Beus and Department of Family and Community Services

[2001] AATA 65

DECISION AND REASONS FOR DECISION [2001] AATA 65

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2000/832

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      LJUBICA BEUS     
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Dr J D Campbell, Member 

Date5 February 2001

PlaceSydney

Decision      The Tribunal affirms the decision under review.

[Sgd] Dr J D Campbell
   Member
CATCHWORDS
Social Security – Lump Sum Compensation Payment – Disability Support Pension – Preclusion Period – Special Circumstances

Social Security Act 1991, sections 17, 1165A, 1184
Re Secretary, Department of Social Security Hill (1995) 2 SSR 9
Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

Dr J D Campbell, Member

1. Ms L Beus ("the Applicant") in this matter seeks a review of the decision of the Social Security Appeals Tribunal dated 3 May 2000.  This decision affirmed the decision dated 8 March 2000 of a delegate of the Secretary, Department of Family and Community Services ("the Respondent") to impose a preclusion period from 2 April 1998 to 28 February 2001.  This decision, in turn, had been affirmed by an authorised review officer on 27 March 2000.

2. A hearing was held before the Tribunal on 5 December 2000 at which the self-represented Applicant presented oral evidence in support of her appeal.  The Respondent was represented by Mr Cox, an advocate from the Advocacy and Administrative Law section of Centrelink.

3. The following material was placed in evidence before the Tribunal:
   Exhibit No.   Description 
   T1 – T24 Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.
   A1      Bundle of receipts re Applicant's expenditure.  
   R1      Respondent's statement of facts and contentions including attachments A – D as amended 10 October 2000     

Issues

1. The relevant issues before the Tribunal are:

   (1) whether the legislation pertaining to the receipt of a lump sum compensation in termination of periodic payments and the imposition of a preclusion period from 2 April 1998 to 25 February 2001 has been correctly interpreted and applied; and if so

   (2) whether there are any circumstances existing as regards the Applicant's which could be considered special circumstances, which could in turn permit the exercise of a discretion to treat the whole or part of the compensation payment as not having been made.

Legislation

1. The relevant legislation in this matter is the Social Security Act 1991 ("the Act") and in particular sections 17, 1065A and 1184.
   Background

2. The Applicant was born in Yugoslavia on 1 January 1944, leaving school at approximately 16 years of age to assist in farm work.  The Applicant migrated to Australia in 1972, married in 1973, and divorced in 1994.

3. The Applicant was injured at work in 1984 and received weekly periodic compensation payments of $213.70, up to 1 April 1998, on which date her compensation claim was settled for the sum of $125,000.

4. On 16 April 1998 the Applicant was advised by the Respondent that as a consequence of the lump sum compensation payment received a preclusion period would apply for the period 2 April 1998 to 28 February 2001, during which the Applicant would not be able to receive social security payments, with the exception being payments made for children (T5, P56).  The Applicant received a lump sum payment of outstanding monies of $81,843.50 on 20 April 1998 (T7, P60).

5. The Applicant applied for a disability support pension on 14 may 1997 and this was rejected because the Applicant's income was too high at that time.  The Applicant made a further claim for disability support pension on 3 November 1999 (T3, P54) and this claim was rejected on 26 November 1999 due to the existence of the compensation preclusion period (T10, P70).

6. Following a request for a review of this decision, the Applicant was advised that the earlier decision was correct (T14, P78), and this was further affirmed by the authorised review officer on 8 March 2000 (T20, P67).  This decision was reviewed by the Social Security Appeals Tribunal and affirmed on 3 May 2000 (T2, P3).
   Applicant's evidence

7. The Applicant told the Tribunal that she had received the sum of $81,843.50 in April 1998, and that currently she owned her own unit, with no mortgage and had a sum of $9,200 in a St George Bank Account.  The Applicant stated that she owed no debts and that no money was owed to her.  In relation to her unit, the Applicant indicated that she had trouble with a sliding door which would cost approximately $700 to correct.

8. The Applicant indicated that the statement in the Social Security Appeals Tribunal where it stated she had $24,185.68 in her bank as at 3 May 2000 (Para 8, T2, P3) was incorrect.  The Applicant further indicated to the Tribunal that at the time of receipt of the lump sum, she had been made aware of the preclusion period and the issue of social security payments.  Further, the Applicant told the Tribunal that that expenditures from the lump sum included:

• $10,000 to her son for car maintenance and repair and for the purchase of a computer;

• $20,000 for refurbishment of her home unit;

• $5,000 repayments of loans to friends; and

• the remaining expenditure being spent on the incidentals of daily living.

1. In relation to her health, the Applicant indicated that she had the following medical conditions:

• low back pain, which arose as a consequence of a related injury and which requires analgesics; sleeping difficulties; ability to walk for 30 minutes; does her own housework; uses public transport and has assistance from her son when shopping;

• hypertension and high cholesterol, for which she is receiving treatment;

• a left-sided muscular problem, mainly around her left shoulder;

• a nervous condition resulting in her being overly anxious and sometimes depressed; and

• a major abdominal operation in the last six months, with some continuing urinary problems.

1. The Applicant stated that she has a few friends, never goes out in the evening and spends time watching television and doing a little reading.  She further stated that she would like to work, but she is aware that her various medical conditions will make it very difficult for her to work.
   Submissions

2. The Applicant submitted that she had very limited financial resources and that by the time the preclusion period ended, her financial resources to fund an emergency situation would be extremely limited.  Accordingly she submitted that in view of her financial situation and her deteriorating health, which prevents her from working, the preclusion period should be shortened.

3. The Respondent submitted in summary that the Applicant had received the necessary advice regarding the preclusion period and its effects, that there was no error in the calculation of the preclusion period, and that neither her financial circumstances or her medical condition when taken alone or together constituted special circumstances.  Accordingly, in the Respondent's view, any exercise of the discretion nominated in s.1184 is not warranted and the period of the preclusion period should remain.
   Considerations and findings

4. The Tribunal, having considered all the evidence, including the Applicant's statements to the hearing, makes the following finding of facts:

   a. that the Applicant did receive a lump sum payment of $81,843.50 on 20 April 1998 as the result of a settlement of a compensation claim;
   b. that the Applicant had been advised of the effects of such a payment on social security benefit payments and the imposition of a preclusion period from 2 April 1998 until 28 February 2001 on 16 April 1998 and further that the Applicant understood the nature and effect of that advice;
   c. that the Applicant's financial situation at the time of the hearing was essentially one in which the Applicant had assets of an unencumbered home unit (value $130,000), cash assets of $9,200 and household contents with no evidence of any debt; and
   d. that the Applicant's medical conditions, although causing disability, did not prevent the Applicant from walking for half an hour, using public transport, undertaking housework or participating in shopping.

1. The Tribunal notes the following statutory framework which details the Compensation recovery definitions (section 17); the effect, including the calculation of the length of the preclusion period and the commencement date thereof (s1165) and the discretion to disregard the whole or part of the compensation payment, when special circumstances are found to exist.

   "…
   Compensation recovery definitions
   17.(1) In this Act, unless the contrary intention appears:
   "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
   (e) a disability support wife pension; or
   (f) a carer payment; or
   (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
   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 such a scheme; or
   (c) a payment (with or without an 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 capacity to earn; and
   (f) made either within or outside Australia.

   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 judgement being entered in respect of the settlement or otherwise, on or after 9 February 1998;

   Person not member of a couple – payment received on or after 20 March 1997
   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.

   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; and
   (b) ends after the number of weeks worked out under subsections (8) and (9).

   1165.(6) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the new lump sum preclusion period is the period that:
   (a) begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and
   (b) ends after the number of weeks worked out under subsections (8) and (9).

   1165.(7) If neither subsection (5) nor (6) applies, the new lump sum preclusion period is the period that:
   (a) begins on the day on which the loss of earnings or loss of earning capacity began; and
   (b) ends after the number of weeks worked out under subsections (8) and (9).

   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

   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.

2. The Tribunal further notes that pursuant to s1165(1A) of the Act, no compensation payment is payable to a person not being a member of a couple during the new lump sum preclusion period, that pursuant to s1165(9) of the Act the preclusion period is calculated by dividing the compensation part of the lump sum payment ($62,500) by the income cut out amount (410), which results in a preclusion period of 152.4 weeks. The Tribunal further notes that pursuant of s1165(5) of the Act the preclusion period commences on 2 April 1998.

3. As a consequence of the Tribunal's considerations, referred to in paragraphs 19 and 20 of this decision, the Tribunal finds that the commencement date and length of the preclusion period have been correctly calculated and the effect of such a preclusion period on social security payments correctly stated.

4. The Tribunal, in turning to the issue of special circumstances, has made particular findings of fact in relation to the Applicant's financial and ill health circumstances.  In summary, the Tribunal has concluded that the Applicant's financial circumstances can best be described as appropriate financial management in terms of the financial resources available.  The Tribunal would further conclude that while financial resources are limited, the Applicant is not in tightened financial circumstances, let alone exceptionally difficult financial circumstances.  The Tribunal, in acknowledging that the Applicant has managed her financial situation to the best of her endeavours, finds that there is nothing unusual, uncommon or exceptional in the Applicant's financial circumstances (Re Secretary, Department of Social Security and Hill (1995) 2 SSR 9 and Re Beadle and Director-General of Social Security (1984) 6 ALD 1, considered and applied).

5. In considering the issue of ill health the Tribunal, having already detailed particular findings of fact, concludes that the Applicant's various medical conditions, while causing some disability for the Applicant, are not circumstances which can be considered to be unusual, uncommon or exceptional (Re Beadle (supra)) considered and applied.  Further, the Tribunal finds that the various circumstances, when considered together, do not constitute special circumstances for the very reason that they are not uncommon, unusual or exceptional.

6. As a consequence of the Tribunal's findings that special circumstances are not found to exist in this matter, the Tribunal further finds there does not exist an opportunity for the Tribunal to exercise a discretion as to whether whole or part of the compensation payment could be disregarded.
   Determination

7. The Tribunal affirms the decision under review.

   I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for the decision herein of Dr JD Campbell

   Signed:         .....................................................................................
     Associate

   Date/s of Hearing  5 December 2000
   Date of Decision  5 February 2000
   Advocates for the Applicant     Self-represented Applicant
   Solicitor for the Respondents  Mr A Cox