Alexakis and Secretary, Department of Education, Employment and Workplace Relations
[2008] AATA 158
•27 February 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 158
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/2430
GENERAL ADMINISTRATIVE DIVISION ) Re THEODOROS ALEXAKIS Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date27 February 2008
PlaceSydney
Decision
The Tribunal affirms the decision under review.
....................[sgd]..................
Ms N Isenberg, Senior Member
CATCHWORDS
SOCIAL SECURITY – Workers compensation - Compensation affected payments – Special circumstances – Poor legal advice – Health issues – Accommodation needs – Debt – Financial situation – Centrelink’s actions– Decision under review affirmed.
LEGISLATION
Administrative Appeals Tribunals Act 1975 – section 37
Social Security Act 1991 – sections 17, 1173, 1184, 1184K
CASE LAW
Beadle v Director of Social Security (1985) 60 ALR 225
Groth v Secretary of Social Security (1995) 40 ALD 541
Haidar v Secretary of Social Security (1998) 52 ALD 255
Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281
Re Mosarevski and Secretary, Department of Social Security (AAT 10714, 2 February 1996)
Re Secretary Department of Social Security and VYS (1995) 40 ALD 745
Secretary, Department of Social Security v Ellis (1997) 46 ALD 1
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
REASONS FOR DECISION
27 February 2008
Ms N Isenberg, Senior Member
DECISION UNDER REVIEW
1. Mr Alexakis (“the Applicant”) seeks review of the Social Security Appeals Tribunal decision dated 18 May 2007, which affirmed the decision of a Centrelink authorised review officer (“ARO”) to recover compensation affected payments amounting to $32,161.47.
BACKGROUND
2. On 11 September 2001 Mr Alexakis was injured at work. From 16 December 2002 he received sickness allowance from Centrelink, and later, from 8 February 2003, newstart allowance. On 24 February 2006 he was granted disability support pension.
3. The NSW Workers Compensation Commission issued a determination, which when later amended, awarded Mr Alexakis weekly compensation of $160.34 from 27 July 2002 to 6 October 2002; $199.50 per week from 7 October 2002 to 13 October 2002; $160.34 per week from 14 October 2002 to 15 December 2002; and $284.73 per week from 16 December 2002 and continuing. The determinations were affirmed on appeal.
4. On 9 November 2006 Centrelink sent a Compensation Preliminary Notice to the workers compensation insurer, notifying that Mr Alexakis had received “compensation affected payments”, that is, sickness allowance, newstart allowance and disability support pension. This was followed by a Compensation Recovery Notice for $32,161.47. A letter dated 14 November 2006 to this effect was also sent to Mr Alexakis. The amount was recovered on 25 January 2007.
ISSUES BEFORE THE TRIBUNAL
5. The issues to be determined by this Tribunal are:
§ Is $32,161.47 recoverable from Mr Alexakis from the compensation affected payments paid to him during the period 16 December 2002 to 9 November 2006 because of the weekly workers compensation received by him during this period?
§ Should any part of the amount of $32,161.47 payment be regarded as not having been made in the special circumstances of the case?
LEGISLATION
6. Section 17(2)(b) of the Social Security Act 1991 (“the Act”) includes the definition of compensation as “a payment under a scheme of insurance or compensation under a … State … law …”.
7. Section 17(1) of the Act includes disability support pension and social security benefit (sickness allowance and newstart allowance) in the definition of a “compensation affected payment”.
8. Section 1173 of the Act provides as follows:
1173 Effect of periodic compensation payments on rate of person’s
compensation affected payment
(1) If:
(a) a person receives periodic compensation payments; and
(b) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified
for, and receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected
payment in relation to a day or days in the periodic payments
period;
the rate of the person’s compensation affected payment in relation
to that day or those days is reduced in accordance with
subsection (2).
(2) The person’s daily rate of compensation affected payment is
reduced by the amount of the person’s daily rate of periodic
compensation.
(3) The reference in subsection (2) to a daily rate of periodic
compensation is a reference to the amount worked out by dividing
the total amount of the periodic compensation payments referred to
in paragraph (1)(a) by the number of days in the periodic payments
period.
(4) If:
(a) a person receives periodic compensation payments; and
(b) at the time of the event that gave rise to the entitlement of the
person to compensation, the person was qualified for, and
was receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected
payment in relation to a day or days in the periodic payments
period;
the periodic compensation payments are to be treated as ordinary
income of the person for the purposes of this Act.
The effect is that weekly compensation payments reduce Centrelink benefits on a dollar-for-dollar basis.
9. Section 1184K of the Act provides potential relief from the strict application of the compensation preclusion period, by giving a discretion to disregard the whole or part of the compensation payment in “special circumstances”. Section 1184K(1) of the Act reads:
1184K Secretary may disregard some payments
1184K(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.
EVIDENCE
10. I had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 (“the T-documents”), which I took into evidence.
11. In addition, Mr Alexakis provided a large number of documents, some of which he had been obtained following a Freedom of Information request. He also had two lengthy statements written in Greek, which he arranged for the interpreter to read.
12. Mr Alexakis gave evidence and was cross-examined on behalf of Centrelink. I also asked him questions.
DISCUSSION AND FINDINGS
13. In coming to the correct and preferable decision, I took into account all the evidence, submissions, case law and relevant legislation.
Is $32,161.47 recoverable from Mr Alexakis for weekly workers compensation payments paid to him for the period 16 December 2002 to 9 November 2006?
14. It is clear from T8-11 of the T-documents that Mr Alexakis received “compensation affected payments”, as defined, as follows:
Sickness allowance 16/12/02 to 07/02/03 $ 1,308.42
Newstart allowance 08/02/03 to 23/02/06 $ 26,948.06
Disability support pension 24/02/06 to 09/11/06 $ 3,904.99
$ 32,161.47
There appeared to be no dispute as to those payments.
15. The Workers Compensation Commission determination on 18 October 2006 was that Mr Alexakis was to receive weekly compensation payments backdated to 16 December 2002. This meant that any payments to Mr Alexakis by Centrelink after that time were compensation affected. Section 1173 of the Act requires that the periodic compensation payments are to be treated as a direct deduction from the social security payments received by Mr Alexakis.
Should any part of the amount of $32,161.47 payment be regarded as not having been made in the special circumstances of the case?
16. Mr Alexakis addressed me at length about aspects of his circumstances which he claimed to be special.
Poor legal advice
17. He said that he had initially engaged a solicitor in a “big firm”. The first solicitor that he saw was the principal, who then referred him to his son, who was also a solicitor. Mr Alexakis had problems with the son, for example offers of settlement were not conveyed to him and medical evidence was not arranged. The matter was assigned to another solicitor who tried to help. That solicitor told him, in about 2004, that if he received $50,000 in compensation payments he would only have to pay $3,500 back to Centrelink. The matter did not progress to Mr Alexakis’ satisfaction and when he complained about the delays, the firm said, in about early 2005, they did not want to act for him any further. Mr Alexakis said he believed that the advice given to him about repayment to Centrelink was correct.
Health issues
18. Mr Alexakis told me that he suffers from psychological problems and also from problems with his left and right “hands” (although he demonstrated his arms), lower and upper back and that he suffers headaches. He said he is continually nervous and had contemplated suicide.
19. He needs continuous massage. He does not think the insurer would pay for that because earlier medical expenses have not been paid for.
Accommodation needs
20. Mr Alexakis said that up until recently, he has been living for about three years with one of his brothers. For the last two or three weeks he has lived at his parents’ home and “on the street”. There is a lot of tension at home and his parents are sick of listening to him at talk about his cases. While there are three “bedrooms”, only two have beds and his brother lives at the house also. Mr Alexakis sleeps on the sofa. He might stay out until 3 or 4 am, sit on a park bench, and then go to his parents’ home and rest there.
21. He said that he needs a clean apartment without other people. He is unable to share accommodation because he is 42 years old and needs a tranquil environment. He needs proper furniture and a fridge. He produced photographs of very poor accommodation which would cost in the vicinity of $110 to $140 per week.
“Debt” to brother
22. Mr Alexakis told me that his brother, who was a computer programmer, took on Mr Alexakis’ representation in the workers compensation matter. That continued for three and a half years during which he devoted several hours daily to the matter and for which he was unpaid. He thought that his brother should have been entitled to be paid costs by the insurer. As a result, he feels he owes his brother some money for his brother’s “suffering”. His brother is now unwell and unable to work. For reasons which are unclear his brother chooses not to apply for any benefits himself.
Financial situation
23. Mr Alexakis currently receives a combination of disability support pension and ongoing workers compensation payments which he said totalled about $440 per week clear. He has no home, no car or other assets.
24. He eats out nearly every night but said this was limited to pizzas and barbecues. He goes to clubs four nights a week but tries to avoid going when there is an entrance fee. He said he only pays for two drinks which cost approximately $15. He pays $50 for massages every eight to nine days. There was no evidence of other expenses.
25. When he received his compensation payment he spent $35,000 on a three month holiday to Greece. It was unclear to me why the holiday was so expensive when he had said that his family owned a house in Greece. However, Mr Alexakis said that Greece was no longer a cheap holiday destination. He said he did not give his brother money at that time because his workers compensation matter was not completely finalised and he thought the insurer was going to pay his brother. He said he only found out two days before the present hearing that his brother did not receive any money.
Centrelink’s actions
26. Mr Alexakis expressed frustration with Centrelink about his pension payments. He found the arrangements in respect of newstart allowance to be particularly stressful. For example he was obliged to look for a job, undertake programs and Centrelink refused to accept his doctor’s view that he was unable to work. This led to altercations at Centrelink. He believes that as a result his psychological problems have increased.
27. He expressed concern about the delay in granting his disability support pension.
28. He alleged that Centrelink had intentionally made mistakes (sic), and that there may have been “under the table deals”.
29. Following Mr Alexakis’ submissions I reviewed the decision in Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281 where Mansfield J, said that “section 1184, (as it then was) is designed specifically to enable [the Department] … to ameliorate such unfairness or injustice” which results upon the strict application of the Act.
30. The discretion to disregard the whole or part of a compensation payment can be exercised where application of the usual rules would lead to a result that is unfair or inappropriate: see Beadle v Director General of Social Security (1985) 60 ALR 225 and Secretary, Department of Social Security v Hulls (1991) 22 ALD 570.
31. Section 1184K(1) is a way of alleviating the harshness of the statutory provision in appropriate cases where there are special circumstances. Special circumstances do not have to be statistically “extreme” or “unique”, it is sufficient if there is something that takes the matter out of the usual ordinary case: see Haidar v Secretary Department of Social Security (1998) 52 ALD 255 at 264, in which Hill J cited the earlier Federal Court cases of Groth v Secretary, Department of Social Security (1995) 40 ALD 541 and Secretary, Department of Social Security v Ellis (1997) 46 ALD 1.
32. I considered each asserted “special circumstance” in turn.
33. There was no corroborative evidence that Mr Alexakis had received poor legal advice, as he contended. Even if the advice was as he asserted, the proper remedy for defective legal advice is a complaint and action for damages against the lawyers in question: see, for example, Re Mosarevski and Secretary, Department of Social Security (AAT 10714, 2 February 1996).
34. Where there has been clear evidence of incorrect or inadequate advice from a solicitor the Tribunal can take that into account as a relevant factor when considering special circumstances: Re Secretary Department of Social Security and VYS (1995) 40 ALD 745. This is not the case though where there is no clear evidence to that effect. In VYS specific advice had been sought from the solicitors on two occasions in relation to obligations vis-à-vis the Department and the respondent, Mr VYS, had been misinformed. The taxpayer should not be required to compensate an applicant for a mistake made by his solicitors.
35. I accept that Mr Alexakis has ongoing health issues. In that regard I note that he continues to receive the disability support pension.
36. As to Mr Alexakis’ accommodation needs, I accept that the rental market may currently be tight and that only fairly basic premises are available for $140 per week. For three years Mr Alexakis was living with one of his brothers. Apparently he also received rental assistance during this time. I do not accept that currently he is living “on the street”. He chooses to stay out until 3 or 4 a.m. several nights a week after attending nightclubs.
37. He apparently is welcome at his family home but there is tension between him, his parents and his brother because of this matter.
38. I have reviewed the medical evidence provided in the T-documents and by Mr Alexakis and could find no evidence to suggest that there was any medical reason why he is unable to share accommodation.
39. I accept that Mr Alexakis’ brother may have devoted a lot of time to the pursuit of Mr Alexakis’ workers compensation claim. I accept that Mr Alexakis feels some obligation (“debt”) towards his brother for his efforts and that he may want to be supportive now that his brother’s circumstances are difficult. In my view though it was naive for MrAlexakis (and his brother) to expect that they would be entitled to any costs.
40. Further, when Mr Alexakis’ workers compensation payments were made he took no steps to reimburse his brother, taking an overseas holiday instead.
41. Mr Alexakis’ financial situation is that he receives about $440 per week clear. While he has no assets, he spent $35,000 on a three-month holiday to Greece. No doubt the trip may have been therapeutic but there was no medical evidence that it was essential to his well-being. He eats out nearly every night and goes to nightclubs four times a week. He pays $50 for massages but does not appear to have enquired if this would be covered by insurance. There was no evidence of other expenses.
42. I appreciate that Mr Alexakis may have been frustrated by Centrelink’s actions about his pension payments. I do not accept that being obliged to look for a job or undertake programs is onerous such as to produce increased psychological problems. In any event there is no medical evidence to this effect. It is unclear as to his concern that Centrelink refused to accept his doctor’s view that he was unable to work, but this would seem to relate to his being placed on newstart allowance rather than immediately on to disability support pension.
43. There was simply no evidence that Centrelink had conspired against him as he alleged.
44. As Mr Alexakis correctly pointed out, there are many situations where the Tribunal has found special circumstances. Each matter is different.
45. I have come to the view that none of Mr Alexakis’ circumstances, amounted, alone, to “special circumstances” for the purposes of exercising the discretion under section 1184K. Further, I also find that, even considering all the factors in Mr Alexakis’ circumstances in their totality, they were still not “special” for the purposes of section 1184K of the Act: Secretary, Department of Social Security v Hales (1998) 82 FCR 154 at 162. I have come to the conclusion that while Mr Alexakis’ circumstances, taken together, are unfortunate, there is nothing so unusual or unfair that would justify the exercise of the discretion under section 1184K of the Act.
DECISION
46. For the reasons given above, the Tribunal affirms the decision under review.
I certify that the 46 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member
Signed: ....................[sgd]..................
AssociateDate of Hearing 1 February 2008
Date of Decision 27 February 2008
Representative for the Applicant Self-represented
Advocate for the Respondent Mr K Bullock of Centrelink Legal Services
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