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Accident Compensation Cases

Re SSA11/12 (SSAA, 05/07/12)

Judgment Text

Mr R D Burnard - Deputy Chairperson, Mrs N Te Hira - Member, Mr K Williams - Member
This is an appeal against decisions of the Chief Executive upheld by a Benefits Review Committee, which were made on 8 June 2011, 13 September and 16 September 2011 to seek recovery of overpayments of Sickness Benefit, Invalid's Benefit, Accommodation Supplement, Disability Allowance, Temporary Additional Support and Miscellaneous GST Assistance Allowance during the period from 1 May 2009 to 22 May 2011. The total sum paid to xxxx we were told was $35,935.45. The appeal was confined to the supplementary payments made during the period 1 May 2009 to 31 March 2011. 
The appellant had been granted a Sickness Benefit, Accommodation Supplement, Disability Allowance and Temporary Additional Support on 4 May 2009. He had also made a claim for Accident Compensation which was initially declined by ACC. That decision was contested and on 25 May 2011, two years after the social security benefits had commenced, ACC advised that the appellant had been granted weekly compensation backdated to 30 April 2009 in respect of a work injury sustained on 1 November 2006. The appellant's benefits under the Social Security Act 1964 were accordingly suspended from 23 May 2011. In accordance with normal practice advice was sent to the appellant that reimbursement from ACC to Work and Income of $25,815.61 would be made but the balance of $6,517.02 was his responsibility to repay. 
An application for review was received from the appellant and a Benefits Review Committee hearing took place on 2 December 2011, the Committee deciding to uphold the original decision. 
On 13 January 2012 the appellant sent a Notice of Appeal to this Authority. 
During the course of hearing this appeal the Authority was told that in round figures the backpayments made by ACC amounted to approximately $600 per week compared to approximately $350 per week which the appellant had been receiving under the Social Security Act. 
Case for the Appellant 
xxxx was unable to attend the appeal hearing in person but was ably represented by Mr A S Carlyle of the ACC Advocacy Support Trust. Mr Carlyle explained that the appeal was confined to the supplementary payments made by the Ministry. He raised three grounds for resisting recovery of these payments. 
First he argued that whilst any supplementary payments in the tax year commencing 1 April 2011 would have to be repaid this would not apply to the years up to 31 March 2011 because the ACC payment to xxxx was not paid until the 2012 tax year and in the earlier years xxxx had in effect received no income so that he should be entitled to retain the supplementary benefit payments. 
Secondly Mr Carlyle maintained that s 252 of the Accident Compensation Act 2001 which deals with the relationship of ACC compensation to social security benefits applied only to income tested benefits and not to supplementary payments so that there was no legislative authority to recover such payments from xxxx. 
Finally Mr Carlyle maintained that the Ministry's position in seeking to recover the supplementary payments was discriminatory and in breach of the Human Rights Act 1993 and the NZ Bill of Rights Act 1990. 
Case for the Ministry 
Mr Signal on behalf of the Chief Executive of the Ministry had submitted a comprehensive report under s 12K(4)(e) of the Act dealing with the background to the appeal and the Ministry's position. He said that the Ministry considered that recovery of benefits in the circumstances applying to xxxx case was well settled by the legislation and case law and he said that s 81 of the Act empowers the retrospective review of entitlement to benefits and once xxxx became entitled to ACC and received backdated payments the Chief Executive was fully entitled to review all his benefit payments and seek recovery of the balance over and above the amount refunded to the Ministry by ACC. 
The Authority's Findings 
The Authority concurs with Mr Signal's assertion that the position regarding recovery of benefits in the circumstances arising in xxxx case is well settled. 
Section 81(1) of the Act reads: 
Review of benefits 
The [chief executive] may from time to time review any benefit in order to ascertain— 
Whether the beneficiary remains entitled to receive it; or 
Whether the beneficiary may not be, or may not have been, entitled to receive that benefit or the rate of benefit that is or was payable to the beneficiary— 
and for that purpose may require the beneficiary or his or her spouse [or partner] to provide any information or to answer any relevant question orally or in writing, and in the manner specified by the [chief executive]. If the beneficiary or his or her spouse [or partner] fails to comply with such a requirement within such reasonable period as the [chief executive] specifies, the chief executive may suspend, terminate, or vary the rate of benefit from such date as the [chief executive] determines.]] 
If, after reviewing a benefit under subsection (1) of this section, the [chief executive] is satisfied that the beneficiary is no longer or was not entitled to receive the benefit or is or was entitled to receive the benefit at a different rate, the [chief executive] may suspend, terminate, or vary the rate of the benefit from such date as the chief executive reasonably determines.]] 
If, after reviewing a benefit under subsection (1) of this section, the [chief executive] considers the beneficiary is more appropriately entitled to receive some other benefit, the [chief executive] may, in his or her discretion, cancel the benefit the beneficiary was receiving and grant that other benefit commencing from the date of cancellation.]] ] ”
Subsection (1)(b) plainly envisages a review in hindsight of the entitlement to a benefit, that entitlement having been supplanted retrospectively by the later entitlement to compensation from ACC for the same period. Under s 85A(f) the overpayment then becomes a debt due to the Crown. 
It is convenient to deal with the three contentions advanced by Mr Carlyle to prevent the recovery. 
As noted above he contended that in the income years prior to 31 March 2011 xxxx had in fact received no income because the backpayment of ACC was made in one sum following that date. This argument was rejected in Goh v the Chief Executive of the Ministry of Social Development1
| X |Footnote: 1
[2010] NZCA 110, 31 March 2010 
. Asher J at paragraphs 23 to 25 after noting the definition of ‘income’ in s 3 of the Social Security Act and the mode of ascertaining income for benefit purposes in s 64 stated (at paragraph 25): 
“ … the section indicates that in determining what is income it is correct for the Chief Executive to treat entitlements paid for certain periods as income for the periods, even if the payments are actually made at a much later date. ”
The Authority considers that this is precisely the position in the present appeal. 
Secondly xxxx contended that s 252 of the Accident Compensation Act 2001 was confined to permitting recovery of income tested benefits only and not supplementary benefits. It is true that the section relates to income tested benefits but the legislative power under which the Chief Executive of the Ministry acts is found in the Social Security Act provisions dealt with above. ACC payments plainly fall within the definition of income in s 3 of the Social Security Act and once the Ministry learnt of the appellant's entitlement to ACC compensation the Ministry quite properly reviewed xxxx entitlement to the supplementary payments which had been made in addition to the main benefits which under s 252 of the Accident Compensation Act were to be reimbursed to the Ministry by ACC. 
Finally Mr Carlyle maintained that the overpayment recovery being pursued by the Ministry amounted to discrimination in terms of the Human Rights Act and the New Zealand Bill of Rights Act. This Authority considers that the appellant is simply in the position of many beneficiaries who because of subsequent payments from ACC or elsewhere are retrospectively found not to have been entitled to benefits they received during periods for which the later payment related. He is in no sense being discriminated against but is simply being placed in the position he would have been in had he received compensation from ACC throughout the period during which he received the social security benefits. 
Mr Carlyle accepted that if his argument was sustained xxxx would in effect receive a windfall in the form of the supplementary payments on top of the Accident Compensation payments for the periods prior to 31 March 2011. This would be an extraordinary result which the Authority considers is not supported by the arguments Mr Carlyle has advanced. 
For these reasons the appeal is dismissed. 

[2010] NZCA 110, 31 March 2010 

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