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

Burgess and Secretary, Department of Social Services (Social services second review) [2019] AATA 2429 (7 August 2019)
Division:GENERAL DIVISION
File Number(s): 2019/0070
Re:Michael Burgess
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Dr I Alexander, Senior Member
Date:7 August 2019
Place:Sydney

The decision under review is set aside and in substitution it is decided that Mr Burgess’ compensation preclusion period should end on 30 June 2020.
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Dr I Alexander, Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension cancellation – rejection of carer payment – lump sum compensation for workplace injury – whether a lump sum preclusion period applies – length of preclusion period – reduction of preclusion period for special circumstances – payments treated as though not having been made – whether special circumstances apply – untreated diagnosis of pathological gambling – whether gambling was a lifestyle choice – decision set aside and substituted
LEGISLATION
Social Security Act 1991 (Cth) ss 17, 1169, 1184K
CASES
Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
SECONDARY MATERIALS
Impact of the DSM-IV to DSM-5 Changes on the National Survey on Drug Use and Health, Substance Abuse and Mental Health Service Administration (US) 2016 June
J.E Grant and S.R. Chamberlain, Expanding the Definition of Addiction: DSM-5 vs. ICD-11 CNS Spectrums. 2016 Aug 21(4) 300-303
Social Security Guide – Version 1.256 17 July 2019
REASONS FOR DECISION
Dr I Alexander, Senior Member
7 August 2019

In June 2010, in the course of his employment, Mr Burgess, who is now 66 years old, suffered severe injuries to his lower limbs which included a crush injury to his right leg, which required below knee amputation. He also suffered fractures and soft tissue injuries to his left foot with the loss of the left great toe.
Mr Burgess received regular compensation payments totalling $99,737.16 until 6 January 2012 and subsequently lump sum payments in March 2012 and December 2013 totalling $1,038,149.90.
At some unspecified time following the injury it appears that Mr Burgess had qualified for Disability Support Pension (DSP). In a letter dated 6 January 2014 he was informed by Centrelink that his DSP had been cancelled because of the compensation settlement.
In a second letter dated 6 January 2014 Centrelink informed Mr Burgess that on consideration of his compensation payment a preclusion period starting on 7 January 2012 and ending on 10 December 2021 (10 years) had been calculated. The letter stated that during this period he was not able to receive income support from Centrelink and that he needed to repay $31,910.93 that he had already received.
In calculating the preclusion period, the weekly compensation payments of $99,737.16 were deducted from the gross settlement amount.
In a letter dated 2 July 2014, Centrelink confirmed the preclusion period and provided the relevant details as to how the calculation was performed.
On 16 April 2018 Mr Burgess lodged a claim for carer payment with respect to the care of his elderly father.[1]
[1] At the hearing Mr Burgess informed that Tribunal that in January 2019 his father had been admitted in to a nursing home following a stroke.
On 22 May 2018 Mr Burgess’ claim for carer payment was rejected because he was “not caring for the caree”.[2]
[2] Section 37 Docs p. 241.
In a letter dated 7 August 2018, following internal review by an Authorised Review Officer (ARO), Centrelink informed Mr Burgess that pursuant to sections 17 and 1169 of the Social Security Act 1991 (Cth) (the Act) his claim for carer payment was rejected and that a compensation preclusion period until 10 December 2021 was applied.
In a decision dated 3 December 2018 the Social Services & Child Support Division of the Administrative Appeals Tribunal (AAT1) affirmed the decision by Centrelink that Mr Burgess’ compensation preclusion period is to end on 10 December 2021.
Mr Burgess, who was self-represented, attended the hearing before this Tribunal by telephone and now seeks review of the AAT1 decision.
ISSUES
At the hearing the Respondent informed the Tribunal that the calculation of Mr Burgess’ compensation preclusion period was incorrect.
Written submissions dated 16 July 2019 were subsequently provided.
The Respondent submitted that the “ARO and AAT1 erroneously deducted weekly compensation payments paid by Workcover Queensland…. This was incorrect given the express terms of the Deed of Release & Discharge dated 13 December 2018[3] which confirmed that Workcover was not entitled to a refund of statutory benefits paid under the claim”.[4]
[3] The Deed was in fact signed on 9/10 December 2013.
[4] The calculation error appears to have been made in January 2014 when Mr Burgess was informed that there was a preclusion period from 7 January 2012 to 10 December 2021.
The Respondent now submits, more than 5½ years after the original notification, that the preclusion should be extended from 7 January 2012 to 31 December 2022 (11 years).
Mr Burgess does not challenge the calculation of the preclusion period and concedes that in 2014 he was fully aware and understood that a compensation preclusion period would be applied.
However, Mr Burgess submits that in his situation there are special circumstances and seeks a reduction in his preclusion period.
Section 1184K provides as follows:
1For 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.
Therefore, the determinative issue in this matter whether there are special circumstances in Mr Burgess’ case which would allow the Tribunal to exercise the discretion under section 1184K(1) and decide that the preferable decision would be that a variation in the compensation preclusion period should be applied.
MR BURGESS’ EVIDENCE
In his application for carer payment dated 30 August 2018 Mr Burgess stated the following:
I am asking for a review because I am looking after my 95 year-old father who has only 10% vision in one eye … the problem for me is I am living off him and he has little in savings…my accident caused me to stay in the PA hospital for over 7 months and I can say it changes a person….I had my leg removed I couldn’t look at it for over 2 mths ….when I got out of hospital all I wanted was to get a long way away from it, in hindsight that was not my best idea because after a few months in Kilkivan I felt isolated. So I started to go to Gympie RSL club and met people but also started to play poker machines …. previous to this I hardly ever went to a club or hotel What started out as trying to meet people ended up sitting in front of a machine and blocking out the rest of the world. By late 2016 I was broke and had to sell my house in Kilkivan and move back to Caboolture and rent a house. I bought a bus which has been converted into a motor home but eventually ran out of money. It was then that my father needed me so I moved to Umina Beach NSW.
The record of a telephone interview between interview between Mr Burgess and the ARO dated 19 August 2018 noted the following:
Mr Burgess explained that following the accident he spent 7 months in hospital including 5 months in rehab. …Mr Burgess wanted to get as far away from the hospital so he moved to Kilkivan about 250 kms away, this was in late 2011. The customer sold his home and bought one in Kilkivan without a mortgage.
Only about 1000 people lived in Kilkivan and the customer had to go to Gympie to go to town.
After about 3 months living in Kilkivan the customer started to gamble on the poker machines at the Gympie RSL club. The money ran out by the end of 2016.
Mr Burgess had to sell the house at Kilkivan and move to rented premises in Caboolture.[5] The customer also bought an old school bus…. The bus has now been converted into a motor home. Then on 8.4.18 customer moved in with his father to take care of him.
Mr Burgess stated that he did understand the preclusion period however he had no plan as to how he would cope during the period. The customer assumed the money would be enough….
I then asked the customer about his gambling and whether he sought any treatment…. … the customer did not seek any help or treatment for the gambling. Mr Burgess did however find comfort in discussing his problems with his father. At the moment he has no desire gamble.
[5] The house was sold in January 2017 – S37 Docs p.202 – ANZ account deposit.
In his evidence to AAT1 Mr Burgess conceded that, over 5 year period, he had gambled over half a million dollars, now found the retelling of his story “demeaning” and acknowledged that his current position was a result of “excessive gambling”.
However, he added that “he had no insight or control”, that it was not his choice to be injured and “endure the medical rehabilitation and pain as a result of his extensive injuries” and that he dealt with the situation “as best as he could”
At the hearing, Mr Burgess confirmed the facts as outlined above but also provided the Tribunal with additional information with respect to his circumstances and gambling behaviour.
Mr Burgess told the Tribunal that he is currently living in his converted campervan which is parked in his son’s backyard. He said that currently has no income and is being supported by his son but that this support is limited and cannot continue until the end of the preclusion period. He said that in 2016 and 2017 he tried to work but his capacity to work has been significantly impeded by his physical disability.
Mr Burgess explained that he had moved to Kilkivan in about October 2011 and started gambling on the poker machines a “month or two after that”. He confirmed that he did not do any other type of gambling apart from the poker machines.
Mr Burgess said that he did most of his gambling at the Gympie RSL club and that the club never questioned him about the amount of his gambling but, in fact, encouraged it.
Mr Burgess explained as follows:
…they induce you to do more gambling by how they are. They treat you differently because you – you know, you gamble and gamble a lot. They treat you way better, you know, give you free beers, give you free meals…give you free things to because you were a good gambler…they keep records…because what these places have is like a rewards point by how much you spend, you get so many points for every dollar you spend and you can cash that back…I might cash in when is 3 to 4 hundred dollars but it might take 7 to 8 thousand dollars to get that …
When asked about his gambling behaviour, Mr Burgess said that he would frequently gamble daily for 3 to 5 days in a row from about 10 am in the morning to 10 pm at night. He would withdraw the daily cash maximum from the club ATM and, when needed, he would reserve his machine, leave the club and go to the nearby ANZ Bank and withdraw up to $4000 at a time. Often, he would also go to the bank before going to the club. He explained that on a single day he would choose one machine for the whole day and if he had a win on the machine he would continue to play because he would think to himself that “I’m in front, I am playing with their money now”.
Mr Burgess told the Tribunal that when he started to run out of money he took out “about $30,000” mortgage on his house but continued to gamble and then, in January 2017, he had to sell his house and still continued to gamble.
Mr Burgess told the Tribunal that he went to see Ms Buller at the suggestion of a “solicitor who was provided by the tribunal”. He indicated that he had seen Ms Buller on three occasions and had “more appointments to go”. He also said that previously he had never considered consulting anyone about his gambling because he didn’t think he had any symptoms.
Mr Burgess explained that he wasn’t the “sort of person to be running off to a doctor” and that his long stay in hospital had been a significant factor in his decision to move to Kilkivan which was “two and a half hours from everybody that I care about and everybody that ever helped me” a decision which he described as “in itself was madness”. He described Kilkivan as a “little town of 1000 people” which was 250 km from Brisbane. He said that he didn’t know anybody in Kilkivan, he lived alone and had only occasional visits from his family
When asked by the Tribunal what he was thinking in the face of such a substantial loss of moneys Mr Burgess responded as follows:
Well, I don’t honestly know, to be honest. I mean at first, with wins and losses it’s the sort of thing you don’t take a lot of notice of because it sort of evens out. You might be a little bit behind, but eventually you’re a lot behind and you probably try to – you probably try to get it back or some back …I didn’t think anything was wrong with me. I knew later on I was starting to get into a desperate position, but I just felt the only way I could get back out of it was to try to win a bit of it back….
OTHER EVIDENCE
The Tribunal has been provided with copies of the statements of Mr Burgess’ ANZ Access Advantage Account (the Account) from 11 October 2012 to 12 January 2018.
Perusal of the statements from October 2012 to December 2017 revealed continuing frequent cash withdrawals from the Gympie RSL ATM (the ATM) and the Gympie ANZ branch bank (the bank).
The ATM withdrawals usually ranged from $400 to $1600 per day and the bank withdrawals from $1000 up to $4000 per day. The withdrawals often occurred daily for one to three days and not infrequently withdrawals were made from the ATM and the bank on the same day.
Between 11 October 2012 and 31 December 2012 more than $13,000 was withdrawn from the Gympie RSL ATM and about $50,000 from the ANZ bank.
During 2013 there were 127 withdrawals from the Gympie RSL ATM for a total of about $51,000, 32 withdrawals from the Brisbane Lions AFC ATM for about $14,000 and regular ANZ bank cash withdrawals of up to $4000 for a total of greater than $100,000.
On 18 December 2015 $35,000, the proceeds of a loan draw down, was deposited in the account.
During 2016 the there was a significant decrease in amounts and frequency of the withdrawals.
On 30 January 2017 $186,806.56, the net proceeds from the sale of Mr Burgess’ house, was deposited in the account.
During 2017 the frequency and amounts of cash withdrawn from the ATM, the bank as well as various other club ATMs significantly increased and returned to a pattern of withdrawal as seen prior to 2016.
In a relatively brief letter dated 13 June 2019 Ms Buller, clinical psychologist, stated inter alia as follows:
Dr Azizul Islam referred Mr Burgess on 7/5/2019, for Clinical Psychology to address a gambling addiction. Mr Burgess fulfilled the diagnostic criteria for Pathological Gambling 312.31 (DSM-IV) which commenced in 2011 and continued until April 2018 when he moved to NSW to care for his aged Father.
This letter was requested by Mr Burgess to support him in his Tribunal Hearing on in July 2019. In particular, Mr Burgess disagreed with statement from a Centrelink employee, who described his gambling as a “lifestyle choice”.
Mr Burgess suffers from symptoms of PTSD related to his workplace injury, which resulted in Right Below Knee Amputation. Unfortunately, he used gambling as a maladaptive coping mechanism to suppress symptoms associated with PTSD, and as a result this has had a great negative impact on his current quality of life and personal wellbeing.
CONSIDERATION
Mr Burgess contends that following his injury he developed a gambling disorder which continued until January 2018 when his money ran out. He submits that as a result of this disorder his circumstances are such that they should be considered to be special circumstances within the meaning of the Act.
Mr Burgess relies on the history of his gambling behaviour and the opinion of Ms Buller.
The Respondent does not dispute the history and extent of Mr Burgess gambling but contends that the gambling was a “lifestyle choice”.
The Respondent submits that little weight should be attributed to Ms Buller‘s brief report because she did not see Mr Burgess during the relevant period, relied on his self- reporting and did not provide a basis for the diagnosis.
The Act does not define what constitutes “special circumstances”.
However, there has been considerable judicial consideration of the phrase in the context of other social security legislation, for example:
·Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other,[6]
·“Special” denotes something different from the usual or ordinary,[7]
·The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. … It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. … But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose,[8]
·The core requirement for "special circumstances" or “special reasons” is that there be something unusual or different,[9]
·the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists.[10]
[6] The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 at 450.
[7] Fischer v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2010) 185 FCR 52, [80] per Ketzmann J, referring to Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per Kiefel J.
[8] Secretary, Department of Social Security v Hales (1998) 82 FCR 154, at 162 per French J.
[9] Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18] per French J.
[10] Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639 per Jacobson J.
In order to determine whether Mr Burgess’ circumstances are “out of the ordinary” such that that they can be considered to be “special circumstances” for the purposes of the Act it is useful to recap and comment on relevant aspects of the evidence before the Tribunal.
At the age of 56 years, Mr Burgess suffered an unexpected severe injury in the course of his employment which resulted in a below knee amputation of his right leg and amputation of his left great toe.
In my view, it would be reasonable to conclude that, in peacetime employment, such a severe injury is relatively uncommon and is likely to have had a significant impact on Mr Burgess’ physical and mental health as well as his lifestyle

As a result of the injury he received two large lump sum compensation payments, with a combined total of more than a million dollars, which was meant to cover his future financial needs for several years. These payments appear to have been made with no specific provisions as to their use and no assistance or advice as to the management of such a large sum.
In 2011, after spending seven months in hospital, Mr Burgess decided to relocate to Kilkivan a relatively remote town in Queensland, where he purchased a property and lived alone.
After a few months Mr Burgess decided to attend the nearest RSL Club, in Gympie, for entertainment and an opportunity to meet other people. He started to gamble socially by playing the poker machines.
Mr Burgess’ quickly gambling increased such that between October 2012 and December 2013 he had withdrawn more $150,000 to support his gambling.
In my view, the evidence clearly demonstrates that Mr Burgess had established a pattern of behaviour, consistent with problem gambling, prior to being informed of the compensation preclusion period in January 2014
Furthermore, it appears that Mr Burgess’ gambling was actively encouraged by the RSL club with inducements of free meals, free beer and a system of cash-back rewards. The club appeared to have no policy of monitoring and intervention with problem gamblers.
Over the next 4 years it is uncontested that Mr Burgess continued to gamble until the money ran out in late 2017.
During 2018, while caring for his elderly father, Mr Burgess stopped gambling and had to rely on his father for financial support.
In January 2019, after his father was admitted to a nursing home, Mr Burgess was forced to seek support from his son and, at this point in time, he has no other means of financial support as he is unable to work.
If the Tribunal accepts the Respondent’s submission, Mr Burgess will be unable to receive any income support from Centrelink for more than another 3 years.
In her brief letter of 13 June 2019, Ms Buller expressed the opinion that between 2011 and April 2018 Mr Burgess suffered a mental health condition which fulfilled the diagnostic criteria for Pathological Gambling (DSM-IV).
It is not clear why Ms Buller chose the diagnostic criteria in DSM-IV rather than the modified criteria for gambling disorder in DSM-5 which was published in 2013.
An important departure for DSM-5 from its predecessors was the inclusion of gambling disorder in the chapter on Substance-Related and Addictive Disorders. Gambling disorder was formerly listed as pathological gambling in the section on impulse control disorders not elsewhere classified.[11]
[11] J.E Grant and S.R. Chamberlain, Expanding the Definition of Addiction: DSM-5 vs. ICD-11 CNS Spectrums. 2016 Aug 21(4) 300-303.
Gambling disorder was relocated because of evidence showing similarities in phenomenology and biology to substance use disorders.[12]
[12] Ibid.
Although the diagnostic criteria for gambling disorder in DSM-5 were also modified, when compared to DSM-IV, the relevant criteria, for present purposes, were essentially the same.[13]
[13] Impact of the DSM-IV to DSM-5 Changes on the National Survey on Drug Use and Health, Substance Abuse and Mental Health Service Administration (US) 2016 June.
Notwithstanding, the apparent limitations of Ms Buller’s report, as submitted by the Respondent, I am satisfied that, between 2011 and 2018, Mr Burgess did suffer from an untreated gambling disorder which has made a significant contribution to his current circumstances.
The fact that Ms Buller did not see Mr Burgess during the relevant period and that she relied on his self-reporting does not dissuade me from accepting the diagnosis.
It is not unusual for a psychiatric diagnosis to be made in retrospect on the basis of a person’s self-report of symptoms and/or behaviour.
In my view, Mr Burgess has provided an uncontested, coherent and honest account of his of his gambling behaviour, corroborated by the ANZ bank statements, which is consistent with a severe gambling problem.
Furthermore, the fact that, despite ruinous financial loss, Mr Burgess sought no assistance for his gambling problem, in my view, lends support to the diagnosis of a gambling disorder.
The proposition that Mr Burgess’ gambling behaviour was a lifestyle choice I find unacceptable.
It follows that I am satisfied that Mr Burgess’ circumstances are “out of the ordinary” and meet the threshold of special circumstances for the purposes of the Act. Therefore, I am satisfied that, in accordance with section 1184K(1) of the Act, part of the preclusion should be waived.
The question as to which part of Mr Burgess’ compensation payment should be treated as “not having been made” is somewhat problematic as the circumstances of the case are such that it is difficult to determine the specific amount to be disregarded.
The obvious amount is the $99,737.16 that was added to the compensation lump sum in the recalculation of the preclusion period as submitted by the Respondent on 16 July 2019.
At this point, I note that this recalculation represented a retrospective correction of an administrative error made by Centrelink in 2014. This error was maintained in at least five documents provided to Mr Burgess up to and including the Secretary’s Statement of Facts and Contentions dated 2 July 2019.
The responsibility for the error clearly lies with Centrelink and the penalty placed on Mr Burgess as a result of Centrelink’s administrative error, is in my view, unfair and. therefore, I am satisfied that the payment of $99,737.16 should be treated as not having been made.
However, on consideration of all the circumstances in this matter I am satisfied that the preferable decision is that a further reduction in the preclusion in warranted.
The particular factors which I consider to be relevant with respect to my decision include Mr Burgess’ untreated gambling disorder, his age, his current severe financial hardship with no apparent prospects of relief, his willingness to continue psychological treatment and the fact that that he has completed almost 8 of the 10 years of the preclusion period that was originally calculated.
In deciding the actual reduction of preclusion period, I note that The Department of Social Services Social Security Guide (SSG)[14] at 4.13.4.10 provides as follows:
The decision to apply the special services provision by the delegate may be made in terms of a reduction in the actual duration of the preclusion period. This would be relevant where there are a number of mitigating factors in the decision and it is not possible to determine any specific amount to be disregarded.
[14] Social Security Guide – Version 1.256 17 July 2019.
In accordance with the provisions of the SSG and a consideration of all the circumstances in the matter, I am satisfied that the preferable decision is that Mr Burgess’ compensation preclusion period should be reduced to approximately 12 months from the date of the hearing, that is, 30 June 2020.
DECISION
The decision under review is set aside and in substitution it is decided that Mr Burgess’ compensation preclusion period should end on the 30 June 2020.

I certify that the preceding 83 (eighty -three) paragraphs are a true copy of the reasons for the decision herein of Dr I Alexander, Senior Member

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Associate
Dated: 7 August 2019

Date(s) of hearing: 8 July 2019

Date final submissions received: 16 July 2019

Applicant: In person

Solicitors for the Respondent: Department of Human Services

[2019] AATA 2429

7 August 2019

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Remedies

Statutory Construction

Standing

Date(s) of hearing:	8 July 2019
Date final submissions received:	16 July 2019
Applicant:	In person
Solicitors for the Respondent:	Department of Human Services