Ascic and Secretary, Department of Social Services (Social services second review)

[2015] AATA 637

Ascic and Secretary, Department of Social Services (Social services second review) [2015] AATA 637 (27 August 2015)

Division

GENERAL DIVISION

File Numbers

2014/6579 and 2014/6583

Re

Marko Ascic

Ana Ascic

APPLICANTS

And

Secretary, Department of Social Services

RESPONDENT

DECISION

Tribunal	Deputy President, Dr Christopher Kendall
Date	27 August 2015
Place	Perth

The decision under review is affirmed.

...................[sgd].........................................

Deputy President, Dr Christopher Kendall

CATCHWORDS

SOCIAL SECURTY – Carer Payment – DSP – whether payments made are “compensation payments” – whether there are “special circumstances” such that all or part of payments can be treated as not having been paid – whether couple’s combined income exceeds allowable limit – decision under review affirmed 

LEGISLATION

Social Security Act 1991 (Cth) – 17(1)(a), 17(1)(f) 17(2A), 17(5), 1064E-2, 1064F, 1064F, 1161, 1173, 1174, 1184(K)(1).

Compensation (Commonwealth Government Employees) Act 1971 (Cth) – 5, 6, 27(1), 54(1), 103(1) and (2).

Safety, Rehabilitation Act and Compensation Act 1988 (Cth) – 19, 124(1) 126(2), 128

Social Security (Administration) Act 1999 (Cth) – 36 and 37

CASES

Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114

Haidar v Secretary, Department of Social Security [1998] FCA 994

Locke and Secretary, Department of Social Services [2014] AATA 904

Randall and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 922

SECONDARY MATERIALS

A Guide to Australian Government Payments 1 July to 19 September 2013 - pages 12, 29 and 35.

Guide to Social Security Law - 3.1.6.10 “General Payability Provisions”

REASONS FOR DECISION

Deputy President, Dr Christopher Kendall

27 August 2015

FACTS

1. Marko Ascic is 63 years old.  He is married to Ana Ascic. 

2. Mr Ascic began working as a police officer with the Australian Federal Police (the “AFP”) in 1973.  He was injured at work on 11 December 1987.  He suffered a mental and emotional collapse and was, consequently, retired from the AFP in 1988 on the grounds of mental incapacity (A1).

3. The reason Mr and Mrs Ascic appeared before this Tribunal was summarised by the Secretary, Department of Social Services (the “Secretary”) in a Statement of Facts, Issues and Contentions dated 27 March 2015 (R2) at paragraphs 2-19.  The Tribunal adopts that summary and provides the following relevant details below.  

4. On 20 August 2013, Mr Ascic completed a claim for Carer Payment for the care he provides to Mrs Ascic (T4 at 29-42).

5. On the same day, Mrs Ascic completed a claim for disability support pension (“DSP”) (T6 at 49-74).

6. On 23 August 2013, Mr Ascic completed an Income and Assets form on behalf of Mrs Ascic (T8 at 86-101).  On that form Mr Ascic indicated that:

   ·He receives income from work other than self-employment from Comsuper and Comcare Australia. He stated that this income is his usual wage (T8 at 87, question 8).

   ·He is receiving an invalid pension from Comsuper (of which 50% is his share and 50% is his wife’s share) and compensation from Comcare of which 50% is his share and 50% is his wife’s share (T8 at 95, question 25).

   ·He or his wife have claimed or are able to claim compensation (T8 at 100, question 47).

   ·He and/or his wife are receiving or have been paid compensation, insurance and/or damages (T8 at 100, question 48).

   ·He had not told the Department about these payments before (T8 at 100, question 49).

7. Mr Ascic also stated that he and/or Mrs Ascic receive a regular income stream from:

   ·Comsuper, for invalid pension and Comcare for compensation (T8 at 95);

   ·a term deposit, for a family trust with the Commonwealth Bank (T8 at 95); and

   ·a Netbank saver account, for a family trust with the Commonwealth Bank (T8 at 95).

8. Mr Ascic indicated that the current market value of his and Mrs Ascic’s assets was $201,049.71.

9. On 14 October 2013, Centrelink rejected Mrs Ascic’s claim for DSP on the basis that they had not received a reply to the letter/s they had sent Mrs Ascic. Centrelink also advised that the information they had used to assess Mrs Ascic’s claim was that her total combined assets were valued at $101,048.00 and her combined annual income was $501.20 (T15 at 119).

10. On 21 October 2013, Mr Ascic completed a Mod PT Private Trust form. In the form he stated that:

    ·he is the trustee of the Ascic Family Trust;

    ·he and Mrs Ascic are the beneficiaries of the Ascic Family Trust;

    ·the Ascic Family Trust has $120,000 or $12,000 in assets held in bank accounts (T16 at 134, 135); and

    ·Mrs Ascic received a distribution of $9,227 from the Ascic Family Trust in the 2013 financial year (T16 at 137).

11. On 6 January 2014, Mr Ascic completed a Mod C Compensation and damages form (T22 at 194-196). On this form, Mr Ascic stated that:

    ·he is claiming compensation payments;

    ·Comcare is making the compensation payments;

    ·the date of his injury was 11 December 1987;

    ·the start date of his loss of earnings because of his injury was 11 December 1987;

    ·the injury occurred at work;

    ·he has been and continues to be in receipt of regular compensation payments; and

    ·he is claiming compensation from his employer, the AFP.

12. On 15 January 2014, a Centrelink officer wrote to Comcare requesting information regarding Mr Ascic’s compensation payments (T25 at 200).

13. On 22 January 2014, a Comcare officer advised that Mr Ascic’s compensation claim is proceeding and provided an incapacity determination list which set out periodic payments made to Mr Ascic from 1 July 1988 to 1 January 2014 (T25 at 201-209).

14. On 28 January 2014, Centrelink advised Mr Ascic that his claim for Carer Payment had been rejected as Centrelink had not received a reply to the letter/s they had sent him. The letter also advised that the information used to assess his claim was that his total combined assets were valued at $194,076.00 and his combined annual income was $31,437.22 (T26 at 210).

15. Mr Ascic sought a review of the decision to reject his claim for Carer Payment.

16. On 9 April 2014, a Centrelink officer wrote again to Comcare requesting information regarding Mr Ascic’s compensation payments (T32 at 254).

17. On 14 April 2014, a Comcare officer advised that Mr Ascic’s compensation claim was proceeding and provided an incapacity determination list which set out periodic payments made to Mr Ascic from 1 July 1988 to 1 July 2014 (T33 at 259-267).

18. On 1 May 2014, Centrelink advised Mrs Ascic that her DSP claim had been rejected because the combined income of her and Mr Ascic was above the allowable limit. Centrelink also advised that the information used to assess Mrs Ascic’s claim revealed combined assets of $288,424.00 and a combined annual income of $73,419.72 (T34 at 268).

19. On 5 May 2014, Centrelink advised Mr Ascic that his claim for Carer Payment was also rejected because the combined income for him and Mrs Ascic was above the allowable limit. They also advised that the information used to assess Mr Ascic’s claim revealed total combined assets of $288,424.00 and a combined annual income of $73,419.72 (T35 at 271).

20. On 4 August 2014, an authorised review officer of Centrelink (“ARO”) affirmed the decision in relation to Mr Ascic’s claim for Carer Payment (T39 at 279-282). In reaching this decision the ARO found that:

    ·Mr Ascic suffered an injury on 11 December 1987.

    ·The Department was informed by Comcare that Mr Ascic was receiving ongoing payments of $561.53 per week at the time of his claim.

    ·The ongoing payments being made by Comcare were compensation payments.

    ·Carer Payment is a compensation affected payment.

    ·Mr Ascic was not qualified for and receiving a compensation affected payment at the time of his injury.

    ·Mr Ascic’s ongoing compensation payments were to be treated as a dollar for dollar rate reduction.

    ·Mr Ascic’s ongoing compensation payments reduced his entitlement to Carer Payment to nil.

21. On 8 August 2014, an ARO affirmed the decision under review in relation to Mrs Ascic’s claim for DSP (T43 at 293-296). In reaching this decision the ARO found that:

    ·Mrs Ascic contacted the Department on 14 August 2013 about claiming a payment.

    ·On 23 August 2013, Mrs Ascic lodged a claim for DSP.

    ·Her partner was receiving periodic compensation payments from Comcare.

    ·The payments were to be treated as a dollar for dollar rate reduction against her partner’s entitlement.

    ·Any excess compensation was to be treated as her own ordinary income.

    ·As at 14 August 2013, she had a combined annual affecting income of $35,730.44.

    ·This has reduced Mrs Ascic’s entitlement to DSP to nil.

22. On 14 August 2014, Mr and Mrs Ascic lodged an application for a review of the ARO’s decisions by the SSAT (T44 at 297).

23. On 21 November 2014, the SSAT affirmed the two decisions under review (T3 at 17-27).

24. On 19 December 2014, the Applicants lodged individual applications for review of the SSAT’s decision at the Administrative Appeals Tribunal (Tribunal) (T1 at 1-16).

    ISSUES

25. The central issues for the Tribunal to determine are whether Mr Ascic is entitled to the Carer Payment and whether Mrs Ascic is entitled to DSP.

26. In deciding these issues, the Tribunal is required to determine whether the payments made to Mr Ascic by Comcare are “compensation payments” for the purposes of the Social Security Act 1991 (Cth) (the “Act”).

27. If the Tribunal finds that the Comcare payments are compensation payments, the Tribunal must then determine whether there are “special circumstances” in relation to Mr and Mrs Ascic’s case such that all or part of these payments can be treated as not having been made

28. Further, if the Tribunal finds that Mr Ascic’s Comcare payments constitute “compensation” and that there are no special circumstances that warrant the Tribunal disregarding part or all of the compensation payments made, the Tribunal must then determine whether Mr and Mrs Ascic's combined income exceeds the allowable limit to be paid Carer Payment and DSP.

    Are the payments made by Comcare “compensation payments”?

29. DSP and Carer Payment are “compensation affected payments” under the Act: s17(1)(a) and (f) of the Act.

30. DSP became a compensation affected payment from 1 May 1987 and Carer Payment became a compensation affected payment from 1 January 1993: s1161 of the Act.

31. It is this important to determine whether what Mr Ascic receives from Comcare is “compensation” for social security purposes. Mr Ascic’s claim for Carer Payment and Mrs Ascic’s claim for DSP essentially hinge on the outcome of this determination.

32. Under s17 of the Act, “compensation” is defined as:

    Compensation

    (2)Subject to subsection (2B), 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 and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.

    (2A)     Paragraph (2)(d) does not apply to a compensation payment if:

    (a)the recipient has made contributions (for example, by way of insurance premiums) towards the payment; and

    (b)either:

    (i)the agreement under which the contributions are made does not provide for the amounts that would otherwise be payable under the agreement being reduced or not payable because the recipient is eligible for or receives payments under this Act that are compensation affected payments; or

    (ii)the agreement does so provide but the compensation payment has been calculated without reference to the provision.

    …

    Receives compensation

    (5)A person receives compensation whether he or she receives it directly or whether another person receives it, on behalf of, or at the direction of the first person.

33. Mr Ascic contends that the payments he receives are not, and have never been, “compensation”.  Before the Social Security Appeals Tribunal (“SSAT”), Mr Ascic argued that he had never claimed workers compensation; that he was retired/invalidated by the AFP; and that the income he receives from Comcare should be treated as ordinary income - such as income from and income protection policy, salary continuance or income replacement (T3 at para. 15).  Mr Ascic made similar arguments before this Tribunal.

34. Mr Ascic was employed by the AFP.  It is not contested that he was injured at work on 11 December 1987 (T22 at 194-196).

35. At the time of his injury, the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (the “1971 Act”) was relevant to Mr Ascic's employment with the AFP.

36. Section 5 of the 1971 Act defined injury as:

    any physical or mental injury and includes the aggravation, acceleration or recurrence of any physical or mental injury but, subject to section 29, does not include a disease or the aggravation, acceleration or recurrence of a disease.

37. Section 6 of the 1971 Act makes it clear that an injury to an employee shall, unless the contrary intention appears, be read as a reference to an injury to the employee in respect of which the Commonwealth is liable to pay compensation under the 1971 Act. Further, section 27(1) of the 1971 Act states that if a personal injury arises out of the course of the employment of an employee of the Commonwealth, the Commonwealth is, subject to the 1971 Act, liable to pay “compensation” in respect of that injury in accordance with the Act. Again, the word “compensation” is clearly referenced. As noted by the SSAT, the method of calculating the compensation is set out in Part 3 of the 1971 Act (using average weekly earnings) (T3 at para. 22).

38. Mr Ascic was employed by the AFP.  He was thus at all times “an employee of the Commonwealth.”  When he was injured, the Commonwealth was liable to pay compensation for any injuries he sustained while employed by the AFP.

39. Section 54(1) of the 1971 Act also states that compensation in relation to an employee is not payable under the Act to a person, unless a claim in writing for the compensation was served as prescribed, on the Commissioner by or on behalf of the person within the prescribed period.

40. The Secretary submitted before this Tribunal (and the Tribunal agrees) that it is reasonable for the Tribunal to find that a claim for compensation under the 1971 Act was made by or on behalf of Mr Ascic. The Secretary noted, in that regard, an undated document provided by Mr Ascic (T2 at 15) which states:

    The attached letter detailing your recent claim(s) for time off work now refers to the section of the SRC Act under which your entitlement has been calculated.

41. This document then makes reference to calculation provisions under s 19 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the “SRC Act”) which is titled “Compensation for injuries resulting in incapacity”.

42. This reference to the SRC Act is relevant. As explained by the SSAT, the 1971 Act was replaced by the SRC Act with effect from 1 December, 1988. Subsection 124(1) of the SRC Act provides that the SRC Act applies in relation to an injury suffered by an employee whether before or after the commencement date provided that compensation would have been payable under than 1971 Act. Subsection 126(2) of the SRC Act provides that a claim for compensation made under the 1971 Act is taken to be a claim for compensation under the SRC Act. Further, section 128 of the SRC Act provides that any liability of the Commonwealth, or of a Commonwealth authority, to pay compensation or make any other payment to a person under any provision of the 1971 Act shall, to the extent that it had not been discharged, be taken to have been incurred by the relevant authority on that date under the corresponding provision of the SRC Act.

43. The Secretary contended that Mr Ascic was in receipt of compensation for the purposes of the Act at the time of his claim for Carer Payment. The Secretary relied on the following in support of his contention:

    (a)On 10 December 2013, Comcare wrote to Mr Ascic confirming that he has an accepted compensation claim for which he receives fortnightly incapacity payments at the gross fortnightly rate of $1,123.06. The letter also advises that Mr Ascic will continue to receive these payments to the age of 65 years provided that he continues to submit medical evidence stating that his work-related injury is still related to his Commonwealth employment (T21 at 192).

    (b)On 15 January 2014 and 9 April 2014, Centrelink wrote to Comcare requesting information regarding payments made to Mr Ascic (T25 and T33).

    (c)In responses dated 22 January 2014 and 14 April 2014, Comcare reported that periodic payments of compensation have been or will be made to Mr Ascic. The Incapacity Determination List dated 14 April 2014 indicates that Mr Ascic started receiving payments from 1 July 1988 and would continue to receive payment until 28 February 2015 (T33 at 261-267).

44. In hearings before the SSAT and this Tribunal, Mr Ascic rejected the argument that he now receives, or has ever received, compensation. In written submissions dated 17 December 2014 (T1 at 3), Mr Ascic wrote:

    These early days are very vague in my memory, but I do recall attending a number of Doctors, Specialists and Psychiatrists for treatment and medical assessments. At that time, either the Government Medical Officer or an alternate Government Authority did advise me that they concluded that my Employer was directly and intentionally responsible for my disability or condition.

    From that time, to the present, I was required to undergo periodic medical assessments and provide appropriate medical certificates of my condition, which I have always done and continue to do. This was and still is required, to maintain my incapacity leave approval and payments by The Commission initially and later by Comcare,

    About the time of my retirement, I do recall some communication with the Australian Federal Police Staff Section, regarding my accrued termination entitlements and payments; as well as my intentions of claiming or not claiming compensation. I was aware that I could claim compensation or opt to receive statutory benefits or entitlements instead; which were intended to maintain my income at the level I was receiving at the time of suffering the incapacity and until I was able to engage in other employment. I also recall being advised that in the event I pursued and received compensation, but subsequently resumed any type of employment; any such payments would be subject to consideration of repayment to the Commonwealth.

    I was also given the option of using my excess superannuation contributions to fund a higher rate of pension or withdrawing those and receive a lower superannuation pension. But in either event my income till the age of 65 would still be the same, as the difference would be made up by my other entitlements.

    I opted for the lower pension as the funds were almost enough to discharge the mortgage on our home and at that time I did not consider that I would live long enough to draw a pension for any length of time.

    I opted for the benefits and entitlements. I have not ever submitted a claim for compensation and to my knowledge no such claim has ever been submitted on my behalf. That is, I have not ever received any advice or confirmation that such a claim had been submitted, processed or approved.

1. Unfortunately, Mr Ascic was unable to provide any evidence that supported this argument.

2. Mr Ascic also argued that the payments he has received from Comcare are akin to “sick leave payments” (A1 - Written Submissions from Mr Ascic, undated). 

3. This argument was addressed by the SSAT (T3 at paras 17 and 18) as follows:

   17.Mr Ascic refers the tribunal to a “Notice to Claimant” Form (undated) which he states confirms that he was able to claim sick leave credits.  He stated he had in excess of two years sick leave credits when he was injured at work on 11 December, 1987.  The tribunal notes that the notice provides that such sick leave credits cannot be claimed where the person has been retired by his employer as set out below:

   you are able (if you have not already done so) to request payment by way of sick leave credits.  These sick leave payments are additional to your compensation entitlement but the following conditions will generally apply:

   …

   · The additional sick leave is not payable in cases where you have been retired or your services had been terminated.

   If you wish to use any sick leave credits in the above manner, you should get in touch with the personnel staff section of your employee, for a further details.

   18.This means, in the Tribunal’s view, that Mr Ascic could not claim sick leave credits following his retirement by the AFP.

4. The Tribunal agrees with the SSAT’s conclusions in this regard.  There is no evidence that the payments that Mr Ascic has been receiving from Centrelink are “sick leave payments” for social security law purposes. 

5. Mr Ascic also argued that section 103 of the 1971 Act means that he could not have received compensation payment (T1, p4).

6. Section 103 of the 1971 Act provides:

   (1)In this section, "determination" means a determination, award or order by which provision is made for or in relation to the grant of any benefits to or in relation to employees or their dependants in respect of injury or disease causing death or incapacity, or in respect of the loss of, or damage to, property, in circumstances connected with the employment of those employees, being -

   a)a determination made under the Public Service Arbitration Act 1920-1969;

   b)an award or order made under the Conciliation and Arbitration Act 1904-1970; or

   c)a determination, award or order made by a prescribed person, tribunal or body under a law of the Commonwealth or of a Territory.

   (2)A person who would, but for this section, be entitled to compensation under this Act and to benefits under a determination in respect of the same injury, or in respect of the same loss of, or damage to, property, is not entitled to receive both compensation under this Act and benefits under the determination but shall elect whether to receive the compensation or the benefits.

7. The Secretary submitted that no evidence was produced by Mr Ascic that suggests that a determination, award or order was made in relation to Mr Ascic for the purposes of section 103 of the 1971 Act. Therefore, it was contended, section 103 of the 1971 Act is not relevant to the issue for determination of compensation.

8. The Tribunal agrees. Section 103 of the 1971 Act does not assist Mr Ascic in relation to his arguments about “compensation” versus “ordinary income”.

9. The Tribunal is not unsympathetic to the frustrations experienced by Mr Ascic.  His wife is unwell, he has always been honest about his financial situation and he is now worried about his and his wife’s financial security.  He also undoubtedly believes he has never received compensation payments.

10. Unfortunately, there is no evidence or legislative interpretation that assists Mr Ascic in proving his argument that he has never received compensation.

11. Having reviewed the relevant legislation and the limited evidence before it, the Tribunal agrees with the conclusion of the SSAT that a claim for compensation under the 1971 Act was made either by Mr Ascic, or on his behalf, for the injury suffered by him as an employee of the AFP on 11 December in 1887. 

12. Further, the Tribunal finds that Mr Ascic was paid compensation in regular amounts under Part Three of the 1971 Act using average weekly earnings and subsequently under the SRC Act.

13. In the circumstances, the Tribunal finds that the payments Mr Ascic receives are “compensation” pursuant to section 17(2) of the Act.

    Are there special circumstances in relation to Mr and Mrs Ascic that allow all of part of this compensation to be deemed not made?   

14. The Social Security law is designed to ensure that people who receive a compensation in respect of lost earnings or a capacity to earn do not also receive income support from Centrelink in respect of the same period of time: Haidar v Secretary, Department of Social Security [1998] FCA 994; (1998) 28 AAR 288 at 297. However, section 1184K of the Act provides Centrelink (and the Tribunal on review) a discretion.

15. Section 1184K(1) of the Act provides:

    (1)For the purposes of this Part, the Secretary may treat the whole all 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.

16. The Act does not define what is meant by the term “special circumstances” as that term is used in section 1184K. There is, however, a considerable body of case law to assist the Tribunal in relation to this issue.

17. In that regard, the Tribunal notes the summary of this case law provided by Senior Member Walsh in Locke and Secretary, Department of Social Services [2014] AATA 904, wherein the Tribunal stated (at [41]):

    In summary, it has been held for circumstances to constitute “special circumstances” (for the purposes of s 1184(1) of the SSA and, it follows, s 1237AAD(b) of the SSA), they must be circumstances which are “unusual, uncommon or exceptional”, be “markedly different from the usual run of cases”, “special” or “out of the ordinary” and they include “events which would render the (strict application of the rule in question) unfair or inappropriate”: see for example, Re Ivocic and Director General of Social Services [1981] AATA 57 at [45]; Re Beadle and Director-General of Social Security (1984) 6 ALD at 3 per Toohey J; Beadle and Director General of Social Security [1984] AATA 176; (1985) 60 ALR 225 at 228 as per Bowen CJ, Fisher and Lockhart JJ; Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541 at [545] per Kiefel J and Dranichnikov v Centrelink [2003] FCAFC 133; [2003] 75 ALD 134 at [66] per Hill J. Circumstances might be “special” although they apply to more than one person or class of persons, provided they are not of universal application (for example, they are a common or universal characteristic of social security recipients): see Fischer v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2010] FCA 441; (2010) 185 FCR 52 at [65].

18. In Randall and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 922, the Tribunal stated that the circumstances do not have to be unique to the applicant as long as they are not a common or universal characteristic of social security recipients.

19. The Tribunal also notes the decision in Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114, wherein Deputy President Forgie stated (at [80]):

    … “special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances … that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system.

20. In Davy, there being no injustice or unfairness to the applicant that was not “visited, or potentially visited, upon all other recipients of social security payments”, the Tribunal was not satisfied that it was desirable to waive the debt under the Act.

21. Before the SSAT, Mr Ascic was asked about his and Mrs Ascic’s personal and financial circumstances. The SSAT described Mr Ascic’s response as follows (T3 at para. 35):

    He explained that they had only about $120,000 saved (as reflected on the Mod PT form received by Centrelink on 13 February 2014), however much of their savings have been withdrawn to finish building their home and to purchase a bus from the USA which cost about $85,000.  He said he has spent about $20,000 refurbishing the bus as they wanted to travel around in it but they have now run out of money and the work is only one third complete.  He noted their savings were now less than $12,000.

22. Mr Ascic repeated these facts before this Tribunal, adding that he was extremely worried about his and his wife’s future and concerned that they would need to sell their home if they did not receive the social services payments they felt they were entitled to.

23. There is no question that Mr and Mrs Ascic will now face significant personal circumstances if they are denied the social security payments they believe they are entitled to. Unfortunately, the circumstances they find themselves in are not uncommon to many who seek social assistance. Taking into account all of the information before the Tribunal, the Tribunal is not satisfied that there are special circumstances that make it appropriate to treat all or part of Mr Ascic’s compensation payment as not having been made or not liable to be made as per section 1184K of the Act

    Does Mr and Mrs Ascic’s combined income exceed the allowable limit to be paid for Carer Payment and DSP?

    Mr Ascic – Carer Payment

24. As the Tribunal has found that Mr Ascic has received compensation payments and that there are no special circumstances that warrant disregarding part or all of the compensation payments made, the Tribunal must now consider the effect of Mr Ascic’s periodic compensation payments on the rate of his Carer Payment and on Mrs Ascic’s claim for DSP.

25. Section 1173 of the Act sets out how a person's rate of compensation affected payment is changed when a person receives periodic compensation payments for the same period of time. It states:

    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.

26. As explained by the SSAT (T3 at para 39) section 1173 of the Act provides that if (like Mr Ascic) a person was not in receipt of compensation affected payment at the time of the event that led to compensation being paid, then the person's daily rate of compensation affected payment must be reduced by the amount of the person's daily rate of periodic compensation.

27. Mr Ascic was not in receipt of a compensation affected payment at 11 December 1987, (that is, the date he was injured at work).  Hence, his rate of Carer Payment must be calculated by deducting his rate of compensation payment directly from his rate of payment.

28. The effect that this has on Mr Ascic was clearly outlined by SSAT Member Petrucci (T3 at paras 40-48).  The Tribunal agrees with and adopts the SSAT’s analysis in this regard and notes, accordingly, as follows.

29. The maximum rate of carer payment payable at the date of Mr Ascic’s claim was $655.50 per fortnight (including the pension supplement and clean energy supplement): pages 12, 29 and 35, A Guide to Australian Government Payments 1 July – 19 September 2013. 

30. Comcare advised Centrelink that Mr Ascic was paid $561.53 per week (ie $1,123.06 per fortnight) (T33 at 261). 

31. Mr Ascic did not dispute this amount before this Tribunal.  Accordingly, the Tribunal finds that these figures were correct at the date of the claim. 

32. The Secretary can only grant a claim for a social security payment if the claimant is qualified and the payment is payable: sections 36 and 37, Social Security (Administration) Act 1999 (Cth) (the “Administration Act”).

33. The evidence shows that Mr Ascic was receiving more than the maximum rate of Carer Payment at the date of his claim. As such, his rate of carer payment, by application of section 1173 of the Act, is reduced to $0.

34. A social security payment is not payable where the rate would be nil: Guide to Social Security Law, 3.1.6.10, General Payability Provisions.

35. The Tribunal finds that Carer Payment is not payable to Mr Ascic.

    Mrs Ascic - DSP

36. Mrs Ascic’s income is affected by the periodic compensation payments received by Mr Ascic from Comcare.  This has an effect on her ability to claim DSP. 

37. In relation to Mrs Ascic’s DSP application, the Tribunal notes that section 1174 of the Act deals with the effect of periodic compensation payments on the rate of the person's partner's compensation affected payment (of which, as noted above, DSP is one).

38. Section 1174 provides:

    Effect of periodic compensation payments on rate of partner's compensation affected payment

    (1)       If:

    (a)     a person receives periodic compensation payments; and

    (b)     the person is a member of a couple; and

    (c)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

    (d)the person is qualified for a compensation affected payment in relation to a day or days in the periodic payments period but, solely because of the operation of this Part, does not, or would not, receive the payment; and

    (e)the person's partner receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;

    the amount (if any) by which the daily rate of periodic compensation payable to the person exceeds the daily rate of the compensation affected payment for which the person is qualified in relation to a day or days in the periodic payments period (the excess amount) is to be treated as ordinary income of the person's partner for the purpose of the calculation of the amount of the compensation affected payment referred to in paragraph (e).

    (2)The reference in subsection (1) 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.

    (3)For the purposes of subsection (1):

    (a)the amount that would, apart from this section, be the amount of the partner's ordinary income in relation to the day or days referred to in paragraph (1)(e) is to be increased by the excess amount; and

    (b)the increased amount is to be taken to be the amount of the partner's ordinary income in relation to that day or those days, as the case may be.

39. As explained by the SSAT (T3 at para 43), under the income test the person’s and their partner's ordinary income is combined and each person is taken to have received 50% of the combined amount. This 50/50 split is done after the dollar for dollar rate reduction for periodic compensation payments has been applied and any excess periodic compensation is treated as ordinary income (section 1064E-2,1064F and section 1174 of the Act).

40. Centrelink calculated Mrs Ascic's annual affecting income as $35,730.44[1]  comprised of:

    [1] As noted by the SSAT (T3 at 26, footnote 5), if the energy supplement is included, Mrs Ascic’s annual affecting income is $35,465.24 as at the date of claim.  As the maximum rate would still be exceeded, Mrs Ascic’s rate of GST would still be $0.

Mr Ascic's excess compensation income	$13,620.36 ($29,199.56 compensation [$561.53 x 52 weeks as advised by Comcare] - maximum rate of carer payment $15,579.20 [($553.10 x 26 fortnights maximum rate) + $462.80 basic supplement + $93.60 remain supplement + $642,20 minimum supplement)] (T41 at 287)
Deemed financial investment income	$30.30 (T41 at 290)
Commonwealth Super Scheme	$17,466.28 (50% x ($1,343.56 x 26 fortnights)) (T41 at 290)
Income from Ascic Family Trust	$4,613.50 (50% x distribution of $9,227 to Mrs Ascic in 2012/13 per Mod PC) (T41 at 290)

1. As at 7 August 2014 (the claim period), Centrelink calculated the maximum rate of basic pension and supplement to be $15,579.20[2] (T41 at 288).

   [2] As noted by the SSAT ((T3 at 26. footnote 8), if the energy supplement is included, the maximum rate is $15,844.40.  Like the SSAT, this Tribunal notes that Centrelink excluded the energy supplement from its calculation.  Nonetheless, there is no impact on the final outcome.  The rate of Carer Payment and the rate of DSP payable is $0 at the date of claim (August 2013).

2. As noted by the SSAT (T3 at para 44), Centrelink concluded (T41 at 288) that, as 50% of Mrs Ascic's annual affecting income ($35,730.44), reduced by the annual income free area ($3,588), for a total of $16,071.22, exceeded the maximum annual rate of Carer Payment as at the date of claim, Mrs Ascic's rate of DSP is $0.

3. The Tribunal finds that, on the basis of the information before it, as at the date of claim Centrelink’s calculations were correct. 

4. The Tribunal finds that as Mrs Ascic’s income reduction amount of $16,071.22 is greater than the maximum payment rate of $15,579.20, Mrs Ascic cannot claim DSP.

   FINDINGS

5. The Tribunal finds as follows:

   (a)The payments Mr Ascic receives from Comcare are compensation payments for the purposes of the Social Security Act 1991.

   (b)No special circumstances exist that would permit the Tribunal disregarding part or all of the compensation payments being made to Mr Ascic.

   (c)Mr and Mrs Ascic’s combined income at the date of their respective claims exceeded the maximum payment rates for Carer Payment and DSP.

6. In the circumstances, Mr Ascic is not entitled to Carer Payment and Mrs Ascic is not entitled to DSP.

   DECISION 

7. The decision under review is affirmed.

I certify that the preceding 91 (ninety one) paragraphs are a true copy of the reasons for the decision herein of Deputy President, Dr Christopher Kendall.

..................[sgd D Brodie].......................

Administrative Assistant

Dated 27 August 2015

Date of hearing	29 July 2015
Representative of the Applicants	Mr M Ascic
Representative of the Respondent	Ms M de Reus
Solicitor for the Respondent	Australian Government Solicitor