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Accident Compensation Cases

TODD v SOCIAL SECURITY COMMISSION (HC, 20/06/90)

Judgment Text

ORAL JUDGMENT OF EICHELBAUM CJ 
EICHELBAUM CJ
This is an appeal by way of case stated on a point of law brought pursuant to S 12Q of the Social Security Act 1964 (“the Act”). Since 31 December 1963 the appellant has been in receipt of an Invalid's Benefit because of blindness. From time to time he was in employment, and as a result of an injury he suffered to his back in 1975, became entitled to earnings related compensation under the Accident Compensation Act 1982 and its predecessor. As from 12 December 1985 the second proviso to Clause 1 of the Sixth Schedule of the Social Security Act has read as follows: 
“Provided also that, in computing the income of any beneficiary for the purposes of this clause, the Commission 
(a)
Disregard that part of the beneficiary's income (but not exceeding $20 a week) earned by the beneficiary's own efforts: 
(b)
Disregard all of the income of a totally blind beneficiary earned by the beneficiary's own efforts ”
.
See the Social Security Amendment (No 2) Act 1985, Section 24, substituting a new Sixth Schedule to the principal Act in terms preserved by subsequent amending legislation of 1986 and 1989. 
In a decision given on 8 July 1986 the Social Security Appeal Authority held that the earnings related compensation payments made to the appellant were not “earned by the beneficiary's own efforts” within the meaning of para (b) of the proviso quoted. The Authority accepted that the earnings related compensation payments were conditional upon the appellant complying with the obligation to take steps to be rehabilitated, to undertake available employment within the limit of his disabilities, and to undergo examinations and treatment. Further, the Authority was satisfied that the appellant had conscientiously fulfilled those obligations. With regret however, it felt compelled to hold that the payments were not made by way of recompense for the appellant's efforts in doing those things. The Authority was of the view that, to the contrary, the payments were compensation for the very fact that the appellant was unable to earn by his own efforts, despite conscientious attempts to do so. The question is whether the Authority's finding was correct in law. 
In terms of the Accident Compensation Act“earnings related compensation” means compensation payable under any of the provisions of SS 57, and 59 to 65 of the Act, including compensation paid under S 88 and allocated to the above provisions. Basically, to be eligible for earnings related compensation a claimant for compensation has to be, in the first place, an “earner”, meaning an employee or a self employed person at the time of the accident. Section 59 provides that where as a result of incapacity due to personal injury by accident, an earner suffers any temporary loss of earning capacity during any period after the expiration of a week following the accident, the claimant is entitled to earnings related compensation, broadly at the rate of 80% of the loss of earning capacity due to the injury. 
The effect of the opposing contentions is as follows. Pursuant to S 71A(1) of the Social Security Act, if in the opinion of the Commission the earnings related compensation is payable in respect of the same circumstances as those which gave rise to the application for a benefit, the rate of the benefit otherwise payable is reduced by the amount of earnings related compensation. In short there is a straight deduction. If on the other hand the Commission is satisfied that the earnings related compensation is not payable in respect of the same circumstances as those which gave rise to the application for a benefit, then the compensation payments “shall be brought to charge as income in the assessment of any such benefit”. The import of the last mentioned phrase becomes clear when one looks for example at the Sixth Schedule relating to the rates of Invalids' Benefits. There, if (again by way of example) one considers the position of an unmarried beneficiary, the annual rate of the benefit of such a beneficiary is diminished by 40¢ for every complete dollar of the total annual income of the beneficiary in excess of $1300 but not in excess of $2080 a year, and by 80¢ for every complete dollar of total income in excess of $2080 a year. I have quoted from the Sixth Schedule as it stood at the time the decision in this case was made. 
The effect of the proviso to the Sixth Schedule therefore is that all the income of a totally blind beneficiary earned by the beneficiary's own efforts is disregarded for purposes of the calculation to which I have just adverted. I interpolate here that the Commission found, and it is not now in issue, that in relation to the appellant the earnings related compensation was not payable in respect of the same circumstances as those giving rise to the application for the benefit. In its decision the Authority, having recorded that finding, continued that S 71A did not apply. It is plain I think that the Authority meant that ss 1 was inapplicable. If the interpretation for which the appellant contends is correct, the effect of the proviso to the Sixth Schedule as it now stands is to create a specific exception applicable to a blind person relating not only to the manner in which the benefit is to be calculated (clearly it has that effect) but also to the provisions of S 71A dealing with earnings related compensation. The latter being in general terms, there is no conceptual difficulty about the creation of an exception for a specific class of persons. The question is whether the proviso does so. 
One purpose apparent in the legislation is to provide an incentive for disabled persons to take up employment, with the beneficial social effects that participation in the workforce has to offer in the way of increased self confidence and social contact. It may be thought that that element is particularly important in the case of the totally blind, and that the additional consideration afforded by the proviso is designed to that end. I do not believe that those considerations help me greatly with the question of interpretation, since the issue before the Court deals with persons who by definition are unable to work. 
In the end the issue depends on a narrow point of construction. On that, I have reached the same view as the Authority, and for much the same reasons. The question is whether earnings related compensation is within the description “earned by the beneficiary's own efforts”. I have emphasised “by”. The phrase as a whole appears to connote a present rather than a past connection with effort. One of the dictionary definitions of “effort” quoted states “often used, somewhat trivially for any kind of achievement, artefact, or result of an activity” (Oxford English Dictionary, 2nd Ed 1989). I think that respondent's counsel is correct in the submission that having regard to the ordinary meaning of the word, effort involves activity, not merely the actions of filling out forms, attending medical appointments, and fulfilling the other obligations incumbent on a person in receipt of earnings related compensation, but rather the more strenuous endeavour associated with work or services. 
Compensation on the other hand in this context has a meaning of a payment or benefit for the fact that the person concerned cannot earn. As was said in Great Western Railway Company v Helps [1918] AC 141, 144, the natural meaning of compensation is something that is to be paid which makes up for the loss that the person has sustained. The point was well made, and in a context not inappropriate to the present, in Hardie v Hardie [1947] VLR 79, 81 where Gavan Duffy J had to deal with the construction of the expression “means of support” in the context of maintenance in a matrimonial setting. In the particular statute it was defined as meaning “lawful and sufficient means of support other than [the wife's] own earnings”. Gavan Duffy J said: 
“Compensation paid under the Workers' Compensation Acts is not ‘earnings’ in the popular sense, or in any other sense of which I am aware. The worker indeed is compensated because he has lost his ability to earn. ”
Looking at the words in their natural and ordinary meaning, I conclude that in the present statute the expression “earned by the beneficiary's own efforts” is not apt to encompass earnings related compensation. 
As a subsidiary argument, counsel submitted that the Authority's conclusion was inconsistent with its other finding, not in issue on this appeal, that in respect of an earlier period compensation was properly not taken into account in the calculation of the benefit. Having regard to the change in the wording of the proviso to the Sixth Schedule, I do not consider that there is any inconsistency. 
Accordingly, the appeal fails and is dismissed. I share the regret of the Authority that the wording of the legislation compels that conclusion. I doubt that it is a proper case for an award of costs, but reserve the respondent leave to apply should it wish to do so. 

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