Coleman and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 523
•24 June 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 523
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4935
GENERAL ADMINISTRATIVE DIVISION ) Re DOUGLAS COLEMAN Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Dr J D Campbell, Member Date24 June 2008
PlaceSydney
Decision The decision under review is affirmed.
...................[Sgd]........................
Dr J D Campbell
Member
CATCHWORDS
SOCIAL SECURITY – compensation payment – compensation preclusion period – compensation affected payments – special circumstances.
Social Security Act 1991 – section 1184K
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Secretary, Department of Family and Community Services v Allan (2001) 116 FCR 1
Re Colaiacolo and Secretary, Department of Social Security (1985) AATA 2109
REASONS FOR DECISION
24 June 2008 Dr J D Campbell, Member
1. Mr Coleman is a 60 year old physiotherapist. Mr Coleman lives with and cares for his 86 year old mother. Mr Coleman was injured in a motor vehicle accident on 7 August 2001. His injuries included fractures to the third and fourth cervical vertebrae and contusions to his right hip and right knee. Mr Coleman lodged a claim for compensation. This claim was settled on 8 February 2005 for an amount of $620,000, with Mr Coleman receiving an amount of $395,000 after costs and repayments.
2. On 23 February 2005, Mr Coleman was advised by Centrelink that, as a consequence of the lump sum compensation payment, a preclusion period, during which Mr Coleman was not entitled to access particular compensation affected payments, was noted to have commenced on 7 August 2001 and would continue until 23 August 2010.
3. Mr Coleman lodged a claim for carer payment and carer allowance on 6 December 2005. Mr Coleman was granted carer allowance, but the claim for carer payment was rejected by Centrelink on 13 December 2005, as carer payment was a compensation affected payment. Further, Mr Coleman was advised that a sum of $3,600.70, being a compensation charge for Newstart Allowance paid between 20 October 2004 and 22 February 2005, remained outstanding.
4. On 14 March 2007, Mr Coleman forwarded an email to Centrelink detailing his parlous financial circumstances (T37). On 10 April 2007, Centrelink affirmed the earlier decision not to grant carer payment and, in so doing, noted Mr Coleman’s assertion that he had invested his compensation monies in bad investments, namely Colayco Pty Limited, the latter being a wholly owned subsidiary of Jobro Holdings Pty Limited, with the shares in both companies being held by Mr McAviney (Mr Coleman’s accountant) on behalf of Mr Coleman. An application to have Colayco Pty Limited de-registered was lodged on 20 April 2007. A complex assessment officer’s report dated 14 May 2007 confirms such circumstances (T46).
5. On 17 May 2007, Mr Coleman lodged an income and assets statement in which he details household contents of $10,000 (his share 50 per cent), his mother’s savings account - $58.90 and his savings accounts - $42. Following further enquiry on 1 June 2007, Mr Coleman requested a review of the decision of 10 April 2007. On 18 June 2007, Centrelink informed Mr Coleman that they would review the preclusion to receiving compensation affected payments decision under section 1184K of the Social Security Act 1991 (“the Act”). The original decision was affirmed on 4 July 2007, the reviewer considering that Mr Coleman’s circumstances were not sufficiently special (T55). This decision was affirmed following a review by an authorised review officer on 31 July 2007 (T56), with the latter decision being affirmed by the Social Security Appeals Tribunal on 10 September 2007.
6. The relevant issues in this matter are:
(a)Whether Mr Coleman is subject to a lump sum preclusion period from 7 August 2001 to 23 August 2010 by virtue of a compensation settlement on 8 February 2005.
(b)Whether Mr Coleman is subject to a compensation charge in the amount of $3,600.70, arising from the payment of Newstart Allowance for the period 20 October 2004 to 22 February 2005.
(c)Whether Mr Coleman’s circumstances are such that they warrant the whole or any part of the compensation payment to be disregarded pursuant to section 1184K of the Act.
Decision
7.For the reasons stated later in this decision, I find that:
(a)Mr Coleman is subject to a lump sum preclusion period, as a consequence of the compensation settlement dated 8 February 2005, and that the preclusion period has been correctly formulated to extend from 7 August 2001 until 23 August 2010.
(b)Mr Coleman is subject to a compensation charge of $3,600.70, arising from the payment of Newstart Allowance for the period 20 October 2004 to 22 February 2005.
(c)Special circumstances do not exist in this matter.
Evidence of Mr Coleman
8. Mr Coleman provided the following assessment of issues, which he would like to be considered in assessing the issue of whether his circumstances are to be considered special:
·He was born on 3 November 1947, and carried on a successful private practice as a physiotherapist prior to his injury.
·He was involved in a motor vehicle accident on 7 August 2001. He was taken by ambulance to St Vincent’s Hospital where he remained overnight with fractures to third and fourth cervical vertebrae, and contusions to his right hip and knee. He was placed in a neck brace. The following day he consulted his general practitioner and was given one week off work. The pain worsened and was referred for a CT scan and to a neurosurgeon.
·Mr Coleman closed his physiotherapy practice in 2002 because he was unable to do any hands-on work. For the next three years, Mr Coleman described going from doctor to doctor because of pain, and was treated with a variety of medications. During this period, he received sickness and unemployment benefits. In late 2005, he attended the Prince of Wales Pain Clinic and received relief with physiotherapy and Botox injections. He last visited the clinic nine months ago, and currently takes Nurofen Plus, on a variable basis, up to four a day when the neck aches.
·Mr Coleman lives with his mother, aged 86, in rented Housing Commission accommodation. His mother is blind in the left eye, has had a left hip replacement, has arthritis in multiple joints, is essentially housebound, using a stick for mobility assistance and tends to forget things. Mr Coleman stated that his mother was able to dress herself and attend to her personal hygiene, while he does the cooking, cleaning and shopping. His daughter, from an earlier marriage by Mr Coleman, calls in to see his mother from time to time.
·That the $395,000 received in February 2005 was spent in a very short time, during a period in which he lost control. During this period, he invested $200,000 in an escort agency business through the establishment of Colayco Pty Limited and Jobro Pty Limited, with his accountant acting as his nominee, he gambled in excess of $70,000 and he paid rent in advance on a property ($34,020).
·That he had been made bankrupt on 1 March 2004, having been forced to sell his mother’s house which he had bought for her in 1969, and against which he had borrowed some $260,000. His mother’s house had been purchased in his name, and he had used the house asset as collateral for a property purchased at Chippendale. The end of a long-term defacto relationship resulted in the loss of the Chippendale property.
·That he had instituted recovery action for outstanding loans of $24,518.08 on 9 October 2007, against an individual with whom he had a casual but intimate relationship between 2001 and 2006.
·That he owes approximately $2,000.
·That he and his mother exist on the mother’s fortnightly age pension of $309.93 (the amount is net, after rent deduction for the house (mother’s) and his rent for being a permanent resident in Housing Commission accommodation). Further, they exist on his carer’s allowance of $99 a fortnight – making a total of $408.93 a fortnight after payment of rent.
·That they currently have credit amounts in their savings account of $17.93 (mother) and $44.26 (Mr Coleman), with necessary weekly outgoings exceeding revenue.
·That he does not work because he has not been able to make affordable arrangements for someone to care for his mother while he would be at work.
Consideration
9. In addressing the issue of the compensation lump sum, I am satisfied that the negotiated settlement did include an amount ($310,000) for economic loss, and that the resultant preclusion period has been correctly calculated as commencing on 7 August 2001 and extending to 23 August 2010. I understand that Mr Coleman has no dispute with such calculation.
10. Similarly, the issue of the outstanding charge of $3,600.70, being an amount of Newstart Allowance paid to Mr Coleman between 20 October 2004 and 22 February 2005, is not disputed by either party. I find that such a debt remains outstanding.
11. Section 1184K of the Act provides:
(1) 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;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case.
12. As to what constitutes special circumstances has been much discussed. In Re Beadle and Director General of Social Security (1984) 6 ALD 1, Mr Justice Toohey considered that such a phrase ‘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.
13. Further, one must be mindful of the statutory purposes for which such legislation has been enacted. In this regard, I note the comments of Heerey J in Secretary, Department of Family and Community Services v Allan (2001) 116 FCR 1 at [1]:
The basic policy, understandably enough, is that there should not be “double dipping”. People should not receive social security payments for loss of earnings, where they have received compensation for that same loss of earnings from another source.
14. Further, I note that in the matter of Re Colaiacolo and Secretary, Department of Social Security (1985) AATA 2109 at [19] the Tribunal concluded that the factor of financial hardship is not sufficient to amount to special circumstances, unless it is “exceptional” and not merely “straitened”.
15. In addressing the circumstances of this matter, I can only conclude that Mr Coleman’s current financial circumstances are of his own making. I observe that he has raised issues of his medication, taken for his compensation injury that led to a de-compensation in his ability to handle his financial affairs. I am not satisfied, in the absence of corroborative professional opinion, that this is the case. In so stating, I observe the totality of his financial affairs disclosed during the hearing, which suggest a degree of financial sophistication in the way Mr Coleman sought to manage his financial affairs, albeit in the end with a dismal outcome.
16. There is no doubt that the dismal outcome alluded to in the previous paragraph, is one where Mr Coleman is dependent on his aged mother for accommodation and board, for which in return he provides care and attention for an aged and increasingly disabled person.
17. To rectify that current financial and social predicament, Mr Coleman is pursuing his request to be granted a carer’s payment – this being a compensation affected payment. The other alternative available to Mr Coleman is for him to seek work and make other arrangements for the care of his mother. In this regard, I am mindful that Mr Coleman is a trained health professional. In the absence of evidence suggesting that Mr Coleman is unable to work, an option does exist whereby Mr Coleman could seek paid employment, with arrangements being made for the care of his mother.
18. I accept that Mr Coleman’s financial circumstances are currently difficult. I do not accept them as exceptional, in that while his current financial circumstances are both difficult and a product of his own creation, the solution to such also rests with him, which undoubtedly involves difficult decisions.
19. I am mindful that the circumstances in this matter do involve the welfare of Mr Coleman’s aged mother, for it appears to me that she pays the rent and provides most of the fortnightly revenue. Nevertheless, in the absence of more detailed assessments on her disabilities, I would be speculating as to what care and attention is required for her on a daily basis.
20. In concluding, on the material I have before me, I am unable to find that special circumstances exist in this matter. In so finding, I acknowledge that Mr Coleman is in difficult financial circumstances and dependent on the current arrangements with his mother for financial support. I do not find his financial circumstances exceptional, in that, in part, they are a consequence of his own doing, as well as the current circumstances in which he has chosen to live. I conclude that the decisions involving the care of his mother, albeit of much emotional difficulty, are not unusual, uncommon or exceptional, in that they are issues confronted at some stage by most. In the circumstances outlined, I consider that Mr Coleman has not exhausted the employment option, with alternate arrangements being made for the homecare of his mother, even if it does involve expenditure from the income earnt by Mr Coleman.
21. In finding as I have, I recognise that to do otherwise, in the context in which the circumstances have occurred, would be in clear frustration of the Act’s intent and purpose to prevent double dipping. While the current circumstances involving an aged mother have been considered, I see little merit in an argument that Mr Coleman’s financial circumstances remain dependent on his mother and/or his mother’s circumstances, for they could change at any time.
22. In concluding that no special circumstances exist in this matter – there the matter ends, with the decision under review being affirmed.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member.
Signed: ...............[Sgd]..............................
AssociateDate of Hearing 13 May 2008
Date of Decision 24 June 2008
Solicitor for the Respondent Ms Mantaring, Centrelink Legal Services
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