Asaad; Department of Family and Community Services - [2001] AATA 878

DECISION AND REASONS FOR DECISION [2001] AATA 878

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2000/739
GENERAL ADMINISTRATIVE DIVISION
  Re:         SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES
  Applicant
  And:       SALEM ASAAD
  Respondent

DECISION

Tribunal:       Miss E.A. Shanahan, Member
Date:             22 October 2001
Place:            Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) E.A. Shanahan
Member
SOCIAL SECURITY – compensation affected social security payments – preclusion period – discretion to treat compensation payments, whole or part, as not having been made – special circumstances
Social Security Act 1991 ss.17(1), (2), (3), 1165(1A), (2AA), (5), (8), (9), 1184(1)

Beadle v Director-General of Social Security (1985) 60 ALR 225
Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64, (1989) 17 ALD 201
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Kryzwak and Secretary, Department of Social Security (1988) 15 ALD 690
Re Secretary, Department of Social Security and Gulevsky (AAT 10959, 24 May 1996)

Groth v Secretary Department of Social Security, Federal Court, 1 December 1995, 989/1995

REASONS FOR DECISION

22 October 2001 Miss E.A. Shanahan, Member

The applicant, Secretary to the Department of Family and Community Services ("the Secretary") ("the Department"), seeks review of a decision of the Social Security Appeals Tribunal ("the SSAT") dated 19 May 2000. The SSAT set aside the decision of the primary delegate dated 30 November 1999 and subsequently was affirmed by an authorised review officer ("ARO"). The SSAT in its decision found that the respondent's entitlement to a disability support pension ("DSP") was not precluded by compensation as from 1 November 1999. The previous preclusion period had been correctly calculated by Centrelink as expiring on 28 February 2003.
At the hearing before this Tribunal the applicant was represented by Ms P. D'Cunha, an advocate with Centrelink, and the respondent was represented by Mr I. Alger, of counsel, instructed by Legal Aid Victoria. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act1975 ("the T documents") and additional documents were tendered at the hearing by both parties. The applicant provided two medical reports from Dr N. Strauss, consultant psychiatrist, dated 12 September 2001 (exhibit A1) and 20 January 2001 (exhibit A2). The applicant provided a medical report from Dr N. Strauss, consultant psychiatrist, dated 12 September 2001 (exhibit A1), a medical report from Dr Strauss dated 20 January 2001 (exhibit A2) and the respondent tendered a report from Dr B. Healey, clinical psychologist, dated 29 January 2001 (exhibit R1), a report from Dr C. Moore, consultant psychiatrist, dated 24 August 2000 (exhibit R2), a report from Dr A. Kaplan, consultant psychiatrist, dated 5 March 1996 (exhibit R3), a report of Dr Kaplan dated 2 May 1997 (exhibit R4), two reports from Dr A. Kaplan, consultant psychiatrist, dated 5 March 1996 (exhibit R3), and 2 May 1997 (exhibit R4), a statement by Mr L. Tawil dated 16 May 2001 (exhibit R5) and a statement by Mr R. Touchan dated 14 May 2001 (exhibit R6).
Background to the application
The respondent was injured at work on 15 December 1994 when one tonne of dashboards fell from a fork-lift onto him. From that time, he suffered chronic pain in his back and right leg. As a result of his chronic pain, he has developed a major psychiatric illness with severe chronic depression and post traumatic stress disorder. The Secretary does not challenge these diagnoses. Some four months prior to this accident he and his wife separated. Following the accident the respondent resided predominantly with his sister and less frequently at his wife's residence. He was in need of constant care. Initially he received Workcover payments and when these expired he received sickness benefits. On 4 December 1997 his claim for compensation was settled for the sum of $315,000. At the time of settlement he was advised by his legal representatives that he would be precluded from receiving social security payments for some time as a result of the settlement. On 7 January 1998 Centrelink advised the respondent that the preclusion period was from 9 September 1995 to 28 February 2003. Centrelink also advised the repayment of $19,986.52 to the Commonwealth was required to cover the period in which the respondent received sickness allowance (19 September 1995 to 8 January 1998).
The respondent twice requested review of the decision regarding the preclusion period. The first of these was lodged in March 1998 and a delegate affirmed the preclusion period by letter on 19 June 1998. The second review also affirmed the decision and the respondent was notified by letter on 25 October 1999, and affirmed by an ARO on 10 December 1999. The respondent appealed to the SSAT on 28 January 2000 for review of the latest decision of 10 December 1999.
The only issue before the SSAT and also before this Tribunal is whether or not there are special circumstances in existence which make it appropriate, reasonable and just to treat the whole or part of the amount of compensation as not having been made. The applicant argues there are no special circumstances in existence whilst the respondent contends that the questions of financial hardship and continuing ill health amount to special circumstances.
Evidence before the Tribunal
Dr Strauss gave evidence before the Tribunal having previously provided two written reports dated 12 September 2001 (exhibit A1) and 20 January 2001 (exhibit A2). Dr Strauss had seen the respondent on 12 September 2000, consultation taking approximately 45 minutes. In his written report Dr Strauss was of the opinion the respondent suffered a chronic physical condition with chronic pain and disability and ongoing depression of many years duration. He did not believe however that the psychiatric state of the respondent had resulted in irrational or inappropriate use of the money he had received from his worker's compensation settlement. Dr Strauss expanded upon his opinion while giving evidence. He had concluded that the respondent's expenditure of his settlement moneys was done in order to get his family back. He had found the respondent to be a very dependent person in his personality make-up who did not like being by himself. While the respondent had succumbed to the pressure exerted by his wife to purchase the house, the car and furniture, this was not necessarily irrational behaviour. However, Dr Strauss attested that all psychiatric illness affects a person's decision-making in regard to what they do with their financial affairs (trans, p.13, line 14).
Ms D´Cunha took Dr Strauss to the report of Dr Moore contained in the T documents. Dr Moore had diagnosed chronic depressive condition and post traumatic stress disorder. Dr Strauss was not entirely convinced that a post traumatic stress disorder existed. He was also taken to the report of Dr Kaplan dated 5 March 1996 (exhibit R3). Dr Strauss agreed that on that date there was no evidence of a deficit in judgment as assessed by Dr Kaplan. Dr Kaplan's further report of 2 May 1997 (exhibit R4), which concluded there had been no significant change in his psychiatric impairment, was also put to Dr Strauss who found that this conclusion agreed with his assessment of the respondent when he had seen him in September 2000. In cross-examination by Mr Alger, Dr Strauss accepted that the respondent suffered from a depressive illness. He also agreed that in his assessment the respondent had a dependent personality and that the combination of his dependency and the chronic depressive state would create considerable pressure upon the respondent. Dr Strauss was also of the opinion that the respondent's chronic depression would not improve in the future and that the respondent's cultural background was also of significance in that it was much more important for the respondent to be with his blood relatives than it might be with other cultural groups.
In re-examination by Ms D´Cunha, Dr Strauss stated that he believed the respondent had had an adequate trial of treatment, that he was taking his prescribed anti-depressants and had resumed ongoing psychiatric treatment with Dr Mouratidis after a gap of some years.
The respondent gave evidence before the Tribunal and was provided with the services of an interpreter, Mr A. Ibrahim. Whilst the respondent's command of the English language was excellent, it was felt an interpreter might be needed at some stage in the hearing, but in fact was not. In examination-in-chief by Mr Alger, the respondent agreed his was currently receiving a DSP and that he had arrived in Australia in February 1990, following which he commenced employment at the Ford factory. He worked at the Ford factory until 1994 when he suffered an accident which had severely affected his health. He had not worked since that date. He had received a lump sum compensation payment in January 1998, and had been informed that this was forthcoming in December 1997. He was also aware that a preclusion period would apply during which he would not be eligible for social security payments.
Following the accident and a period of hospitalisation, the respondent had returned to his home where he had been cared for by a niece and nephew for a period of four weeks. He then went to live with his sister and her children. He required constant care and this was provided by the sister and her children. The respondent stated his sister's attitude to him had altered once he received his compensation payment. She requested that he support her and her family financially with respect to the purchase of a car for the children and provision of a deposit for a house. Following his sister's demands the respondent decided he would be better living with his wife and children as he greatly missed his children. His wife agreed to this arrangement on the understanding that he would buy a house, furnish it and purchase a car. As the only alternatives available to the respondent were living with his sister who was making financial demands or returning overseas to live with his mother, he agreed to his wife's conditions. To him it appeared that whatever he did the money would be spent and it was likely that there would be no one to care for him once the money was spent. The respondent detailed the manner in which the money was outlaid, paying $165,000 for a house with $6000 in associated purchase expenses, $15,000 for his solicitor's costs, the repayment of $20,000 to the Commonwealth and $15,000 to repay a debt owed to his brother-in-law. The brother-in-law had paid his original costs of migrating to Australia in 1990.
Mr Alger asked the respondent what would happen if he now had to sell the house. The respondent advised that his wife had said she would not sell the house and if he forced the issue she would divorce him. As he was unable to look after the children, they would have to stay with their mother and as a result of a divorce it was likely that she, his wife, would receive the bulk of the family assets. He would then have nowhere to live and no one to care for him. He was unable to return to his sister's, as he had not spoken to her for three or four years, since returning to live with his wife. Following the purchasing of the house, car and furniture the respondent believed he had sufficient money in the bank to last him until the preclusion period expired. Money had however been expended by himself on a trip to Syria where he had been advised he could obtain superior medical treatment for his back injury. He did receive some treatment in Syria but it was not beneficial. His wife subsequently went overseas with their children because her mother was ill. While there she required dental treatment which further reduced their finances. The respondent stated that he still had periods when he was confined to bed for several days after some minor physical effort had aggravated his back symptoms. During these periods he was unable to do anything for himself.
In cross-examination by Ms D´Cunha, the respondent agreed that he was separated from his wife at the time of the accident in December 1994 and that the separation took place in August 1994. He agreed that, following the birth of their third child in April 1994, his wife had suffered from post natal depression requiring hospitalisation and this had made life extremely difficult with frequent arguments between him and his wife. He confirmed that following the accident he was cared for by his niece and nephew and then shifted to his sister's house. He agreed that he was able to do some household tasks but this was variable depending on the level of his back pain. He had contributed financially to the household costs whilst in receipt of his compensation payment and sickness allowance and would spend money for the purchase of food and payment of school fees, buying things for his children. Ms D´Cunha asked the respondent when he had approached his wife regarding reconciliation. The respondent thought it sometime in January, February or March 1998. She made reconciliation conditional upon the purchase of a house and that was bought in February 1998.
Ms D´Cunha took the respondent to his wife's application for parenting payment and family allowance. These had outlined the domestic relationships stating that they were living in the same house but separately. This document was completed on 17 February 1998. The wife had stated that the respondent did not share certain tasks because of his disability, but was responsible for himself. The respondent agreed that he would be responsible for himself on those days when he could. The respondent told the Tribunal that he was uncertain as to what social security payments his wife received but that he was aware that she had claimed those payments from the time they were separated. At that time he was paying child support. The respondent agreed that he had requested review of the preclusion period on 16 March 1998. He did so, he stated, because he had been so-advised by a Centrelink employee. He agreed he had been fully aware of the set preclusion period. He also agreed that he had reapplied for reconsideration in June 1998 at which time there was still $44,000 in his bank account. At this stage the Tribunal intervened with regard to the relevance of the respondent's wife's statements in 1994 when claiming social security support.
In re-examination by Mr Alger, the respondent agreed that he would have no source of income if he sold his home. His wife would divorce him and he would be left without his children and anyone to care for him. Ms D´Cunha was allowed further cross-examination and asked the respondent of his current relationship with his wife. He told the Tribunal the situation had improved and was fairly good at the moment.
Mr Healey, clinical psychologist, gave evidence to the Tribunal. He described his work as involving assessment and treatment of persons who have been imprisoned, those who have suffered injuries as a result of accident and victims of crime. He had seen the respondent on one occasion, on 29 January 2001 and the consultation was over a period of three hours. Mr Healey was of the opinion that the respondent suffered from major depression with a measure of social introversion withdrawal. He believed the respondent also suffered from post traumatic stress disorder and met the requirements of the American Psychiatric Association Diagnostic and Statistical Manual. The respondent had told him that he was fearful and experienced a level of helplessness, frequently re-experienced the accident, dreamt about the event, suffered flashbacks and worried about possible exposure to situations resembling that of his accident. Mr Alger took Mr Healey through Dr Strauss's report and in particular that the respondent's psychiatric illness would not impair his rationality and ability to make financial decisions. Mr Healey was of the opinion that with the level of depression that existed, this would have a significant effect upon the clarity of decision-making, particularly in view of the respondent's sense of desperation relating to coping, to survival and to the provision of support which he felt he could only get from his wife (trans, p.69, lines 15-19). Mr Healey in his interview with the respondent noted suicidal ideation and a sense of desperation.
In cross-examination Ms D´Cunha pointed out that the respondent had not been cared for by his wife in the three years prior to receiving his compensation settlement. Mr Healey was of the opinion that the respondent was helpless during those three years and was desperate to get back to his original family structure. Whilst he had been living fairly independently during that period of time, Mr Healey believes that that degree of independence frequently changes over a period of time in persons with chronic depression. Ms D´Cunha took Mr Healey to the reports of Dr Kaplan and in particular that there was no change in his depressive illness and intellectual functioning between March 1996 and May 1997. Mr Healey reported that he had performed an intellectual assessment on the respondent and found him below average to an extent where he could not exclude some subtle higher level cerebral impairment.
In re-examination by Mr Alger, Mr Healey opined that, if the respondent's wife and children were to leave him, the effect would be devastating. Such an event may in fact lead to suicide.
Documentation evidence before the Tribunal
Dr Mouratides had provided two reports in relation to her treatment of the respondent (T4 report dated 5 June 1999 and T5 report dated 4 April 2000). Dr Mouratides made a diagnosis of chronic depression, attributable to the his constant pain and his inability to work. She regarded his prognosis as poor given the lack of response to treatment and chronicity of his symptoms. She also noted a lack of effective social supports which was detrimental to his progress. In her report of 4 April 2000 Dr Mouratides related that, following receipt of his compensation payment, the respondent and his wife had got back together again in February 1998. This was on the basis that they would attempt reconciliation provided he purchased a house and furniture from his compensation money. When the compensation money ran out his wife requested that he leave. Dr Mouratides made a diagnosis of major affective disorder and commenced treatment with ducene and efexor. On this occasion Dr Mouratides found the respondent permanently incapacitated for all work.
Dr Kaplan provided reports dated 5 March 1996 (exhibit R3) and 2 May 1997 (exhibit R4). Dr Kaplan noted there was no past history of psychiatric disorder and that the respondent had completed high school education following which he attended an army college and graduated as an officer. He remained in the army until he was 27 years of age and in 1990 he migrated to Australia. Following the respondent's wife's development of post-partum depression in 1994, conflict in the marriage occurred. Dr Kaplan obtained a history of chronic pain in the lower back radiating to the hips and legs. He found that the respondent was markedly depressed, had totally lost his libido and had had no sexual relations since the accident. The respondent also gave a history of flash backs and re-experiencing the accident. Dr Kaplan found the respondent to be suffering from chronic depression and post traumatic stress disorder. In his second report of 2 May 1997, Dr Kaplan found the psychiatric condition had not improved and the symptoms of post traumatic stress disorder had intensified over the ensuing year. He felt the respondent would require continued supportive psychotherapy from his treating psychiatrist.

Dr Moore provided a report to the respondent's legal advisors dated 24 August 2000 (exhibit R2). Dr Moore was of the opinion that there were multiple psychiatric diagnoses and that the respondent fulfilled the DSM IV criteria for post traumatic stress disorder. In addition there was chronic major depression and a marked pre-occupation with pain which he considered to have a significant Somatoform component. Dr Moore regarded the respondent's prognosis as poor, given the complex mixture of psychiatric disorders and his failure to improve with treatment from Dr Mouratides. He did however feel that this psychiatric condition had stabilised.
Relevant legislation
Subsections 17(1), (2), (3) of the Social Security Act 1991 ("the Act") provide that:
17(1)       In this Act, unless the contrary intention appears:
"average weekly earnings", in relation to an old lump sum preclusion period, means the amount:
(a)estimated as the average total weekly earnings, during a particular month, of all employees (all persons) in Australia; and
(b)last published by the Australian Statistician before the lump sum compensation payment became payable;
"compensation" has the meaning given by subsection (2);
Note: See also section 1163B.
"compensation affected payment" means:
(aa)an age pension; or
(a)a disability support pension; or
(b)a parenting payment; or
(c)a social security benefit; or
(d)(Omitted)
(da)(Omitted)
(e)a disability support wife pension; or
(f)a carer payment; or
(fa)      Omitted
(g)a special needs disability support pension; or
(h)a special needs disability support wife pension; or
(i)mature age allowance; or
(j)mature age partner allowance; or
(k)a former payment type;
"compensation part", in relation to a lump sum compensation payment, has the meaning given by subsections (3) and (4);
"compensation payer" means:
(a)a person who is liable to make a compensation payment; or
(b)an authority of a State or Territory that has determined that it will make a payment by way of compensation to another person, whether or not the authority is liable to make the payment;
"disability support wife pension" means a wife pension for a woman whose partner receives a disability support pension;
"event that gives rise to an entitlement to compensation" has the meaning given by subsection (5A);
"former payment type" means:
(a)an invalid pension under the 1947 Act; or
(b)an invalid pension under this Act as previously in force; or
(ba)a disability wage supplement under this Act as previously in force; or
(c)a sheltered employment allowance under the 1947 Act; or
(d)a sheltered employment allowance under this Act as previously in force; or
(e)an unemployment benefit under the 1947 Act; or
(f)a sickness benefit under the 1947 Act; or
(g)a special benefit under the 1947 Act; or
(h)a sickness benefit under this Act as previously in force; or
(ha)a job search allowance; or
(i)a rehabilitation allowance under the 1947 Act payable in place of:
(i)an invalid pension under the 1947 Act; or
(ii)a sheltered employment allowance under the 1947 Act; or
(iii)an unemployment benefit under the 1947 Act; or
(iv)a sickness benefit under the 1947 Act; or
(v)a special benefit under the 1947 Act; or
(j)a rehabilitation allowance under this Act as previously in force payable in place of:
(i)a disability support pension; or
(ii)an invalid pension under this Act as previously in force; or
(iii)a sheltered employment allowance under this Act as previously in force; or
(iv)a social security benefit; or
(v)a sickness benefit under this Act as previously in force; or
(k)an invalid wife pension under the 1947 Act; or
(l)an invalid wife pension under this Act as previously in force; or
(m)a special needs invalid pension under this Act as previously in force; or
(n)a special needs invalid wife pension under this Act as previously in force; or
(o)a carer payment under this Act as previously in force; or
(p)a sole parent pension under this Act as previously in force; or
(q)a parenting allowance under this Act as previously in force; or
(p)a youth training allowance under Part 8 of the Student Assistance Act 1973 as previously in force.
income cut-out amount is the amount worked out using the formula in subsection (8).
"invalid wife pension" means:
(a)in relation to the 1947 Act, a wife's pension under the 1947 Act for a woman whose husband received an invalid pension under the 1947 Act; or
(b)in relation to this Act as previously in force, a wife pension for a woman whose partner received an invalid pension under this Act as previously in force;
"lump sum preclusion period" means either an old lump sum preclusion period within the meaning given by subsections 1165(3) to (4) (inclusive) or a new lump sum preclusion period within the meaning given by subsections 1165(5) to (8) (inclusive), as the case requires.
"payment for a period" has the meaning given by subsection (7);
"periodic payments period" means:
(a)in relation to a series of periodic payments — the period in respect of which the payments are, or are to be, made; and
(b)in relation to a payment of arrears of a series of periodic payments — the period in respect of which those periodic payments would have been made if they had not been made by way of an arrears payment;
Note: arrear [sic] of periodic compensation payments are normally treated as reducing, on a dollar for dollar basis, a payment under this Act that is covered by Part 3.14 because these compensation payments are not lump sum compensation payments: see subsection 17 (4A) and sections 1168 and 1170.
"potential compensation payer" means a person who, in the Secretary's opinion, may become a compensation payer;
"receives compensation" has the meaning given by subsection (5);
"special needs disability support wife pension" means a special needs wife pension for a woman whose partner receives a special needs disability support pension;
"special needs invalid wife pension" means a special needs wife pension for a woman whose partner received a special needs invalid pension under this Act as previously in force.
17(2)       For the purposes of this Act, compensation means:
(a)a payment of damages; or
(b)a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c)a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d)any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments) that is:
(e)made wholly or partly in respect of lost earnings or lost capacity to earn; and
(f)made either within or outside Australia.
Note: Under section 1163B, a person may be treated as having received compensation that the person would have received but for the effect of a State or Territory law.
17 (3)      For the purposes of this Act, the compensation part of a lump sum compensation payment is:
(a)50% of the payment if the following circumstances apply:
(i)the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii)the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(ab)     50% of the payment if the following circumstances apply:
(i)the payment represents that part of a person's entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and
(ii)the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and
(iii)the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(b)if those circumstances do not apply — so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn.
. . .
1165(1A)    If:
(a)a person receives or claims a compensation affected payment; and
(b)the person is not a member of a couple; and
(c)the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) on or after 20 March 1997;
no compensation affected payment is payable to the person for the new lump sum preclusion period.
Note 1: For "new lump sum preclusion period" see subsections (5) to (8).
Note 2: A series of lump sum payments can be taken to be one lump sum compensation payment under subsection 17(2B).
. . .
1165(2AA) If:
(a)a person receives or claims a compensation affected payment; and
(b)the person is a member of a couple; and
(c)the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) on or after 20 March 1997;
no compensation affected payment is payable to the person for the new lump sum preclusion period.
. . .
1165(5)    If periodic compensation payments are made in respect of the lost earnings or lost earning capacity, the "new lump sum preclusion period" is the period that:
(a)begins on the day after the last day of the periodic payment period; and
(b)ends after the number of weeks worked out under subsections (8) and (9).
Note:   For "periodic payments period" see section 17.
. . .
1165(8)    If a compensation lump sum is received on or after 20 March 1997, the number of weeks in the preclusion period is the number worked out under the following formula:
Compensation part of lump sum
Income cut-out amount
Note 1: For "compensation part of lump sum", see section 17.
Note 2: For "income cut-out amount", see section 17.
1165(9)    If the number worked out under subsection (4) or (8) is not a whole number, the number is to be rounded down to the nearest whole number.
. . .
1184(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.

Applicant's submissions

The applicant submitted that the calculation of the preclusion period was correct. The respondent did not challenge this calculation. The applicant also agreed there was no doubt that the respondent suffered from a psychiatric condition and the Department accepted that he suffered from post traumatic stress disorder as well as major depression. However, it was contended that the psychiatric illness did not impact upon the respondent's ability to make rational financial decisions. It was contended that the respondent's application for a review of the preclusion period some two months after he received his compensation payment did not sit well with the evidence given to this Tribunal, that he had expected his compensation payment to provide day-to-day living costs until the end of the preclusion period in the year 2003. The applicant relied on the reports of Dr Kaplan and Dr Strauss who had found no evidence of irrationality in the respondent's thinking, nor in his actions in purchasing a house, car and furniture. The Department also regarded the respondent's desire to live with his children, as opposed to his sister, as a rational decision. The applicant relied on the decision in Re Secretary, Department of Social Security and Gulevsky (AAT 10959, 24 May 1996) wherein the Tribunal had found that the ultimate breakdown of a marriage was not a special circumstance. This relates directly to the respondent's evidence that should the house be sold to provide for daily living expenses his wife would divorce him. Because of her situation and the dependent children, she would most probably be awarded the majority of the assets.
Respondent's submissions
The respondent agreed that the preclusion period had been correctly estimated by the Department. The only issue before the Tribunal was whether or not there were special circumstances to attract subsection 1184(1) of the Act. Mr Alger, for the respondent, referred to consideration of the term "special circumstances" by the Administrative Appeals Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 in which 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 unusualness that permits them to be described as special.

It was noted that the Full Court of the Federal Court in Beadle v Director-General of Social Security (1985) 60 ALR 225 was in broad agreement with the approach of the Tribunal. In Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64 Hill J stated, at p.73:

. . .
It is neither appropriate nor proper here to attempt a definition of what circumstances will be "special". The occasions when circumstances are special will vary with the facts of each particular case.

Mr Alger drew the Tribunal's attention to the decision in Re Kryzwak and Secretary, Department of Social Security (1988) 15 ALD 690 where several factors thought relevant were listed. These were financial hardship, legislative changes, incorrect legal advice and ill health.

The respondent relied on financial hardship and ill health in his submission. It was contended that the respondent's major affective disorder and his dependent personality (the bulk of psychiatric evidence agrees that the respondent has a very dependent personality) resulted in the respondent facing only two options. First, to refuse the financial demands made upon him by his sister and then his wife and budget the money awarded in compensation so that he would have the necessary daily funding until the preclusion period ended. The respondent had concluded that he would end up effectively destitute in that he would have no family and no one to provide the care he required. The second option was to spend the compensation money in accordance with his wife's wishes which would give him both the family structure he so desired and would also provide for his ongoing physical care. In the respondent's mind there was no alternative but to spend the money in the way that he did and in effect buy back his family.
The respondent is unable to work and has no other source of financial support. His ongoing chronic depression has not improved over a period of seven years. Restoration of the preclusion period to the year 2003 would leave him financially destitute. The alternative of selling his house would most probably lead to his wife taking action to divorce him and this in turn would probably result in her being awarded the vast majority of the assets. Divorce would obviously result in the destruction of the family unit as it now functions.
Decision
The Tribunal determines that special circumstances do exist on the basis of financial hardship and the severity of the ill health of the respondent.   The Tribunal agrees with the finding of the SSAT and affirms the decision of the SSAT which shortened the preclusion period to 1 November 1999.   The respondent is entitled to a DSP from that time.
I certify that the twenty-six [26] preceding paragraphs are a true copy of the reasons for the decision herein of
Miss E.A. Shanahan, Member
(sgd):     Catherine Thomas
            Clerk
Date of Hearing:  8 August 2001
Date of Decision:  22 October 2001
Solicitor for the Applicant:           Nil — Ms P. D'Cunha, Advocate with Centrelink
Counsel for the Respondent:       Mr I. Alger
Solicitor for the Respondent:        Victoria Legal Aid