Brady and Secretary, Department of Employment Workplace Relations
[2005] AATA 1145
•18 November 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 1145
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2005/357
GENERAL ADMINISTRATIVE DIVISION ) Re STANLEY BRADY Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Senior Member P McDermott Date18 November 2005
PlaceBrisbane
Decision Pursuant to section 43 of the Administrative Tribunals Act 1975, the decision under review is set aside. In substitution for that decision, the Tribunal decides that in the special circumstances of Mr Brady’s case, so much of the compensation paid to him should be treated as not having been made so as to allow the preclusion period to end on 18 November 2005.
.......[Sgd].......
P McDermott
Senior Member
CATCHWORDS
SOCIAL SECURITY - lump sum compensation - preclusion period - special circumstances – decision set aside –preclusion period to end as of date of decision.
Social Security Act 1991 (Cth) ss 17, 1170, 1184K
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Secretary of the Department of Social Security v Banks (1990) 23 FCR 416
Re Secretary, Department of Social Security and Hickman (1996) 43 ALD 75
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Re Allen and Secretary, Department of Family and Community Services (2000) 59 ALD 289
Barrington and Secretary, Department of Employment and Workplace Relations [2005] AATA 1050
Department of Family and Community Services and Orlando [2000] AATA 632
Woods and Secretary, Department of Family and Community Services [2002] AATA 277
Secretary of the Department of Social Security v Thompson (1994) 53 FCR 580
Secretary, Department of Social Security and VYS (1995) 40 ALD 745REASONS FOR DECISION
18 November 2005 Senior Member P McDermott INTRODUCTION
1. On or about 15 October 2001 Mr Brady was severely injured in a motor vehicle accident. In June 2004 he received the proceeds of a common law settlement. Centrelink has determined that Mr Brady is precluded from receiving compensation from 15 October 2001 until 30 July 2006. I have to consider whether there are any special circumstances in his case which justify the reduction of this preclusion period.
PRIOR DECISIONS
2. On 25 May 2004 a Centrelink delegate decided that Mr Brady was precluded from receiving compensation from 15 October 2001 until 30 July 2006. The delegate also decided that Centrelink would recover a compensation charge of $31,121.77 (T27). Mr Brady sought an internal review of that decision of the delegate.
3. On 25 January 2005 an authorised review officer, on internal review, affirmed the decision of the delegate. The authorised review officer found that there were no “sufficiently unusual or uncommon aspects to accept as special circumstances”. Accordingly the authorised review officer affirmed that the preclusion period would commence on 15 October 2001 and conclude on 30 July 2006 (T51).
4. Mr Brady then sought a review of the decision of the authorised review officer by the Social Security Appeals Tribunal (“the SSAT”). On 4 April 2005 the SSAT decided to affirm the decision under review (T1). Mr Brady has now made an application for review of the SSAT’s decision to this Tribunal.
ISSUE FOR RESOLUTION BY TRIBUNAL
5. I have to decide whether the circumstances of Mr Brady are “special” in accordance with section 1184K of the Social Security Act 1991 (“the Act”) which would allow any reduction in Mr Brady’s preclusion period..
LEGISLATION
6. In deciding this application I have had regard to a number of provisions of the Act.
7. Section 17 of the Act deals with compensation recovery definitions.
8. Compensation is defined by subsection 17(2) (c) of the Act, to include “a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme”: see para (c). This is the case whether the whether the payment is in the form of a lump sum (as was the case in this matter) or in the form of a series of periodic payments and whether it is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.
9. It is also appropriate to mention subsection 17(3) of the Act which defines the “compensation part of a lump sum compensation payment”. This is referred to as the “50 per cent rule”, which generally means that where a payment has been made for non-economic loss, 50 per cent of the compensation will be taken to be in respect of lost earnings or lost capacity to earn. This provision was introduced in 1988 to overcome any difficulty caused where settlement does not expressly allocate a component of the settlement monies which is attributable to lost earnings or lost capacity to earn: see Secretary of the Department of Social Security v Banks (1990) 23 FCR 416 at 422.
10. Preclusion periods are calculated in accordance with subsection 1170 (formerly section 1165) of the Act. To calculate a preclusion period, only the compensation part of the lump sum payment is taken into account. The compensation part is determined under the provisions of subsection 17(3) of the Act. The start day of the preclusion period begins on the day following the last day of the periodic payments period. The length of the period of preclusion is calculated using a formula contained in the Act.
11. Chapter 3 of the Act deals with compensation recovery: see Part 3.14. Subsection 1184K deals with circumstances where a whole or part of a compensation payment maybe treated as not having been made or not liable to be made if the Secretary thinks it is appropriate to do so in special circumstances of a case.
12. Section 1184K of the Act provides that for the purposes of Part 3.14 of the Act, 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: see subsection (1).
NATURE OF PAST EMPLOYMENT
13. Mr Brady is 32 years of age. He completed his school education to 9th grade leaving school in 1988 at the age of 15. He had and continues to have literacy problems.
14. Mr Brady has worked as a gardener, boner, labourer, air conditioner installer and hospital wardsman. Ms K Hanscher B. Psych (Hons) has pointed out: “Mr Brady has always been employed in jobs involving physical labour” (Exhibit A7)
15. Mr Brady has been employed for most of his working life with the exception of two brief periods (of 12 days and 10 days) when he was reliant on newstart allowances and one period (of 2 months and 5 days) when he was in receipt of sickness allowance. However, after his accident on or about 15 October 2001 he has been in receipt of social security benefits.
MOTOR VEHICLE ACCIDENT INJURIES
16. On or about 15 October 2001, Mr Brady was severely injured in a motor vehicle accident.
17. Mr Brady was initially treated by intubation in the intensive care unit of the Rockhampton Hospital and then, in a general ward. He sustained multiple and serious injuries including: a severe fracture of the pelvis, a fracture of the posterior superior iliac spine on the left (Exhibit A1), a fractured skull, a closed head injury, fractured ribs, soft tissue injury to the abdomen with a ruptured abdomen including a ruptured spleen, a collapsed lung, a whiplash injury, and cuts and bruises. (Exhibit A5)
18. I am satisfied that as a result of his injuries Mr Brady suffers from chronic pain syndrome, a brain injury and depression. The applicant is required to take medication to control and manage his conditions.
MEDICAL EVIDENCE
19. In considering the medical evidence before me I have had regard to the following medical reports.
§Mr Iain Macfarlane
20. A medical report dated 26 August 2002 by Mr Iain Macfarlane FRCS (Edin), an orthopaedic surgeon, was admitted into evidence (Exhibit A1). His report is a comprehensive examination of Mr Brady from an orthopaedic perspective.
21. Mr Macfarlane has made an assessment that Mr Brady has a 25% impairment of the whole person. Mr Macfarlane considers that this degree of impairment is permanent. The components that make up that assessment are 20% for the severe fractures of the pelvis and left sacro-iliac joint and 5% for the soft tissue injury to the lower back with evidence of nerve damage at L5/S1 on the left.
§Mr L Salzman
22. A medical report dated 1 December 2002 by Mr L Salzman, a counselling and clinical neuropsychologist was also admitted into evidence (Exhibit A2). Mr Salzmann considers that Mr Brady is unemployable because of physical problems and cognitive defects. A neuropsychological assessment suggests that Mr Brady would have difficulty in learning a new trade. Mr Salzman considers that Mr Brady would not be capable of working in an administrative or clerical position because of literacy problems.
§Dr John Chalk
23. Medical reports dated 10 October 2003 (Exhibit A8) and 30 January 2004 (Exhibit A9) from Dr John Chalk, a psychiatrist, have been admitted in evidence. Dr Chalk considers that Mr Brady has an acquired brain injury as a result of the accident of October 2001 and that this has impacted predominantly on his visually based speed of information processing. He also has a broader range of problems that are functional or psychological in origin and susceptibility to stress.
§Dr Trevor Myers
24. A medical report dated 26 November 2002 from Dr Trevor Myers, a consultant physician, was admitted into evidence (Exhibit A5). Dr Myers considers that since the motor vehicle accident Mr Brady has diminished mobility, persisting pain, impaired cognition, some drug dependency and significant depression. Dr Myers opined that Mr Brady is possibly unemployable.
§Dr Peter Steadman
25. A medico-legal report from Dr Peter Steadman was admitted into evidence (Exhibit A6). Dr Steadman in general agrees with the report of Mr Iain Macfarlane. Dr Steadman would not give a definitive opinion on the degree of permanent impairment not having the x-rays of the pelvic fracture but he agreed that a sacro-iliac joint injury would cause pain and attract impairment of 5-10% depending on the x-rays.
§Dr Geraghty
26. Mr Brady’s conditions were verified by his treating general practitioner, Dr Geraghty (T42, fol 100-104). Dr Geraghty has now retired from general practice.
HISTORY OF THE MATTER
27. At the time of the accident, Mr Brady was in a relationship with his now former partner, Ms Vicki Maree Bell. The applicant and Ms Bell have one child, Alexandra May Bell, born on 26 September 1996, who is 9 years of age.
28. The relationship between the applicant and Ms Bell broke down approximately 5-6 months after his accident.
29. The applicant settled his personal injury claim for $325,000.00 plus costs. After deductions of $900.40 for HIC (Medicare), $31,121.77 to Centrelink, $1,000.00 to Westpac, and further (shortfall) legal costs of $17,794.83, the applicant received the amount of $254,410.26 in approximately late June 2004.
30. Mr Brady and Ms Bell briefly reconciled very soon before he received the payment of the settlement money of $254,410.26.
31. Ms Bell agreed to live with Mr Brady on the condition that the house he was going to purchase be purchased in their joint names and that he purchase a car to be registered in her name. (Exhibit A4)
32. Mr Brady said that he agreed to these conditions because he wanted to secure their relationship and because he wanted to ensure he had an ongoing relationship with and care of their child, Alexandra.
33. Mr Brady purchased a car which was registered in Ms Bell’s name and a motorcycle which was registered in his name.
34. Mr Brady and Ms Bell signed a contract to purchase a house at 72 Lion Creek Road, Wandal on 2 August 2005 for a purchase price of $167,000.00. Settlement was effected on 9 September 2005. The property was registered in the names of Mr Brady and Ms Bell as tenants in common. Mr Brady provided all the moneys for the purchase of the property.
35. Mr Brady was aware that a compensation preclusion period had been assessed by Centrelink. He appreciated that he would be precluded from social security entitlements and would need to provide for his own support for a period. Mr Brady had discussed this with Ms Bell. They agreed that in order to support themselves they would use the remainder of the compensation payment; the first home buyers grant ($7,000.00); benefits payable in respect of Alexandra and to Ms Bell; and employment income to be earned by Ms Bell.
36. Soon after the date of settlement, Ms Bell terminated the relationship with the applicant and moved out of the house taking Alexandra. Ms Bell also took the car and items of furniture. Some time after this, Ms Bell left Alexandra in the care of her mother, Mrs Gloria Bell who resides in Rockhampton.
37. Mr Brady gave evidence that Ms Bell had a chronic drug dependency habit, a gambling habit and has engaged in prostitution to support her habit. Ms Bell also refused to sign the first home buyers grant form.
38. Mr Brady gave evidence that Ms Bell became violent, abusive and aggressive towards the applicant, damaged his property, began harassing him and demanded money from him on many occasions. Mr Brady was intimidated by and scared of Ms Bell. I am satisfied that Mr Brady was and remains vulnerable given his medical, emotional and intellectual impairments.
39. The police were called to Mr Brady’s residence on numerous occasions. On 15 November 2004, with the assistance of the police, Mr Brady applied for a protection order against Ms Bell.
40. On 17 November 2004 the Magistrates Court at Rockhampton made orders that Ms Bell be of good behaviour towards the applicant and not commit any domestic violence and that Ms Bell not contact or try to contact Mr Brady directly or indirectly (by telephone or through any other means of communication) except through a solicitor. Orders in the same terms were made on 4 February 2005 and 18 February 2005. The relevant documentation relating to the domestic violence order, which is still in force, was admitted in evidence [ex. A12].
41. After Ms Bell left their residence, Mr Brady discovered that Ms Bell had used his bank account key card without permission and taken substantial amounts of money. The applicant believes the money was used to purchase drugs or for gambling. Mr Brady initially estimated the total of the amounts at $13,000.00 but he now believes the total is approximately $20,000.00.
42. Mr Brady stated that he tried to report the thefts to the police. He was informed by the police that they could not accept his complaint because they considered the matter was a civil matter. They, however, assisted him to obtain the protection order.
43. Mrs Bell began to deny Mr Brady contact to Alexandra and so he commenced family law proceedings. The applicant was granted legal aid for the residence and contact matters and Mr Robert Nauta of John Williams & Associates was appointed as his solicitor.
44. In September 2005, Mrs Bell, the Child Representative and Mr Brady agreed to terms which allowed Mr Brady supervised contact. Mr Brady has been denied contact for a significant period and the Child Representative is concerned that Mr Brady start exercising contact as soon as possible. Supervised contact is tentatively being organised for late November 2005.
45. After Ms Bell left the applicant’s residence, her arrangements have been erratic. Mr Brady understands that Ms Bell went to Brisbane for a period although he was unaware of her address. He believes that Ms Bell returned to her mother’s address but has again left. The applicant does not know Ms Bell’s address.
46. Mr Brady is anxious to avoid contact with her due to her threats, violence and harassment. He stated that she has attempted to directly telephone him in contravention of the domestic violence order. It would seem that she wants Mr Brady to sell the property. There was some suggestion that she still owed a substantial sum for drug debts.
47. Mr Brady has sought legal advice about having Ms Bell’s name removed from the title of the property at 72 Lion Creek and has been informed by Mr Nauta that it will cost at least $15,000.00 and will probably take a lengthy time. This was confirmed by the evidence given by Mr Nauta who stated that he has discussed this with Mr Brady. Mr Brady cannot pay for a solicitor to represent him in a property matter and has been informed that legal aid is not available for this type of matter. Mr Brady has requested his solicitor to inquire into pro bono schemes for representation for him.
48. Mr Brady does not wish to sell his house as it is his only remaining asset and is his usual residence. After purchase he spent approximately $10,000.00 to have the house modified for his conditions with hand rails and with air-conditioning. He will require the house in order to exercise contact with Alexandra.
49. If Mr Brady were to sell the property, Ms Bell would be entitled to 50% of the sale proceeds.
50. In view of Ms Bell’s previous threats and demands for money, Mr Brady believes that Ms Bell would only agree to a sale of the property provided she received 50% of the proceeds of the sale. Mr Brady is also concerned about Ms Bell’s reliability and that she would use the 50 % share of the proceeds of sale on drugs.
51. Since his case was considered by the SSAT, Mr Brady was involved in a motorcycle accident on 24 April 2005. He has received injuries to his right arm and shoulder. His shoulder joint was displaced and has been surgically repaired on at least 3 occasions. The repair has failed to consolidate and the outcome of the injuries remains uncertain. A copy of a medical certificate issued by the emergency department of the Rockhampton Hospital on 28 June 2005 was placed in evidence [ex. A3].
52. Mr Brady’s motorcycle was damaged in the accident. He received an insurance payout for the motorcycle of approximately $11,000.00. The applicant purchased a car (and paid for necessary repairs) for his transport needs.
53. On 9 September 2005, Mr Brady’s mother, Mrs Bev Brady, visited the applicant in Rockhampton. She transported Mr Brady to Brisbane and arranged for him to be admitted to the Mental Health Unit at the Royal Brisbane & Women’s Hospital on 10 September 2005. Mr Brady was admitted for detoxication and remained in the Mental Health Unit for 5 days. Mr Brady could not, however, be referred to a rehabilitation unit as he had no source of income (such as social security benefits) and would not be accepted.
54. Mr Brady in evidence estimates that he used approximately $10,000.00 of his compensation moneys for the purchase of drugs, mainly amphetamines. He believes the major reason for his drug use was the destruction of all aspects of his life. In his evidence he was frank about his drug habit and mentioned that his sister did not trust him with petrol money preferring to personally put the petrol in his vehicle.
55. After discharge from the Royal Brisbane & Women’s Hospital, the applicant returned to Rockhampton. He has temporarily returned to Brisbane and is residing nearby with his sister, Loretta Gladman, and her family consisting of her husband, three children and son’s girlfriend.
56. Mr Brady wishes to return to Rockhampton soon to exercise contact with Alexandra.
EXPENDITURE OF COMPENSATION PAYMENT
57. Mr Brady did not provide the SSAT with full details of the expenditure of the compensation payment. He estimates that the compensation was spent as follows:
EXPENDITURE
AMOUNT
House $167,000.00 Purchase costs (stamp duty, inspections, legal costs) $2,500.00 Installation handrails, air conditioning $10,000.00 Car (in name Ms Bell) $10,000.00 Motorcycle $13,000.00 Vehicle registrations and insurances $3,000.00 Repairs to motorcycle $6,000.00 Repayment of debts $5,000.00 Purchase television, DVD, walkman, music $2,000.00 Moneys stolen by Ms Bell $20,000.00 Drugs $10,000.00 TOTAL $248,500.00 REMAINDER $5910.26
58. Mr Brady estimates that the remainder of his compensation payment, was spent on normal living expenses, such as food, electricity, telephone. When Ms Bell first left and before contact was totally denied, Mr Brady also had increased expenses for taxis in order to have contact with Alexandra.
EXPENDITURE OF INSURANCE PAYOUT
59. Mr Brady estimates that the insurance payout of $11,000.00 for the motorcycle was expended as follows:
EXPENDITURE
AMOUNT
Rates $2,500.00 Electricity account $300.00 Repayment of debts $4,000.00 Purchase of motor vehicle and repairs to make roadworthy $4,000.00 TOTAL $10,800.00 REMAINDER $200.00
CURRENT CIRCUMSTANCES
60. Mr Brady has been unemployed since the accident which occurred on or about 15 October 2002. He is currently unable to work and has no realistic prospect of obtaining employment in the foreseeable future. If he is to find employment he would need considerable support and training.
61. The only assets which Mr Brady has are his interest as tenant in common of a house. A real estate agent Mr Dodson who gave evidence estimated the value of the house as being worth approximately $180,000.00-$190,000.00.
62. The house is currently not being occupied by anyone. Mr Brady obtained a boarder for a short period in 2005 but the boarder moved out after his motorcycle accident. He has not been able to find another boarder.
63. Mr Dodson also stated that it would be necessary to obtain the consent of the other co-owner of the property before it could be rented. Without the written consent of Ms Bell he could not rent the property.
64. Mr Brady has a 1993 Hyundai vehicle. Estimates of the value of that vehicle of $1,500.00 and $2,000 have been placed before me.
65. It was submitted that Mr Brady has been in financial hardship since November 2004. His tendered bank statements disclosed that he had no funds in his account in January 2005 (Exhibit A13). Mr Brady has exhausted all options for raising money with which to support himself.
66. Mr Brady has made enquiries to borrow against his house but was refused. This is not surprising as he is not in receipt of any income. He has not been able to find another boarder.
67. Mr Brady does not have the capacity to meet even the most basic living expenses for himself. He has begged for food and medication from the Rockhampton Hospital and from charitable organisations.
68. Although an agreement has been concluded for contact with his daughter, Mr Brady has no resources with which to exercise contact and pay for basic items such as food for his daughter. Mr Brady has no prospects of exercising contact with his daughter while living in Brisbane.
69. Mr Brady cannot rely upon relatives for his support. His mother, Mrs Brady, is reliant herself on social security benefits. He is temporarily staying with his sister and her family but this is to assist him in the short term only and does not appear to be a sustainable situation.
SPECIAL CIRCUMSTANCES
70. I have to decide whether the preclusion period should be reduced because of any special circumstances of Mr Brady. I must now consider whether there are special circumstances which apply to Mr Brady.
71. I have already mentioned that the term “special circumstances” is contained in section 1184K of the Act. There are decisions of the Federal Court of Australia, which are binding upon me, which have considered the meaning of this term.
72. The Federal Court of Australia in Beadle v Director-General of Social Security (1985) 7 ALD 670, in agreement with a decision of this Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1, determined that special circumstances look to situations which are “unusual, uncommon or exceptional”: see also Re Secretary, Department of Social Security and Hickman(1996) 43 ALD 75.
73. The circumstances need not be unique but must have a particular quality of unusualness, which would permit a description of being “special”. A similar discussion is to be found in Groth v Secretary, Department of Social Security (1995) 40 ALD 541.
74. In determining whether “special circumstances” exist, s 1184K of the Act confers a very broad discretion which requires me to consider the circumstances of this case: see Beadle v Director-General of Social Security(1985) 60 ALR 225 at 228. See also Secretary, Department of Social Security v Hulls(1991) 22 ALD 570.
75. It has been submitted on Mr Brady’s behalf that special circumstances exist in his case due to several factors relating to his ill-health; the financial hardship of the applicant; the breakdown of his relationship with his partner; his drug addiction and his mental health.
ILL-HEALTH OF THE APPLICANT
76. On or about 15 October 2001 Mr Brady suffered multiple and serious injuries that have resulted in his permanent medical and intellectual impairments. Although he received compensation payment for these injuries resulting in the preclusion period, his ill-health may still be a factor which is taken into consideration when determining the existence of special circumstances.
77. The applicant suffered further injury from a motorcycle accident on 24 April 2005 which has not resolved. This accident occurred after his application was considered by the SSAT. Mr Brady has received injuries to his right arm and shoulder. His shoulder joint was displaced and has been surgically repaired on at least 3 occasions. The repair has failed to consolidate and the outcome of the injuries remains uncertain. As Mr Brady is right-handed (Exhibit A1, p4), this accident is a severe impediment to his activities.
78. The employment prospects of Mr Brady are very limited. Mr Brady has no capacity to undertake any administrative or clerical work because of his literacy problems as well as his brain injury. His previous employment was mainly manual work. He now cannot undertake such work. Previous decisions of this Tribunal have recognised that ill health resulting in an incapacity to engage in paid employment is relevant to a finding of special circumstances: see Barrington and Secretary, Department of Employment and Workplace Relations [2005] AATA 1050.
79. I find that the ill health of Mr Brady is a special circumstance.
Financial hardship
80. This Tribunal has recognised that financial hardship is itself a special circumstance that I can take into account: see Re Allen and Secretary, Department of Family and Community Services(2000) 59 ALD 289 at 296.
81. It was contended on behalf of Mr Brady that this is not a case of someone living on a low income, such as social security benefits, and having difficulty meeting their expenses from a finite and meagre amount of income. Since November 2004 Mr Brady has been without any income at all and is unable to meet his expenses.
82. The respondent contends that Mr Brady owns a house which can be sold. This home was not an extravagant purchase. When Mr Brady purchased the home he did not expend all of his settlement moneys to buy the house or buy a house of excessive value. The cost of the house and alterations amounted to $177,000.00, leaving $77,410.26.
83. Although the house is unencumbered he has only a half interest in the house. If Mr Brady was required to sell the house he would receive at best $85,000.00, and could receive substantially less. This amount would not be sufficient for him to purchase another house.
84. In any event this Tribunal has ruled that the mere ownership of a property (and other assets) does not preclude a finding of financial hardship being made in a case: see Barrington and Secretary, Department of Employment and Workplace Relations [2005] AATA 1050; Secretary, Department of Security and Hickman (1996) 43 ALD 75; Department of Family and Community Services and Orlando [2000] AATA 632
85. In Barrington and Secretary, Department of Employment and Workplace Relations [2005] AATA 1050, the Tribunal stated at [36]: “In past applications the Tribunal’s approach to the sale of a house to relieve financial hardship has varied considerably. In some cases it has decided the applicant should sell the house and live off the proceeds, but in other applications there has been a reluctance to, in effect, force the sale of a house. In cases involving a modest house there seems to be a greater reluctance to suggest that a sale is appropriate.”
86. This matter has been discussed in a leading textbook on social security law: see P Sutherland, Social Security and Family Assistance Law , 2nd Edition, 2005, pp 518-520.
87. In this case I do not consider that it is realistic that he should sell his interest in the home. Having regard to the alleged drug taking activities of Ms Bell I do not consider that it is appropriate for a Commonwealth agency to suggest or sanction a course of conduct whereby a drug addict such as Ms Bell would be provided with a large sum of money.
88. There are other public interest considerations to take into account. If Mr Brady was to sell his interest in the house, he would be reliant on public housing or social security rent assistance.
89. I also do not consider that the purchase by Mr Brady of the 1993 Hyundai car could not be regarded as an extravagant purchase. It is reasonable for him to want to retain the car due to his injuries and the lack of public transport where he resides. He needs to have a car to have access to medical assistance.
90. I also mention that the family of Mr Brady have limited financial resources particularly as his mother is in receipt of social security benefits.
91. I find that the financial hardship of Mr Brady is a special circumstance.
BREAKDOWN OF RELATIONSHIP WITH PARTNER
92. After the accident in 2001, the applicant’s relationship with Ms Bell broke down. There was a brief period of reconciliation at the time the applicant received his compensation but the relationship then broke down in very traumatic circumstances.
93. The applicant and Ms Bell devised a relatively sensible plan for his financial support during the remainder of the applicant’s preclusion period. Unfortunately the breakdown of the relationship had a very real negative financial impact. Essentially $7,000.00 that would have otherwise been available as a resource could not be utilised when Ms Bell refused to complete the first homebuyers grant form. In addition when Ms Bell took the car Mr Brady needed to incur greater day to day costs when car travel was necessary.
94. Ms Bell ‘stole’ approximately $20,000.00 from Mr Brady which further reduced the resources that would have otherwise been available to him for his support.
95. In Secretary, Department of Security and Hickman (1996) 43 ALD 75; the Tribunal took into account the effect of the applicant’s injuries on his relationships.
96. I find that the breakdown of the relationship of Mr Brady with his partner (including his loss of contact with his daughter) is a special circumstance.
DRUG ADDICTION
97. Mr Brady has on his own admission used $10,000.00 for his own drug use. This excessive drug use may be attributed to the accident and the breakdown of his relationship. His relationship with a drug user may have also contributed to his addiction.
98. This Tribunal has found special circumstances in circumstances of “hopelessness and despair” leading to taking an overdose of drugs: Woods and Secretary, Department of Family and Community Services [2002] AATA 277.
99. I find that the drug addiction of Mr Brady is a special circumstance.
Mental health
100. In Secretary of the Department of Social Security v Thompson(1994) 53 FCR 580 Einfeld J, in discussing the predecessor provision, remarked at 586:
“The width of the discretion under the section clearly extends to all the circumstances of the case, including circumstances not specifically related to a particular portion of the compensation payment. It is not therefore outside the section for the tribunal to consider the general factors such as the mental health and social conditioning of the individual in concluding that the preclusion period should be shortened”.
101. Having regard to these remarks of Einfeld J I must take account of the mental health of the applicant.
102. I find that the fact that Mr Brady has sustained a brain injury from the accident is a special circumstance.
103. It is most probable that his intellectual impairment has contributed to his financial predicament. His failure to take account of financial advice that has been available to him from Centrelink and the bank is explained by the state of his mental health.
104. I have had regard to the fact that Ms K Hanscher B. Psych (Hons) has pointed out that Mr Brady has made a number of suicide attempts (Exhibit A7)
SHORTENING OF THE PRECLUSION PERIOD
105. I appreciate that the purpose of the legislation is to ensure that a person in receipt of compensation does not “double- dip”, that is to receive income from compensation in addition to income security from the respondent. The legislation, however, enables the preclusion period to be shortened where there are special circumstances.
106. In the context of the operation of the preclusion period this Tribunal has previously mentioned that it does not regard the social security system to require people to take “a one way ticket to poverty”: see Secretary, Department of Social Security and VYS (1995) 40 ALD 745; Secretary, Department of Security and Hickman (1996) 43 ALD 75 at [18].
107. Having determined that there are special circumstances in Mr Brady’s case, I consider that a shortening of the preclusion period is warranted. The preclusion period has been imposed for the period from 15 October 2001 to 30 July 2006. By now a significant portion of the period has elapsed.
108. In Secretary, Department of Social Security v Thompson (1994) 53 FCR 580 at [28] Einfeld J said in calculating the appropriate reduction of the preclusion period: “intuitive justice will often be as fair a criterion and as faithful to the legislative intention as any other approach”.
109. In determining the appropriate adjustment that must be made it is not necessary to precisely calculate a figure, but to consider all of the relevant facts and circumstances in this case: see Barrington and Secretary, Department of Employment and Workplace Relations [2005] AATA 1050.
110. I have given some thought as to whether I should make an order for the preclusion period to end earlier than this date such as to provide Mr Brady with a lump sum. In my view that would not be an appropriate decision to make as his receipt of a lump sum may tempt him to engage in drug taking. The fact that Mr Brady’s sister does not trust him with petrol money for this car is a matter of concern to me.
111. I have decided that the preclusion period should end of the date of this decision. This would enable Mr Brady if he is still so minded to enter a rehabilitation centre if one is available. I have also taken into account the limited financial resources of his family. There are also obvious tensions in Mr Brady’s current living arrangements.
DECISION
112. In framing the terms of the decision, which appears at the commencement of these reasons, I have had regard to the remarks of Einfeld J in Secretary, Department of Social Security v Thompson(1994) 53 FCR 580 at [28] that I may make a decision which refers to the length by which the preclusion period is shortened without specifying the corresponding reduction in the compensation sum.
113. I also mention that I have made a decision on evidence that was not available to the SSAT.
114. I have decided to set aside the decision under review and substitute a decision that in the special circumstances of Mr Brady’s case, so much of the compensation paid to him should be treated as not having been made so as to allow the preclusion period to end on the date of this decision.
I certify that the 114 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member P McDermott
Signed: Jeff Mills
. Legal Research Officer
Date/s of Hearing 11 November 2005
Date of Decision 18 November 2005
For the Applicant Robyn Wilkinson, Solicitor
For the Respondent Suzy Dole, Departmental Advocate
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