Clinch and Department of Family and Community Services - [2000] AATA 866

DECISION AND REASONS FOR DECISION [2000] AATA 866

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V2000/0755

GENERAL ADMINISTRATIVE DIVISION          )
           Re      BRIAN CLINCH
  Applicant
           And    DEPARTMENT OF FAMILY & COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr J. Handley, Senior Member

Date28 September 2000
PlaceMelbourne

Decision The decision under review is affirmed.

..……Sgd. Mr J. Handley……….
Senior Member

SOCIAL SECURITY: Applicant received weekly workers compensation and disability support pension; error in calculating pension by respondent; overpaid; whether compensation to be treated as income or a direct deduction; whether any special circumstances; decision affirmed.
Social Security Act s1163(5), s1168, s1168(3)
Beadle v Director General of Social Security 1984 6ALD1

REASONS FOR DECISION

28 September 2000 Mr J. Handley, Senior Member

The applicant applies to review a decision of the Social Security Appeals Tribunal ("SSAT") made on 17 May 2000. The SSAT then decided to affirm a decision made by an officer of Centrelink on 15 May 2000 to reduce the rate of disability support pension then being paid to the applicant and wife pension then being paid to the applicant's wife by treating periodic compensation payments as a direct deduction.
This application, despite it having a long history, is of relatively narrow compass. A hearing was convened in Mildura on 21 September 2000. Mr Clinch appeared without representation. The respondent was represented by Ms Cunningham.
The facts may be briefly summarised as follows.
In 1963 Mr Clinch suffered injuries in employment. He continued to work until he was retrenched in 1987. Compensation was then claimed for the injuries sustained in 1963 and in 1990 the Workers Compensation Tribunal of NSW awarded Mr Clinch periodic (weekly) compensation payable from the date of claim being 3 March 1987.
On 20 August 1992 Mr Clinch qualified for disability support pension and Mrs Clinch qualified for pension as his wife.
Thereafter the respondent treated the periodic compensation (which Mr Clinch continues to receive) as income rather than a direct deduction.
In early 2000 disability support pensioners were reviewed with respect to the manner in which pension was calculated. It was then learnt that the methodology adopted to calculate the rate of disability support pension paid to Mr Clinch and the Wife Pension payable to Mrs Clinch since 1992 had been in error. It was asserted by the respondent that at all relevant times the periodic compensation should have been treated as a "direct deduction" and the net effect of the error made by the Department since 1992 has resulted in an overpayment to Mr and Mrs Clinch.
Ms Cunningham submitted that the total amount overpaid to Mr and Mrs Clinch since 1992 amounts to $37,556. The respondent admits its error and will not seek to recover these monies.
the legislation
Section 1163(5) of the Social Security Act 1991 provides that invalid pensioners (and subsequently disability support pensioners) will have their payments affected if compensation is received on or after 1 May 1987 and a claim for pension was made on and after 1 May 1987.
This section applies to Mr Clinch because his claim for pension was made in August 1992 and compensation has been received by him on or after 1 May 1987. (Mr Clinch was unhappy with the interpretation placed upon the word "received" because the Compensation Court did not award him weekly compensation until 1990. The decision then made by that Court nonetheless had in part a retrospective operation directing that payments be made to him from 3 March 1987. It follows therefore that compensation was received by Mr Clinch on and after 1 May 1987. In any event, at August 1992 when pension commenced, Mr Clinch continued to receive periodic compensation, which was at a point in time after 1 May 1987.)
Section 1168 of the Act provides that if a persons' or the persons' partner receives periodic compensation and the person is qualified for an invalid pension (disability support pension) the persons pension is to be reduced under s1168(3).
Section 1168(3) provides that the pension is to be reduced by the amount of the fortnightly rate of periodic compensation divided by 2.
conclusion and reasons for decision
I am satisfied that since 1992 the respondent has been in error in treating the periodic payments as income and calculating the rate of disability support pension accordingly. The respondent should have treated the payments of periodic compensation as direct deductions and calculated the entitlement by reference to s1168(3). This error has resulted in an overpayment.
Mr Clinch is unhappy with the decision made earlier this year by the respondent to make payments of disability support pension by reference to s1168(3). The net effect of this has been to reduce his fortnightly pension.
Mr Clinch also submitted that had his rate of pension been calculated by reference to s1168(3) before the commencement of this year he probably would have accepted an offer of $70,000 made by the Workers Compensation insurer to redeem his future entitlement to periodic compensation. This would have permitted him to have invested those monies and have recovered a greater sum (by reason of the investment) than he would have received in pension and/or weekly compensation. Accordingly, he submitted that there are circumstances to his application which are special and which has caused him a loss.
The respondent's representative filed and exchanged a lengthy statement of case prior to the commencement of the hearing which relied in part on the number of previous decisions of the Tribunal on a similar factual basis.
I am influenced by those decisions and am not satisfied that Mr Clinch has suffered circumstances which are special. As the Federal Court said in Beadle v Director General of Social Security 1984 6ALD1 the adjective (special) "looks to circumstances that are unusual, uncommon or exceptional".
In the present application Mr Clinch is unhappy with the manner in which his entitlements to pension have been calculated. At the present time the pension payments are being calculated in accordance with the legislation. He might be unhappy with the amount presently being received but it is consistent with the legislation. The respondent is doing no more presently than complying with the law. If the consequence of that conduct causes Mr Clinch unhappiness it cannot amount to circumstances that are special.
Mr Clinch may be unhappy with the decision made earlier this year having received benefits under a different methodology for the proceeding eight years. The net effect, however, of the methodology adopted by the respondent between 1992 and 2000 has been to permit he and his wife to receive an overpayment in the sum of $37,556. That is to say, he and his wife received this sum when they were not entitled to it. The Department admits its error. They do not seek and will not seek to recover this sum. Mr and Mrs Clinch have received monies to which they were not entitled. There can be no complaint by them upon this issue.
Mr Clinch submitted that were it not for the respondent correctly calculating his entitlement to pension at an earlier point in time he would have accepted an offer of $70,000 made by the compensation insurer, invested it and earned money from that investment. That may well be so, nonetheless he would have been subjected to a preclusion period, he would have been subjected to income tax either upon the lump sum received or upon the monies achieved by the investment of the lump sum and may not necessarily have achieved any better financial outcome. Continuing to receive periodic compensation has permitted Mr Clinch to maintain a regular income base and has preserved his rights against his employer under the NSW Workers Compensation scheme. At the end of the day, for reasons which are not entirely economic or capable of being computed with a dollar value, Mr Clinch may well be better off and have achieved a more secure and/or prudent financial outcome than had he redeemed his periodic compensation.
For all of the above reasons I am not satisfied that Mr Clinch can demonstrate special circumstance. I understand that he returns to the Compensation Court on 30 October 2000 where the opportunity may arise again to negotiate – with his solicitors – a redemption of weekly compensation. Whether that occurs or whether he continues to receive weekly compensation is a matter then for him and his advisors.
Presently Mr Clinch and his wife are being paid pursuant to the Social Security Act 1991. He has not been disadvantaged but has received monies in an amount greater than other persons in a similar situation. His circumstances are not special. The decision under review must be affirmed.

I certify that the preceding twenty two (22) paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member
Signed:    Linda A Nemeth    ............................................
                 Secretary
Date of Hearing  21 September 2000
Date of Decision  28 September 2000
Solicitor for the Applicant         Unrepresented
Solicitor for the Respondent    Ms Karyn Cunningham, Departmental Advocate