Editors --- "Compensation preclusion period: special circumstances; small economic loss" [2009] SocSecRpr 20; (2009) 11(2) Social Security Reporter, Article 9

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Compensation preclusion period: special circumstances; small economic loss

LEE and SECRETARY TO THE DEEWR

(2009/372)

Decided: 22nd May 2009 by M. D. Allen

Background

Lee was injured in a motor vehicle accident in 2003 and the compensation claim settled for $150,000 inclusive in July 2007. Lee claimed there was no economic loss awarded in the settlement. In accordance with the decision of von Doussa J in Secretary, Department of Social Security v a’Beckett (1990) FCA 332; (1990) 26 FCR 349 the Department looked at the objective evidence of the compulsory arbitration proceedings. As part of her compensation Lee claimed $22,000 for past economic loss and more than $300,000 for future economic loss. The Defendant insurer denied future economic loss and assessed the past economic loss at $875.00.

Prior to the accident Lee had arranged a course of study and attended the Wodonga College of Technical and Further Education in the period after the accident and before the settlement.

When the settlement was paid Centrelink determined that Lee had been overpaid youth allowance (YA) and some newstart allowance (NSA) in the amount of $11,660.14. The SSAT affirmed the decision and Lee appealed to the AAT.

Issues

Lee argued that the component of economic loss was so small that the 50% rule produced an unfair result. Lee also argued that, because she was undertaking pre-arranged study, the YA and NSA paid had no relationship to the accident.

Legislation

The preclusion period which gave rise to the debt was calculated under s.1169 of the Social Security Act 1991 (the Act) and the calculation was not disputed.

Special circumstances

Lee sought a special circumstances reduction of the preclusion period (and hence the debt), under s.1184 of the Act, because she would have to pay more for the economic loss than she was awarded.

The AAT sympathised but felt bound by the decision in Secretary, Department of Family and Community Services v Chamberlin [2002] FCA 6 where Keifel J stated that for many the economic loss was less than the statute assumed and that this was not a basis for special circumstances

Causal connection

Regarding the payment for study which would have been paid anyway: s.1160 (2) of the Act states that the compensation provisions apply whether there was a causal connection between the qualification for compensation affected payment and the circumstances involving the compensation payment or not. The AAT cited Secretary, Department of Family and Community Services v Edwards [2000] FCA 1645 where Drummond J referred to a similar provision and stated that the absence of a causal connection was a relevant consideration but not sufficient for special circumstances.

Decision

The AAT considered Lee’s personal circumstances and although Lee would have ongoing costs as a result of the injuries suffered, her circumstances were not ‘special’. In conformity with the judgment in Chamberlin the AAT affirmed the decision under review.

[M.R.]