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

Carden and Secretary, Department of Social Services (Social services second review) [2018] AATA 1499 (31 May 2018)
Division:GENERAL DIVISION
File Number(s): 2017/3757
Re:Aronn Carden
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Member C Edwardes
Date:31 May 2018
Place:Perth

The Tribunal affirms the decision of AAT1 dated 30 May 2017.
........................................................................
Member C Edwardes
Catchwords
Social security – compensation - motor vehicle accident - consent judgement – compensation preclusion period applied – carer’s payment – straitened financial circumstances – ill health – evidence does not support special circumstances – decision affirmed.
Legislation
Social Security Act 1991 (Cth) – ss 17(1)- ss 17(2) - para 17(3)(a) – ss 17(4) – ss 17(8) – ss 1169(1) – para 1170(1)(a) – ss 1170(4) - ss 1171(1) – s 1184 - s 1184G – ss 1184K(1)
Cases
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Massoud v Secretary, Department of Social Services (Social services second review) [2017] AATA 1366
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) [1979] AATA 179
Secretary, Department of Employment and Workplace Relations v Homewood [2006] FCA 779
Secretary, Department of Social Security and Winterbotham [1990] AATA 808
Secondary Materials

The Guide to Social Security Law – Part 4.13.2.60 – Part 4.13.4.10 – Part 4.13.4.20
REASONS FOR DECISION
Member C Edwardes
31 May 2018
INTRODUCTION

On 11 June the Applicant was involved in a motor vehicle accident. (T6 130) (R1)
The Applicant was granted Newstart Allowance from 19 July 2013. His claim for Carer Payment was subsequently granted from this day and he was paid arrears (T17/190) (R1).
The Tribunal notes a ‘consent to judgement’ document signed by Mr Hoe on 5 December 2016 and the defendant’s solicitors which states that the consent to judgement was for “the sum of $300 000 plus costs in the sum of $30 000 plus disbursements in the sum of $24 622.18” (T8 135) (R1)
The Tribunal notes that the Applicant received an additional past payment of $36.30. The correct sum of the compensation figure that the Applicant received was thus $353 658.78 (T2 9), rather than a total of $354 622.18 as noted in paragraph 3.
The Tribunal notes that the Department of Human Services (the Department) states that they were not advised about the Applicant’s compensation claim when the Applicant claimed his carer Payment. On 19 December 2016, Centrelink issued a compensation recovery notice seeking compensation recovery totalling $25 262.00 from the Applicant’s Carer’s payment for the period 19 July 2013 to 19 December 2014. (T9 139) (R1).
The Department determined that 50% of the gross total payment paid to the Applicant of $353 658.48 was recoverable. That is, a total of $176 829.24 was recoverable. The Tribunal notes, that the assessed recoverable amount of $176 829.24 resulted in a 184 week preclusion period from 11 June 2011, ending 19 December 2014. (T9 141)(R1)
A compensation charge amount of $25 262.00 was initially recovered for the period 19 July 2013 to 19 December 2014. This represents the amount of Carer Payment paid to the Applicant during the period 19 July 2013 to 19 December 2014. This amount was repaid to the Department by the Insurance Commission of Western Australia before the compensation moneys were released to the Applicant.
On 13 January 2017, the Department determined that an additional amount should have been included in the charge amount repaid to the Department. This additional amount was $596.31, and was not recovered from Insurance Commission of Western Australia. (T10 144) (R1)
The Tribunal notes and accepts that the total amount of payments made during the compensation preclusion period was $25, 858.31 (T16/176-177)(R1). This includes amounts of Newstart Allowance and Carer Payment. While Newstart Allowance was also compensation affected payment, the Tribunal agrees that the listed payments of Newstart Allowance were effecting for Carer Payment.
On the 23 January 2017 by an Authorised Review Officer (ARO) affirmed the Department’s decision on who found the following:
You suffered an accident on 11 June 2011.
The department was not advised about your compensation claim when you claimed Carer Payment on 19 July 2013.
You were granted Carer payment from 19 July 2013.
On 25 November 2013, you were sent a letter advising you to notify the department within 7 days if you receive, or are likely to receive, compensation.
The department was informed on 16 December 2016 by the Insurance Commission of Western Australia that you were awarded a lump sum compensation payment on 4 December 2016 totalling $353,658.48…
The lost earnings or lost capacity to earn (economic lost) of your settlement was $176,829.24 ($353,658.48/50%).
The department has calculated you are subject to a compensation preclusion period (and that a Social Security payment is therefore not payable to you) from 11 June 23011 to 19 December 2014.
You were paid Carer Payment totalling $25,858.31 in the period 19 July 2013 to 19 December 2014 which needed to be recovered.
An amount of $25,262.00 was repaid to the department on 6 January 2017 by the Insurance Commission of WA.
The outstanding amount of $596.31 has been raised as a debt of $596.31 which you are required to repay.
There are no circumstances that can be described as special to disregard part of your lump sum compensation preclusion period and to allow refund of the compensation charge (T11 145-148) (R1)
On the 27 February 2017 the Applicant applied to AAT1 for a review of the ARO decision.
On the 30 May 2017 AAT1 affirmed the decision of the ARO:
The tribunal concluded therefore that the compensation preclusion period and the compensation recovery charges were correctly applied.
The tribunal determined Mr Carden’s circumstances are not special so as to warrant the reduction of the preclusion period (T2 6-13) (R1)
On the 29 June 2017 the Applicant applied to the General Division of the Tribunal for a second review of the AAT1 decision dated 30 May 2017.
ISSUES FOR DETERMINATION
The issues in this matter are:
a)Whether a compensation preclusion period applies;
b)Whether Carer Payment paid during the preclusion period was correctly recovered; and
c)Whether it is appropriate, in the special circumstances of the case, that part or all of the compensation payment be treated as not having been made (in order to reduce the length of the compensation preclusion period).
RELEVANT LEGISLATION AND PRINCIPLES
The Tribunal notes relevant legislation in the Social Security Act 1991 (the Act).
The Tribunal also notes policy contained in the “Guide to Social Security Law” (the Guide). The Tribunal notes that the Guide should be applied in the absence of cogent reasons not to do so (Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 645).
The principles underpinning the relevant provisions and the objectives of the Social Security Act more generally have recently been put by Senior Member Sosso in Massoud v Secretary, Department of Social Services (Social Services Second Review) [2017] AATA 1366 (the Massoud decision) as follows:
12.The Act contains provisions dealing both where a person, the recipient of social security payments, receives a lump sum compensation and where a person who has received a compensation payment subsequently applies for social security.
13.The Act is focused either on recovery of social security paid, or preventing the payment of social security during the preclusion period. The principle underpinning these provisions is that “double dipping” should not be allowed, and that a person should not simultaneously obtain the benefit of a compensation payment and also receive the benefit of a social security pension or allowance.
14. The Commonwealth Parliament enacted legislation with the specific objective of ensuring that if a person receives a compensation payment for economic loss, the recipient should draw on those funds for a reasonable period before again benefitting from social security payments.
15. This overriding objective was explained by Deputy President Burns in Secretary, Department of Social Security and Winterbotham [1990] AATA 808 as follows:
“This particular piece of legislation…was aimed specifically at preventing those people receiving compensation for loss of income because of incapacity for work, from being able also to receive benefit from the public purse…Primary responsibility for the payment of such compensation lies at the feet of those responsible for the compensable injury. Once that responsibility has been met, by way of a settlement sum agreed to by both parties, it is inequitable for the recipient to seek supplementary funds from the taxpayer.
Part 4.13.4.10 of the Guide relevantly states:
The compensation recovery provisions of social security law are designed to ensure that people who receive compensation for a loss of income do not also receive income support from the Australian Government in respect of the same period of time.
Note: The special circumstances provisions should not be used to override this basic legislative intention.
Whether a compensation preclusion period applies
Compensation is defined in subsection 17(2) of the Act to mean:
(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 under such a scheme; or
(c) a payment (with or without 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 Carer Payment paid during the preclusion period was correctly recovered.
Subsection 1169(1) of the Act provides:
If:
(a)a person receives or claims a compensation affected payment; and
(b)the person receives a lump sum compensation payment;
the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.
Under subsection 17(1) of the Act, “compensation affected payment” includes a Carer Payment.
Whether Carer Payment paid during the preclusion period was correctly recovered
In summary, paragraph 1170(1)(a) states, if a person did not receive periodic compensation payments, the lump sum preclusion period is the period that begins on the day on which the loss of earnings or loss of capacity to earn began…
The length of the preclusion period is calculated according to subsection 1170(4) of the Act:
The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
·The compensation preclusion period is calculated according to the “compensation part of the lump sum.” This amount is determined according to paragraph 17(3)(a), which provides:
(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 judgment being entered in respect of the settlement or otherwise;
·The income cut out amount is defined in subsection 17(1) of the Act as “…the amount worked using the formula in subsection (8) of the Act, as in force at the time when the compensation was received….”
Section 1184 of the Act provides that Centrelink can send a recovery notice of a compensation payer
Section 1184G of the Act states:
… If the Secretary gives a person a notice under section 1184 that the Secretary proposes to recover a specified amount from the person, the specified amount is a debt due by the person to the Commonwealth
Whether it is appropriate, in the special circumstances of the case, that part or all of the compensation payment be treated as not having been made (in order to reduce the length of the compensation preclusion period
Subsection 1184K(1) of the Act provides that:
Secretary may disregard some payments
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.
The Tribunal notes Senior Member Sosso’s commentary Massoud:
[30] “Special circumstances” is not defined in the Act, but it has generally been accepted that “special circumstances” are “unusual, uncommon or exceptional” or “markedly different from the usual run of cases” per Toohey J, Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3. The discretionary nature of the “special circumstances” provision requires a consideration of the particular facts and merits of each case. Certainly, in undertaking this exercise the Tribunal is required to consider the scope and purpose of the compensation preclusion provisions so as to avoid making determinations that would frustrate the legislative intent—Re Ivovic (1981) 2 ALN 95.
[31] However, Branson J cautioned against overstating the test by emphasising “exceptional” —Ryde v Secretary, Department of Family and Community Services [2005] FCA 866. Her Honour said (at [26]):
the statutory requirement for ‘special circumstances’ discloses an intention to proscribe waiver in ordinary cases. The hardship or unfairness…must be understood to be hardship or unfairness sufficient to justify departure from the general rule in the particular case.
[32] This approach was also endorsed more recently by Besanko J in Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; 100 ALD 9 at [33]:
…the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.
[33] Although these cases concern different provisions in the Act their approach to what constitutes special circumstances applies with equal force to those words in s 1184K—Secretary, Department of Social Security v Hulls (1991) 22 ALD 570 at 580–581 per O’Loughlin J.
[34] Finally, reference can be made to the decision of French J (as he then was) in Secretary, Department of Employment and Workplace Relations v Homewood [2006] FCA 779; 91 ALD 103. His Honour outlined how the Tribunal should address the question whether special circumstances in the context of s 1184K exist (at [34]):
The decision before the Tribunal in this case arose under s 1184K of the Act. It was necessary to the exercise of the power conferred by that section that the Tribunal identified ‘special circumstances of the case’ in which it thought it ‘appropriate’ to treat the whole or part of the relevant compensation payment as not having been made. In giving its reasons for a decision under that section to treat the whole or part of a compensation payment as not being made it would be expected, consistently with s 43, that the Tribunal would:
1   Identify the circumstances of the case which it found to be ‘special’ and the reasons for which it arrived at that finding.
2     Explain why, in the special circumstances so found, it thought it appropriate to treat the whole or part of the compensation payment as not having been made.
3     Explain why it selected the particular quantum (i.e. the whole or part) of the compensation payment as not having been made.
The Tribunal notes instruction 4.13.4.20 of the Guide. This instruction states that the Applicant’s health may be considered in determining whether subsection 1184K of the Act could be exercised in the Applicant’s situation. Some general principles for delegates to follow include:
·The Applicant’s state of ill health should be more severe than the majority of disability support pension recipients.
·The injury that the Applicant received compensation for cannot generally be regarded as a special circumstance.
·Current medical reports should be provided of the conditions that the individual/family member has and the impact of these conditions should be outlined.
The Tribunal further considers that the Applicant’s financial circumstances should be exceptional when considering whether there are “special circumstances” within the meaning of the Act to warrant a decision by the Respondent to recover monies. (Colaiacolo and Secretary, Department of Social Security [1985] AATA 91)
EVIDENCE
The matter was heard in Perth on 23 April 2018. The Applicant appeared in person and was self-represented. The Secretary was represented by Ms Jones – Bolla of Sparke Helmore Lawyers.
The Tribunal received the following evidence:
·Exhibit A1 – Aronn Carden witness statement.
·Exhibit A2 – Report from Dr Michael Benson.
·Exhibit A3 - Email from Aronn Carden received 05/10/2017.
·Exhibit A4 - Email from Dr Michael Benson dated 3 July 2017
·Exhibit A5 - Letter of Dr Michael Benson dated 3 July 2017.
·Exhibit A6 - Witness statement of Aronn Carden received 28/08/2017.
·Exhibit A7 - Hearing Certificate dated 22/02/2018.
·Exhibit A8 – Additional evidence received on day of hearing 23/04/2018.
·Exhibit R1 – T documents received 03/04/2018.
·Exhibit R2 – Secretary’s Statement of facts and contentions (SOFIC) dated 21 October 2017.
·Exhibit R3 – Secretary’s list of authorities.
·Exhibit R4 – Attachment A received 24/10/2017.
·Exhibit R5 – Hearing Certificate received 02/03/2018.
·Exhibit R6 – Cases submitted by SDSS in regards to decision received 23/04/2018.
The Tribunal has reviewed all of the material before it. The Tribunal is satisfied that all relevant evidence was before it and that both parties were provided an opportunity to address the evidence, either orally or in writing. Relevant aspects of the evidence and material before the Tribunal will be analysed and referred to below.
The Applicant gave the following oral evidence at hearing dated 23 April 2018.
The Secretary contends:
20. Part 3.14 of the Act provides for the effect on a person's social security payment if the person is entitled to or receives compensation.
Lump Sum and Compensation Amount
21. Compensation is defined in s 17(2) of the Act to mean:
(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 under such a scheme; or
(c)a payment (with or without 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 and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.
22. The Secretary contends that the lump sum of $353,622.18 for which judgment was entered on 14 December 2015 (TB/137) was compensation as it was made partly in respect of loss earnings or capacity to earn (TB/134).
23. The Secretary accepts that the "additional" amount of $36.30 recorded by the compensation payer appears to be a component of the $23,622.18 of "disbursements" in the settlement agreement (TB/135). Accordingly, it is reflected in the gross amount of $353,622.18 and need not be added to it.
24. The compensation preclusion period is calculated according to the compensation part of the lump sum. This amount is determined according to s 17(3), which provides:
Subject to subsection (4), 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; or
25. Accordingly, the compensation part is 50% of $353,622.18 or $176,811.09. Compensation Preclusion Period
26. Section 1169 of the Act provides that a compensation affected payment is not payable to a person during a compensation preclusion period. Carer Payment is included in the definition of compensation affected payment ins 17(1).
27. As the applicant did not receive periodic payments, the lump sum preclusion period begins on the day on which the loss of earnings or loss of capacity to earn began: s 1170(3). The compensation payer stated that this day was the day of the injury, 11 June 2011 (TB/134).
28. The length of the period is calculated according to s 1170(4):
The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
Compensation part of lump sum Income cut-out amount
29. The income cut-out amount is defined in s 17(1) as the amount worked out using the formula in subsection (8), as in force at the time when the compensation was received. This amount was $959.10 at the relevant time (T16/174).
30. 176,811.09 divided by 959.1 is 184.35. Pursuant to s 1170(5), this number is rounded down to the nearest whole number, producing a period of 184 weeks.
31. The 184 week period commencing on 11 June 2011 ends on 19 December 2014 and this is the compensation preclusion period.
32. The total amount of payments made during the compensation preclusion period was
$25,858.31 as worked out at T16/176-177. This includes amounts of Newstart Allowance and Carer Payment. While Newstart Allowance is also a compensation affected payment, for completeness, the Secretary submits that the listed payments of Newstart Allowance were effectively for Carer Payment. This is for the following reason.
33. The applicant was first in receipt of Newstart Allowance before his claim for Carer Payment was granted from the same day. When Carer Payment was granted, this effectively replaced the earlier entitlement and the applicant was paid arrears to make up the difference between the two rates of payment.
34. On 19 December 2016, a notice was sent to the insurer under s 1184 of the Act seeking recovery of the amount of $25,262.00. This amount purported to represent the amount of compensation affected payments received as required by s1184A(a). This became a debt to the Commonwealth under s 1184G and departmental records indicate that it was paid.
35. On 13 January 2017, it was determined that the correct amount of compensation affected payments received during the preclusion period was $25,858.31. This meant that the applicant had received an additional $596.31 which had not been payable to him by force of s 1169 and this amount was a debt to the Commonwealth”.
In respect to “Special Circumstances” the Respondent makes the following submissions:
36. Subsection 1184K(1) provides that:
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;
(c)if the Secretary
(d)thinks it is appropriate to do so in the special circumstances of the case.
37. The phrase "special circumstances" has been the subject of exposition judicially and by this Tribunal. In Beadle, Toohey J said (in his capacity as Presidential Member):5
An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of the cases. This is not to say that the circumstances must be unique but they have a particular quality of unusualness that permits them to be described as special.
4 Newstart Allowance became not payable on grant of Carer Payment: s 614(2). Carer Payment is defined as a social security pension in s 23.
5 Beadle and Director-General of Social Security (1984) 6 ALD 1, 3.
38. In Boscola, French J said of the requirement that:
It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened. ... The core of the requirement for "special circumstances" or "special reasons" is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course.
39. policy states at 4.13.4.10 that the discretion would not usually be applied when the person has sufficient liquid assets to support themselves, and their family if applicable, for the duration of the preclusion period (T4/82). The Tribunal has previously considered that financial circumstances must be exceptional in order to be relevant to consideration of the discretion.
40. In Hales, speaking in the context of debt recovery, French J emphasised the requirement for flexibility so as not to erode the useful purpose of the similar discretion in s 1237AAD of the Act. However, he noted that:
It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. 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.
41. The applicant has submitted a number of matters for consideration by the Tribunal (T14/154; T1/3; Attachment A) and the Secretary's response to each is below. It is relevant to consideration of the discretion that the applicant does not contend he is in present financial hardship. Were he to do so, it is not apparent that his financial circumstances are exceptional given that he and his wife both receive social security pensions.
Inappropriateness of calculation
42. The applicant submits that the calculation of the compensation amount used to determine the preclusion period is inappropriate or unfair because:
(a)The net amount he received was $250 thousand.

Past and future economic loss components should be distinguished.
(b)Payments made past the age of 65 are not means tested pursuant to Constitutional amendment.
43. As stated in the Guide at instruction 4.13.2.60, the policy underlying the compensation recovery regime is that a person who is compensated for loss of income should not receive an income support payment during the same period (T4/74). Deputy President Forgie said in Groth:
It seems to me that the purpose of the provisions is to ensure that a person is not paid from two sources in respect of the same period of time. What are special circumstances must be considered against that background.
44. When compensation is received as a lump sum, no distinction is drawn between compensation for past and future economic loss. The preclusion period starts from the date of the compensable injury and has duration based on the amount of compensation, ensuring that all income support recipients are treated equally.
45. The amount of the settlement which was for economic loss was indicated by the insurer to be $249,420 (TS/134). The applicant's solicitor estimated that the economic loss component of the compensation was "no less than $175,000" (T13/153). The Secretary submits that the "50% rule" in s 17(3) of the Act, based on the gross amount of the settlement, does not produce unfairness in this case. The figure it produces of
$176,811.09 is almost identical to the estimate by the applicant's solicitor and significantly lower than the amount indicated by the insurer.
46. The applicant's Constitutional argument is misconceived. The Constitution was amended in 1946 to insert a new placitum of federal legislative power ins 51(xxiiiA). This enabled the passage of new laws concerning a broad range of matters of social welfare. There is no provision in the Constitution which provides that social security payments to recipients above the age of 65 must not be means tested. While it is therefore irrelevant, the applicant had not attained this age during the compensation preclusion period anyway.
Ill health
47. The applicant submits that:
(a)His wife has serious health problems and he is her carer, preventing him from working.
(b)He has health problems including the injury to his arm as well as heart disease and diabetes.
48. The Secretary contends that the applicant receives Carer Payment due to his wife's ill health, and she Disability Support Pension. Carer Payment is paid because the significant daily care the applicant provides prevents him from working. It is not unusual or unfair for Carer Payment not to be payable to the applicant during a compensation preclusion period. As stated above, the evident Parliamentary intention is that a person not receive (sic) income support at the same time as they have been compensated for lost earnings.
49. The ill health described by the applicant includes the injury for which he received compensation as well as other conditions. It is not apparent that the applicant's state of health is unusual or out of the ordinary in comparison to other income support recipients or other Australians of his age to such an extent that the discretion should be engaged.
Medical expenses
50. The applicant submits that:
(a)He needs new medical equipment.
(b)His wife requires surgery which she could receive sooner as a private patient.
51. The Secretary contends that the applicant has not provided adequate evidence of either of these matters. Were he to do so, the Secretary submits that they are not special circumstances which would make it appropriate to apply the discretion in s 1184K.
52. Regarding the surgery, a preference to receive treatment privately when it is accessible through the public system should not be accepted as a special circumstance.
53. In the case of the medical equipment, the applicant gave evidence to the AAT1 that he applied $200 thousand of the compensation payment towards the purchase of a home (T2/11 at [29]). Securing stable accommodation in this way, rather than renting, is surely of benefit to the applicant and his wife. However, if it means that liquid assets which could otherwise have been applied to the applicant's medical expenses are no longer available, this represents the exercise of choice by the applicant. It is not a special circumstance.
Theft of superannuation
54. Finally, the applicant has submitted that his accountant stole $40 thousand of superannuation and died in prison so this was not recovered. The applicant has not provided evidence of the offending and its circumstances, such as when it happened and whether any restitution was ordered or made.
55. The Secretary accepts that the event described by the applicant would be unfortunate given the purpose of compulsory superannuation. However, it is not clear why he would not have a remedy in a claim against the accountant's employer or professional indemnity insurer or against his superannuation fund (depending on the circumstances of the offending). In any case, the applicant does not contend present financial hardship.
Conclusion
56. The Secretary contends that, having regard to the entirety of the applicant's circumstances, they do not amount to special circumstances which would make it appropriate to treat part or all of the compensation payment as not having been made…
The Tribunal notes the Applicant’s testimony under cross examination, including evidence that the Applicant:
·did not dispute the policy, methodology and calculation of the preclusion period;
·had never budgeted for the sum of $25,851.31 as a debt arising out of his lump sum compensation payment;
·questioned the legitimacy of the deduction;
·stated that he required money for the health care of his wife;
·stated that in 2012, his wife suffered from a cerebral haemorrhage. This resulted in her being in a coma for 5 months;
·stated that his wife’s rehabilitation took 6 months;
·stated that his wife has balance, gait difficulties and memory failure;
·stated that his wife has a number of abnormalities in her left foot;
·stated that his wife is currently provided with fortnightly domestic assistance;
·stated that he is his wife’s carer and he receives a carer payment;
·stated his wife currently receives a disability support pension;
·claims that he has medical problems, including an injury to his arm, diabetes and a heart disease.
·does not dispute income and assets statement produced;
·in conjunction with Keystart, purchased a home which he funded through his compensation claim. The property that the applicant purchased cost $400,000. The Applicant paid $200 0000 of the $400 000 from the amount that he received from his compensation claim;
·stated that he is currently undergoing a finally difficult time.
·stated he was receiving rental assistance from the State government prior to the purchase of the property in Baldivis.
CONSIDERATION
Whether a compensation preclusion period applies
The Tribunal notes that the Applicant received compensation payments as defined by subsection 17(2) of the Act, being the $300,000 plus costs $30,000, plus disbursements of $23,622.18 9 (lump sum compensation payment). (T8 135) (R1) The Tribunal notes, pursuant to subsection 17(1) of the Act, the Applicant received a lump sum compensation payment. Thus, pursuant to subsection 1169(1) of the Act, the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.
Whether Carer Payment paid during the preclusion period was correctly recovered
Pursuant to subsection 1170(3) of the Act, as the Applicant did not receive periodic payments, the lump sum preclusion period begins on the day which the loss of earnings or loss of capacity to earn began, that is, the Tribunal agrees that the lump sum preclusion period begins on 11 June 2011.
The Applicant’s lump sum compensation payment equated to a total of $353, 658.48 (as noted in paragraph 3). Pursuant to subsection 17(3) of the Act, the Tribunal therefore considers that the lost earnings or lost capacity to earn (economic loss) component of the Applicant’s settlement was $176, 829.24 ($353, 658.58 / 50%).
The Tribunal notes that the length of the preclusion period is calculated according to subsection 1170(4) of the Act:
The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
The Tribunal is satisfied that the Department followed the legislative requirements in the way in which processed the Applicant’s compensation payment. The Tribunal is satisfied that the ‘compensation part of lump sum’ pursuant to subsection 17(3) of the Act equated to $176 829.24, and that the ‘income cut out amount’ equated to 959.10 (T16 174). The Tribunal agrees with the Respondent’s contentions that the relevant preclusion period in relation to the Applicant was 184 weeks.
Whether it is appropriate, in the special circumstances of the case, that part or all of the compensation payment is treated as not having been made (in order to reduce the length of the compensation preclusion period).
The Tribunal will now turn its mind to determine whether evidence before it demonstrates “special circumstances” which might result in the “preclusion period” being shortened.
Consideration of health issues
The Tribunal notes the Applicant’s contentions in relation to the Applicant’s ill health, and the Applicant’s wife’s ill health. The Tribunal considers that section 1184 of the Act contemplates ill health as a further factor that can constitute a ‘special circumstance.’
Part 4.13.4.20 of the Guide particularly states that the Applicant’s state of ill health should be more severe than the majority of DSP recipients and that the injury that a person received compensation for could not generally be regarded as a special circumstance. The Tribunal also notes that current medical evidence should be provided in support detailing the relevant conditions and their impact.
The Tribunal notes commentary in paragraph 70 of the Massoud decision.
The Applicant is in bad health, but in most cases involving a preclusion period that would be expected. The fact that an applicant has been injured and received a compensation payout usually results in that person being in ill health during the preclusion period or immediately thereafter. The various Tribunal determinations focus on the consequences of that ill health in making a determination as to special circumstances. In short ill health is the starting point of the exercise, not the determining factor. Further, it is usually the case when determining that ill health is a special circumstances, the ill health being experienced by an applicant is more severe than the majority of DSP recipients.
The Tribunal notes that:
·The Applicant and his wife are not well and that she has had significant debilitating medical conditions (A2-A4).
·The Applicant himself has a severe left arm injury, heart disease and diabetes.
·The Applicant’s wife receives a disability support pension.
·The Applicant receives a carer’s payment.
·The Applicant received a lump sum compensation payment for an injury to his arm.
·The Respondent claims the Applicant’s ill health includes an injury for which he has been compensated and therefore his condition is not unusual to those who are in receipt of such income support.
·The Tribunal notes that the above are primarily assertions of the Applicant and that no independent evidence had been provided in respect to his medical condition.
Consideration of Applicant’s difficult financial circumstances
Tribunal notes the Applicant’s oral contentions in relation to his difficult financial circumstances:
·The Applicant claimed that he and his wife need ongoing medical care, and possibly surgery. The Applicant stated that such medical costs would be very costly, and that he had never envisaged that approximately $26,000 would be deducted from his lump sum pay out.
·The Applicant claims that his wife needs surgery, which could occur earlier if she had access to private health care coverage.
·The Applicant claims that he is in need of new medical equipment which is quite expensive.
·The Applicant claims that his accountant has stolen $40,000 of his superannuation and has since died in prison.
·On the 19 December 2016 the Applicant was advised by Centrelink of their intention to deduct $25,262.00 from his lump sum compensation.
·That after having been advised by Centrelink of the deduction, the Applicant put $200,000 towards the purchase of a Keystart property.
·The Applicant was receiving rental assistance from the State government prior to the purchase of the property in Baldivis.
The Tribunal finds that it has inadequate independent evidence to corroborate the assertions of the Applicant in paragraph 46 of this decision.
The Tribunal notes that the Applicant and his wife had pre-existing medical conditions prior to receiving the lump sum compensation payment.
The Tribunal agrees with the Secretary’s contentions that the purchase of the property was a choice made by the Applicant.
The Tribunal is of the opinion that the Applicant could have continued receiving rental assistance and using the $200,000 that he received from the Department for medical purposes, or the Applicant could have provided less money towards the purchase of the property. The Tribunal considers that these were his decisions.
CONCLUSION
The Tribunal does not find the Applicant’s condition is exceptional, unusual or uncommon.
There is no evidence before the Tribunal to show that the Applicant’s circumstances were significantly different to those receiving carers’ payment and DSP.
The Tribunal, on the basis of having considered all the evidence and circumstances of this case, concludes that:
·A compensation preclusion period applied;
·The carer payment paid during the preclusion period was correctly recovered; and
·Section 1184K of the Act does not apply to the Applicant’s situation.
DECISION
The Tribunal affirms the decision of AAT1 dated 30 May 2017.

I certify that the preceding 54 (fifty-four) paragraphs are a true copy of the reasons for the decision herein of Member C Edwardes

........................................................................
Associate
Dated: 31 May 2018

Date(s) of hearing: 23/04/2018

Applicant: In person

Solicitors for the Respondent: Daphne Jones-Bolla

[2018] AATA 1499

31 May 2018

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Jurisdiction

Procedural Fairness

Remedies

Statutory Construction

Date(s) of hearing:	23/04/2018
Applicant:	In person
Solicitors for the Respondent:	Daphne Jones-Bolla