Chamberlain and Secretary Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 740

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 740

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0887

GENERAL ADMINISTRATIVE DIVISION		)
Re		MARK CHAMBERLIN

Applicant

And SECRETARY DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal  M J Carstairs, Senior Member

Date 25 August 2008

Place Brisbane (Heard in Townsville)

Decision  The Tribunal affirms the decision under review.

....................[sgd]..........................

SENIOR MEMBER

CATCHWORDS

SOCIAL SECURITY – disability support pension – applicant received lump sum compensation – compensation recovery – whether part or whole of compensation payment could be disregarded – consideration of special circumstances – decision under review affirmed

Social Security Act 1991 (Cth), s 1184K

Secretary, Department of Social Security v Thompson (1994) 53 FCR 580
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
Haidar v Secretary, Department of Social Security (1998) 52 ALD 255
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Ivovic and Director-General of Social Services [1981] AATA 57

REASONS FOR DECISION

25 August 2008 M J Carstairs, Senior Member

1.       Mr Chamberlin took legal action after he was injured at a supermarket in 2003.  The matter ultimately settled and Mr Chamberlin was paid a lump sum.  At the time of the injury Mr Chamberlin was receiving disability support pension, so he and his solicitor were alerted to the fact that he may have to repay the disability support pension he had received when he obtained the lump sum payment. 

2.      In circumstances such as these, Centrelink is required to apply a formula, found in the Social Security Act 1991 (the Act), in order to calculate the amount, if any, a person may have to repay to reflect benefits received from Centrelink, during the period that is referred to in the legislation as the “preclusion period”.  The underlying policy reflected in the Act, in that regard, is that a person should not “double dip” by receiving both social security payments and compensation for lost earnings during the same period. 

3.      Mr Chamberlin does not dispute the application of these legislative provisions in his case.  He agrees that the calculations were correct.  And, he acknowledges that his solicitor made him aware that Centrelink would seek to recover the moneys paid by way of social security payments.  However, Mr Chamberlin maintains that his circumstances have changed for the worse, and that the circumstances are sufficiently “special circumstances”[1] as would justify treating his compensation as not having been paid in whole or in part.

[1]        Social Security Act 1991 (Cth), s1184K.

4.      The Act recognises and provides for a discretion with respect to payments received as compensation, so that the decision maker may treat the whole or part of the compensation as not paid.  This discretion may be exercised: 

…if the Secretary thinks it is appropriate to do so in the special circumstances of the case.

5.      Mr Chamberlin seeks a favourable exercise of this discretion so that some or all of the money recovered by Centrelink in July 2007 from his compensation settlement would now be remitted to him.  It is relevant therefore to consider Mr Chamberlin’s circumstances.

MR CHAMBERLIN’S CIRCUMSTANCES

6.      When he attended the Social Security Appeals Tribunal hearing in December 2007, Mr Chamberlain outlined his circumstances from July 2007 when he had received the settlement.  His main issues as he described them to the Social Security Appeals Tribunal can be briefly summarised as including:

§  that he received in hand rather less than he expected after his costs were paid; and

§  that he had incurred a significant amount of debt which he repaid from the lump sum settlement, including for training courses which he had paid personally, unsupported by Centrelink, in order to improve his employment prospects. 

7.      In his oral evidence Mr Chamberlin described himself as “welfare dependent” since he was a young person.  His disability support pension is paid with respect to his significant psychiatric disabilities which, in the past, made paid employment an unattainable goal.  In that regard Mr Chamberlin said that one good outcome had been that his solicitor for the compensation action supported his efforts to undertake training courses, and advanced him money to retrain.  He now has qualifications that include certificates in Workplace Health and Safety, and fork lift driving.  These, as the Social Security Appeals Tribunal noted, were self-funded and highly commendable undertakings. 

8.      Mr Chamberlin had significant debt at the time of the Social Security Appeals Tribunal hearing, and there was little money left.  His financial situation is even worse now; he describes himself as destitute.  A car he purchased for $2,500 (from the settlement money) had cost many thousands more to make roadworthy.  He owes debts to Centrelink, Telstra, and Queensland Housing Commission, and has sundry unpaid fines. 

9.      However the main, and recent, adverse event that Mr Chamberlin relied upon in relation to special circumstances was that his house in Gladstone was targeted after he provided information to the police in relation to a murder investigation.  To ensure his personal safety he had to leave Gladstone at short notice.  Although at the time of the hearing he had commenced in a job and had found a place to live in Townsville, he said that the move had been expensive and was further complicated by his having to continue paying rent in Gladstone because his possessions are still at the house. He is behind in a number of payments, including the Housing Commission payments in Gladstone; he cannot pay for the removals; and he has had to rely on the Salvation Army for food and petrol vouchers.

WHETHER THERE ARE SPECIAL CIRCUMSTANCES?

10.     Centrelink submitted that if Mr Chamberlin were relieved from the compensation charge this would amount to “double dipping”, as he has already been compensated through the settlement. One object of the legislation is to require compensation recipients to provide for their own support during preclusion periods. I agree that this is the legislative intent, and that the discretion for special circumstances should be exercised with that purpose in mind.

11.     I accept that Mr Chamberlin’s financial circumstances are indeed difficult, more so as a result of what happened to him in Gladstone in recent times.  I also accept that he was disappointed by the amount he received in hand as a result of the settlement of his litigation.  He was not reckless in his expenditure of those funds, except, perhaps, the regrettably large outlays on the car.  

12.     Mr Chamberlin submitted that his were special circumstances, considering what has happened to him in his life and the difficult circumstances in which he has found himself having to flee from attack in Gladstone.  I agree that these are more unusual circumstances than others would face and are out of the ordinary.  However, it is important to appreciate that the “special circumstances” discretion exists in the context in the Act to relieve hardship that might arise from the operation of the legislative provisions with respect to compensation recovery and preclusion periods.

13.     In that regard, although the wording of the discretion in the Act at the time was different, the Tribunal’s words in Re Ivovic and Director-General of Social Services[2] remain correct:

The reference to special circumstances…requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes. In the exercise of the discretion…the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the…Act.

[2] [1981] AATA 57 at [45].

14.     In considering this discretion Einfeld J said, in Secretary, Department of Social Security v Thompson[3] drawing upon von Doussa J in Secretary, Department of Social Security v Smith[4] that the scheme is intended to operate to provide:

a fair balance of the interests of the recipient of the payment with the competing interests of others in the community whose needs must be met as far as possible from a finite budget allocation for social security measures.

[3] (1994) 53 FCR 580 at 583-584.

[4] (1991) 30 FCR 56 at 61.

15.     It is also important to consider what facts and circumstances ought relevantly be taken into account when a review is carried out.  In Haidar v Secretary Department of Social Security[5], Hill J considered the question of “special circumstances” in the context of hardship and difficulties experienced after the preclusion period had come to an end.  These are the facts here too, in the sense that Mr Chamberlin’s preclusion period ended in July 2004.  In that regard, and with reference to the deemed 50 per cent of lump sum that is used in the statutory formula, and the role to the special circumstances discretion, Hill J said[6]:

It seems to me that events after the expiration of the ordained preclusion period could only have relevance as factors to be considered in the exercise of discretion if those facts in some way related to the events occurring during the preclusion period.

[5] (1998) 52 ALD 255.

[6] (1998) 52 ALD 255 at 264-265.

16.     I consider that the circumstances that Mr Chamberlin relies on with reference to leaving Gladstone and the financial hardship that he has suffered as a result are not the sort of circumstances which ought to be addressed by exercising the discretion. Whilst it is not the case that the discretion must be limited solely by reference to the person’s circumstances at the time that Centrelink recovers the compensation charge, nevertheless the cases will be rare where circumstances that occur after the person’s preclusion period has expired will be relevant.  If it were otherwise, the purposes of the Act would not be met. 

17.     In Groth v Secretary, Department of Social Security[7] case, Kiefel J stated:

…for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only inquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. The inquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied.

[7] (1995) 40 ALD 541 at 545.

18. I have come to the view that Mr Chamberlin’s circumstances are not special in the relevant sense. What has happened to disrupt his life as a result of attacks on him in Gladstone is not relevant to the exercise of this particular discretion. None of the other circumstances, as fully outlined in Mr Chamberlin’s evidence to the Social Security Appeals Tribunal, warranted the exercise of the discretion to treat the whole or part of the settlement as not having been paid. No unfairness or unintended consequence arises from the application of the compensation provisions in this case, and the discretion available under s 1184K of the Act ought not to be exercised.

DECISION

19.     The Tribunal affirms the decision under review.

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of M J Carstairs, Senior Member.

Signed:         .................................[sgd]....................................................
  Joan Torbey, Associate

Date of Hearing  21 July 2008
Date of Decision  25 August 2008 
The applicant was self-represented
Advocate for the Respondent   Ms R Knight, Centrelink