Bang Ngo Vu and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2012] AATA 647

[2012] AATA 647

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/1420
Re	Bang Ngo Vu
APPLICANT
And	Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT

DECISION

Tribunal	Mr Conrad Ermert, Member
Date	25 September 2012
Place	Melbourne

The Tribunal affirms the decision under review.

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

Mr Conrad Ermert, Member

CATCHWORDS

DISABILITY SUPPORT PENSION - Lump sum compensation payment - health problems - financial circumstances - inexact Centrelink advice re partner's parenting payment - application of legislative provisions - whether special circumstances - decision affirmed

LEGISLATION

Social Security Act 1991 section 1184K(1)

CASES

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

Secretary, Department of Family and Community Services v Allan (2001) 116 FCR 1

REASONS FOR DECISION

Mr Conrad Ermert, Member

25 September 2012

1. In 2001 Mr Vu suffered injuries at his place of work.  Mr Vu received periodic compensation payments in relation to the injuries.  He later accepted and received two lump sum compensation payments: $10,910 on 14 April 2005 and $420,000 on 17 June 2008.  On 30 June 2008 Centrelink, the provider of services for the respondent, notified Mr Vu in writing that a lump sum compensation preclusion period from 12 June 2008 to 20 November 2013 would apply to any pension benefits.

2. On 10 October 2011 Mr Vu lodged a claim for disability support pension (DSP).  Centrelink rejected the claim because the preclusion period was still in operation.  That decision was reviewed in turn by a Centrelink officer, a Centrelink Authorised Review Officer and the Social Security Appeals Tribunal (SSAT).  On 13 March 2012 the SSAT affirmed the decision to reject Mr Vu’s claim for DSP.  This matter is an application for a review of the SSAT decision.

   THE HEARING

3. Mr Vu gave evidence to the Tribunal in person.  He was supported by his wife and daughter.  Mr Tim de Uray of the Centrelink Program Litigation & Review Branch of the Department of Human Services represented the respondent.

4. I took into evidence a letter dated 9 April 2012 from Mr Vu to the Tribunal, (Exhibit A1) and the documents provided by the respondent in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T-documents and the Supplementary T‑documents (ST1 to ST4)).

   THE ISSUES

5. There was no dispute between the parties regarding the key facts of Mr Vu’s workplace injury, the details of the compensation payment, the amounts of money involved, or the relevant dates.  Mr Vu did not dispute the imposition of a preclusion period. nor the calculation of its duration  However, he disagreed with its commencement date.  Mr Vu also contended that his circumstances warranted consideration as special circumstances under s 1184K of the Social Security Act 1991 (the Act), meaning  and therefore the compensation payment should be treated as not having been made in part.

6. Accordingly, the issues to be determined are the correct commencement date of the preclusion period and whether Mr Vu’s circumstances should be considered special circumstances. .

   THE EVIDENCE

7. Mr Vu told the tribunal of his anguish at not having enough money to buy birthday and Christmas presents for his children and how his son could not accept invitations to friends’ birthday parties because he could not afford to buy presents for them.  He also spoke of his fear that the workplace injury to his back might develop into paralysis.  Mr Vu said that he could not afford to use the heater to keep his family in a warm environment.  Mr Vu emphasised that, at all times, he used his money for his wife and children.  He did not spend money on drinks or cigarettes.  He said he feels a duty of care to his family.

8. Mr Vu said he spoke to a Centrelink officer by telephone on 28 April 2008, before receiving his final lump sum payment, and asked about the effect the payment would have on his wife’s parenting payment.  He was told her PPP may reduce if he has income from the investment of his settlement monies (the Centrelink Advice) (T-documents, page 59).  Mr Vu testified that he made additional telephone calls to Centrelink in an attempt to ascertain the amount of the reduction but he was never given a concrete answer.  Mr Vu said that he thought the reduction might be about a third of the payment at the time, reducing the payment from about $300 per fortnight to about $200 per fortnight.  Based on the information of a reduce[d] payment, Mr Vu then proceeded to purchase a new house.  He stated that had he known that the parenting payment would cease altogether and not merely be reduced, he would have bought a smaller and cheaper house.

9. In answer to questions from Mr de Uray, Mr Vu confirmed the following:

   ·He owns a house in Noble Park, which has a council-based valuation of approximately $200,000, is mortgaged to about $50,000 and returns a rental income of $1,170 per month;

   ·He owns a house in Dandenong, which has a council-based valuation of approximately $230,000, is mortgaged to about $50,000 and returns a rental income of $1,279 per month;

   ·He lives in another house in Noble Park, which is mortgage free, and which he bought for $430,000; and

   ·He has bank savings of about $5,000.

10. Mr Vu said he had asked his bank about taking out a mortgage on his current residence but was told it was not possible because he had no income.  When Mr de Uray asked him about selling an investment property, Mr Vu said he could not tolerate the idea.  He said he needed the security of the properties for his family’s future, particularly if he became paralysed from his injury.

11. In regard to the start date for the preclusion period, Mr Vu said that he did not receive his lump sum compensation payment until 11 July 2008.  Mr de Uray explained that the start date was determined by the cessation of Mr Vu’s periodic compensation payments on 11 June 2008, resulting in the start date of 12 June 2008.  The start date is not affected by the date the lump sum payment is received.  Mr Vu accepted this explanation of the start date.

    LEGISLATION

12. The relevant legislation is contained in s 1184K(1) of the Act, which states:

    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.

    SUBMISSIONS

13. Although not stated specifically, I accept from his evidence that Mr Vu is seeking to have his financial situation, and the fact that he was given incorrect advice regarding his wife’s parenting payment, accepted as special circumstances.

14. Mr Vu submitted that, after meeting his mortgage payments, he does not have sufficient money to provide for his family.  He said that had he been told that his wife's parenting payment would cease entirely, he would have bought a smaller house and not be in such a poor position. 

15. Mr de Uray referred the Tribunal to the submissions in the Secretary’s Statement of Facts and Contentions.  He emphasised that Mr Vu owns two rental properties from which he derives a net rental of about $ 2400 per month.  Mr de Uray noted that Mr Vu owns his residence which is not encumbered by a mortgage.  Mr de Uray also referred the Tribunal to the Federal Court decision in Secretary, Department of Family and Community Services v Allan (2001) 116 FCR 1, in which Heerey J noted that:

    The basic policy, understandably enough, is that there should not be “double dipping”.  People should not receive social security payments for loss of earnings where they have received compensation for that same loss of earnings from another source”.

16. Mr de Uray contended that Mr Vu’s financial difficulties could be resolved easily by selling one of his investment properties. However, Mr Vu is not prepared to do that.

17. On the issue of the Centrelink advice, Mr de Uray said that the advice could not be expected to have been reliable, as Mr Vu had not received his final payment at the time.  In regard to Mr Vu’s evidence of further queries of Centrelink, Mr de Uray submitted that there were no records to verify these calls and questioned the reliability of Mr Vu’s evidence on this point.

    CONSIDERATION

    Financial Situation

18. In considering Mr Vu’s financial situation, I note the evidence of his considerable assets, comprising his unencumbered residence and two investment properties in which he owns considerable equity.  I note also his limited cash income comprising the balance from the rents after expenses and his wife’s family tax benefit of $430 per fortnight I consider his overall financial situation to be sound.  Indeed, he is to be commended for securing such a good financial situation for himself and his family. Nevertheless, Mr Vu is experiencing difficulty in meeting his reasonable expenses from his cash income.

19. Mr Vu’s cash problem stems from his decision to rent out his earlier residence and buy a new house using almost the entirety of his lump sum payments.  The purpose of those payments was, in part, to provide for living expenses in lieu of Mr Vu’s previous wages.  Mr Vu, however, chose to use that money to buy a new house while letting out his previous residence as an investment property and maintaining equity in yet another investment property.  In doing so, he left himself with insufficient available cash to meet his ongoing expenses.

20. A solution to Mr Vu’s cash problem is clearly available to him.  However unpalatable it may be, he can sell one of his properties and use some of the proceeds to meet his living costs.  From the evidence there is no reason why one or other of the investment properties could not be sold, other than Mr Vu’s unwillingness to do so.  After considering his overall financial situation I am satisfied that he is not in straitened financial circumstances. Indeed, he has considerable assets.  I am satisfied that Mr Vu’s short term cash problem can be resolved without causing financial hardship to himself or his family and I find accordingly.

21. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J of the Federal Court stated:

    it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

22. After considering Mr Vu’s circumstances and applying the test in Groth I am satisfied that there is nothing unfair, unintended or unjust in the application of the preclusion period to an applicant in Mr Vu’s circumstances.

23. Accordingly, I am satisfied that Mr Vu’s financial situation is not a special circumstance calling for the exercise of the discretion in s 1184K(1) to treat the whole or part of the lump sum payment as not having been made.

    The Centrelink Advice

24. In regard to the Centrelink advice regarding his wife’s parenting payment, I note Mr Vu’s evidence that he would have bought a new house, albeit a smaller house, even if he had known the parenting payment would stop.  His overall financial worth would be similar to what it is now; except that he would have less equity in property but more cash in hand.  As I have found already, the solution to Mr Vu’s short term cash shortage is available to him.  Indeed, the option of selling a property has been available to Mr Vu from the time he first became aware that his wife’s parenting payment was reduced to zero.  It was Mr Vu’s choice to not exercise that option.  In considering the whole of Mr Vu’s circumstances I am satisfied that there is nothing unfair or unjust arising from the Centrelink advice.  The Act clearly provides for the imposition of a preclusion period and is not unfair or unjust in the circumstances.

25. Mr Vu testified that he would have made a different decision had he received better advice from Centrelink.  I considered this in relation to the unintended element of the Groth decision.  Mr Vu testified that, had Centrelink officers given him more accurate advice, he would still have proceeded to buy a new house, albeit a smaller one.  That evidence indicates that the consequence of the advice was at most a matter of matter of degree, not substance.  In any case, there is nothing unintended about the imposition of the preclusion period and the consequence that Mr Vu must make provision for his living expenses from the lump sum payment.  In addition, it was always open to Mr Vu to alleviate his situation at any time it became too difficult for him to meet his expenses from available cash and income.

26. Accordingly, I am satisfied that Mr Vu's circumstances in relation to the Centrelink Advice are not special circumstances appropriate to the exercise of the discretion in s 1184K(1).

27. If Mr Vu considers that he has suffered detriment as a result of the Centrelink advice, he may wish to seek recompense from Centrelink under the Scheme of Compensation for Detriment caused by Defective Administration (CDDA).  However, that is not an issue for this Tribunal.

    Start Date

28. Mr Vu accepted the explanation given by Mr de Uray regarding the determination of the start date of the preclusion period and consequently this is no longer in dispute.  Mr Vu’s periodic compensation payments ceased on 11 June 2011.  As a consequence the start date is correctly determined to be 12 June 2011 and I find accordingly.

    CONCLUSION

29. After considering all of the evidence before me, I have found that Mr Vu’s lump sum preclusion period has been correctly calculated and applied. I have also found that there are no circumstances in Mr Vu’s case that justify the exercise of the discretion available under section 1184K(1) of the Act to treat the compensation payment as not having been made, in whole or in part. Accordingly, I find that Mr Vu’s application does not succeed.

    DECISION

30. The Tribunal affirms the decision under review.

I certify that the preceding  (30) thirty paragraphs are a true copy of the reasons for the decision herein of
Mr Conrad Ermert, Member

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

Clerk

Dated:  25 September 2012

Date of hearing	12 September 2012
Applicant	In person
Advocate for the Respondent	Mr Tim de Uray, Legal Division, Department of Human Services