By Michael Langenheim and Marcus Frangos -
Snapshot
- The case of Lind and SDSS (2014) AATA 680 demonstrates the difficulty an applicant faces when trying to establish the existence of ‘special circumstances’ to obtain relief from a preclusion period preventing access to social welfare benefits
- While the policy direction of Part 3.14 of the Social Security Act 1991 (Cth) may be a sensible one, i.e. to prevent double dipping, the legislation goes too far and has the capacity to produce surprisingly harsh outcomes, particularly for vulnerable clients inexperienced in managing a lump sum
- Solicitors should advise clients who have received a lump sum compensation payout that the current legislation will impose a preclusion period, the extent of the period, and that it can apply prospectively and retrospectively
The recent Administrative Appeal Tribunal decision in the case of Lind and SDSS (2014) AATA 680 again demonstrates the difficulty an applicant faces when trying to establish the existence of ‘special circumstances’ to obtain relief from a preclusion period preventing access to social welfare benefits. This article discusses the need for reform in this area and sets out some issues solicitors should consider when their clients receive a lump sum compensation payout.
Facts
In December 2009, Ms Lind, a 62-year-old nurse, was injured when a car crashed into the rear of her car as she was driving to work. Her injuries were such that she was unable to continue working on a full-time basis and had to scale back to a part-time role. Ultimately, her condition worsened and she became unable to work at all. She received workers compensation payments until she became ineligible upon reaching 65 years of age, at which time she began receiving the age pension. Ms Lind then later settled her CTP claim and received a lump sum payment (including legal costs) of around $275,000. This was the second lump sum she had received in relation to her injury and included an amount for future economic loss. An earlier lump sum payment of around $7,000 was also paid, which did not include any component of future economic loss.
Ms Lind used the lump sum to make payments for workers compensation payback, legal fees, outstanding mortgage payments on her home, outstanding Medicare payments, refunds to Centrelink and outstanding council rates (including interest).
This left her with a very modest amount of money, which she spent in a very short period of time by paying for basic repairs to her home, a second hand car, and repaying loans to friends and family.
