was made to the applicant. In considering whether to accept the offer or not, Mr Robinson needed to know how much, if any, he was liable to repay to the Department from the settlement monies. Mr Carmody informed counsel of Mrs Howard's advice that there was a payback due to the Department for the amount of pension paid to Mr Robinson in the preclusion period to be calculated from the date of his retirement. Counsel suggested that the Department be telephoned again and advised of the offer of settlement and asked for an assessment of the actual payback amount if any. Mr Carmody's evidence is that Counsel's opinion was that Mrs Howard's advice was wrong and that Mr Robinson had no liability to the Department. Counsel was of the opinion that applying the Act to Mr Robinson's situation, the preclusion period commenced in 1980, at the time he was first incapacitated for work by the illness. Mr Carmody agreed with this opinion.

13. Mr Carmody telephoned the Department from the court and had a conversation with Ms Carnovale, an employee of the Department. Ms Carnovale advised him that it was likely that the preclusion period in Mr Robinson's case, commenced on the date of the chemical spill incident. This meant that Mr Robinson could expect to receive the settlement monies without any deduction being made for monies owed to the Department. Mr Carmody did not raise with Ms Carnovale the apparent conflicting advice given earlier by Mrs Howard. Ms Carnovale's advice accorded with the view of counsel and Mr Carmody as to the application of the preclusion period under the Act to Mr Robinson's circumstances. The settlement took place without a court hearing.

14. There is some dispute as to what information Mr Carmody gave Ms Carnovale on the telephone. Ms Carnovale's witness statement dated 20 April 1999 is in evidence (Exhibit 1). In it she states that the advice she gave was subject to qualification. She states that she emphasised to Mr Carmody that she "could not give him a definite answer" and that she was "skimming through the system and that any information was off the top of my head". She states that, as it transpired, her advice was in error because it was based on an incorrect understanding of Mr Robinson's work history. She explains that at the time she gave the telephone advice she was not aware that Mr Robinson had kept working until August 1994. It is not clear whether she was aware of Mr Robinson having time off work from illness in the period 1980 to 1994 when she gave the telephone advice or when she made her statement to the tribunal. She was not available to give evidence in person.

15. Mr Carmody said in evidence that he couldn't recall if he told her that Mr Robinson had continued to work until March 1994 and that he had retired in August 1994. He was sure, however, that Ms Carnovale was aware that Mr Robinson had not ceased work at the date of the accident. Mr Carmody concedes that Ms Carnovale qualified her advice. He asserts, however, that the qualification was with specific reference to the need to check what benefits Mr Robinson had received before his pension commenced. This did not concern Mr Carmody. He was confident that Mr Robinson had received no payments from the Department before he received the disability pension. Mr Carmody insists that he made it clear to Ms Carnovale on the telephone that a settlement was imminent and its acceptance was dependent upon her advice as to the amount of the repayment, if any.

16. The Department's records reveal that Mr Robinson's relevant work history was contained in either its compensation file, or his pension file. It is not clear what information Ms Carnovale had on her computer screen at the time she advised Mr Carmody. Taking both versions of the conversation into account, it seems that Ms Carnovale was to some extent dependant upon information she received from Mr Carmody on the telephone. It is likely that she did not have on her computer screen all of Mr Robinson's relevant work history. She was unaware when she gave advice to Mr Carmody, that inconsistent advice had previously been given by Mrs Howard. I accept that Mr Carmody regarded Ms Carnovale's qualification to her advice as going only to the question of whether Mr Robinson received benefits from the Department prior to his retirement. That is likely to be the only specific matter Ms Carnovale indicated that she needed to check.

17. Mr Carmody submits that Ms Carnovale and he were at one in the conversation and that she had all the information she required to give correct advice. He submits that, as Mr Robinson was incapacitated and did have time off work as a result of his illness prior to his retirement, that the advice Ms Carnovale gave was correct. He suggests that as a consequence of becoming aware that her advice was contrary to that of Mrs Howard, she accepted the Department's view that she had given the wrong advice.

18. Mr Carmody submits that he was entitled to assume that Ms Carnovale had access to all relevant information, the Department having obtained details of Mr Robinson's work history when he was first paid the pension. He pointed out that the Department noted at that time that Mr Robinson had received no periodic compensation payments, and a schedule of his absences from work and his consequent claim for wage loss had been forwarded to the Department.

19. After the settlement was effected, the Department issued a notice in writing of the payback due as calculated in accordance with the formula in section 17 of the Act. It applied the 50% rule to the amount of the settlement to determine the loss of earnings or income component. This was then divided by the "income cut-out amount" of $403.20, resulting in a preclusion period of 142 weeks, beginning on the day after Mr Robinson last worked. This meant he was not eligible for disability support pension from 26 August 1994 until 15 May 1997, resulting in a payment being raised of $20.039.80 which they then deducted from his settlement moneys. Mr Robinson thus received some $20,000 less than what he was advised he would receive clear in his hand on accepting the settlement offer. Understandably, this came as quite a shock to Mr Robinson, and indeed, to his solicitors.

20. Mr Robinson said that he would not have accepted the settlement if he had been aware of the amount of the payback, but rather he would have "hung out" for more. It is clear that the settlement he accepted was a substantial compromise of his claim. Further, of the settlement sum of $115,000 some $48,000 was consumed by legal costs. There were other amounts to be paid out. Mr Robinson accepted the settlement after being advised on what he would receive clear in his hand. I accept Mr Robinson's evidence that had he known a further sum of $20,000 was to be deducted, he would not have accepted the settlement.

21. Whether or not Mr Robinson would have received a higher award from a court, had he not accepted the settlement offer, is speculative. Liability in relation to the cause of his condition was in issue. I do not know the strength of the defendant's case. It is not appropriate to make any findings on what a court might have decided. It is appropriate, however, to take into account the fact that there is some medical evidence before me linking Mr Robinson's condition to his exposure to the chemicals in 1979 (Exhibit B), and that his claim was not fanciful. It was apparently sufficiently persuasive to give him some bargaining power for the purpose of achieving a settlement.

22. The fact Mr Robinson had bargaining power is relevant to my consideration of whether or not he was likely to have been able to negotiate a more favourable settlement had he received advice from Ms Carnovale consistent with that of Mrs Howard. The evidence is that the insurer's legal advisers were consulted about the effect of the payback due to the Department. In making their offer, they are likely to have taken into account the amount it would give Mr Robinson in his hand. I have accepted that Mr Robinson would not have accepted the offer had he known the amount the Department intended to deduct from the settlement offered. He was ready and willing to proceed to a court hearing that day. In those circumstances it is reasonable for me to assume that had both parties to the action been aware of the payback due to the Department, the settlement negotiations were likely to have taken place in a different framework, and to have produced a better outcome for Mr Robinson.

The commencement date of the preclusion period

23. Mr Robinson does not dispute the method of calculation of the payback to the Department. He disputes only the correctness of the decision to calculate the preclusion period from 26 August 1994, the day after he last worked. He maintains that on an application of subsection 1165(7) the preclusion period commenced in 1980, when he was first incapacitated for work as a consequence of the chemical spill.

24. As I have pointed out, it has not been established that the first time Mr Robinson had off work in 1980 after the chemical spill was a consequence of illness arising out of that incident. That matter was not the subject of a judicial determination. He received a settlement payment without admission of liability by the defendant. However, for the purpose of calculating the preclusion period under the Act, it is sufficient for the compensation lump sum to have been paid in settlement of a claim by Mr Robinson that related, wholly or partly, to his condition.

25. Mr Robinson claims that the payment made in settlement of his claim was intended to cover his claimed incapacity from time to time between 1980 and 1994, and thereafter. The evidence supports that contention. The tribunal has before it medical evidence produced in support of his common law claim linking Mr Robinson's current condition with the illness he suffered between 1980 and 1994, and his medical condition at the time of his retirement (Exhibit B). For the purpose of his common law claim he had particularised the periods he had had off work between 1980 and 1992. The schedule of damages prepared for those proceedings alleged a past wage loss of $8,953 for that period (T11). The time he was off work in 1994 and thereafter was included in his future economic loss claim (Exhibit C).

26. Mr Robinson had some 25 days off work ill in 1980, 4 days in 1981, and 2 days in 1982. In November 1990 he was admitted to hospital with pneumonia, and according to Dr Carney (Exhibit B) this illness contributed to his pre-existing lung condition. He had 120 days off work in 1992 (T11), and in 1994 he was on sick leave from March 1994 until he retired in August 1994 because of his ill-health. Mr Robinson maintained his claim for past economic loss up to the time of the settlement.

27. It is not in dispute that the lump sum Mr Robinson received was compensation for damage he suffered by way of personal injury arising out of the chemical spill incident. It is not disputed that the effect of that settlement put an end to Mr Robinson's claim for compensation for his alleged past wage loss. I am satisfied on the evidence that the lump sum settlement payment included the claim Mr Robinson made for past and future economic loss.

28. Subsection 1165(5) of the Act does not apply to Mr Robinson. He did not receive periodic compensation payments. Thus, subsection 1165(7) applies for the purposes of determining the commencement of the preclusion period. The central issue for the tribunal to decide is whether, for the purposes of subsection 1165(7), Mr Robinson had a loss of earnings or a loss of earning capacity in the periods when he was off work for the condition on sick pay between 1980 and August 1994.

29. The respondent argues that so long as the applicant was in receipt of sick pay, he suffered no loss of earnings or earning capacity when he was off work. His loss of earning capacity commenced on his retirement. On Mr Robinson's behalf it is argued that in the periods he was incapacitated for work he suffered both a loss of earnings and a loss of capacity to work, notwithstanding that he received income by way of sick pay. These arguments give rise to the question of whether income by way of sick pay is to be regarded as earnings, and if so, whether the utilising of earned sick leave credits is to be regarded as a loss of earnings.

30. Mr Robinson's evidence is that the Council had a policy of granting its retiring employees their unused sick leave (see T2, SSAT's reasons for decision in which it refers to the employer's letter dated 10 September 1998). According to Mr Robinson, in his case the employer reneged on that arrangement. But for his illness and his action of suing his employer, he said he would have received a lump sum from his employer on his retirement representing unused sick leave.

31. The respondent urges that on the facts of this particular case Mr Robinson suffered no loss of sick leave entitlements, because he resigned before he used up the credits he had. It is submitted on its behalf that any loss of entitlement to unused sick leave Mr Robinson had on his retirement was a loss of a bonus and not a loss of earnings.

32. His Honour Justice Von Doussa in Secretary, Department of Social Security and a'Beckett (1990) 21 ALD 79, at 89 sets out the scheme of the legislation for preclusion and recovery as being "to prevent double payments arising from that part of a payment by way of compensation which is fairly to be characterised as damages or compensation for an incapacity for work". Mr Robinson's settlement was paid to compensate him for damage he might have suffered as a consequence of the 1979 incident. It encompassed his claim for the periods between 1980 and 1994 in which he was incapacitated for work. In the normal course the amount of sick pay Mr Robinson received for those periods of incapacity would have been repayable to his employer on receipt of a compensation award or settlement. Had his settlement been the subject of such a repayment Mr Robinson would be able to demonstrate clearly that he had suffered a loss of earnings.

33. As it transpired, Mr Robinson was not required to repay that amount. No reasons are available for this decision on the part of the Council. On the evidence it is open for me to conclude as a possibility that the Council regarded it as futile to require repayment of the sick pay in the light of the applicant's retirement and its policy to pay out unused sick leave to retirees. If that was the case Mr Robinson's right to retain sick pay is arguably an employee bonus.

34. Subsection 1165(7) refers to loss of earnings and loss of earning capacity, not to loss of income. The Macquarie Dictionary (2nd edition) defines "earning" as "the act of one who earns", and "money earned; wages; profits". "Income" is a broader concept including, but not limited to earnings, being defined in the Macquarie Dictionary as "the returns that come in periodically, ... from one's work, property, business, etc.; revenue; receipts", and "something that comes in". Sick leave payments fall within the category of income received other than for labour or services.

35. Even if, which I doubt, sick pay forms part of earnings, in my view Mr Robinson suffered a loss of earning capacity while he was incapacitated for work and in receipt of sick pay. A person incapacitated for work has a loss of earning capacity for the duration of that incapacity, be it a temporary or permanent incapacity, and whether or not the person remains in the employment. An employee's loss of earning capacity is not restored by receipt of worker's compensation payments, welfare benefits, or income maintenance payments under an insurance policy. I do not think that the receipt of income by way of sick pay is any different. If a person is incapacitated for work and unable to earn his or her normal income by personal exertion, it follows he or she has suffered a loss of earning capacity.

36. Counsel for the respondent submits that Mr Robinson's case is akin to that considered by the tribunal in Nixon and Secretary, Department of Social Security (unreported, 26 June 1998, AAT 13022). Mr Nixon was self-employed and was injured in a motor vehicle accident in 1991, necessitating a short time off work. Mr Nixon continued his business until he was incapacitated for work. His compensation claim was settled by payment of a lump sum in 1996. The tribunal decided that the lump sum preclusion period commenced when he sold his business and ceased work. The facts in the case of Nixon differ in vital respects from the matter before me. The tribunal in Nixon found that Mr Nixon continued to operate his business and consistently earned income throughout the relevant period. He was self-employed and continued to receive earnings by way of profits. The tribunal was satisfied that for the purpose of the Act, Mr Nixon's loss of earnings and loss of earning capacity began on the date of the sale of his business. It also noted that Mr Nixon's compensation settlement did not include an amount for past economic loss.

37. For these reasons, I find that Mr Robinson first suffered a loss of earnings and a loss of earning capacity as a result of his condition on 31 March 1980. I find that the application of subsection 1165(7) to Mr Robinson's situation results in a preclusion period commencing on 31 March 1980. I have not been provided with the "cut-off" weekly figure required to calculate the length of the preclusion period. I understand from the parties that Mr Robinson received no relevant benefits from the Department until 1994, and it is unlikely that he is in debt to the Department in respect of the period, whatever its termination date. The amount of $20,039.80 paid to the Department from Mr Robinson's settlement is due and owing to Mr Robinson.

Special circumstances

38. In view of my decision it is not necessary for me to deal with the issue of whether or not special circumstances arise to warrant the compensation payment being treated as if it had not been made pursuant to the discretion granted in subsection 1184(1). For completeness I express my views on that matter.

39. The Department regarded Ms Carnovale's telephone advice as incorrect, or given without the benefit of full information. However, it was received in good faith by Mr Carmody and it accorded with Counsel's and Mr Carmody's view of the effect of the application of the legislation in relation to Mr Robinson's situation. Mr Carmody had reason to believe that Ms Carnovale had available to her all relevant information.

40. I note the respondent's submission that had Mr Carmody referred Ms Carnovale to the previous contrary advice his secretary had received, there may have been a different outcome. While that may be so, his failure to do so was understandable in the circumstances. The previous request made of Mrs Howard was for advice as to whether Mr Robinson had any payback obligation without reference to any settlement or award figures. It was not in writing. The legal advisers believed it to be wrong. The advice requested from Mrs Carnovale on the day of the settlement was for an actual and final payback figure, if any. She was made aware of the importance of giving correct information, and the urgency of the matter.

41. The Department had the information available to it to give consistent advice. The determination of the benefit preclusion period and a final pay back figure can not be calculated under the Act until the amount of the settlement or court award is known. The Department is commonly asked for final payback figures or an assessment of the maximum amount of any repayment obligation, over the telephone at the court door in the course of settlement negotiations. This places officers of the Department in a difficult position; one in which Ms Carnovale found herself. In practice solicitors rely upon the Department to provide accurate payback figures, as the length of the preclusion period and amount of benefit paid to their clients in the relevant period is not necessarily known by them. There is often no opportunity for that advice to be put in writing, and it is not appropriate or practical to defer settlements until that can be done.

42. In my opinion it was reasonable for Mr Robinson's legal advisers to have acted upon Ms Carnovale's telephone advice. It follows that in my opinion this is not a case as to which it can be said that Mr Robinson's appropriate remedy is against his solicitors.

43. I find that the circumstances outlined above, namely the inconsistent advice given by the Department, that Mr Robinson's legal advisers acted on the advice that they reasonably believed to be correct, are special circumstances to warrant the exercise of a discretion under subsection 1184(1) of the Act. I take into account the impact it had on Mr Robinson's decision to accept the settlement offer, and the likelihood of a better settlement figure being negotiated if what the Department regards as being the correct advice, was given at the relevant time. Thus, if, contrary to my decision, Ms Carnovale's advice was incorrect, I am of the opinion that it would be appropriate to treat the whole of the compensation payments as not having been made.

Decision

44. The decision of the Social Security Appeals Tribunal of 10 September 1998 is set aside and the matter is remitted to the respondent for reconsideration with the directions that:

(a) The preclusion period which applies to the applicant's compensation lump sum is to commence on 31 March 1980.

(b) The debt raised of $20,039.80 was incorrectly deducted from the applicant's lump sum compensation settlement.

I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Pamela Burton, Senior Member

Signed: .....................................................................................

Associate

Date of Hearing 27 April 1999

Date of Decision 9 June 1999

Counsel for the Applicant Mr Keith Carmody

Solicitor for Applicant Carmody & Co

Counsel for the Respondent Ms Patsy Hay

Solicitor for Respondent Administrative Law Section, Centrelink