Cameron and Department of Family and Community Services - [2000] AATA 863

DECISION AND REASONS FOR DECISION [2000] AATA 863

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2000/496

GENERAL ADMINISTRATIVE DIVISION )

Re John CAMERON
Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent

DECISION

Tribunal Mrs M T Lewis, Senior Member

Date28 September 2000
PlaceSydney

Decision The decision under review, being the decision of the Social Security Appeals Tribunal dated 2 March 2000, is affirmed.

..............................................
M T Lewis
Senior Member
CATCHWORDS
SOCIAL SECURITY lump sum compensation payment – settlement attributable to loss of earnings – preclusion period - recovery of Newstart Allowance and AUSTUDY paid during preclusion period - whether special circumstances - whether financial hardship suffered – whether appropriate to treat whole or part of monies as not having been paid

Social Security Act 1991 – s 1184(1)

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

28 September 2000 Mrs M T Lewis, Senior Member

This is an application for review of a decision of the Social Security Appeals Tribunal made on 2 March 2000 lodged by John Cameron ("the Applicant") that affirmed a decision of an authorised review officer on 18 October 1999, and a delegate of the Secretary, Department of Family and Community Services ("the Respondent") dated 10 August 1999 to impose a preclusion period from 9 January 1999 to 10 September 1999 and to recover an amount of $4,832.06 from the Applicant's lump sum compensation payment.
The Tribunal had before it the documents provided by the Respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, comprising documents numbered T1 to T22, and supplementary documents tendered at the hearing comprising documents numbered T23 to T34. At the hearing the Applicant tendered a written list of weekly expenses (exhibit A), and statements from ANZ Visa and interest saver account in the name of the Applicant and letter from the ANZ bank to the Applicant dated 28 October 1999 (exhibit B).
The Applicant gave oral evidence at the hearing. He was unrepresented. The Respondent was represented by a Departmental advocate.
The Applicant was granted a lump sum compensation payment of $30,000 on 30 July 1999. This arose from the commutation of his weekly payments (T32) and therefore was found by the Tribunal to have been in respect of loss of earnings.
The Tribunal established at the commencement of the hearing that the only issue to be determined is whether there are special circumstances to treat some or all of the lump sum compensation payment as not having been made.
legislation
Section 1184(1) of the Social Security Act 1991 provides –
(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.

background

The Applicant was born on 7 December 1967. He sustained a stress injury whilst employed as a panel beater on 31 October 1997 and was paid weekly compensation payments until 8 January 1999. He received Newstart Allowance from 7 January 1999 until 21 July 1999, and AUSTUDY payments from 22 July 1999 until 4 August 1999. Whilst receiving compensation the Applicant pursued rehabilitation and employment, in the course of which it was decided that he was unable to return to his previous occupation as a panel beater. He became concerned that he was unable to obtain alternative employment when it was disclosed that he had had a compensation claim, and he decided, with some assistance from the Commonwealth Rehabilitation Service, to pursue further study on his own accord.
The Applicant chose to undertake a Diploma of Environmental Science through the TAFE college at Newcastle, this being the closest course of that nature to his home at Brooklyn. This involved travelling by car from his home to the TAFE college for four and sometimes five days per week, over a distance of 118 km. each way. The course was to be undertaken over a period of two years, and the Applicant expects to complete the course at the end of 2000.
The Applicant acknowledged that he received a letter from Centrelink dated 13 January 1999 (T10) explaining that if he received any payment of weekly compensation or a lump sum compensation payment, some or all of the social security payment paid to him since the date of his injury may have to be paid back, and that any compensation he received may also prevent him from receiving social security payments in the future. He also acknowledged that he received a letter from Centrelink dated 10 August 1999 (T16) explaining that, having been advised of his entitlement to a lump sum compensation payment of $30,000, his preclusion period would commence on 9 January 1999 and end on 10 September 1999, that he would have to repay $4,832.06 which would be deducted from his compensation payment by the insurance company, and that his current social security payment would cease. He was also advised that if he needed to receive social security payments after 10 September 1999 he would need to reapply.
The Applicant's evidence to the Tribunal was that he received an amount of $22,000 from the insurance company, and a further $2,400 from the Health Insurance Commission. He decided to deposit all this money into his interest saver ANZ account because he had been behind with his mortgage repayments and this deposit would then pay off the loan on his house and negate the need for him to pay further mortgage instalments from his social security payments in the future. It also negated his need to pay interest. He said that he could withdraw money from that account (in fixed amounts of $1,000) if he needed it, thus incurring interest. He has in fact done that on one occasion since he deposited the money.
The Applicant said that he expected to be able to live on his savings until the end of his preclusion period, and then to live on his resumed AUSTUDY payments until the end of his course. However, he had not anticipated the sharp increase in the price of petrol that occurred in 2000. He has estimated that he now spends $113.28 per week on petrol (exhibit A), travelling to and from his classes, and using his own car is the only feasible way of travelling to TAFE.
The Applicant said that he has now reached the maximum amount of credit on his ANZ Visa account ($4,000) and he is making the minimum payment of $80 on that per month. He has been loaned a total of $14,000 by his parents, who themselves are on pensions, and he does not consider he can make further demands on them for financial assistance. They have been assisting him ever since he ceased work as a panel beater when he found that his weekly compensation payments were much less than his previous income, and this has continued ever since when he has needed money to pay things like house insurance and car registration. He said that they have indicated to him that they hope he will be able to obtain employment very soon after he has completed his course, inferring that he could then repay the loan.
The Applicant said that he is currently undertaking compulsory work experience with the Hornsby Council during his college vacation, and he is hoping that he will be able to obtain employment there at the end of his course. However that has not yet been negotiated. While he is prepared to travel widely to obtain employment, he hopes to obtain it locally.
In cross-examination, he said that because of the demands of his course,, and the study that he needs to do for it, he has very little time to engage in part-time work. He has explored the idea of renting his house, but having considered the effect that would have on reducing his AUSTUDY payment and needing to obtain alternative accommodation, he understood he would be worse off. He said he has also explored taking in a boarder, but he understood that too would reduce his AUSTUDY income. It is not clear however that he has received the best advice in respect of that latter option, and it could be to his advantage to explore it with Centrelink again.
consideration of evidence and findings of fact
The Tribunal found the Applicant to be a credible witness and genuine in attempting to re-enter the workforce. His efforts to embark on a program to rehabilitate himself through this new study program appear to be feasible and are commendable. The Tribunal finds, on the Applicant's evidence, that his weekly expenses are currently $105 in excess of his income from AUSTUDY. However he is close to the end of his course, and thus to the end of the period he will have to spend $113 per week on petrol.
The Tribunal also finds that the Applicant was well aware of the preclusion period and its implications for him when he chose to repay his mortgage on receipt of the lump sum compensation payment. That was a considered decision that was in no way reckless. Indeed, the Applicant calculated at the time that he would be able to manage financially by doing this. The Tribunal accepts however, that he could not reasonably have predicted the escalation in the price of petrol, nor can he now abandon using his car until he has finished his course. Without the petrol expenses he could manage.
Notwithstanding that, the Tribunal also finds that the Applicant is able to draw down $1,000 amounts from his interest saver ANZ account to supplement the shortfall in his income until he has completed his course. The Tribunal notes that this will incur interest payment, but notes that he is already paying a much higher level of interest on his credit card balance of $4,000. The Tribunal finds that the Applicant's existing financial hardship is likely to be short term, and that he will be available for employment, either in his new career or at least in casual unskilled work by December 2000.
The Tribunal considers that the Applicant has the capacity to manage his financial problems, as outlined above, within his own resources, and that therefore in respect of financial hardship the Tribunal finds that this does not constitute a special circumstance to warrant the reduction in his preclusion period.
The Applicant submitted that there is no precedent representing the particular circumstances that he is experiencing currently. The Respondent submitted that the "whole" of the Applicant's circumstances were not "unusual"; Re Beadle and Director-General of Social Security (1984) 6 ALD 1. It was also argued that it was reasonable for the Applicant to have understood the implications of the advice that was given to him by Centrelink, and that it was his own choice to spend his compensation money in the way he did.
The Tribunal is of the view that, taking each person's circumstances separately as it is required to do, those of the Applicant are not, in the words of Re Beadle (supra) "unusual, uncommon or exceptional" so as to constitute special circumstances, notwithstanding that the Applicant's financial position is distressing for him.
This is not to ignore the personal effort the Applicant has made in pursuing retraining so that he will not continue to need social security payments. He has taken a responsible attitude to planning for his future and is to be commended for that. However a finding that special circumstances exist cannot be a reward for the Applicant's initiative.
The Tribunal therefore will affirm the decision under review.
I certify that this and the 22 preceding paragraphs are a true copy of the decision and reasons for decision herein of Mrs M T Lewis, Senior Member
Signed:         ...........................................
  Associate
Date/s of Hearing  12 September 2000
Date of Decision   28 September 2000
Counsel for the Applicant        N/A
Advocate for the Respondent S,Mantaring, Dept. of Family and Community Services