4.9.2 Examples | Military Compensation SRCA Manuals and Resources Library, Death Handbook, Ch 4 Determining SRCA/ADB Lump Sum Entitlements, 4.9 Calculating the Amount of Economic Loss

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4.9.2 Examples

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Example 1

In Re: Buck and Comcare (1999), the Tribunal awarded an amount of $2,000 to a partly dependent adult daughter of a deceased employee. The Tribunal calculated this amount by reference to the amount of financial support being provided by the employee at the date of his death ($50 – $100 per week) and the period for which it considered the support was likely to have continued but for the father's death (i.e. up until the time when she subsequently found employment).

Example 2

The following example is an abbreviated version of the AAT decision in 'Cook and Thales Australia Limited and Cook (Joined Party) and Comcare (Joined Party) [2013] AATA 67 (13 February 2013)'.

http://www.austlii.edu.au/au/cases/cth/AATA/2013/6...

Gary dies as a result of a compensable injury.  He is survived by his wife and son (from a previous marriage).  His son is 15 years old at the time of his death.

His spouse is considered a wholly dependent dependant and as such the full amount of lump sum compensation is to be divided between the dependants.

In making its decision, the AAT considered the financial loss of each dependant.

Gary's son (Haydn):  Haydn lived for the majority of the time with his mother and visited his father and step-mother during school holidays. Gary paid approximately $7,000 per year in Child Support payments as well as giving his son gifts and other assistance during his stays.  It was estimated Haydn lost economic support of approximately $10,000 per year for four years (when he would have graduated from high school and gained employment).

Gary's Wife (Teena): Teena and Gary shared finances, including a joint mortgage on their home.  Gary was the primary income earner in their relationship.  Gary earned approximately $47,000 per year in income and paid $7,000 in Child Support payments.  It was estimated that Teena lost economic support of approximately $20,000 per year.  She would have continued to receive this support until Gary reached retirement age (a further 7-12 years).

The AAT awarded 87.5% of the lump sum to Gary's wife ($360,500) and 12.5% to Gary's son ($51,500) (rates current at the time of the death).

Example 3

Lisa dies as a result of a compensable injury.  She is survived by a husband and two children aged 6 and 8 years old, who were all living with her at the time of her death.

All of Lisa's dependants are considered wholly dependent and as such the full amount of lump sum compensation is to be divided between them.

The delegate considers the financial loss of each dependant.  Lisa worked part-time and earned $30,000 per annum and the couple met the expenses of the household jointly, including a joint mortgage.  Given that the household will now have a single income, and Lisa's husband will be responsible for the ongoing care and support of the children, the delegate decides to apportion the majority of the lump sum to him.  The delegate awards 80% of the lump sum to Lisa's husband and 10% each of the lump sum is held in trust for Lisa's children.

Example 4

John dies as a result of a compensable injury.  He is survived by two children, an 8 year old son and an 18 year old daughter.  John had custody of his son 2 nights a fortnight and no longer had contact with his daughter.  Neither of his children were wholly dependent on John.

The delegate apportions the lump sum based on the economic loss that each dependant has suffered.  The amount paid may be less than the maximum amount payable as there are no wholly dependent dependants.  The delegate considers the financial loss of each dependant.

John's daughter (Bianca): Bianca lived with her mother and was attending university fulltime. She had 3 years of study remaining when her father died. John was paying Child Support payments at a rate of $90 per week.  The delegate considers the period in which John could have been expected to continue paying Child Support payments was 156 weeks (3 years) until she completed her study.  It was estimated Bianca lost economic support of $14,040.

John's son (Zak): Zak lived with his mother for 12 nights of the fortnight, and spent 2 nights per fortnight with his father.  John was paying Child Support payments at a rate of $70 per week as well as paying half of Zak's education expenses (fees, uniforms. camps etc). John purchased gifts and clothing for Zak on a regular basis along with birthday, Christmas presents etc. The delegate calculates that John could have been expected to continue to provide economic support until Zak is 25, another 17 years.

The delegate calculates the amount of economic support for Zak as:

Child Support Payments

$3,640 per year

Education expenses

$   400 per year

Gifts

$1,000 per year

Household expenses (2nights)

$1,200 per year

Total

$6,240 per year

The delegate considers the age of the child and decides that it is reasonable that these costs would increase as Zak gets older, the delegate estimates that from age 13 these costs would increase to approximately $10,000 per year.

4 years x $6,240

=

$24,960

+ 12 years x $10,000

=

$120,000

Total

=

$144,960

The delegate awards $14,040 to John's daughter, Bianca and awards $144,960 to John's son, Zak.