Abdelmalek and Secretary, Department of Family and Community Services
[2004] AATA 944
•10 September 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 944
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2003/698
GENERAL ADMINISTRATIVE DIVISION ) Re HISHAM ABDELMALEK Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr J D Campbell, Member Date10 September 2004
PlaceSydney
Decision The decision under review is affirmed. ……………………..
Dr J D Campbell
Member
CATCHWORDS
SOCIAL SECURITY - compensation payment - lump sum - compensation part of a lump sum compensation payment -compensation affected payments - lump sum preclusion period - recovery of compensation affected payments - special circumstances - disregard compensation payment - debt owing to Commonwealth - sole administrative error – decision under review is affirmed.
Social Security Act 1991 - sections 17, 1165, 1166, 1170, 1178, 1184, 1225, 1237A
REASONS FOR DECISION
10 September 2004 Dr J D Campbell, Member 1. In this matter, Mr Abdelmalek (“the Applicant”) seeks a review of the decision of the Social Security Appeals Tribunal (“the SSAT”) dated 28 March 2003. The SSAT in their decision affirmed the decision of an authorised Centrelink delegate of the Secretary, Department of Family and Community Services (“the Respondent”) dated 19 July 2002 to establish a preclusion period commencing 6 April 2000 and ending on 22 October 2003. This latter decision had been considered and affirmed by an authorised review officer in a decision dated 8 November 2002.
background material
2. Mr Abdelmalek was born in Egypt in December 1964. Mr Abdelmalek migrated to Australia in August 1992 and is married with two young children. On 1 August 1998 the Applicant injured his back while working at Pan Pharmaceuticals. On 9 October 1998 the Applicant was certified fit for light lifting duties only by Dr Boulis, due to work related back pain.
3. On 24 May 1999 Dr Boulis again certified the Applicant fit for light lifting duties only for 30 days due to work related back pain and elbow pain. On 26 May 1999 the Applicant completed a claim for compensation in respect of work related injuries sustained in August 1998. On 10 February 2000 the Applicant was certified unfit for work for two days by Dr Boulis due to pain in his right shoulder. On 6 April 2000 the Applicant ceased employment with Pan Pharmaceuticals.
4. On 19 April 2000 the Applicant was granted a Newstart Allowance. On 23 April 2000 the Applicant lodged a claim for compensation arising out of the nature and conditions of his employment with Pan Pharmaceuticals. On 1 November 2001 the Applicant’s solicitor lodged with the Respondent an estimate of Social Security Charge/Preclusion in which he nominated a proposed gross lump sum amount of $40,000 with the nature and conditions of the claim commencing in 1996. On 6 November 2001 the Respondent detailed a preclusion period of 34 weeks commencing on 1 August 1998 and ceasing on 26 March 1999 (T3), again with a date of injury as confirmed with the GIO being 1 August 1998 (T4). The Applicant’s solicitors were notified of this advice on 7 November 2001 with the calculations based on the information provided by the solicitors (T5). A further advice was forwarded to the Applicant’s solicitor on 8 April 2002 with calculations based on the previous advice from the solicitors, and with a reduction in the length of the preclusion period by a week.
5. On 2 July 2002 the Applicant’s partner rang the Respondent requesting advice concerning the preclusion period. The Respondent in a file notation states that the Applicant’s partner was advised of the 50 per cent rule and that the preclusion period commenced on date of loss of earnings (T6).
6. On 3 July 2002 the Applicant’s claim for compensation was settled by a consent agreement between the parties, with the consent agreement schedule noting the date of injury as 15 January 1996 (T8, p20).
7. On 5 July 2002 the Respondent was advised by GIO Insurers of compensation settlement details which included a gross settlement amount of $220,000, a date of injury of 1 August 1998 and no periodic payments made (T7). A copy of the settlement documents were forwarded by the GIO to the Respondent on 10 July 2002 (T8). Such terms of settlement documents were lodged with the District Court on 15 July 2002 (T19).
8. On 10 July 2002 the Respondent was advised by the Applicant’s solicitors that the date for loss of earnings was 6 April 2000 (T9). On 19 July 2002 the Respondent determined that as a result of the settlement the amount of compensation affected payments to be repaid was $17,705.43 and a preclusion period was to be applied commencing 6 April 2000 and ending 22 October 2003 (T10, T11, T12, and T13).
9. On 24 July 2002 the Applicant’s partner rang the Respondent to state that they had been misled in that they have given an estimate on the basis that the preclusion period began on the date of the accident and not the date of the loss of earnings (T15).
10. On 9 August 2002 the Applicant’s solicitors’ requested a review of the decision as their client and his family had suffered and will continue to suffer financial pressures as a result of the work place injury (T19).
11. On 12 August 2002 the Applicant’s partner rang the Respondent claiming that she had been given incorrect information on 2 July 2002, with the Centrelink operative stating that calculation of the preclusion period commenced from the date of injury. The Respondent noted that a file note of 2 July 2002 stated that the customer was informed to calculate from the date of economic loss; and that the estimate request in April 2002 did not contain the date of economic loss (T16).
12. On 12 August 2002 the Respondent in answer to queries from the Applicant’s solicitors replied that the estimate in April 2002 related to an amount of $40,000 not $220,000, and that the date of loss of earnings was not disclosed in the request for an estimate (T17).
13. On 14 August 2002 the Applicant wrote requesting a review of the decision. In so doing, the Applicant referred to his wife’s phone call to Centrelink on 2 July 2002, which led her to believe that the preclusion period was calculated from the date of injury. The Applicant stated that while in a subsequent phone call with Centrelink it was explained to his wife that the preclusion period commenced from the date on which work ceased and that a genuine misunderstanding had occurred following the phone call of 2 July 2002. The Applicant also indicated that whilst he ceased work on 6 April 2000, there was a long period of time before 6 April 2000 in which he was unable to perform his full duties. It was contended that he had a lost capacity to earn during this period (T18).
14. On 16 August 2002 the Applicant’s solicitors forwarded the submission previously sent by the Applicant on 14 August 2002 and enclosed with it a list of clinical attendances by the Applicant provided by Dr Boulis on 30 June 2001 for the period 9 January 1998 to 19 June 2001. Five medical certificates from Dr Boulis accompanied the submission (T19).
15. On 8 November 2002 the authorised review officer affirmed the decision under review. The SSAT, consequent to a hearing, affirmed the latter decision on 28 March 2003.
issues
16. The relevant issues in this matter are:
(i) Whether the Applicant’s preclusion period was correctly calculated; and
(ii) If so, was there a charge owing by the Applicant to Centrelink?; and
(iii)If so, were there special circumstances which would allow all or some of the compensation payment to be disregarded?
decision
17. Following a review of all the material before the Tribunal and for the reasons listed later in this decision the Tribunal concludes that:
(a) The Applicant’s preclusion period was correctly calculated; and
(b)The charge made by the Respondent as a result of the payment of compensation affected payments (“Newstart”) during the preclusion period was correct; and
(c)The Applicant’s circumstances were not considered to constitute special circumstances by the Tribunal, with a consequence that the amount of compensation payment remains unaltered.
Applicant’s evidence
18. The Applicant and his partner provided the following material:
(1)Mr Abdelmalek commenced employment with Pan Pharmaceutical in January 1996 as a process worker making tablets. He stated that he had experienced minor back problems in his previous employment. In May 1999 he made an application for workers compensation because he was experiencing significant low back pain. He states that his employer did not forward this claim to the insurer.
(2)Mr Abdelmalek stated that he continued in employment with periodic doctors’ certificates for no heavy lifting, and sickness, excusing him from work for either low back pain or problems in either his right shoulder or right elbow. Throughout this period he was treated with Naprosyn and Voltaren.
(3)In April 2000 the Applicant stated that he ceased work because of the following:
(i) He was stressed because of his injury;
(ii) The non forwarding of his earlier claim for compensation;
(iii)The non acceptance by the employer of work restrictions imposed by his doctor;
(iv) No provision of light duties by his employer; and
(v) The non acceptance of medical certificates relating to his neck, right shoulder, right elbow and back as being work related conditions.
(4)Mr Abdelmalek stated that he applied for compensation on 23 April 2000, claiming that the nature and conditions of his work had caused/aggravated his nominated injuries.
(5)Mr Abdelmalek stated that he commenced receiving Newstart Allowance one week after ceasing work.
(6)Mr Abdelmalek stated that he considered the date of injury an arbitrary date, and that he had taken time off from work because of his condition.
(7)The Applicant’s wife stated that she had made enquiries of Centrelink on 2 July 2002 prior to settlement to ensure that they were likely to clear $140,000 to $150,000. As a consequence of the earlier estimate given by Centrelink and her conversation on 2 July 2002 with Centrelink, the Applicant’s wife held the view that a preclusion period would be applied and that it would commence from the date of injury.
(8)Both the Applicant and his wife were of a view that there was evidence available from an examination of the Applicant’s earnings which would demonstrate that he had a loss of capacity to earn at a much earlier time than 6 April 2002.
(9)Both the Applicant and his wife indicated that their financial situation was difficult in that from the lump sum received monies had to be repaid on borrowings from family (cousin $9,000, parents $3-4000); $2,000 had been for car maintenances (brakes) and $50,000 had been invested in a high interest and essentially non-secured investment.
19. The Tribunal, at the request of the Applicant, granted an adjournment to allow further evaluation of the Applicant’s earnings during the relevant period. On resumption the Applicant and his wife detailed:
(1)That they owned a home at Padstow – valued at $550,000, with a mortgage of $350,000;
(2)The wife was working as a migration agent, with some limited assistance from the Applicant – earning $300-$400 per week;
(3) That the Applicant was still unemployed and receiving Newstart;
(4)That they had $200 in the bank and owned a 1995 Hyundai Sonata and a 2001 Toyota.
consideration and findings
20. In preliminary comment, the Tribunal would wish to state that both the Applicant and his wife explained the circumstances as perceived by them in this matter in a forthright and genuine manner. It was also evident to the Tribunal that they were concerned about their current circumstances but still doing their utmost to work through the problems that they believed existed.
21. Having considered all the material the Tribunal makes the following finding of facts:
(1)A compensation claim was lodged by the Applicant on 23 April 2000 claiming specified injuries arising out of the nature and conditions of work with his employer;
(2)Settlement of the claim occurred by way of a consent agreement between the parties on 3 July 2002 with a gross settlement amount of $220,000 and date of injury being nominated as 15 January 1996;
(3) That the Applicant was legally represented throughout the settlement process;
(4)That the Applicant ceased work with the employer on 6 April 2000 and received a Newstart Allowance approximately one week later.
22. Section 17(2) of the Social Security Act 1991 (“the Act’) defines compensation to include a payment in settlement of a claim, with section 17(3) defining the compensation part of a lump sum compensation payment as 50 per cent of the payment. Section 1165(7) of the Act defines a preclusion period as beginning on the day on which the loss of earnings or loss of earning capacity began and ends pursuant to section 1165(8) which details the methodology for calculating the number of weeks in the preclusion period.
23. In this matter, two issues have been raised concerning the commencement of the preclusion period. The first relates to the belief genuinely but mistakenly held by the Applicant’s wife that the preclusion period commenced from the date of injury. In forming her belief the Applicant’s wife relied upon the estimate provided by Centrelink on 6 November 2001, in response to a request from the Applicant’s solicitor of 1 November 2001. Secondly, the Applicant’s wife believes her understanding was reinforced during a conversation with a Centrelink operative on 2 July 2002.
24. In addressing this issue the Tribunal firstly notes that the law is specific as to when a preclusion period is to commence (day of loss of earnings or loss of earning capacity began). Secondly, the Tribunal observes that the estimate sought by the Applicant on 1 November 2001 did not indicate the day on which lost earnings or lost capacity to earn commenced. Further, the Tribunal notes that date of injury was nominated as a nature and conditions causation commencing 1996. Thirdly, the Tribunal notes that at all times during the settlement process the Applicant was legally represented. Fourthly, while the Applicant’s wife believes that according to her understanding, the preclusion period commenced from the date of injury and was reinforced by her conversation with a Centrelink operative on 2 July 2002, the Tribunal observes that there is a file note (T6) raised by the Respondent which details advice given in accordance with the Act.
25. The Tribunal accepts that the Applicant’s wife held the belief that she did, and that she proceeded to plan outcomes based on her genuinely held but mistaken belief. In assessing all the relevant material in relation to this issue, the Tribunal concludes that many parties, including the Applicant’s wife and the Applicant’s legal advisors have played a part in either forming or nurturing her mistaken belief genuinely held by the Applicant’s wife. Finally, the Tribunal is left wondering why the estimate given by Centrelink refers to a commencement date of 1 August 2001, when there is nothing on the estimate proposal to suggest such a date.
26. In summary the Tribunal concludes that the mistaken belief of the Applicant’s wife was a product of many factors, and clearly was not the result of sole administrative error by the Respondent. In considering all the circumstances as outlined, the Tribunal does conclude that the significant causation factors for the Applicant’s wife mistaken belief rested with herself and the Applicant’s lawyers for not drawing attention to the correct situation, if indeed they had been made aware of the Applicant’s wife misunderstanding.
27. The second issue raised by the Applicant was that the Applicant’s loss of earning capacity began when he had to lose workdays and overtime because of his work related injuries commencing 1 August 1998. An adjournment was granted in order that the Applicant make further evaluation of material received in relation to pay sheets and correlate them with medical certificates.
28. In addressing this issue the Tribunal notes the financial analysis as provided by the Applicant for the period 3 August 1998 to 10 April 2000 (Exhibit A2), the medical certificates provided by Dr Boulis for 9 October 1998, 25 May 1999, 11 February 2000 and 12 February 2001; and the medical summary of attendances compiled by Dr Boulis (T19).
29. In analysing the material, the Tribunal notes that for the period 9 January 1998 to April 2000, Dr Boulis makes a notation for back pain on 9 October 1998 and 25 May 1999 and for shoulder/elbow pain on 24 March 1999, 11 April 1999 and 10 February 2000. The Tribunal further notes that for the period 3 August 1998 to April 2000, the Applicant had some 13 sick days detailed in his pay sheets (Exhibit A2), of which 6 days were for back, shoulder or elbow pain and seven for other conditions. The Tribunal also notes the Applicant’s weekly and monthly earnings over the period 3 August 1998 to April 2000 and observes little variation in earnings including overtime over that period. Further, the Tribunal notes that when the Applicant was placed on listed duties for 30 days by Dr Boulis, there was no significant change in earnings during that period (June 1999).
30. From the analysis, the Tribunal is satisfied that the Applicant has not demonstrated a loss of earning capacity during his period of employment with Pan Pharmaceuticals. Further, the Tribunal concludes that his loss of earnings commenced at the time he ceased work with Pan Pharmaceuticals.
31. As a consequence, the Tribunal concludes that the calculation of the preclusion period pursuant to section 1165(8) of the Act is 185 weeks commencing on 6 April 2000 and concluding on 22 October 2003.
32. Further, the Tribunal notes that pursuant to section 1166(1), a charge of $17,705.43 was raised to recover the amount of compensation affected payment made to the Applicant during the lump sum preclusion period. The Tribunal notes that a notice was sent to the Insurer pursuant to section 1172(1) of the Act.
33. Section 1184 of the Act provides that the Secretary may disregard the whole or part of the compensation payment as not having been made if he thinks it appropriate to do so in the special circumstances of the case.
34. In addressing the issue of special circumstances, the Tribunal is aware that for such circumstances to be considered they must be unusual, uncommon or exceptional. In addressing the material before the Tribunal, the Tribunal notes the circumstances of the Applicant’s wife genuinely held but mistaken belief concerning the date on which a preclusion period would commence. The Tribunal has already detailed the circumstances leading to such a belief and again concludes that significant responsibility for such a belief must rest with the Applicant’s wife and the Applicant’s legal advisers if they were made aware of the Applicant’s wife’s mistaken belief. However in the analysis, one must also consider that even if the Applicant’s wife was aware of the correct commencement date for preclusion period commencement, there would have been no certainty of outcome if indeed the matter went to hearing. A result greater than what was already achieved by way of settlement may or may not been achieved.
35. While the Applicant’s wife believes that she was misled by the actions of Centrelink on the two nominated occasions, the Tribunal, after careful analysis of the estimate document of November 2001 and the file note of 2 July 2002, finds that such material to the objective reader does not constitute misleading advice in the circumstance in which it was given.
36. Accordingly the Tribunal concludes that the circumstances surrounding the Applicant’s wife’s genuinely held but mistaken belief are essentially matters of self construction, which may have been reinforced by the Applicant’s legal advisers. Nevertheless, the Tribunal concludes that they do not constitute special circumstances, for genuinely held but mistaken beliefs are not unusual, uncommon or exceptional, when considered in the context of a particular issue.
37. The Tribunal also notes the financial circumstances of the Applicant and the stressors arising from his continuing unemployment. Further, the Tribunal observes the non recoverability of the $50,000 investment, but in turn notes the assets (home and two cars) and the employment circumstances of the wife, together with the Newstart allowance paid to the Applicant. In such circumstances the Tribunal accepts that the Applicant’s financial circumstances are not robust, but in turn considers them not unusual or uncommon in the general community. As such the Tribunal concludes that the Applicant’s financial circumstances do not constitute special circumstances.
38. In summary the Tribunal concludes that there is no relief available to the Applicant pursuant to section 1184 of the Act, as the Tribunal has concluded that special circumstances do not exist. Further, while the issue of sole administrative error was raised by the Applicant during the hearing, the Tribunal has earlier concluded that the Applicant’s wife’s genuinely held but mistaken belief was the product of many causation factors, and hence not the consequence of a sole administrative error by Centrelink. As such any relief pursuant to section 1237A of the Act is not available to the Applicant.
detemination
39. The Tribunal affirms the decision under review.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member
Signed: Neil Glaser
AssociateDate/s of Hearing 22 December 2003, 22 June 2004
Date of Decision 10 September 2004
Representative for the Applicant Ms Theresa Nicolas
Solicitor for the Respondent E Thistlethwaite/A Garcia
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