Casey Carter and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2010] AATA 554
•23 July 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 554
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/1716
GENERAL ADMINISTRATIVE DIVISION ) Re Casey Carter Applicant
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
Respondent
DECISION
Tribunal Senior Member Jill Toohey Date23 July 2010
PlaceSydney
Decision The decision under review is affirmed. .....................[sgd].........................
J Toohey
Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension (permanent blindness) – compensation preclusion period – whether compensation recovery provisions should be applied to the blind pension - whether there are special circumstances – decision under review affirmed.
Social Security Act 1991, ss 17, 94, 95, 1169, 1170, 1184
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security (1985) 7 ALD 670
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Holmes and Secretary, Department of Family and Community Services [2005] AATA 812
Jess v Scott (1986) 12 FCR 187
Morgan and Secretary, Department of Family and Community Services [1999] AATA 168
Parezanovic and Secretary, Department of Social Security [1993] AATA 174
Secretary, Department of Employment and Workplace Relations and Streckfuss [2006] AATA 317.. See also
REASONS FOR DECISION
23 July 2010 Senior Member Jill Toohey Background
1. Ms Casey Carter has received a Disability Support Pension (DSP) since 1988. Since March 2003, she has received a DSP (permanent blindness) on account of a genetic condition which renders her legally blind.
2. In January 2006, Ms Carter was injured in a motor vehicle accident. Her claim for compensation was settled in November 2009 for $311,000 inclusive of all costs. In December 2009, after deductions and payments to Medicare, Centrelink, and her workers compensation insurer, Ms Carter received $165,452.33.
3. As Ms Carter’s compensation payment include a component for economic loss, Centrelink decided that she was subject to a period (the preclusion period) applied during which time she was not entitled to receive DSP (permanent blindness). Centrelink calculated the period to be from 16 August 2007, when Ms Carter’s weekly workers compensation payments ceased, to 23 March 2011. The period was calculated by applying the relevant formula in the Social Security Act 1991 (the Act).
4. Between 16 August 2007 when her workers compensation payments ceased, and 16 November 2009, Ms Carter received $27,640.87 in DSP (permanent blindness) payments. As she had received these payments within the preclusion period, Centrelink recovered $27,640.87 by way of a deduction from Ms Carter’s compensation payment.
5. Ms Carter disputes the calculation of the preclusion period. In particular, she says:
(i)the preclusion period should be calculated by reference only to what she actually received in her hand, being $165,452.33;
(ii)that DSP (permanent blindness) is not a “compensation affected payment” within the meaning of the Act, and that Centrelink should not have recovered the amount of $27,640.87 from her compensation payment; and
(iii)that medical and other expenses deducted from her compensation payment should be disregarded when calculating the preclusion period because those amounts were paid to medical providers and not to her.
6. By the time of the hearing of Ms Carter’s application to this tribunal, the compensation payment had all been spent and the preclusion period imposed by Centrelink means that Ms Carter is not entitled to receive DSP (permanent blindness) until 23 March 2011. She is now struggling financially and asks that the remainder of the preclusion period be waived on account of her special circumstances.
7. On 19 February 2010, the Social Security Appeals Tribunal (SSAT) affirmed Centrelink’s decision to impose a preclusion period from 16 August 2007 to 23 March 2011 and to recover $27,640.87 from Ms Carter’s compensation payment. The SSAT also decided there were no special circumstances on account of which the preclusion period should be waived. Ms Carter seeks review of the SSAT’s decision.
The issues
8. I have to determine the following:
(i)whether the compensation preclusion period has been correctly calculated as lasting from 16 August 2007 to 23 March 2011;
(ii)whether the amount of $27,640.87 paid to Ms Carter between 16 August 2007 and 16 November 2009 should have been recovered; and
(iii)whether there are special circumstances by reason of which some or all of the preclusion period should be reduced or waived.
Has the period been correctly calculated and should Centrelink have recovered $27,640.87
9. These questions are related and I will deal with them together.
10. A person who receives compensation may be precluded by the Act from receiving a Centrelink payment for a period of time. Compensation includes a payment, with or without admission of liability, in settlement of a claim for damages for lost earnings or earning capacity: s 17(2)(c).
11. Section 17(1)(a) provides that “a disability support pension” (DSP) is a compensation affected payment. A compensation affected payment is not payable during a lump sum preclusion period: s 1169(1). That period is calculated according to the rules in s 1170 of the Act.
12. Ms Carter contends that DSP (permanent blindness) is not a compensation affected payment and that the sum of $27,640.87 should not have been recovered from her compensation payment. She says that DSP (permanent blindness) is dealt with separately from other categories of DSP under the Act and that, as distinct from DSP, DSP (permanent blindness) is not subject to income and assets tests.
13. Ms Carter is correct in saying that DSP (permanent blindness) is treated differently under the Act from DSP. The criteria for eligibility for DSP are in s 94 of the Act and include an impairment of a particular rating and a continuing inability to work. The criteria for eligibility for DSP (permanent blindness) are in s 95 of the Act and include permanent blindness, and age and residency criteria. The rate of payment of DSP (permanent blindness) is calculated differently and it is not subject to income and assets tests. Ms Carter is also correct in saying that DSP (permanent blindness) is not listed as a separate compensation affected payment in s 17(1).
14. It does not follow, however, that DSP (permanent blindness) is not “a disability support pension” and therefore a compensation affected payment under the Act. The Tribunal has considered this argument previously: Parezanovic and Secretary, Department of Social Security [1993] AATA 174; Morgan and Secretary, Department of Family and Community Services [1999] AATA 168; Holmes and Secretary, Department of Family and Community Services [2005] AATA 812; Secretary, Department of Employment and Workplace Relations and Streckfuss [2006] AATA 317.
15. I agree with the reasons in the decisions above. The fact that DSP (permanent blindness) is a separate payment under the Act does not change the fact that it is a disability support pension and, therefore, a compensation affected payment as defined in s 17(1).
16. As the Tribunal pointed out in Morgan (above), the fact that DSP (permanent blindness) is not subject to income and assets tests but is nevertheless affected by receipt of a compensation payment may be anomalous, but that is a matter for Parliament.
17. In relation to Ms Carter’s claim that medical and other expenses should not be taken into account when calculating the preclusion period, s 17(4) of the Act makes clear what is to be deducted from a compensation payment before applying the preclusion period formula:
(4) Where a person:
(a) has received periodic compensation payments; and
(b) after receiving those payments, receives a lump sum compensation payment (in this subsection called the LSP); and
(c) because of receiving the LSP, becomes liable to repay an amount (in this subsection called the Repaid Periodic Compensation Payment -- RPCP) equal to the periodic compensation payments received;
then, for the purposes of subsection (3), the amount of the lump sum compensation payment is: LSP – RPCP
18. Moreover, s 17(5) specifically provides:
A person receives compensation whether he or she receives it directly or whether another person receives it, on behalf of, or at the direction of the first person.
19. The formula as Centrelink applied it to Ms Carter’s compensation payment is set out in detail in the decision of the SSAT. Ms Carter does not take issue with how Centrelink applied the formula itself, only with the amount of the compensation payment to which it was applied. I am satisfied that the formula was correctly applied to the lump sum compensation payment.
20. I accept that Ms Carter sincerely believes that the formula has been incorrectly applied in her case but I do not accept her arguments. I am satisfied that the preclusion period has been correctly calculated. Centrelink correctly deducted from Ms Carter’s compensation payment the sum of $57,815.01, being workers compensation payments she had received, and applied the formula to the remaining lump sum compensation payment to arrive at the applicable preclusion period.
21. Ms Carter claims that because her medical expenses were paid directly to her workers compensation insurer by her motor vehicle insurer and she never received this money ‘in her hand’, these expenses should also be deducted from the lump sum compensation payment. Nothing in sub-section 17(4) or 17(5) would allow for deductions to be made in respect of money paid for Ms Carter’s medical expenses in applying the formula. The fact that payments were made to another insurer makes no difference.
22. Centrelink was also correct in recovering from Ms Carter the amount of DSP (permanent blindness) paid during the preclusion period.
Are there special circumstances by reason of which some or all of the preclusion period should be reduced or waived?
23. Section 1184K(1) of the Act provides that the Secretary may treat the whole or part of a compensation payment as not having been made if the Secretary thinks it appropriate to do so in the special circumstances of the case.
24. In December 2009, Ms Carter sought internal review by Centrelink of the decision to impose the preclusion period. At that time, her grievance lay essentially with the manner in which the preclusion period had been calculated. The review officer considered there were no special circumstances by reason of which the preclusion period should be reduced or waived, but that is not surprising, given that Ms Carter had only just received the lump sum.
25. At the time of the SSAT hearing on 19 February 2010, Ms Carter had approximately $30,000 remaining from her compensation payment. From the SSAT’s statement of reasons, it appears that Ms Carter’s appeal was concerned mainly with the calculation of the lump sum but it is also apparent that, although she was not “financially desperate”, Ms Carter was concerned about how she would manage for the remainder of the preclusion period. The SSAT noted that $30,000 was more than Ms Carter would have received annually by way of DSP (permanent blindness) and was not satisfied that there were special circumstances which meant that some or all of Ms Carter’s compensation payment should be disregarded and the preclusion period reduced or waived.
26. By the time Ms Carter lodged her application to this tribunal on 29 April 2010, nothing was left of her compensation payment. She gave evidence that it has been used as follows.
27. When she received the cheque for $165,452.33 in December 2009, Ms Carter had to repay her solicitors $5000 which they had advanced to help her while she was waiting for the cheque. A further $11,000 (approximately) went on rent and electricity arrears, her credit card and car repairs, and she tried to plan for the future by making advance payments on her rent, electricity and phone bills, and buying clothes for a couple of years in advance for her baby daughter.
28. Ms Carter suffers from chronic back pain and she paid $30,000 for a second hand car which is high off the ground and easier for her to get in and out of. She gave her husband $5000 to undertake a security course and buy clothes and the like, and she spent approximately $6500 on a boat and a trailer which he had always wanted. She gave her son $5000. She helped her foster daughter with $650 towards her study. Approximately $10,000 went on Christmas because family members said she should put on dinner, and she bought gifts for the family including new televisions for her mother and her mother-in-law. She describes her daughter’s first birthday in December 2009 as “a bit expensive”.
29. Ms Carter says she and her husband were finally able to have a honeymoon and went to the Gold Coast. She says, and I accept, that things got out of hand when her sister-in-law took over the arrangements. They ended up staying at the Sofitel and, with other expenses, the holiday cost them $8000.
30. Other expenditure included a new bed, which Ms Carter needed for her bad back, and a second-hand lounge suite. Most of the rest of the money has been spent on usual living expenses such as rent, utilities, food, clothing and medical expenses.
31. Ms Carter has lent approximately $45,000 to her husband’s family. In December 2009, she lent her mother-in-law $13,100 to buy a new car. Around the same time she lent $1000 to one of her sisters-in-law. After the SSAT hearing, Ms Carter lent another sister-in-law approximately $30,000 to pay for legal costs associated with a custody dispute. This loan was made in varying amounts over time, when her sister-in-law said she needed money to pay various legal costs, and it exhausted Ms Carter’s compensation payment.
32. Ms Carter and her husband moved from their Department of Housing home some months ago into larger, private accommodation where her son and her granddaughter also live. Her son has been paying most of the rent of $310 per week but he is now unemployed. Her husband receives $935 in Centrelink payments each fortnight comprising carer’s pension, family tax benefit and carer’s allowance. Ms Carter cannot afford pain-killers and other medication which her doctor says she needs. She is included on her husband’s Pharmaceutical Health Benefit card and can afford to buy some medication but she says other medication is still too expensive. She says the family is struggling financially and she is scared about what will happen without her income until March 2011. She has tried to return to work, and to work from home, but says her medical conditions have prevented her from working.
33. The Act does not define what “special circumstances” are. Whether circumstances are special depends on the particular case but there must be something to distinguish the applicant’s case from others; something to take a case out of the usual or ordinary: Beadle and Director-General of Social Security (1985) 7 ALD 670; Jess v Scott (1986) 12 FCR 187; Groth v Secretary, Department of Social Security (1995) 40 ALD 541; see also Angelakos v Secretary, Department of Employment and Workplace Relations[2007] FCA 25.
34. Ms Carter says, and I accept, that she honestly believed her husband’s family would repay the loans. However, despite repeated requests, none of the money has been repaid and the likelihood of repayment appears slim. Even if Ms Carter were to take action to recover the money, there is little prospect of recovering it within the preclusion period, if at all.
35. Ms Carter describes her husband’s family as overbearing; she does not deal with pressure well and could not resist their requests for money. Her general practitioner of five years has written to the Tribunal in support of her application, outlining Ms Carter’s family history and why she is especially vulnerable to financial and emotional exploitation.
36. I accept that Ms Carter’s explanation that she felt unable to resist requests for loans from her in-laws, even when it meant her money would be exhausted. I have no reason to doubt her evidence about the pressure exerted on her by her husband’s family and I have no reason to doubt the reasons for her particular vulnerability as explained by her doctor.
37. However, the loans account for only approximately $45,000 of the compensation payment. Approximately $120,000 remained. I accept that Ms Carter tried to plan for the future and paid bills in advance but, regardless, a lot has been spent on things that could not be regarded as strictly necessary, and these expenditures were not because of pressure from her husband’s family. I cannot find anything in how the compensation payment overall has been spent that constitutes special circumstances.
38. Even if there was something about how the compensation payment has been spent that might take it out of the ordinary, I am not satisfied that the circumstances in which Ms Carter now finds herself can be described as special. The family has approximately $935 per fortnight coming in from Mr Carter’s Centrelink payments and they are able to share some costs with Ms Carter’s son even though his circumstances are also difficult. Ms Carter has an outstanding electricity bill for several hundred dollars and she is clearly facing difficult circumstances indeed but I am not satisfied that they are “special” such that the preclusion period should be reduced or waived.
39. I affirm the decision under review.
I certify that the 39 preceding paragraphs are a
true copy of the reasons for the decision
herein of Senior Member Jill TooheySigned: .....................[sgd].........................................................
Eugenie Hwang AssociateDate of Hearing 7 July 2010
Date of Decision 23 July 2010
ApplicantSelf-represented
Representative for the Respondent: Ms Raewyn Harlock, Centrelink Advocacy Branch
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