Chetwynd and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2011] AATA 695
•7 October 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 695
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2011/1122
GENERAL ADMINISTRATIVE DIVISION ) Re PAUL CHETWYND Applicant
And
SECRETARY, DEPARTMENT OF
FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRSRespondent
DECISION
Tribunal Dr K S Levy RFD, Senior Member Date7 October 2011
PlaceBrisbane
Decision
The decision under review is affirmed.
................[Sgd]..............................
Senior Member
CATCHWORDS
FAMILY ASSISTANCE AND SOCIAL SECURITY — compensation preclusion period — calculation of the lump sum preclusion period — special circumstances — decision affirmed
Social Security Act 1991, ss 17, 1170, 1169, 1184K
Director-General of Social Services v Hales(1982-3) 47 ALR 281
Hansford and Secretary, Department of Employment and Workplace Relations [2007] AATA 1152
Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 28
Re Beadle and Director General Social Security (1984) 6 ALD 1
Re Zacardi and Secretary, Department of Social Security (1995) 40 ALD 760
Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
REASONS FOR DECISION
7 October 2011 Dr K S Levy RFD, Senior Member INTRODUCTION
1. Paul Chetwynd was injured in a motor vehicle accident on 10 July 2007. He received compensation payments since that time as follows:
· Workcover (weekly) - 11 July 2007 - 1 August 2008
· Disability Support Pension (“DSP”) - 2 August 2008 - 17 May 2010
·Damages Settlement agreed on 17 May 2010 ($230,286 including periodic compensation of $37,885.44 for loss of earnings and loss of capacity).
The Settlement resulted in a preclusion period from entitlement to Social Security payments. His DSP was cancelled on 8 June 2010.
2. Mr Chetwynd sought review of the preclusion period, but that period was affirmed by an Authorised Review Officer on 19 October 2010. He appealed to the Social Security Appeals Tribunal (“SSAT”) however the original decision was affirmed. He now appeals to the Administrative Appeals Tribunal.
3. Mr Chetwynd’s application dated 24 March 2011 contends that the preclusion period is incorrect and that the 50% figure is excessive. In addition, he argued that the amount repaid to Centrelink should have been included in calculation of the preclusion period.
4. At the hearing, Mr Chetwynd told the Tribunal the real issue is the calculation and that he effectively received nothing for the first 12 months after the accident. In fact, he disputes, in the alternative, the commencement date of the preclusion period.
ISSUES
5. The issues to be determined are:
(a)whether the lump sum preclusion period has been correctly calculated; and
(b)whether there are any special circumstances that would justify the exercise of discretion under s 1184K of the Social Security Act 1991 (“the Act”).
EVIDENCE
6. The background facts are set out in the Introduction.
7. The compensation received following the accident was as follows:
· For the period 11 July 2007 to 1 August 2008 - $37,885.44
· For the period 2 August 2008 to 17 May 2010 - DSP payments.
8. The settlement amount was $230,000 which included a periodic compensation of $37,885.44 for loss of earnings. An amount of $286 for rehabilitation costs was also paid on settlement. Based on the statutory provisions relevant to the facts, the lump sum compensation period was calculated to be 124 weeks, which was determined to be for the period 2 August 2008 to 17 December 2010. That period has now been completed.
CONSIDERATION
9. The law governing entitlement to compensation in these circumstances is set out in s 1169 of the Act. This section prohibits payment for a period where a person received a lump sum compensation payment. The relevant prohibition here is for a “lump sum preclusion period”. This latter period is defined in s 1170 (1) as being the period commencing on the last day of the periodic payments and ending on the number of weeks calculated in subsections (4) and (5) of s 1170.
10. Section 1170(4) provides the formula for the calculation of the lump sum preclusion period:
Compensation part of lump sum
Income cut-out amount
The quotient from this formula is to be rounded down to the nearest whole number
(s 1170(5)).
11. The compensation part of a lump sum is calculated in accordance with s 17(3) of the Act which is ‘[s]ubject to subsection (4)’. That calculation requires deduction from the lump sum settlement amount of an amount repaid for periodic payments (s 17(4)). The calculation in s 17(3) requires the compensation part of the lump sum to be then reduced by 50%.
12. Therefore, the formula in s 1170(4) is to be calculated using the following values:
Compensation part of the lump sum
Gross settlement amount $230,286.00
Less weekly compensation repaid $37,885.44
Net settlement amount $192,400.56
13. The Compensation component specified in s 17(3) is 50% of the net settlement amount, or $96,200.28. This is the amount to be used as the “compensation part of the lump sum” in the formula shown in s 1170(4) (see paragraph 10 above).
14. The “income cut out amount” in that formula is specified from time to time. The amount is defined in s 17(1) of the Act to mean the amount “… in force at the time when the compensation was received”. The relevant amount as at 17 May 2010 was $772.10.
15. Applying these amounts to the formula in s 1170(4) results in a quotient of 124.59 weeks, or rounded down to 124 weeks (s 1170(5)). This period is required to commence statutorily (by virtue of s 1170(1)) on the day following the last day of the periodic payments, or in this case, 2 August 2008. My calculations show a period of 124 weeks from that date would cease on 17 December 2010. I find therefore the calculations made or submitted by the respondent in this case are correct.
16. The applicant submitted that the commencement date was wrong and should have run for the period pertaining to the amounts repaid. However, the Act is quite specific in s 1170(1). The respondent’s advocate, Mr Letch referred the Tribunal to the decision of Senior Member R W Dunne in Hansford and Secretary, Department of Employment and Workplace Relations [2007] AATA 1152. There, Senior Member Dunne referred to the decision of Mansfield J in Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 28, where he referred to the legislative policy involved in these provisions. It may be, as Mr Chetwynd submits, that an unfairness can reasonably be perceived in circumstances such as his. Mansfield J referred to this by reference to the decision of von Doussa J in Secretary, Department of Social Security v Smith (1991) 30 FCR 56, where at [61], his Honour said that the “50 per cent rule” was designed to result in a “fair balance” between the interests of the recipient of compensation and the “... finite budget allocation for social security measures”. There was also an acknowledgement in that case of the possibility of relative unfairness but it was also noted the provisions for considering “special circumstances” were intended by the legislature as a measure to rectify relative unfairness in an appropriate case.
17. Therefore, the calculation of the amounts and period of preclusion are correct and the applicant’s submission on that point cannot succeed as a matter of law.
18.
The second issue is whether the applicant has “special circumstances” which could justify a discretion being exercised so as to regard a payment made to
Mr Chetwynd as not having been made? The applicant made no submissions on this point. The respondent argued that the applicant does not satisfy the requirements for “special circumstances” according to legal criteria and in particular, referred the Tribunal to Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348.
19. I note the SSAT was sympathetic to Mr Chetwynd given his serious injury and the limitations that will place on his capacity for future employment. The SSAT nevertheless could not conclude that there were “special circumstances” in this case.
20. In addition, I note of the amount received as a lump sum, Mr Chetwynd spent $8,000 - $10,000 on an overseas holiday, $60,000 on the purchase of a boat and a car and placed $10,000 in an investment. The preclusion period has now concluded, and while not suggesting that Mr Chetwynd had an easy life for that period he survived with some assistance from a lady with whom he now shares accommodation. He also chose to live on his boat for a period. He is entitled to DSP of $845.70 per fortnight. From that amount he must pay his share of rent ($355 per fortnight). He is a qualified motor mechanic and could work part-time, although he has not had success in obtaining employment to date.
21. “Special circumstances” involve something “markedly different from the usual run of cases” (Re Beadle and Director General Social Security (1984) 6 ALD 1). There must be financial hardship in the sense that it must go beyond “straitened circumstances” (Director-General of Social Services v Hales(1982-3) 47 ALR 281 cited in Re Zacardi and Secretary, Department of Social Security (1995) 40 ALD 760). This is a matter of degree. In the cases recorded, financial hardship alone is not sufficient. So despite the applicant’s perception of unjustness about the “50 per cent rule”, that rule applies to all applicants who come before the Tribunal. There is not a counterbalancing case here which takes the applicant’s circumstances out of the ordinary similar cases. “Special circumstances” therefore cannot be established.
DECISION
22. The decision under review is affirmed.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member K S Levy RFD
Signed: .........................[Sgd]....................................................
Research AssociateDate of Hearing 10 August 2011
Date of Decision 7 October 2011
Applicant Self-Represented
Advocate for the Respondent Mr S Letch, Centrelink Program Litigation & Review Branch
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