This was published 9 months ago
Opinion
‘Uniquely unfair’: How the government grabs a share of compensation payouts
Caitlin Fitzsimmons
Environment reporterThe other day, I had coffee with a man who shared a grim story about how his life was blown off course by a sexual predator when he was a 14-year-old schoolboy.
The man says he was raped by a teacher at his Sydney high school nearly 50 years ago. The resulting trauma is severe and lifelong, including multiple suicide attempts.
His story, while distressing, is not uncommon. Just this week, this masthead reported on disturbing new research showing that one in 10 men have sexually abused children and teenagers, including online offences.
Many survivors of child sexual abuse only report years or decades later.Credit: iStock
As awful as this is, what truly shocked me was the policy of our own government to grab a share of any compensation payout survivors might receive. Did you know that Medicare, Centrelink and the National Disability Scheme need to be paid from any compensation payment? Me neither.
More on that later, but it brought home how broken the system of victim compensation is, especially for survivors of child sexual abuse.
The size of payouts is a lottery. The National Redress Scheme for eligible child sexual abuse survivors provides a payment from $10,000 to a maximum of $150,000. At the other end of the scale, a Victorian jury recently ordered the Western Bulldogs Football Club to pay $5.9 million to a survivor of child sexual abuse.
Not everyone has a wealthy institution or individual to sue and cases before the courts don’t always go to a jury. (Damages in judge-only trials tend to be lower.)
In this case, the man is suing his former school in the NSW Supreme Court. In September, the school made a settlement offer, obtained by this masthead, for a confidential payout of $1.055 million. The school also asked for a “non-disparagement” clause, with the penalty being half the payout.
The man’s claims have never been tested in court and his alleged perpetrator is dead. Several other men in both NSW and New Zealand made police reports about the same teacher, but the cases never went to trial.
The man refused the settlement offer in part because he objected to a gag clause, but also because he would be left with very little after paying his lawyers and other costs. These costs include repaying Centrelink for any benefits paid for periods when he was out of work because of his injury.
He would also have to repay the Medicare rebate for any medical expenses relating to his injury going back nearly 50 years. Thanks to poor advice from a previous lawyer, in his case this could include GP bills where he discussed his mental health even if the primary purpose of the visit was a sore throat.
For any compensation of more than $5000 for injury or illness, Medicare requires you to repay the benefits or subsidies for any relevant medical treatment. It charges 10 per cent of the compensation as a default. He is not on the NDIS, but if he were he would have to pay a recoverable amount to the National Disability Insurance Agency as well.
This is the case for anybody who receives compensation for personal injury, whether paid by an insurance company, an individual or another company. The argument is that it’s double-dipping.
I don’t buy it. Centrelink payments are a social safety net, not a replacement for lost earnings, and the point of universal healthcare is that we are all entitled to Medicare regardless of the circumstances.
It’s a trap for people who do not have legal representation or are not fully briefed by their lawyers. Victims often find themselves accepting a settlement that sounds reasonable and then end up out of pocket when Medicare sticks its hand out.
If a car runs you down on a pedestrian crossing and you break your leg, you might get an insurance payout. While I don’t agree with repaying Medicare payments, it should at least be straightforward to determine which expenses are related to the accident.
But it seems uniquely unfair for victims of child sexual abuse whose injuries are all-encompassing and who are often chasing it up years later. Figures from the Australian Bureau of Statistics for 2019 show 16.3 per cent of male victims and 5.9 per cent of female victims made their first police report more than 20 years after the alleged incident.
It’s a daunting undertaking to analyse an entire life and figure out which periods of unemployment were related to your psychological injury and which were just bad luck, or to neatly categorise every medical treatment over decades.
The compensation payout does not affect your ability to claim from Medicare in the future, meaning people who are resolving their cases after a delay of years or decades are disadvantaged because more of their treatment has already happened.
There is, however, an exclusion period before you can get help from Centrelink or the NDIS after accepting compensation. You’re given a large sum of money and if you don’t manage it well because of your complex trauma, then tough luck.
My coffee date asked us not to name the school because he is still hopeful of a deal based on the principle of “restorative justice”. He says he would be happy to take no compensation at all if the school or associated entities would help him establish a rehabilitation centre for other victim-survivors, and provide a lifetime home for him and his wife and disabled adult child.
The school declined to comment on a matter before the courts. The lawyer’s letter with the settlement offer states that the school believes the case to be “completely void of merit”.
Caitlin Fitzsimmons is the Herald’s social affairs reporter.
Lifeline 13 11 14