Centrelink pension denied to injured man who spent all his compo settlement within weeks

centrelink

The following story highlights that any injured worker who receives monetary compensation (eg. settlement) needs to seek sound financial advice before ‘spending’ their settlement money.

Ultimately when a  seriously injured worker settles their case by means of a settlement (in or out of Court), it’s extremely important to seek good financial advice. A good workcover lawyer will suggest ways to invest or structure settlement money so that it lasts and provides security for the injured worker. Decent personal injury lawyers will also refer you to a (or several) trusted financial advisers.

The following story (and tribunal case) also show that when a seriously injured worker is awarded around a million dollars (by verdict) this actually means that the amount of monetary compensation that is netted (in his/her pocket) by the injured worker is about half a million. This is because you have to pay back all weekly payments, your lump sum is deducted, calculations and adjustments are made regarding vicissitudes; any Centrelink benefits must also be paid back —and of course— there are significant legal costs involved when a matter runs its course in Court.(See: How are damages calculated).

Half a million dollars is NOT much if you are seriously injured and can never work again. It equals $50,000 per year for 10 years, or $25,000 per year for 20 years! So you need to ensure this settlement money lasts and is well invested/used. A seriously injured person who nets half a million dollars will on average have to wait at least 6 (six) years to be eligible for the disability pension (this is known as the preclusion period).

Centrelink pension refused after Canberra man spent all compensation from football accident within weeks

By Ewan Gilbert | 31 Jan 2015, 10:23am |ABC

A Canberra man who was awarded more than a million dollars in compensation after injuring himself during a football half-time show spent almost all his compensation within weeks, a tribunal has heard.

The Administrative Appeals Tribunal ruled many of his purchases were “unwise, irresponsible and unnecessary”.

In 2008, Jason Cooper broke his neck while diving to catch a football using a milk crate and was no longer able to work as a tiler.

It was the event which helped spark the end of audience participation during the half-time break at Canberra Raiders home games.

Mr Cooper was placed on a Disability Support Pension but was eventually awarded damages totalling $1,025,000 and last year received just over half that amount in settlements.

But the Administrative Appeals Tribunal heard that within four months Mr Cooper had spent almost all of it.

He paid back a number of personal loans, as well as bought a house on the south coast and filled it with new furniture.

Thousands of dollars were also spent on fishing gear, home entertainment and model cars.

Under cross-examination Mr Cooper agreed many of the items he bought were not necessities.

But stated that as he was unable to work he needed a good quality stereo system and television, a pool table and games machine to help occupy his time.

The tribunal heard he now had four television sets in the house.

Although Mr Cooper had spent most of his money, Centrelink did not want to allow him immediately back onto the pension.

When Mr Cooper was awarded the million dollars, Centrelink cancelled his payments and calculated he would not need government support again until at least September 2017, known as a preclusion period.

When Mr Cooper appealed that decision, Centrelink took the matter to the tribunal, arguing Mr Cooper did not meet the special circumstances required.

The tribunal agreed, finding:

“he made unwise, irresponsible and unnecessary decisions in a situation where he was aware of the necessity to use the settlement money in a sensible manner and to set aside sufficient funds to meet his living costs during the preclusion period.”

[Source: http://www.abc.net.au/news/2015-01-31/centrelink-pension-refused-after-football-compensation-spent/6059346]

Additional reads:



This post has been seen 7734 times.

26 Responses to “Centrelink pension denied to injured man who spent all his compo settlement within weeks”

  1. The rules affecting the way payments are reduced have changed. Income protection paid by Super funds is now calculated the same way as other income.. My payment has just dropped by $40+ Just from this new calculation… Doesn’t matter that everything gets repaid after settlement, that’s for income protection too…

    Thumb up 0 Thumb down 0

  2. Come on, he got 1 Million and spent it like a kid in a lolly shop, surely someone could live on a million for the rest of their lives. These are the people who make it hard for others. one statement he said was he had to have the best of everything as he had nothing else to do so he had to have the best TV (4 at that) I like others here have been treated like crap, if I got 1 Million I would and my family would be set for life.Peoples greed makes others pay for it.

    Thumb up 0 Thumb down 0

    • Don’t get me wrong what happened to this person was terrible. I have been on disability also where you are treated lower than pond scum, but would you not feel better if you did not have to listen to the Government anymore. Woo Woo did you have a million coming to you in super. You will never get a compensation payout unless you have received sound financial advice or legal advice ( thats in SA ) This is just taking more money away from people who are struggling on disability. The new changes are needed as their are many on disability for the wrong reason’s.

      Thumb up 0 Thumb down 0

    • @Grumpy Pa, I totally agree that this (unfortunate) man spent his settlement recklessly, with no excuse considering that he appears pretty sound of ‘mind’. He was very ‘lucky’ to receive a significant amount of money in damages (many injured workers get zilch, zero or a pathetic K80, 100) in order to ‘right wrong’ and to help improve his quality of life. Of note is that although he was awarded just over 1 million dollars, he received only about half of that (in his pocket). Even so, half a million dollars should last him some time if invested and used properly (with financial advise), and I fully agree with Centrelink and the Tribunal’s ruling that he does not meet the ‘special circumstances’ or ‘criteria’ to go back on DSP 4 months after receiving half a million dollars. It’s double dipping and unfair to other disabled and injured workers who are poverty-stricken and really need the Disability Pension for basic survival. This is the very reason why a preclusion period has been set up in the first instance.

      Just a reminder to all that if you tap into your Super (i.e. TPD benefit) when on workcover, your weekly pay will also cease for some time. It’s therefore best to try to claim your TPD (if eligible) after your case has settled to optimise its value. I’m not sure I find this concept fair (as it is the injured worker’s fund), neither do I think it’s fair to have benefits decreased or ceased when you are lucky enough to receive income protection (you paid the premiums for that insurance). It’s bad enough to be on a heavily reduced normal salary when injured and to struggle or to be incapable to make ends meet (eg for those in Vic who were unfortunate to be seriously injured before 2010, weekly pay decreased to about 60% of pre-injury average weekly earnings – huge drop indeed). There is certainly a lot UNFAIR with the system.

      Thumb up 0 Thumb down 0

      • I did not realize he only received half, but as you have said, half a million would set up anyone for the rest of their lives. Also when dealing with centrelink MAKE SURE YOU GET THE PERSON YOU TALKED TO AND GAVE YOU THE ANSWER HIS?HER NAME HAVE THEM SEND IT TO YOU IN WRITING ALSO. Do not trust just one. I am now paying back a $40,000 debt because of being given the wrong advice by a person from centrelink.

        Thumb up 0 Thumb down 0

        • Dear grumpy pa,when you receive a payout before you even get the money center link writes to you depending on how much you get they work it out how many years you are exempt from claiming anything from them.They make you sign a paper to say that you understand this its a legal requirement from them they are called the compensation recovery team.

          Thumb up 0 Thumb down 0

      • @WCV3
        I have had no weekly payments for some time, hence the reason I now have the income protection payments. have noticed on my super that my TPD has been reducing in leaps and bounds over the last 3 years… and its not like there was much there to start with… But if I was to claim on it now any payout I would get would be reduced by the amount from TPD…
        @Grumpy Pa
        No I don’t have 1M in my super, I have been receiving Sickness Benefit because I couldn’t handle filling in the forms for Disability, not did I want Disability, now I have no option, I am unable to work at all, I managed to keep going for 2 1/2 years part time, my sons are both out of secondary school so besides losing family tax benefit I have now also lost more to Abbotts claw back (over 100 per fortnight in total just from benefits)…

        Thumb up 0 Thumb down 0

        • Amazing isnt it Woo Woo as soon as their is a sniff of money every government dept knows you are getting money before you do. I fought five years to get back on workcover as I was tricked off, I was not back payed by workover only from the time my lawyer got me back on, then every govt dept wanted money, especially disability mob. I said I should be due the five years of backpay are you going to fight for this like I had to get back on workcover, was told not our problem. I fought like blazes to get back on workcover because i had a work injury for all those years with no help from the Government but they are very quick to hold their hand out for the easy money. This is all my fault for getting off DSP when I didnt have to, now I will be getting back on dsp and taking everything I can get. Wonder why no one wants to work. YOU GET SCREWED either way. Like yourself sounds like you wanted to set yourself up with super and once again you get shafted. I would not feel guilty signing up with dsp woowoo you have tried to do the right thing. Stuff them all.

          Thumb up 0 Thumb down 0

          • Yes that’s right every gov dept knows all about you,another thing that happens medicare writes to you with a medical history from the date of your accident until your case was settled with every visit to a medical app that was put through medicare you have to go through it all and anything that was to do with your accident you have to pay back then you have to sign a stat dec.They kept 10% of your payout until this is done and then they send you the money back.So how people cheat the system I don’t know

            Thumb up 0 Thumb down 0

            • Yes Tony they are bloody good at finding out if you are getting money. Shame they do not take into consideration what you had to go through to get the money in the first place. The funny thing is, My workcover payment went down on the 24th dec last year I was told to tell centrelink so they could adjust my wifes carers payment as she is my full time carer , I was told you do not have to we are all linked. Two weeks later, after living on $100 less a week I rang centrelink where is my top up, he then told me I should have rang up, I then asked would I get backpay he said no only from when I rang up. Lucky it was only 200 bucks. still big money for me. As I said before do not trust centrelink at all.

              Thumb up 0 Thumb down 0

              • hi my hubby did apply to centre link for carers payment for our daughter she has been ill her whole life, they LOST the forms ,he went to ask what was going on as it was 8 weeks ,then he had to do it all again ,they delayed it until after the $600 payment for the year then he had to fill the forms in again this was 3 times from February 2014 until August 2014 ,they are hopeless

                Thumb up 0 Thumb down 0

            • Does anyone know if it is normal to have to pay a certain amount of money to Centrelink after receiving a settlement (which is automatically paid by the insurer to Centrelink, deducted from the settlement amount), even though I have never ever claimed Centrelink benefits since the date of my accident?

              Thumb up 0 Thumb down 0

              • @injured. You should only have to repay monies received… You should be given a statement/letter outlining what has been held/repaid.

                Thumb up 0 Thumb down 0

                • @Injured, maybe its time for a follow up phone call, make sure you keep notes and copies of correspondence. It may be that whoever typed the letter mistakenly entered Centrelink instead of Medicare, and there should be a statement from Medicare advising that you must return the form to them within a certain time frame. The statement is ALL Drs visits/scans/reports bulk billed, and you have to highlight which ones relate to the injury/settlement. This is sent prior to court so that you can see how much you are going to have to repay to Medicare and can factor that in to any settlement.

                  Thumb up 0 Thumb down 0

              • Dear injured,im a bit confused if you have never been on centerlink then what to pay them.I know they write to you from what they call the compensation recovery team saying you should not apply to centerlink for so many years and that depends on your payout they have to legally inform you.I know medicare holds 10% of your payout until it has been sorted out weather they have paid anything for you due to your injury and you sign a stat dec then they sent the rest of your monies to you.

                Thumb up 0 Thumb down 0

                • @Tony (and Woowoo), I greatly appreciate your feedback. Funny thing is I received a letter from Centrelink stating the x years as the mandatory preclusion period as I have received my ‘settlement monies’. However I received a letter from my solicitor advising me that a certain amount had been paid directly to Centrelink from my settlement money by (my insurer).
                  I have written to my legal team (settlement team) and asked for clarification, explaining I have never ever received any Centrelink benefits in my life. I am yet to receive an answer.
                  I have however not received anything from Medicare, and the sum paid directly to Centrelink (by my insurer) is about 0.5% (half a percent – still significant amount for me) of my settlement , so it can’t be a typo either.
                  Will keep you posted on that one. By the way I am in VIC

                  Thumb up 0 Thumb down 0

  3. do you settle for $500k or go to court because you deserve more? is it worth the risk?

    Thumb up 0 Thumb down 0

    • @Brent – K500 is indeed NOT a lot for a seriously injured worker. Weekly payments cease as soon as settlement is agreed and a seriously injured worker can never work again. So that is about K50 per year for 10 years or a miserly K25 for 20 years. Peanuts, and unfair.
      With re to going to court or not for the purpose of settlement/compensation, have a read of http://aworkcovervictimsdiary.com/2014/09/to-drop-or-not-economic-loss-part-of-common-law-claim/ and http://aworkcovervictimsdiary.com/2013/05/how-are-damages-calculated/

      Basically going to court is always ‘RISKY’ even if you believe you have a ‘strong’ case. What’s of extreme importance to know is that, at least in VIC, if the court (Judge/Jury) awards you less than the statutory offer (made in the mediation/negotiation by the Defense) then the injured worker becomes liable for the cost of the legal proceedings for the other party as well! (*) Which may leave you in debt! So there is only a measly 10% margin, not much room for speculation indeed!

      (*)

      – if the judgment or order is for not less than 90% of the worker’s counter statutory offer but greater than the agent’s (or employer’s) statutory offer, the agent (or employer) must pay all costs
      – if the judgment or order is equal to or less than the agent’s (or employer’s) statutory offer the worker must pay all costs
      – if the judgment or order is less than 90% of the worker’s counter statutory offer but greater than the agent’s (or employer’s) statutory offer each party must pay their own costs

      That is why it is so important to carefully listen to your lawyer when it comes to settling and making the counter offer.

      Also as discussed in other articles and comments, when you’re awarded compensation by a Court, you will have to pay back all your weekly payments you have received from the date of your accident. In many cases this is 3 -5 or even more years worth of weekly pay and easily K300 or more. Your initial lumpsum also gets deducted from your settlement, any Centrelink benefits you may have received are also to be paid back. Then there are complex calculations about the ‘general risks of life’ (aka vicissitudes) also deducted from your settlement and the list goes on. So say you go to Court, are successful and are awarded (by verdict) K800 to 1 million dollars. Take off all the above deductions and a very hefty legal fee (even if you win, you are still out of pocket and can expect a legal bill for K150-200 (or more) depending how long your case drags on in Court (think barrister fees, expert witnesses etc). So basically a K800 – 1 million award will effectively leave you with about K400-500 in your pocket (if lucky).
      Hope this answers your question at least in part. Is it worth taking the RISK (of loosing, or be awarded less than the counter-offer?), is it worth incurring massive legal fees for court hearing? And is it worth being STRESSED to the max, humiliated and discredited by workcover defense lawyers in a pathetic attempt to mimimise payout?
      A decent lawyer (+ barrister and potentially even a Queen’s Counsel/QC) will be able to advise you on the “RISKS” of going to Court and will negotiate a ‘fair’ settlement taking into account the risks and above expenses.
      Quite a few injured workers have been able to settle out of court and netted more than if they would have gone through court.
      Also re-read the above article about this injured worker who spent all his compo in 4 months. He was awarded just over 1 million dollars, yet received just about HALF of that.
      The average payout in Vic is still only K80 to K100 — for LIFE.
      Only in very severe cases can you expect a verdict of K800-1 mil, which SADLY amounts to about half of that netted by the injured worker (in his/her pocket).
      The system is NOT fair, there is no such a thing as a fair compensation payout. It’s the final insult to your injury/disability,…

      Thumb up 0 Thumb down 0

  4. @Brent, you can only be guided by your legal team and what you can live with…
    I don’t know yet what my claim is worth, how long it will take or if I will even get issued with a serious injury cert… I do know how much I should have been able to earn over the rest of my working life, and how much I would have been happy to earn, so for me thats a start…

    Thumb up 0 Thumb down 0

    • 500k for a life time injury is wrong ,plus wc make you feel like a criminal, whats achieved going to court?

      Thumb up 0 Thumb down 0

  5. Hi everyone, my first step out in the world, living under the world of workcover as I do, like most of you I have suffered the first,second and the third injury (workcover) it’s a fight every day. My question is there a workcover claim code for divertional theapy eg art?

    Thumb up 0 Thumb down 0