Bamford and Secretary, Department of Social Services (Social services second review)
[2018] AATA 1402
•28 May 2018
Bamford and Secretary, Department of Social Services (Social services second review) [2018] AATA 1402 (28 May 2018)
Division:GENERAL DIVISION
File Number(s): 2017/1997
Re:Susan Bamford
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Mrs J C Kelly, Senior Member
Date:28 May 2018
Place:Sydney
The decision under review is affirmed.
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Mrs J C Kelly, Senior Member
CATCHWORDS
SOCIAL SECURITY – Disability Support Pension – compensation for loss of income as a result of injury – “lump sum” – preclusion period – s 1184K, “special circumstances” discretion – meaning of “special circumstances” – purchase of home generally not taken to be “special circumstances” – undue influence of carer – lack of capacity due to alcohol abuse and depression not found
LEGISLATION
Social Security Act 1991 (Cth), s 1184K
Social Security (Administration) Act 1999 (Cth), s 237
CASES
Department of Social Security and Winterbotham [1990] AAT 6499;
Manifikhi and Secretary, Department of Employment and Workplace Relations [2007] AATA 1529
SECONDARY MATERIALS
Australian Government, Guide to Social Security Law
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
28 May 2018
What is this case about?
On 30 October 2015, Ms Bamford received lump sum compensation of $750,000 for an injury she suffered on 13 November 2006. She had received periodic compensation payments until 27 November 2015. Her total lump sum compensation, including a lump sum advance payment on 21 October 2010, was $797,985.
Ms Bamford is seeking the review of the decision that she has a compensation preclusion period (preclusion period) from 28 November 2015 to 15 December 2023, that is, the period within which she is ineligible for benefits such as Disability Support Pension.
She claims that there are special circumstances in her case so that all or part of the preclusion period can be waived. The Tribunal has to decide whether that is so.
Ms Bamford did not challenge the calculation of the Preclusion Period, but for certainty, the Tribunal has reviewed the information before it and finds that it was correct.
Decision under review
On 2 December 2015, the Department of Human Services (the Department) advised Ms Bamford that she was subject to a preclusion period until 15 December 2023. At that time she lived on the New South Wales South Coast with her carer mother and her father.
In December 2015, Ms Bamford purchased a property on the mid north coast of New South Wales (the property) for $420,000. It is not mortgaged or otherwise encumbered.
On 20 September 2016, she applied for Newstart Allowance and disability support pension (DSP).
Her application for Newstart Allowance was rejected on 6 October 2016 and her application for DSP was rejected on 26 October 2016.
Ms Bamford sought review of those decisions on 2 November 2016.
An Authorised Review Officer (ARO) of the Department affirmed the decisions on 11 November 2016. The ARO decided that a Preclusion Period from 28 November 2015 to 15 December 2023 applied to Ms Bamford and that no special circumstances exist for waiving part or all of the preclusion period.
The decision under review was made on 6 March 2017 by the Social Services and Child Support Division of the Tribunal (AAT1). AAT1 affirmed the ARO’s decision.
Legislation and Policy
The relevant legislation is found in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth) (the Administration Act).
Government policy is set out in the Guide to Social Security Law (the Guide).
The relevant provision in this case is s 1184K of the Act, which allows the Tribunal to treat the whole or part of a compensation payment as not having been made, or not liable to be made, “if the (Tribunal) thinks it is appropriate to do so in the special circumstances of the case”.
The Tribunal has taken into account the case law referred to by the Secretary.
Consideration of the evidence and findings
The preclusion period provisions of the Act reflect the principle that a person who has been compensated for loss of income as a result of injury should use that money to live, and not taxpayer funded benefits. Lump sum payments are treated on the basis that people who cannot work because of a compensable injury should not receive income support from the same period from both the social security system and compensation schemes.
Ms Bamford’s reasons for claiming that special circumstances exist such that the preclusion period should be waived, are:
·She is suffering straitened financial circumstances;
·The sum of $131,500 was fraudulently transferred from her account. She was under the influence of her ex-carer mother, was suffering from alcohol dependence and depression, and had poor decision-making capacity when she transferred the following amounts:
(i)$100,000 on 13 November 2015; and
(ii)$31,500 on 18 November 2015.
·She has been affected by drug and alcohol abuse and depression; and
·She was unaware of the preclusion period.
The property
The Tribunal accepts that Ms Bamford has outstanding bills to pay. She has no source of income. She does have an unencumbered asset, the property she purchased. She does not have to pay rent or a mortgage.
Persons who have utilised the proceeds of a compensation settlement to purchase a property should not be advantaged over those who have invested the same amount so as to provide for themselves for the duration of the preclusion period.[1] The Guide states that if a person has used their compensation payment to purchase a house, then that will not generally be taken to be special circumstances.[2]
[1] See the majority in Department of Social Security and Winterbotham [1990] AAT 6499 (11 December 1990); Manifikhi and Secretary, Department of Employment and Workplace Relations [2007] AATA 1529 (10 July 2007).
[2] Australian Government, Guide to Social Security Law, Treatment of Periodic Payments Paid as a Lump Sum at 4.13.2.20.
Currently, Ms Bamford lives in the property with her carer son and his partner and child. The evidence is that they are providing her with some financial support. At the time of the AAT1 decision, Ms Bamford’s mother, her then-carer, and her father, both of whom received social security payments, lived there rent free, although they made some contribution to the household expenses. She had lived with them from 2008 until some time after the AAT1 decision of 6 March 2017.
Ms Bamford told the Tribunal that the property has four bedrooms. In a Centrelink document dated 25 August 2017, Ms Bamford valued the property at $440,000.
The Tribunal accepts that if a property has been substantially modified to suit a person’s disability and similar accommodation would be difficult to obtain, that would be an exception. Ms Bamford’s son’s partner wrote that the house was designed and built open plan to suit an aged or disabled resident because it has easy wheelchair access and is on a single level with no stairs. The Tribunal does not accept that the property has been substantially modified to suit Ms Bamford’s needs or that similar accommodation would be difficult to find.
What happened to her compensation payment?
On 13 November 2015, Ms Bamford’s bank balance was $617,431.25. On that day, the following amounts were withdrawn from that account on the New South Wales South Coast: $2,000, $10,000, $5,000, and $100,000, as well as nine withdrawals of smaller amounts ranging from $16.80to $200. On 17 November 2015 the following withdrawals were made at Port Macquarie: $5,000, $7,000, $5,000 and $540. On 18 November $31,500 was withdrawn as a bank cheque. The Tribunal accepts that the cheque was payable to a motor group and was used to purchase a vehicle.
Ms Bamford told the Tribunal that her mother had contributed an equivalent amount for the purchase of the vehicle which was for the use of her parents and her, and her parents used to drive her around.
On 26 November 2015, the closing balance of the account, as recorded in an incomplete bank statement provided by Ms Bamford to the Tribunal, was $431,373.22. In December, the property was purchased by Ms Bamford for $420,000.
In addition to the $131,000 Ms Bamford claimed she transferred to her mother, she told the Tribunal that she spent $3,000 to $4,000 on a car for herself, bought furniture for the house, and bought her son a 2015 model Mitsubishi lancer car for $19,000 in July 2016. Apart from the $100,000, she said that she had no idea what the amounts totalling $17,000 transferred on 13 November 2015 were used for. She claimed that her mother might have withdrawn three sums of $200 and that she herself did not leave the house much. She could not adequately explain why she only provided two pages of a bank statement. She speculated that some of the large withdrawals made on 17 November 2015 were given to relatives because they asked for money to pay bills and her mother told her to help them and she did not expect to be repaid.
The Tribunal notes that the two pages provided to the Tribunal were numbered 8 and 10. The closing balance on page 8 was $501,419.10 as of 13 November 2015. The opening balance on page 10 on 17 November 2015 was $475,434.62. There was no explanation about the almost $25,000 withdrawn in the interim period.
Evidence of undue influence
The following evidence was provided in support of the claim that Ms Bamford’s expenditure of funds was a consequence of her mother’s undue influence over her for her mother’s benefit.
On 7 September 2017, Ms Bamford’s son sent an email to Westpac External Disputes, stating that the sums of $100,000 and $31,500 had been transferred to Ms Bamford’s mother while Ms Bamford was suffering from depression and alcohol abuse, taking Oxycontin and Endone, and was under the undue influence of her mother. He stated that he had become her primary carer in January and had become aware of and began investigating his mother’s financial circumstances, that the matter was referred to police on 13 June 2017, and asking that that the funds that had been placed in a Westpac Term deposit account in his grandmother’s name be urgently frozen pending investigation by Westpac.
Screen shots of text messages between Ms Bamford and her son between 7:23pm and 7:45pm on Saturday, 6 August 2016, 11:23am to 6:30pm on Sunday 7 August 2016, and 10:23am to 10:32am on Tuesday 27 September 2016 demonstrate the following. On 6 August Ms Bamford was upset because the residents of the house, including her parents, were treating her like a bad person because she had told her sister to use her own car. She wrote that “they have lived rent free since January” and that she can get $470 rent for the house. On 7 August 2016 she felt like a “leaper” in her own home and her mother and sister had gone to the Southern Highlands. On 27 September 2016, Ms Bamford asked her son to investigate listening devices that she can put in the car and in her parents’ room. She said that she had not been “more sober in years”, her mother does not tell her the truth, she was sick of her mother’s control, her drinking “is at a minimum”, and she needed to take control of her life.
Medical evidence
The only medical evidence before the Tribunal is from Dr Roche and Dr Campbell, general practitioners. Dr Roche treated Ms Bamford from March 2009 until August 2015 when she and her parents lived in the Southern Highlands of New South Wales. They then moved to the South Coast. Her parents were her carers when Dr Roche treated her for management of her chronic back pain, the result of the 2006 accident. For most of that time she was on substantial doses of opiate painkillers. He was unaware of her drinking large amounts of alcohol at that time. She had denied such drinking then, although he thought in retrospect, that some aspects of her behaviour and demeanour could have been explained by heavy drinking. Her parents were present at virtually every consultation “especially in the latter years”. He could not comment on any undue control and influence that they may have been exerting.
The Tribunal finds that the first time he became aware of Ms Bamford’s claimed drinking, was the letter she wrote to him dated 3 July 2017 asking for her “patient medical records and your professional opinion on my emotional and mental state when i last had a consult with you early to mid 2015”. She also set out claims about how her mother forced her to transfer funds to her after the compensation payout and “ensited arguments with myself and my son trying to obtain more financial gain and when my son refused her demands she and my father moved out leaving myself no other option then to be wholy financially dependent on my son and daughter in law”.
Dr Campbell’s letters are dated 14 September 2016 and 8 July 2017. His first letter was prepared to support Ms Bamford’s application for DSP. He provided the following information and opinions. Dr Campbell diagnosed Ms Bamford as suffering from depression, anxiety disorder, chronic spinal pain and alcohol dependence. He said that she basically misspent the compensation money she received on gifts for her family, including large sums on a motor vehicle, house repairs and paying bills for friends and family. He wrote: “In short she was not in her right mind”. He believed that she should be given special consideration because of her mental illness, and that she was seeking treatment and “should improve”.
In the letter dated 8 July 2017, Dr Campbell stated the following. Ms Bamford was recovering from a number of illnesses, including anxiety, depression, alcohol abuse and chronic back pain. Her analgesic requirements have reduced and her alcohol consumption has reduced in three months from a bottle of scotch a day to four to five standard drinks a day. Her mood and concentration have improved and she is more active. He does not state when he began treating Ms Bamford.
Ms Bamford told the Tribunal that she began taking anti-depressants in August 2016 and was seeing a counsellor. She claimed that she had stopped drinking alcohol a lot since her parents had left. She claimed that she had been referred to and attended a psychiatrist but did not think a report would have been relevant and had not seen the psychiatrist “in a couple of years”, just before settlement in 2014 or 2015. She claimed that she had once been hospitalised for alcohol dependence and depression in 2014 or 2015 in Bowral hospital. If that were so, Dr Roche was unaware of it.
Notice of the preclusion period
At the AAT1 hearing, Ms Bamford claimed that she had not received the letter from the Department notifying her of the preclusion period. The letter was sent to a PO Box, which she confirmed was correct. Pursuant to s 237 of the Administration Act, the Tribunal finds that she was given notice of the preclusion period. She claimed at the AAT1 hearing, that she had understood from her solicitor, that she would not be eligible for benefits until 2016 but had no such written advice.
Conclusion
The Tribunal finds that Ms Bamford’s parents cared for her, including helping her with her financial affairs, including the purchase of the property, from 2008 until there was an apparent falling out after the AAT1 hearing in March 2017. Apparently by August 2016, Ms Bamford resented the control her mother had over her life. However, in the circumstances, the joint expenditure on a vehicle for joint use in November 2015 is understandable.
In relation to the $100,000, the Tribunal accepts that part or all of that sum is in a fixed deposit in the name of Ms Bamford’s mother. It does not accept that it was for her mother’s use because there is no other possible source of the $19,000 Ms Bamford used to pay for a vehicle for her son in July 2016, than that it came from the fixed deposit. The closing balance of Ms Bamford’s account on 26 November 2015 was $431,373.22. She then purchased a property for $420,000 and purchased furniture for the property.
That Ms Bamford’s mother was not acting in her own interests is reflected in the fact that the property was not purchased in her name, but in Ms Bamford’s name.
The Tribunal does not accept that Ms Bamford’s expenditure was under the undue influence of her mother.
The Tribunal finds that Ms Bamford cannot account for about $50,000 of the compensation payment. She owns an unencumbered property worth about $440,000.
The medical evidence does not show that Ms Bamford has lacked capacity in the past or to date. It does not demonstrate that her medical conditions impacted on her such that she was not in her right mind when the money was expended. Dr Campbell’s account depends on the history given to him by Ms Bamford, which is not reliable.
The Tribunal does not accept that there are special circumstances in this case so that all or part of the preclusion period should be waived.
Decision
The decision under review is affirmed.
I certify that the preceding 44 (forty-four) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member
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Associate
Dated: 28 May 2018
Date of hearing: 25 September 2017 Advocate for the Applicant: Mr R Gilbert Solicitors for the Respondent: Ms M Perotti, Department of Human Services
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