The following minute has been submitted to me for advice:

A.B.C, a munition worker, sailed for England per the S.S. Beltana on 16 June 1917. During the voyage he met with an accident on 21 June 1917, which resulted in his being badly ruptured and in his receiving injuries to the shoulder, ribs, arm and right hand.

2. The medical report shows that this worker is totally and permanently incapa-citated, and that he is likely to remain so for the remainder of his life.
3. Under the agreement between the Defence Department and munition workers the following paragraph is included:

Provided however that if personal injury by accident is caused to the volunteer while on board the vessel during his passage from Australia to Great Britain or from Great Britain to Australia in pursuance of this Agreement the Common-wealth shall be liable to pay compensation to him or to his dependants in accordance with the Seamen's Compensation Act 1911, as if he were a seaman in the employment of the Commonwealth on board such vessel during his passage from or to Australia and for that purpose that Act and the Regulations thereunder shall apply as if they were incorporated in and formed part of this Agreement.

4. Paragraph 1 (b) of the First Schedule of the Seamen's Compensation Act 1911 provides as follows:

[W]here total or partial incapacity for work results from the injury, a weekly payment during the incapacity not exceeding fifty per centum of the seaman's average weekly earnings during the previous twelve months, if he has been so long employed, but if not then for any less period during which he has been in the employment of the same employer, such weekly payment not to exceed Thirty shillings, and, if at any time the seaman is entitled to an old-age pension from the Commonwealth, not to exceed during that time an amount which together with the weekly rate of the pension will make up Thirty shillings. For the purposes of the grant of an old-age pension, compensation under this Act shall not be taken to be income.

5. C, who is now 73 years of age, was granted an old-age pension as far back as April 1914, and is at the present time receiving a pension of 15s a week, which amount has been supplemented by the Defence Department by an allowance of 15s a week to bring the total payments up to 30s.
6. The Defence Department desires to redeem the weekly payments by payment of a sum of £120, which C. is prepared to accept provided his old-age pension is not reduced. It appears however that this lump-sum payment would, under the Old-age Pensions Act, be regarded as property, and that the pension would have to be reduced from £39 per annum to £32 per annum as under:

PROPERTY

Cash	120
Statutory exemption	50
Affecting pension	70

7. Advice is desired on the following points:
1. In the case of a person entitled to an old-age pension who receives compen-sation under the Seamen's Compensation Act, should such compensation be regarded as 'income' for the purposes of the grant of an old-age pension, seeing that there is no provision in the Old-age Pensions Act for the exemption of such compensation as income?
2. Should 'lump-sum' compensation payable under the Seamen's Compensation Act be regarded as 'property' in assessing the old-age pension?
3. Seeing that C. is not legally entitled to compensation under the Seamen's Compensation Act, but is being paid compensation in accordance with that Act by virtue of an agreement containing the provision above referred to, should the weekly payments being made to him by the Defence Department as compensation be taken to be 'income' for the purposes of his old-age pension?

Periodical payments made as compensation under the Seamen's Compensation Act 1911 to persons entitled under that Act, and not by agreements such as that

quoted in the above minute, should not be regarded as income in assessing the amount of old-age pension payable to those persons.

If compensation payable under the Seamen's Compensation Act 1911 is paid in a lump sum, I think that sum must be regarded as property for the purposes of the Invalid and Old-age Pensions Act 1908-1919.

The Commonwealth has by agreement placed Mr C, so far as regards any accident happening to him while travelling between Australia and Great Britain, in the same position as a seaman in the employment of the Commonwealth. Such a seaman has, by paragraph 1 (b) of the First Schedule of the Seamen's Compensation Act, the right to receive an old-age pension (if he becomes thereto entitled) without his compensation under the Act being taken into account as income.

It is doubtful whether the Commissioner of Pensions is legally bound by the agreement to except the periodical payment of compensation in calculating the income of the pensioner in the case under consideration. The Commonwealth is, however, bound by the agreement to pay Mr C. the full rate of periodical payments therein contemplated.

It should be a matter for arrangement between the Commissioner of Pensions and the Department responsible for the administration of the agreement as to the payment of the amount by which the pension is reduced by the weekly payments received as compensation.

[Vol. 17, p. 15]