Claiming a Loss of Income following a motor vehicle accident when receiving Centrelink Carer’s payments

Published 10 Nov 2017

This was an issue considered in the case of Insurance Australia Ltd t/as NRMA Insurance v O’Rourke [2017] NSWSC 494. We acted for Ms O’Rourke in this case.

Our client was receiving a carers payment from Centrelink for the care she was providing her mother.  She began receiving these payments after she had been involved in a motor vehicle accident.  She was, prior to the accident, working and so made a claim for loss of income due to her inability to return to her usual work duties as a results of her injuries and disabilities sustained in the motor vehicle accident.

Her matter proceeded to an assessment hearing through the Claims Assessment and Resolution Service (CARS) and was determined by a CARS Assessor.

Medical evidence was submitted that opined that our client was not fit for any work.

Our client was found to have no residual earning capacity and received an award for her loss of income at CARS. It was noted that while our client may have been able to work in an office on a part time basis, there were no employment opportunities in the area in which she lived.

After the determination was made, the insurer brought a claim in the District Court of New South Wales challenging the validity of the Assessor’s findings in regard to economic loss.

This case deals with whether the CARS Assessor made an error in calculating damages for economic loss by failing to take into account that our client was receiving a carers pension.

The insurer alleged that our client had a residual earning capacity because she received the carers payments from Centrelink. The insurer submitted that this was paid for both physical and emotional support that our client was providing her mother.

It was an issue in this case as to whether in being a carer, our client was required to give physical support as well as “guidance and supervision”.

During the CARS process, the insurer had asked for access to further information from Centrelink and the specialist solicitors at Gerard Malouf & Partners indicated that this request would be opposed.

The CARS Assessor had indicated that she had not identified in the Centrelink material provided, any requirement that care was only physical.

In his District Court Judgment, Justice Davies refers at [54] to the definition of ‘’care’’ from s197(1) of the Social Security Act 1991 (Cth) as including attention and supervision.  He also notes section A of the Centrelink form ‘Assessment For Carer Payment’ defines ‘’help’’ as “any physical assistance, guidance or supervision”  (emphasis added).

Justice Davies also notes at [55] that the Centrelink material did not contain any requirement that the care is not only physical care.

The assessor determined that the claimant had no residual earning capacity despite her being carer and she was awarded economic loss.

The judge identified that in making her decision there was no constructive failure by the assessor in exercising jurisdiction nor was procedural fairness denied. It was held that the amount of the carers allowance was rightly disregarded by the Assessor that the legislature had provided for the repayment of the allowance received (that is, Centrelink monies received have to be repaid to Centrelink following receipt of damages in any event).

The insurer’s summons was dismissed with costs.

Another successful claim from Gerard Malouf & Partners. If you would like a free consultation with one of our compensation lawyers please call 1800 004 878.