If there is one aspect of compensation in the state of New South Wales, and indeed across the land, that is deeply entrenched, it is the concept of “no double-dipping.”

If you are compensated for economic loss, you pay past entitlements back to Centrelink.  If you have received benefits via Medicare, those costs are paid back.  It is a concept that makes sense, in that compensation is about compensating, not profiting.

A recent NSW case has raised serious questions about the National Disability Insurance Agency’s entitlement to request payback of support payments from recipients who have received personal injury compensation.

The case followed a 25-year-old NSW woman, Tegan Sharp, living with cerebral palsy. Sharp is legally blind, deaf and has serious physical and mental disabilities.

Six years ago, she suffered third degree burns while being showered by her carer; being unable to speak, she could not communicate her pain.

Sharp and her family sought compensation from the care provider for the injuries stemming from the incident, and the parties reached a settlement in March.

Since then, the NDIA has requested that Sharp repay more than $100,000 of her settlement to cover ‘duplicate funding’- that is, any compensation for expenses that have already been covered by NDIS payments.

Much of the conflict surrounding this case relates to the fact that Sharp has been living with a profound disability regardless of the third degree burns, which could create some uncertainty as to whether the settlement money was paid to fund the same expenses that her NDIS payments should have covered.

Supreme Court Justice Julia Lonergan did not look approvingly upon the NDIA’s assessment, ruling that the NDIA “no proper basis to claim any payback at all in the circumstances of this case”.

The compensation, Lonergan held, largely dealt with “gratuitous care provided by the parents and family of Tegan in the past and future” and would therefore not fit within the scope of expenses that are covered by her NDIS payments.

Nevertheless, Sharp and her family are for the time being left only with the assurance that the NDIA are “carefully considering the comments of the court”.

The Supreme Court, however, has made an important distinction.  An injured person who receives compensation does not necessarily entail that a federal agency somewhere is entitled to receive money back.

For now, in certain circumstances, the Supreme Court has offered some protection to disabled parties, in that compensation not associated with their federal funding, is not money that federal agencies are entitled to.

Karlo Tychsen

Karlo Tychsen

Personal Injury Lawyer