Centrelink Payments which are not required to be repaid, do not impact the damages payable to a claimant

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By Stuart Eustice, Partner, Holly White, Associate, and Gregor Campbell, Lawyer

 

Facts

This matter arose from a dispute between WQA (a pseudonym) (Plaintiff) and Archbishop Comensoli and Trustees of The Christian Brothers (Defendants) as to whether the Plaintiff’s Newstart and Disability Centrelink payments (Centrelink payments) should be deducted from the settlement sum agreed between the parties.

The Defendants’ contention was that the Centrelink payments paid to the Plaintiff (which were not required to be repaid to the Commonwealth) should be taken into account in calculating the Plaintiff’s damages for past economic loss, and thus deducted from the settlement sum.

The Plaintiff’s position was that, notwithstanding that the payments were not repayable, he was entitled to retain them, and the whole of the settlement sum was therefore payable to him by the Defendants.

At first instance judgement was given in favour of the Plaintiff with the Victorian Supreme Court holding that:

  1. Centrelink payments made to the Plaintiff should not be considered when calculating of damages for past economic loss, in circumstances where they are not repayable to the Commonwealth; and
  2. The full amount of the settlement sum was therefore payable to the Plaintiff.

The Defendants’ appealed the above decision to the Victorian Court of Appeal submitting that the Social Security Act 1991 (Cth) (the Act) under which Centrelink payments are governed does not specify that unrepayable benefits were to be enjoyed by the Plaintiff in addition to his entitlement to damages.

 

Held

In addressing the Defendants’ appeal, the Court of Appeal applied the indicia of legislative intention as set out in High Court case of Manser v Spry (1994) 181 CLR 428 and determined that:

  1. the presence of statutory provisions requiring the repayment of some benefits paid pursuant to the Act but not others was a strong indication that certain Centrelink payments were intended by the Act to be enjoyed in addition to economic loss damages; and
  2. the inability to say with certainty, prior to the finalisation of a claim for damages, the precise amount that will be repayable under the provisions of the Act, whether the claim is settled or prosecuted to a judgment, is another strong indicium that Centrelink Payments which are not required to be repaid are intended to be enjoyed in addition to any right to damages.

The Court of Appeal therefore agreed with the Plaintiff and the conclusion of the Victorian Supreme Court that the Act permitted the Plaintiff’s Centrelink payments to be enjoyed independently of, and in addition to, the Plaintiff’s right to damages.

 

Relevance

The decision of the Court of Appeal makes it clear that in cases where payments made under the Act are not required to be repaid to the Commonwealth, these payments should not be considered when calculating damages for past economic loss.

The Plaintiff is therefore entitled to “double dip” with respect to their past economic loss and retain both payments made under the Act which are not required to be repaid to the Commonwealth and any damages they receive for their past economic loss despite receiving Centrelink payments during this period.

For further information, please do not hesitate to contact us.

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