Adam and Secretary, Department of Education, Employment and Workplace Relations
[2008] AATA 576
•4 July 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 576
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4850
GENERAL ADMINISTRATIVE DIVISION ) Re SANDRA ADAM Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Senior Member L Hastwell Date4 July 2008
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
..............................................
L HASTWELL
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – recovery of compensation affected payment from lump sum damages – special circumstances – health issues considered – financial circumstances – decision affirmed
Social Security Act 1991 ss 1184K
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Secretary, Department of Family and Community Services v Allan (2001) 66 ALD 147
Secretary Department of Social Security and Banks (1990) 23 FCR 416REASONS FOR DECISION
4 July 2008 Senior Member L Hastwell 1. Sandra Adam (the applicant) sustained injuries in a motor vehicle accident in 2003 when, as a pedestrian, she was hit by a motor vehicle.
2. On 4 April 2007 she received a lump sum payment of $81,064.30 in settlement of her common law claim.
3. There was an acknowledged economic loss component in that lump sum payment. The applicant was in receipt of Parenting Payment Single at the time and Centrelink (the Department) calculated a preclusion period (the period during which she had no entitlement to certain Social Security benefits) based on 50 percent of the lump sum. This resulted in a 55 week preclusion period from receiving compensation affected Social Security payments including Parenting Payment Single.
4. As a consequence of that decision which was made on 24 April 2007, the sum of $12,842.50 of her compensation payment was repaid to Centrelink.
5. The applicant sought a review of this decision and it was affirmed by an Authorised Review Officer on 8 August 2007 and by the Social Security Appeals Tribunal (SSAT) on 18 September 2007. She seeks review of the SSAT decision to this Tribunal.
6. The applicant acknowledges that there was an economic loss component in the lump sum payment and she accepts that the preclusion period has been correctly calculated by the Department. It was agreed at the hearing that the only issue for the Tribunal to consider is whether special circumstances exist in this case such that some or all of the compensation payment that has been recovered by the Department should be repaid to her.
legislation
7. Section 1184K of the Social Security Act 1991 (the Act) provides as follows:
“1184K Secretary may disregard some payments
(1)For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case.
…”
issues
8. The issue to be decided in this case is:
·whether or not special circumstances exist in this case within the meaning of the relevant section; and
·if so, whether it is appropriate for the Tribunal to exercise the discretion to disregard some or all of the compensation payment and treat it as not having been made.
the hearing
9. The applicant represented herself at the hearing. She had provided the Tribunal with a written submission and annexures which was received as Exhibit A1. She tendered some other exhibits at the hearing. The T documents were received as Exhibit R1.
10. The applicant gave her evidence in a straightforward fashion and confirmed all the information that had been previously provided to the Tribunal. She confirmed the evidence that she had put to the SSAT, save that she now says that her home is worth $340,000 and that some of the medication that she is taking has changed. The SSAT decision was contained at T2 and elaborated in some detail on the applicant’s personal circumstances and her financial outgoings.
11. The applicant acknowledged that she was not in difficult financial circumstances and that her special circumstances arose from what she considered to be her unusual health problems and the difficulties that they had posed for her in the past and would continue to confront her with in the future.
12. The applicant was injured as a result of trauma and subsequent infection which occurred due to what she termed “the botched delivery” of her second child in 1992. It took some years for there to be a diagnosis of the medical problems that she was left with and she subsequently had corrective surgery which occurred many years later. The surgery has only been partly successful and she is left with ongoing bowel and gynaecological complications.
13. At the time that the applicant sustained this injury, she was a teacher with a good career. She had a third child in 1996 and she has not returned to work since that time. She is now a recipient of a Disability Support Pension (DSP) and has been since November 2007.
14. She holds the view that the South Australian medical profession covered up the negligence of the doctor who performed the delivery. She travelled interstate to find a doctor who was willing to diagnose her condition and acknowledge that it had been caused by the childbirth. That medical specialist is based in Brisbane. She expressed a lack of confidence in the medical profession in South Australia.
15. During the preclusion period she had out-of-pocket medical expenses of some $10,000 for trips to Brisbane, accommodation costs, medical gaps and child care expenses. She had further surgery in Adelaide in 2004 using a local surgeon, but that operation was only partially successful.
16. She anticipates incurring further travel expenses to Brisbane over the next few years for medical check-ups and she may require further surgery.
17. She considers that her life was ruined by the incident in 1992. She and her husband separated shortly thereafter. She then had a third child and she receives only minimal maintenance from the father of the third child who is only 11 years of age.
18. She is a single parent and considers that it is her right to give her children a private school education and therefore she has additional expenses which she considers essential to cover the cost of private schooling. Neither of the fathers of her two children that remain of school age contribute to the cost of their education.
19. She was already in poor physical condition when she was run over by a vehicle in the 2004 incident that gave rise to her receiving compensation. That compensation sum was less than she had hoped to receive.
20. She continues to suffer from very poor health and cannot possibly anticipate returning to the workforce in the future.
21. The applicant’s financial position will alter when her second child turns 16 and commences to receive Youth Allowance. The applicant’s Centrelink payment will then reduce. She acknowledged however that it was appropriate that she ask that child to make a payment of board to her equivalent to the sum that she will be losing from her own benefit, given that she will continue to house and support that child.
22. Because of her poor health, she retains a private medical cover for herself, but cannot afford to also provide a cover for her children.
23. She uses large quantities of medication, including herbal and homeopathic medication, which are costly and add significantly to her outgoings.
24. She now suffers from chronic fatigue syndrome which was diagnosed in 2007 and this has only added to her general feeling of malaise and despair about her future prospects.
25. Her house is in need of renovation. In particular, there is asbestos in the flooring of the house and there is leaking from the lean-to at the back. She believes the house is now worth $340,000. It is unencumbered and registered solely in her name. Nevertheless, she expressed the view that if she were to sell that house, the funds available would not buy her very much at all in the current market and so she has no choice but to remain there and try to repair it.
26. At the time that she appeared before the SSAT she had a $60,000 investment. However, she has spent $10,000 of that sum since late 2007. Several thousand dollars were spent on purchasing a new bed for herself and on linen for that bed. She justified this expenditure saying that she had not had a new bed for 20 years and it was a necessary purchase.
27. She is studying to complete a diploma in financial counselling. She remained pessimistic about her prospects of ever obtaining even part-time employment in that field. She said that she has made enquiries about the availability of employment on a very part-time basis and the agencies with which she would seek work do not pay for counsellors, but use volunteers. She considers that her health, and in particular the onset of the chronic fatigue syndrome, will preclude her from ever working again.
28. She is exceedingly anxious about her future and about her financial position. She now has approximately $50,000 left of her savings and can only look to Centrelink payments and some interest on the investment as her source of income into the future.
29. She feels that there is unfairness and injustice in the strict application of the provisions of the Act and that the preclusion period should be varied from 55 weeks to 5 weeks and she should be refunded the appropriate amount by the Department who directly received the payment.
other evidence
30. The Tribunal received written submissions and a number of medical reports from the applicant, all of which confirm that she has significant physical problems and requires ongoing treatment and medication.
31. Dr Michael Nugent confirms in a letter dated 19 June 2008, that the applicant has paid for orthodontic treatment for her daughter, Tanya, in the sum of $4,602 and faces a further account of $5,200. The applicant in her evidence indicated that this work was required to correct her daughter’s “bite”.
32. The evidence included a financial statement of the applicant to which there had been some minor variations since she prepared that statement. It confirmed the sorts of outgoings that she had spoken to the Tribunal about, including quite significant costs for chemist items and for other treatments.
33. A number of the treatments which she uses are homeopathic and herbal and not available under any Government subsidised scheme.
findings of fact
34. On the basis of all available evidence the Tribunal made the following findings:
·The applicant was 54 years of age at the time of the hearing.
·She is a single parent and has two school age children still residing with her.
·The applicant strongly believes that her children should have a private education. She elects to send them to a private school and pay fees. She receives no contribution towards the school fees from the fathers of her two youngest children.
·The applicant’s oldest child is now residing away from home and is independent.
·The applicant has been granted DSP for the following conditions from which she suffers:
o Chronic fatigue syndrome
o Irritable bowel syndrome
o Neck disorder
o Enuresis
o Tinnitus
o Muscular-skeletal disorder
·The applicant is unlikely to return to the workforce and remains profoundly pessimistic about her future.
·The applicant’s ongoing source of income will be interest on her investment, reasonably modest child maintenance from the fathers of her two school age children and Centrelink payments.
·The applicant is in no current financial difficulty. She owns a freehold home and holds an investment of approximately $50,000 which derives largely from her compensation payment.
·The applicant suffered neck and back injuries in a motor vehicle accident on 4 October 2003 when she was a pedestrian hit by a car.
·She settled her compensation claim by consent for $81,064.30 on 4 April 2007. This sum included a past economic loss component of $7,500 and $30,000 was for future economic loss.
·The applicant had claimed for a larger sum, but upon legal advice she agreed to settle for a lesser sum.
·The preclusion period and the amount of the repayment have been correctly calculated. It covers 55 weeks from 4 October 2003 until 22 October 2004 and resulted in a repayment to Centrelink of $12,842.50 from her compensation payment.
·It is by choice, and not necessity, that the applicant consults a doctor based in Brisbane. This inevitably increases the cost of her treatment.
·The applicant speculates that she may require future surgery, but there is no evidence that any particular surgery is required at present.
consideration and application of the law
35. The issue in this matter is whether there are any special circumstances in this case such that some or all of the compensation payment can be disregarded. The applicant argues that there is injustice if it is not reduced.
36. Special circumstances are determined on a case by case approach. Nevertheless, there has been considerable prior commentary in the cases as to the general principles to apply when considering a claim of special circumstances. The Tribunal must be guided by prior Federal Court and Administrative Appeals Tribunal decisions as to how the relevant provisions are to be applied.
37. In the case of Re Beadle and Director-General of Social Security (1984) 6 ALD 1, Justice Toohey commented as follows
"An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular qualify of unusualness that permits them to be described as special."
38. Justice Heerey said in Secretary, Department of Family and Community Services v Allan (2001) 66 ALD 147 at 150:
"It is not sensible to lay down precise limits or precise rules as to what may constitute special circumstances: Beadle v Director-General of Social Security (1985) 7 ALD 670 at 673; 60 ALR 225 at 228. Ill health, financial circumstances and the unfairness of a strict application of the Act are some matters which may in an individual case, constitute special circumstances: Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281 at 284-7; 65 ALD 211; 32 AAR 120; see also Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64 at 71; 57 ALD 6000 at 607."
39. The decision-maker has a wide discretion to consider all the circumstances of a case. Ill health resulting in incapacity to engage in paid employment can be relevant to the finding of special circumstances.
40. There is no financial hardship alleged in this case. The applicant bases her case squarely on her ill health as giving rise to a special circumstance.
41. The Tribunal had a number of medical reports available to it which indicate that the applicant does have some medical conditions which are likely to preclude her from returning to the workforce. These are not life-threatening conditions. The fact that she suffers from these conditions is not in itself a special circumstance. She receives a Social Security pension in recognition of her disability and she will continue to receive a pension into the foreseeable future. The preclusion period ended prior to her receipt of a lump sum compensation payment and so she did not suffer any period without income.
42. She does not claim to have been unaware of the possibility that she would need to repay some part of her compensation to the Department and she is by no means the first person to settle a claim for less than the original expectation.
43. The applicant is focused on her health issues and is choosing to spend significant sums of money on alternative herbal and homeopathic and like treatments that are expensive.
44. The Tribunal must also have regard to the public policy which lies behind this compensation recovery legislation. It is intended to prevent double dipping when someone receives a lump sum payment that provides compensation for a time when a person is also a recipient of a Social Security benefit. In the case of Secretary Department of Social Security and Banks (1990) 23 FCR 416, Justice von Doussa expressed this policy in the following terms at 424:
“… The prescribed percentage (50 per cent) of the lump sum payment made in settlement of a claim which by s152(2)(i) is deemed to be the ‘compensation part of a lump sum payment by way of compensation’ should be viewed as a broad attempt to balance the interests of the recipient of the payment with the competing interests of others in the community whose needs must be met as far as possible from a finite budget allocation for social security measures. The paragraph seeks to eliminate double dipping in a practical way which operates effectively in a straight forward manner.…"
45. The Tribunal has a great deal of sympathy for the applicant. However, after consideration of all the relevant evidence, the Tribunal is not satisfied that the applicant's circumstances are such that they are so unusual, uncommon or exceptional to justify an exception being made to the usual rule.
46. The main circumstance that she puts forward as being “special” is her physical condition and the way in which that has impacted and will continue to impact on her life. Unfortunately, many people are in her position and as she is a recipient of only DSP, she is in the same position as many other Social Security recipients where she is anxious about finance and about the future. Her anxiety about the future is not in itself a special circumstance.
47. The applicant has very strong views and elects to pursue alternative treatments for her health condition, which incur considerable extra expense. She also elects to send her children to a private school, thereby incurring extra expense. She is very much choosing her current financial situation which is the source of her anxiety. She has spent a considerable sum in recent months on furniture which makes little sense given her expressed concerns about the need to carry out some renovations to her home. The Tribunal found this expenditure difficult to reconcile with her stated concerns about resolving some of the defects in her home.
48. In the circumstances and considering all the evidence, the Tribunal does not consider that there is anything in the applicant’s circumstances that is unusual or uncommon such that she satisfies the requirement that her circumstances are “special”. The Tribunal affirms the decision under review.
I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member
L HastwellSigned: .....................................................................................
AssociateDate of Hearing 20 June 2008
Date of Decision 4 July 2008
Advocate for the Applicant Self representedAdvocate for the Respondent Mr C Goldsworthy
Centrelink Legal Services Branch
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