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AGA v QBE [2019] NSWDRS MR 155 (subject to Review Panel Decision)

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMerit Review
CatchwordsEarner – second entitlement period – full time carer – contract of employment – personal exertion – service rendered – pensions – loss of earnings – Centrelink payments – carer payment – carer allowance – caring for mother – government pension
Legislation citedMotor Accidents Injury Act (NSW) ss 1.4, 3.5, 3.6, 3.7, 3.9, 7.13(4), div 3.3, Schedule 1 clause 2 & 3(2), Schedule 2 clause 1(a
Motor Accident Injuries Regulation 2017 s 7
Motor Accident Guidelines effective 15 January 2019
Cases cited

N/A

Text citedN/A
Parties AGA - Claimant
QBE - Insurer
DisclaimerThis decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Merit Review Certificate

Merit Reviewer's Reasons for Determination

Background

1.  There is a dispute between the claimant and the insurer as to whether the claimant is an earner for the purpose of Division 3.3 of the Act.

2.  The claimant was in a motor vehicle accident (“MVA”) on 16 June 2018. At the time of the MVA the claimant had been in receipt of a Carer’s Payment and Carer’s Allowance from Centrelink on the basis she was her mother’s full-time carer.

3.  On 10 April 2019 the insurer determined the claimant was not entitled to weekly payments of statutory benefits on the basis she was not an ‘earner’ for the purpose of Division3.3 of the Act.

4.  This decision was confirmed by the insurer on 10 May 2019 following an internal review.

Documents and Information

5.  I have considered the documents provided in the application and the reply.

Submissions

6.  The claimant submits she was working as a ‘carer’ at the time of the accident and receiving an ‘income’ from Centrelink for this work. The claimant submits if it had been the intention of the Act for the claimant not to be considered an ‘earner’ it would not have included ‘pensions’ under the definition for ‘personal exertion’ under clause 3(2) of schedule 1 of the Act.

7.  The insurer submits the claimant is not an ‘earner’ as defined in Schedule 1, clause 2 of the Act, as she was not ‘employed, self-employed or in receipt of workers compensation benefits’ at the time of the accident. The insurer says the arrangement to care for her mother was not a ‘contract of employment’ and whilst the claimant received payment from Centrelink she was not an employee of the Commonwealth, noting the Commonwealth did not pay superannuation on her behalf and she had no annual or sick leave entitlements. The insurer submits if the claimant were considered an earner then an individual in receipt of the Family Tax Benefit or Single Parent Benefits from Centrelink would be an ‘earner’ because they are ‘engaged’ by their children and therefore employed by Centrelink to look after them and this would be illogical and inconsistent with the objects of the Act.

Legislation

8.  In conducting my review, I have considered the following legislation and guidelines:

a.  Motor Accident Injuries Act 2017 (NSW) (“the Act”)

b.  Motor Accident Guidelines effective 13 July 2018 (“the Guidelines”)

c.  Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)

Reasons

Is the claimant an "earner"?

9.  The relevant facts are:

  • That as at the day of the MVA the claimant was in receipt of a Carer’s Payment and a Carer’s Allowance on the basis she was her elderly mother’s full-time carer and did not undertake any other work.]
  • The claimant’s mother entered a nursing home on 18 January 2019.
  • On 18 January 2019 the claimant ceased receiving the Carer’s Allowance of $127 per fortnight ($63.50 per week).
  • On 18 April 2019 the claimant ceased receiving the Carer’s Payment of $1,050 per fortnight ($525 per week).
  • The total loss based on pre-injury payments from Centrelink is $588.50 per week.

10.   The evidence suggests the claimant is fit from a physical perspective to resume her pre-injury occupation as a ‘carer’ but unfit for this work until 31 August 2019 from a psychological perspective (anxiety).

11.   Schedule 1, clause 2 relevantly defines ‘earner’ as:

A person who is injured as a result of a motor accident is an "earner" if the person is at least 15 years of age and who:

(a) was employed or self-employed (whether or not full-time):

(i)  at any time during the 8 weeks immediately preceding the motor accident, or

(ii)   during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or

(iii)  during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,

and, at the date of the motor accident, had not retired permanently from all employment, …

12.   The question is whether he claimant was ‘employed’ by reason of her position as carer to her mother, effectively paid for by Centrelink.

13.   The purpose of the Carer’s Payment is to provide income support to persons who are unable to maintain employment whilst providing full time care to a person with a disability or chronic illness, mental illness or who is frail aged. There are strict criteria including that the carer must be providing constant daily care for the person.

14.   In considering whether the claimant is an earner I have had regard to the fact the main policy intent of the Carer Payment is to provide income support to carers who cannot participate substantially in paid work. It also aims to support the private provision of care in the home, which is a form of care likely to increase with the ageing of the population.

15.   Contrary to the insurer’s submission, carers are entitled to take a break from caring for up to 63 days each calendar year without changes to their Carer’s Payment so essentially, they are entitled to annual leave. Carers are restricted as to the extent they can participate in other work, including voluntary work, study or training and must be continuing to be personally providing constant care.

16.   There is no limiting definition of “employment” in the Act. Section 1.4 simply says employment ‘includes self-employment’ but does not list any exclusions. Having regard to this definition, I do not accept the insurer’s submission that to be ‘employed’ there must be a ‘contract of employment’.

17.   The ordinary legal definition of being ‘employed’ includes one who is in the service of another. Such a person is entitled to rights and is liable to perform certain duties. They are entitled to just compensation for their services and are bound to perform the services in return. The claimant’s circumstances fit within this ordinary definition.

18.   Under clause 3 of Schedule 1 ‘loss of earnings’ means ‘a loss incurred or likely to be incurred in a person’s income ‘personal exertion’. ‘Income from personal exertion’ includes ‘pensions’ received in the capacity of employee or in relation to any services rendered’.

19.   I agree with the claimant’s submission that some regard must be had to the definition of ‘loss of earnings’ when considering the meaning of ‘earner’.

20.   Considering all of the above there is no doubt the claimant was in the service of her mother and was bound to perform the services in return for the Carer’s Payment and Allowance from Centrelink. The Carer’s Payment and Allowance amounted to income or earnings the claimant received ‘from personal exertion’ as a carer. It is difficult to envisage another situation where a ‘pension’ might be earnings or income from ‘personal exertion’ or ‘services rendered’. Accordingly, if it does not capture a carer such as the claimant the inclusion of ‘pensions’ probably serves little or no purpose.

21.   I consider that to deny the Carer’s Payment as income or earnings and in turn the claimant as an earner goes against the policy and purpose for the Carer’s Payment, including to support the private provision of care. Whilst regard must be had to the intentions of the Act, regard must also be had to the policies and intentions underpinning Commonwealth legislation. There is nothing in the Act in my view that is inconsistent with the intention of the Carer’s Payment to provide income support to a person in exchange for providing services to an ill, disabled or aged person. There is nothing in the definition of ‘employment’ that would exclude an arrangement where by the claimant renders services to an elderly person in return for a payment from Centrelink.

22.   For all of these reasons I find the claimant is an ‘earner’ for the purpose of Division 3.3 of the Act on the basis she provided services as a carer in exchange for income support from Centrelink.

23.   I do not agree with the insurer’s submission that my finding in this regard would mean that “an individual in receipt of the Family Tax Benefit or Single Parent Benefits from Centrelink would be an ‘earner’ because they are ‘engaged’ by their children and therefore employed by Centrelink to look after them”. I reject any proposition that my finding supports such a conclusion. There are very different considerations in relation to the Carer’s Payment in contrast to other forms of pension payments, benefits and allowances and for reasons that are not necessary to detail here, I am of the view a person would not be an ‘earner’ under the Act by reason of receiving a family tax benefit or single parent benefit from Centrelink. In fact, this would be the case for most other forms of pension payments (that is, the recipient would not likely be an ‘earner’). My reasons and decision pertain only to the claimant’s circumstances, which include that she was the full-time carer of her mother, she gave up paid employment to do so and was in receipt of both the Carer’s Payment and the Carer’s Allowance.

The claimant's PAWE and the relevant entitlement periods

24.   The claimant’s PAWE is $588.50 per week being the average weekly amount of the combined Carer’s Payment and Carer’s Allowance that she had been receiving for at least 6 months prior to the accident.

25.   The claimant suffered no ‘loss of earnings’ from the date of the MVA until 18 January 2019 when the Allowance of $63.50 per week ceased.

26.   It appears the claimant claims this loss thereafter at the rate of 100% for the ‘first entitlement period’ which the claimant says is from 18 January 2019 (the date upon which her mother went into a nursing home and the Carer’s Allowance ceased) until 18 April 2019 (13 weeks).

27.   However, section 3.5 of the Act defines the first entitlement period clearly as the period of 13 weeks that ‘starts on the day after the day of the motor accident’ and is payable at the rate of 95% (not 100% as suggested by the claimant) under section 3.6. In this case the first entitlement period commenced 17 June 2018 and ceased 16 September 2018, being 13 weeks after the day after the accident. As such, the first entitlement period has expired, and the evidence is the claimant did not suffer a ‘loss of earnings’ during this period as she continued to receive the Carer’s Payment and Allowance without interruption.

28.   The claimant’s entitlement to weekly payments for the first entitlement period is therefore nil.

29.   The second entitlement period is weeks 14 to 78 after the accident and commenced 17 September 2018 and will expire 14 December 2019. The rate payable for total loss of earning capacity is 80% and 85% for partial loss.

30.   The claimant had no loss for the first part of the second entitlement period from 17 September 2018 to 18 January 2019.

31.   From 18 January 2019 to 18 April 2019 the claimant suffered a partial loss in the sum of $63.50 per week. This occurs during the second entitlement period and is therefore payable under section 3.7 at the rate of 85%. This would equate to $53.97 per week. However, the weekly payment is not to be less than the minimum weekly statutory benefits amount or the persons pre-accident weekly earnings, whichever is the lessor. Under section 7 of the Regulation the minimum is 2.5% of the prescribed maximum. The current maximum under section 3.9 of the Act is $4,039 pursuant to the Motor Accident injuries (Indexation) Amendment Order 2018. Accordingly, the minimum is $100.97 (2.5% of $4,039) which is the lessor of the minimum weekly statutory benefits amount and the claimant’s PAWE of $588.50. Accordingly, the amount payable from 18 January 2019 to 18 April 2019 is $100.97 under section 3.7 of the Act.

32.   From 19 April 2019 the claimant says she has suffered a total loss of earnings. The second entitlement period is continuing until 14 December 2019 (subject to the requirements of the Act, Regulation and Guidelines in relation to the ongoing assessment of the claimant’s post- accident earning capacity). Accordingly, the amount of weekly payments for the remainder of the second entitlement period commencing from 19 April 2019 would be 80% of $588.50 which equates to $470.80, assuming the claimant has no post-accident earning capacity during this period. If the claimant has a post-accident, partial earning capacity at any stage during the second entitlement period then the amount would be as assessed under section 3.7 taking into account the partial earning capacity.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is varied as follows:
o   The claimant is an ‘earner’ for the purpose of Division 3.3 of the Act.

o   The claimant’s PAWE is $588.50.

o   The claimant’s entitlement to weekly payments for the first entitlement period from 17 June 2018 to 16 September 2018 under section 3.6 of the Act is nil, as the claimant suffered no loss of earnings during this period.

o   The claimant is entitled to weekly payments of statutory benefits in the sum of

$100.97 being the prescribed minimum pursuant to section 3.7 of the Act (second entitlement period) for the period 18 January 2019 to 18 April 2019.

o   For the purpose of the remainder of the second entitlement period after 18 April 2019 the insurer is to assess the claimant’s entitlement to weekly payments of statutory benefits (if any) at the applicable rate under section 3.7 of the ACT based on a PAWE of $588.50 and depending on the extent of any post-accident earning capacity during this period.

o   The second entitlement period will expire 14 December 2019 after which clause 3.8 will apply.

  • Effective Date: This determination takes effect on 15 July 2019.

Katherine Ruschen
Merit Reviewer, Dispute Resolution Service