Whittaker and National Disability Insurance Agency [2022] AATA 729 (Link to JADE).
Since 2017 the Applicant had been a participant in the NDIS. He sustained a severe traumatic brain injury and a series of serious physical and psychological injuries as a result of a catastrophic motor vehicle accident in 2012. In 2014 the Applicant commenced proceedings in the Supreme Court of Queensland claiming compensation for his injuries against both the driver of the other motor vehicle and the relevant compulsory insurer. The claim was compromised, and the agreed settlement of about $4 million was sanctioned by Justice Flanagan of the Supreme Court of Queensland.
In a later NDIS plan offered to the applicant, various reasonable and necessary supports were funded for the Applicant, but the relevant funding was reduced by the NDIA through the application of a Compensation Reduction Amount (‘CRA’) of $15,531.12 for the period of the statement of participant supports. It is from this decision, and in particular the application of the CRA to his funded supports, that the Applicant sought a review.
The NDIA had calculated a CRA of about $725,000 however the applicant argued that it should be only about $37,500. As explained at [15]:
It is the Applicant’s case that it is possible to identify the NDIS component of the compensation and that this component can be objectively identified. The Applicant submitted that his total claim for damages arising from the collision was just over $7.5 million and, of this, only $433,589.83 was claimed for “future pharmaceutical, travel, medical, rehabilitation, therapy, equipment and orthotic expenses”, part of which the NDIS supports.[13] He further submitted that his sanctioned settlement sum, of just over $4 million (plus future management fees, costs and statutory refunds), was 46.6545% of the total claim.[14] Therefore, using “simple mathematics”, the Applicant submitted that the objectively identifiable NDIS component was $202,289.60.
On the issue of whether the NDIS component could be objectively identified the Tribunal held at [17]:
The sanctioned settlement sum of just over $4 million was the result of a claim formulated on behalf of the Applicant, and the negotiated compromise of that claim. No amount is stipulated in the sanction for supports of the kind that may be funded by the NDIS. Further, it is not possible to extrapolate any such amount by looking at the initial claim and the settlement sum because the initial claim itself is entirely subjective. Counsel for the Respondent submitted, during the hearing, that it was proper to look at a claim as an assertion of entitlement and the Tribunal accepts this submission. The amounts claimed for various heads of damage come entirely from the minds, or beliefs, of the Applicant and those advising him, and could have been requested in any amounts depending on the subjective views of those people. There is no objective verification of what consideration, if any, may have been given to particular head of damage when the parties arrived at the ultimate sanctioned sum and when the Court determined it was appropriate to so sanction. The sum was received by the Applicant as an undissected lump sum and, as such, is to be treated as a whole.
The Respondent produced documents containing substantial information about assumptions underlying the relevant calculation and detailing the three-staged process leading to the full actuarial calculation of the Applicant’s lifetime cost for the purpose of rule 3.13(e). The further information provided by the Respondent was sufficient to demonstrate to the Tribunal that the underlying assumptions had been correctly considered and calculated by the scheme actuary in order to arrive at the lifetime costs figure of $758,000.
Subject only to an adjustment conceded by the Respondent with respect of supports directly funded by the Applicant, the Tribunal accepted that it is proper to calculate and apply the appropriate compensation reduction amount to the approved statement of participant supports and concluded that the methodology adopted by the Respondent was correct ([24]).
[BillMaddensWordpress #1973]