Littles Lawyers: NDIS Compensation Reductions in Pett v NDIA [2024]

In the recent matter of Pett and National Disability Insurance Agency [2024] AATA 2690, the plaintiff (Amanda Pett) has applied to the Administrative Appeals Tribunal to review a decision of the National Disability Insurance Agency to apply a Compensation Reduction Amount, being monies received by the plaintiff in settlement of two civil actions filed in the District Court of South Australia, to her National Disability Insurance Scheme (NDIS) statement of participant supports.

This particular hearing required the Administrative Appeals Tribunal’s consideration of whether compensation received by the plaintiff for her two personal injury claims was a “compensation reduction amount” within the meaning of section 11 of the National Disability Insurance Scheme Act 2013, and furthermore, if a compensation reduction amount applied, the appropriate calculation of the compensation reduction amount to be applied.

The plaintiff’s first claim arose from treatment by a physiotherapist. The plaintiff’s second claim arose from treatment by two medical practitioners. The second claim was made by the plaintiff and her husband. The plaintiff’s first claim settled for $115,000, and the plaintiff’s second claim settled for $1.3 million.

Claim 1

The plaintiff submitted that the Claim 1 settlement sum was not compensation because she received none of those monies because they were subsumed by the legal costs of her first legal practitioner. The Tribunal found that this submission had no merit and it was found that there was no acceptable evidence before the Tribunal in support of that submission. If there was such evidence, it may have been relevant in considering whether the whole or part of the settlement sum should be ignored in the compensation reduction amount calculation by having regard to Rule 3.10 ‘special circumstances’ (at [109]).

Claim 2

The plaintiff’s submitted that the Claim 2 settlement sum was not compensation because the Deed of Release was entered into with a denial of liability. The Tribunal also found that this submission had no merit. Th Tribunal provided that it is common practice in resolution of litigation between parties, including litigation for damages arising out of medical negligence, for parties to reach agreement, often confidential agreement, to resolve the litigation in full and final settlement of all claims rights or entitlements including costs and interest with a denial of liability (at [110]). On this, the Tribunal also provided at [111] as follows:

The denial of liability in resolution of litigation does not operate to change the basis of that litigation informed by the pleadings

The Tribunal further provided at [117]:

I am satisfied that the Applicant has, in relation to each claim, pursued an action for personal injury and that to some extent a personal injury the subject of each Claim contributed to the impairment for which the Applicant was made a participant of the NDIS…

Ultimately, on 30 July 2024, the Administrative Appeals Tribunal found that the plaintiff unsuccessfully argued that the settlement sums referred to in both the Deed (Claim 1) and Deed of Release (Claim 2) were not compensation within the meaning of the National Disability Insurance Scheme Act 2013

Having made those findings, the Tribunal calculated the compensation reduction amounts for each settlement, with reductions for special circumstances. For the first claim the compensation reduction amount was $nil, and for the second claim the compensation reduction amount was about $330,000.

Our team are specialist personal injury lawyers who can assist you with your claim on a ‘No Win No Fee’ basis. If you would like advice in relation to a personal injury claim, including a medical negligence claim, please reach out to Littles Lawyers today.

Further blogs in relation to medical negligence and personal injury claims can be found on our website.

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