Aiken and Secretary, Department of Employment and Workplace Relations

[2006] AATA 195

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 195

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2005/757

GENERAL ADMINISTRATIVE  DIVISION		)
Re		NOELENE AIKEN

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Ms N Bell, Senior Member

Date6 March 2006

PlaceSydney

Decision The decision under review is affirmed

..........................................

Ms N Bell
  Senior Member

SOCIAL SECURITY - Preclusion Period - Period Imposed is Correct - Tribunal Not Satisfied that Applicant's Circumstances Are Special - Decision Under Review Affirmed

Social Security Act 1991

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Riddel v Secretary Department of Social Security (1993) 42 FCR 443

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

6 March 2006 Ms N Bell, Senior Member

1.      Mrs Aiken, a 68 year old age pensioner, was injured when she fell in a supermarket in June 2001.  She made a claim for compensation and received a settlement of $50,000 in October 2004.  Of that amount, she received approximately $22,000 in her hand after payment of legal costs and a refund of $9,416.86 to Centrelink.  The amount of that refund was the amount of age pension paid to Mrs Aiken from 7 June 2001 to 27 February 2002.  That period is a preclusion period calculated by Centrelink by the application of a formula contained in the Social Security Act 1991 (“the Act”).  The calculated result is the period of time during which Mrs Aiken was precluded from receiving social security payments.  Mrs Aiken disputes the calculation of the period and says no money should have been refunded to Centrelink.

issues

2.      The issues to be considered in this application are whether a preclusion period from 7 June 2001 to 27 February 2002 was correctly imposed by Centrelink and, if so, whether it is appropriate, in the special circumstances of the case, to disregard any part or the whole of the compensation paid to Mrs Aiken for the purposes of calculating the preclusion period.

calculation of preclusion period

3. The combined effect of sections 1169 and 17 of the Act is that the amount of the settlement received by Mrs Aiken, that is, $50,000, is the compensation lump sum received by her. 50% of that amount, that is $25,000, is the compensation part of the lump sum. The preclusion period is calculated by dividing the compensation part of the lump sum by the level of income at which no social security payment would be payable, the income cut out amount. At the relevant time, the income cut out amount was $656.63. This yields a preclusion period of 38 weeks. That was the length of the preclusion period calculated by Centrelink. The preclusion period begins on the next payment day after the accident giving rise to the compensation, that is, 7 June 2001. During the preclusion period, Mrs Aiken received $9,416.86 in age pension payments. That was the amount recovered by Centrelink from her settlement monies. The calculation is correct and the charge was properly imposed.

special circumstances

4. Section 1184K of the Act, as it then was, provides for the whole or part of a person’s compensation payment to be treated as having not been made if it is appropriate to do so in the special circumstances of the case.

5.      Mrs Aiken said she first found out about the preclusion period after the settlement was agreed.  She said her solicitor and barrister did not advise her that she would have to repay any of her social security payments.  However, her solicitor told her about it before she received the settlement monies.  She said she would not have settled for $50,000 if she had known about the preclusion period and the refund, but later said that her legal advisers told her that she would be unlikely to obtain more if she went to hearing.  She noted she was unprepared for the settlement discussions and had no support person or family member to assist her.

6.      Mrs Aiken said she continues to suffer with her leg giving way and problems with her shoulder.  Her specialist has recommended a hip replacement and shoulder reconstruction.  Mrs Aiken plans to have the hip replacement in two weeks, as an uninsured private patient at a cost of approximately $7,500.  She is hoping her daughter will assist her financially, as only $1,500 of her settlement monies is left.  Mrs Aiken said she would never consider having surgery in a public hospital because she would worry too much and she prefers to have her own specialist.  Mrs Aiken also suffers from back, arm and neck pain.  She said she can no longer afford physiotherapy and chiropractic treatment. 

7.      Mrs Aiken said she repaid, out of her settlement monies, a loan to her son of about $6,000 and has paid some $6,000 towards her funeral expenses.  She also bought some furniture and took a trip to visit a sick relative.

8.      The term “special circumstances” has been the subject of extensive comment by the Tribunal and by the Federal Court.

9.      The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 is often quoted in relation to the interpretation of “special circumstances”.  In that decision, the Tribunal said:

“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 the 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 quality of usualness that permits them to be described as special.” (at page 3)

10.     The breadth of the discretion in relation to “special circumstances” was also commented on by the Full Federal Court in Riddel v Secretary Department of Social Security (1993) 42 FCR 443 :

“Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.” (at page 450)

11.     Unfortunately, it is not unusual for a person who has had an accident for which they have been compensated, to have accumulated some debts or to have continuing physical limitations or requirements for medical treatment.   Indeed, Mrs Aiken is in a somewhat better situation than many people to whom preclusion periods apply, given that she has some support from her son and daughter.

12.     Mrs Aiken also raised a failure by her solicitor to advise her of the preclusion period prior to her settlement.  While there may be some circumstances where such lack of legal advice may justify alteration of a preclusion period, I do not consider that this is justified in the circumstances of this case.  There are other remedies available to Mrs Aiken against her legal advisers.  I also note that she was advised by her legal advisers that she would be unlikely to obtain a larger amount of compensation if she went to hearing. 

13. The scope and purpose of the Act, in respect of the imposition of preclusion periods, is to avoid “double dipping” by receipt of both compensation and social security payments (see Groth v Secretary, Department of Social Security (1995) 40 ALD 541).  Mrs Aiken received age pension as well as compensation.  In her case there is no overriding issue of fairness or need sufficient to displace the operation of that purpose.  Mrs Aiken’s preference for surgical treatment in the private hospital system is a matter of choice for her, but I agree with the Respondent that it should not be funded by the public purse.

14.     I do not consider Mrs Aiken’s circumstances to be special.  For these reasons I affirm the decision under review.

decision

15.     The decision under review is affirmed.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell,
Senior Member

Signed:         .......................[sgd]..............................
  Associate

Date of Hearing  16 February 2006
Date of Decision  6 March 2006
Solicitor for the Respondent     Centrelink, Legal Services