Cameron and Secretary, Department of Social Services [2014] AATA 176 (1 April 2014)

Last Updated: 1 April 2014

[2014] AATA 176

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2013/4633
Re	Beth Cameron
	APPLICANT
And	Secretary, Department of Social Services
	RESPONDENT

DECISION

Tribunal	Dr M Denovan, Member
Date	1 April 2014
Place	Brisbane

The Tribunal affirms the decision under review.

..............................Sgd.......................................
Dr M Denovan, Member

CATCHWORDS

SOCIAL SECURITY – Pensions and benefits – Applicant received Total and Permanent Disablement benefit from superannuation fund – Whether benefit should be treated as income – Whether the benefit should be treated as a lump sum payment or periodic payment – Decision under review affirmed

LEGISLATION

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

CASES

Cole and Anor and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Anor [2013] AATA 536

Willmott and Secretary, Department of Education, Employment and Workplace Relations [2012] AATA 349

SECONDARY MATERIALS

Guide to Social Security Law, Australian Government

REASONS FOR DECISION

Dr M Denovan, Member


1 April 2014

1. Ms Beth Cameron, the applicant, was granted disability support pension (“DSP”) from 3 March 2002. In September 2012, Ms Cameron received a Total and Permanent Disablement (“TPD”) benefit of $78,661.85. Centrelink determined that Ms Cameron’s income exceeded the allowable income test, and cancelled the payment of DSP on
   20 September 2012. The decision was affirmed by an Authorised Review Officer on
   8 July 2013 and by the Social Security Appeals Tribunal on 30 August 2013.
2. Ms Cameron believes the decision to cancel her DSP was incorrect. Mr Cameron, the applicant’s father, represented her at the hearing. He argues that the TPD payment should not affect the applicant’s DSP payments. He contends that the payment his daughter received was compensation, and therefore income for the purpose of assessing her pension. He further contends that the money his daughter received was a type of superannuation payment and, as such, is not income that would affect her rate of pension. Mr Cameron argues that should I find that the TPD payment is income, I should then follow the Guide to Social Security Law^[1] (“the Guide”) which, according to him, indicates that lump sum payments of compensation are to be ignored as income for pensioners.

ISSUES FOR DETERMINATION AND RELEVANT LEGISLATION

3. The issue that I must determine is whether Ms Cameron’s DSP payments should have been cancelled when she received the TPD insured benefit paid to her on
   4 September 2012. The legislation relevant to this decision is the Social Security Act 1991 (Cth) (“the Act”), and the Social Security (Administration) Act 1999 (Cth).
   Also relevant, although not binding on the Tribunal, is policy advice set out in the Guide. The Tribunal will usually follow the Guide unless there are cogent reasons for not doing so.

CONSIDERATION

4. The facts of this matter are not in dispute. On 4 September 2012, Ms Cameron received a cheque from REST Industry Super in the amount of $69,368.85. Her benefit was calculated to be $78,661.85 less PAYG tax in the amount of $9,293. After the payout, Ms Cameron’s remaining account balance was approximately $4,980.30.

Should the lump sum TPD payment Ms Cameron received on 4 September 2012 be treated as income and be taken into consideration when the rate of DSP is calculated?

5. Calculation of the amount of DSP a person is entitled to is done with reference to Rate Calculator A, which is contained at the end of s 1064 of the Act.^[2] The rate is income tested, and most income will be taken into account when assessing the rate of DSP.
6. Income is defined under s 8(1) of the Act. The definition of income does not include payments of compensation, defined in s 17(2) of the Act, and specifically excludes amounts referred to in ss 8(4), (5), and (8).
7. The TPD benefit received by Ms Cameron is not a compensation payment as defined in s 17(2), because of the manner in which the sum Ms Cameron received was calculated.^[3] This finding is consistent with the Guide which, at 4.13.1.20, states that a lump sum disability benefit paid from superannuation funds is not a compensation payment.
8. Sections 8(4) and (5) relate to home equity conversion amounts and are not relevant to this matter. Section 8(8) provides that any return on a person’s investment in a superannuation fund is not income for the purpose of assessing the rate of DSP. As stated above, it is Mr Cameron’s case that the TPD payment received by the applicant was a return on her investment in REST Industry Super fund, and therefore it should not be regarded as income.
9. In Cole and Anor and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Anor,^[4] s 8(8) was considered, and Senior Member Cunningham concluded that the section refers to “monies generated or earned by the superannuation investment that remain within the fund”. The TPD payment received by Ms Cameron was an insured benefit, it was not money generated or earned by her investment, and is therefore not excluded pursuant to s 8(8) for the purpose of determining her income and rate of DSP.
10. Section 8(11) provides that under certain circumstances the Secretary may determine that some lump sums are exempt from the calculation of a person’s income. The Secretary’s determinations under this subsection are set out in the Guide at 4.3.2.35, and do not cover the type of payment received by the applicant.
11. Ms Cameron’s TPD benefit received in September 2012 is therefore part of her ordinary income, and must be taken into consideration when calculating the rate of DSP she is entitled to.

How should the lump sum TPD benefit Ms Cameron received be treated in the calculation of her DSP entitlement?

12. Mr Cameron submits that 4.13.1.20 of the Guide is to be applied, and as such, the TPD benefit ignored as income when determining the rate of the applicant’s DSP. I was referred by Mr Cameron to the matter of Willmott^[5] and it was argued that in that matter, Senior Member Kenny applied the Guide and the lump sum payment received by the applicant in that case was not treated as having been received over 12 months, but rather, as income in the fortnight in which it was received. Mr Cameron argues that I should apply the Guide in the same way, and the TPD payment received by his daughter therefore only reduces the rate of pension she received for the fortnight in which it was received.
13. The relevant part of 4.13.1.20 of the Guide reads as follows:

Treatment of compensation/compensatory payments assessed as ordinary unearned income
The following Table shows how payments that are compensatory in nature are assessed as ordinary unearned income for allowances/benefit and pensions:

Compensation that is paid...	Is assessed as ordinary unearned income for...
as a lump sum*,	- allowances/benefit in the fortnight it is received, BUT - ignored as income for pensions.
periodically,	- allowances/benefit, AND - pensions.

14. The lump sum payment in the matter of Willmott^[6] was not a TDP payment but was settlement of an unpaid dismissal claim.
15. Directly below the Table in the Guide, and relevant to this case, it is stated that:

If a lump sum is received instead of periodic payments and the lump sum is calculated as a set weekly, fortnightly or monthly rate over a specific period, the payment is treated as if periodical payments were being made throughout the relevant period.

Ms Cameron was paid a lump sum and pursuant to s 1073 of the Act, she is taken to have received one fifty-second of that amount as ordinary income during each week in the 12 months commencing on the day she became entitled to receive the amount.

16. Because the legislation requires her lump sum TPD payment to be treated as if periodic payments were being made pursuant to the Table in the Guide, those payments will be treated as ordinary unearned income, and will affect the amount of her pension she receives.
17. I find the legislation and the Guide have been applied correctly. The applicant failed the ordinary income test and her DSP was properly cancelled on 20 September 2012.

DECISION

18. The Tribunal affirms the decision under review.

I certify that the preceding 18 (eighteen) paragraphs are a true copy of the reasons for the decision herein of Dr M Denovan, Member

............................Sgd.........................................
Associate

Dated 1 April 2014

Date of hearing	3 February 2014
Advocate for the Applicant	Colin Cameron, Applicant's father
Solicitors for the Respondent	Christopher Bishop, Department of Human Services

---

^[1] Guide to Social Security Law, Australian Government at 4.9.1.30.

^[2] See s 117(a) of the Act.

^[3] Pursuant to Section 17(2A)(b)(i) the agreement under which the contributions were made did not provide for the amounts that would otherwise be payable being reduced because the recipient is eligible for or received payments of DSP.

^[4] [2013] AATA 536.

^[5] Willmott and Secretary, Department of Education, Employment and Workplace Relations [2012] AATA 349.

^[6] Willmott and Secretary, Department of Education, Employment and Workplace Relations [2012] AATA 349.