Kemble and Secretary, Department of Family and Community Services [2003] AATA 1048 (17 October 2003)

Last Updated: 17 October 2003

DECISION AND REASONS FOR DECISION [2003] AATA 1048

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2003/325

GENERAL ADMINISTRATIVE DIVISION	)
	Re	TERENCE KEMBLE

Applicant

And

SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal

Mr BJ McCabe, Member

Date 17 October 2003

Place Brisbane

Decision

The Tribunal affirms the decision under review.

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

BJ McCabe

Member

CATCHWORDS

SOCIAL SECURITY - benefits and entitlements - lump sum preclusion period - workers' compensation - whether length of preclusion period properly calculated - whether monies reimbursed to WorkCover for medical expenses should be excluded in the calculation of preclusion period - whether special circumstances exist

Social Security Act 1991 ss 17, 1184K

Administrative Appeals Tribunal Act 1975 s 43(1)

Groth v Secretary, Department of Social Security (1995) 40ALD 545

Re Chamberlain and Secretary, Department of Family and Community Services [2002] AATA 487

REASONS FOR DECISION

17 October 2003

Mr BJ McCabe, Member

INTRODUCTION

1. Mr Terence Kemble is the applicant in these proceedings. Mr Kemble became entitled to a lump sum payment on 10 May 2002 when he settled a personal injuries damages claim. Centrelink calculated the length of the period during which he was precluded from applying for various welfare benefits (the preclusion period) in accordance with section 17 of the Social Security Act 1991.

2. Mr Kemble is upset about the basis on which the respondent calculated the preclusion period. In particular, he is annoyed the figure used to calculate the preclusion period includes amounts paid to WorkCover in respect of medical expenses. The money was paid out of the settlement monies by his solicitor before he received the balance. The Social Security Appeals Tribunal affirmed the respondent's decision, and Mr Kemble has come to this Tribunal for relief.

3. The preclusion period was determined to be 191 weeks, commencing on 17 August 2001 and running until 14 April 2005. The period would be shorter if the monies Centrelink included were left out of the calculation.

THE MATERIAL BEFORE THE TRIBUNAL

4. The Tribunal was provided with the documents required under section 37 of the Administrative Tribunal Act 1975. Mr Kemble appeared on his own behalf at the hearing in Gympie. Ms Wallis-Dunn appeared for the respondent. Mr Kemble and Ms Wallis-Dunn both prepared written submissions that were provided to the Tribunal after the hearing.

THE FACTS

5. Mr Kemble's solicitors wrote to him on 13 May 2002 in connection with his accident compensation claim. The letter (document T32 at p92) begins: "We confirm that you have given us instructions to settle this claim for the amount of $210,000." [emphasis added]. The letter goes on to say that some organisations, like WorkCover and the Health Insurance Commission, might be entitled to have refunds paid out of the settlement monies if they had made payments to him or on his behalf following the injury. Importantly, the final paragraph on page 92 reads:

"In claims related to work injuries, the settlement is often expressed to be clear of the Workcover refund ie so there is no need to pay the amount of this Workcover refund out of the settlement funds (it has already been taken off the top). Your Workcover refund is $61,429.01, so that this settlement would in effect be for the total of $210,000 plus the Workcover refund of $61,429.01, totalling $271,429.01."

6. The letter goes on to estimate refunds to other organisations, including Centrelink, the Commonwealth Rehabilitation Service and the Health Insurance Commission totalling $11,000. It also estimated legal costs and outlays in the amount of $46,000. The letter concluded with an estimate that Mr Kemble would receive $153,000 in his pocket.

7. When Centrelink was informed of the settlement, it used the settlement figure ($271,421.01) less amounts refunded to WorkCover ($45,741.57) in respect of periodic compensation payments that had been made to the applicant while the solicitors were doing their work. A further amount WorkCover had paid in respect of medical expenses and which had been refunded to WorkCover out of the gross settlement was not deducted from the figure used by Centrelink. Mr Kemble says this $15,687..44 should not have been included in the final figure because he never received it. It should have been excluded along with the refunded periodic payments, he says.

8. Centrelink proceeded to perform the calculation using a nett settlement figure of $225,687.44. (Mr Kemble said it should have used $210,000 as the starting figure.) Pursuant to section 17 of the Act, Centrelink deemed 50% of the nett settlement figure to be the compensation part of the settlement. Centrelink then applied the divisor provided for in section 1165 to the compensation part of the settlement (an amount of $112,843.72) to determine the preclusion period. I do not understand there to be any question about the arithmetic; rather, Mr Kemble disputes the inclusion of the money repaid in respect of medical expenses in the nett settlement figure.

9. Centrelink is part of the executive of the Commonwealth. The executive is required to administer laws passed by the Parliament, which is comprised of our elected representatives. The Parliament passed the Social Security Act 1991 that creates the preclusion period and provides for its calculation. The respondent is obliged to do what Parliament says in the Act. Parliament also enacted the Administrative Appeals Tribunal Act 1975. Section 43(1) of the Administrative Appeals Tribunal Act says the Tribunal may effectively step into the shoes of the decision-maker - in this case the Secretary - and do what he or she could have done. The Tribunal's power is no wider than that of the decision-maker. The Tribunal technically forms part of the executive, so it is also bound by the provisions of the Social Security Act.

10. I have made this point because Mr Kemble was under the impression at the hearing that the Tribunal was free to disregard the law if it believed the law was stupid or wrong. I do not accept this law is stupid. But he is mistaken about the role of the Tribunal in any event. In this country, everyone is equal before the law - even the government. The respondent and the Tribunal are under the same obligation to observe the law as Mr Kemble or any other citizen.

11. The Social Security Act provides at section 17 for the calculation of the preclusion period using 50% of the lump sum settlement. The 50% figure is an arbitrary one. It was introduced to avoid the risk that parties to a settlement might manipulate the settlement amount to reduce the portion allocated in respect of future economic loss. The Parliament decided to deem 50% of the settlement to be paid in respect of economic loss to simplify administration of the Act and avoid abuse. I explained the rationale behind the rule in more detail in the Tribunal's decision in Re Chamberlain and Secretary, Department of Family and Community Services [2002] AATA 487.

12. The real question in this case is: 50% of what figure? Mr Kemble says it should be 50% of the gross settlement less all monies refunded in respect of periodic payments and medical expenses. Centrelink concedes only that the gross settlement figure should be reduced by the amount of the refund in respect of periodic payments made by WorkCover. Who is right?

13. Section 17(4) provides the answer. The sub-section says Centrelink must deduct from the lump sum payment any periodic compensation payments that were received but which were repaid. The legislation does not provide for deductions to be made in respect of money paid to the applicant or to anyone else on his behalf in respect of medical expenses. Centrelink is therefore obliged to take those amounts into account.

14. In other words, Centrelink did what it was required to do by the Social Security Act 1991.

15. Mr Kemble declined to provide the Tribunal with information about his personal circumstances that might provide the basis for a finding of special circumstances under section 1184K. If there was something about his circumstances suggesting hardship that set his case apart from the usual run of cases, the Tribunal would consider reducing the preclusion period: see Groth v Secretary, Department of Social Security (1995) 40 ALD 545; see also Re Chamberlain and Secretary, Department of Family and Community Services (supra). But he was having none of that. He preferred to focus on what he regarded as the inherent injustice of the statute. Even if I accepted the statute operates unjustly - which I do not - that is not enough. The law applies to everyone equally. There is nothing to distinguish his case from that of every other person who receives a settlement and refunds money paid in respect of medical expenses.

CONCLUSION

16. Centrelink correctly and lawfully calculated the length of the preclusion period in this case. There were no special circumstances identified that would justify the Tribunal intervening to shorten that period. A sense of grievance or injustice is certainly not enough. If Mr Kemble is dissatisfied with the result, he should take it up with his Member of Parliament. That is as it should be in a democracy.

17. There is one other point. Mr Kemble complained at the hearing that he was discriminated against by a local Job Network provider. He said the Job Network providers are only interested in placing unemployed persons in jobs when the provider or the employer receives a payment from the government. Because he did not receive benefits, Mr Kemble said his provider had no incentive to find him a position, although he was qualified and keen to work. He noted the local newspaper carried stories on this issue. I asked Ms Wallis-Dunn to investigate the matter. She provided a brief report that incorporated copies of the newspaper articles. The articles included an explanation and defence offered by Julie Meyer, the business manager of Wesley Uniting Queensland, a Job Network provider. Ms Meyer said the service was available to everyone.

18. It would be a matter of real concern if persons in Mr Kemble's position were being discriminated against because of perverse incentives built into the remuneration of Job Network providers. But there is no evidence of this. In those circumstances, I merely encourage Centrelink to be diligent in its monitoring of Job Network members to ensure their free service is in fact available to everyone.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Mr BJ McCabe, Member

Signed: Denise Burton

Administrative Assistant

Date/s of Hearing 21 August 2003 at Gympie

Date of Decision 17 October 2003

The Applicant appeared in person

For the Respondent Ms Wallis-Dunn, Departmental Advocate