CONFIDENTIAL and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2012] AATA 75
•10 February 2012
[2012] AATA 75
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2011/4144
Re
CONFIDENTIAL
APPLICANT
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
DECISION
Tribunal Mr R G Kenny, Senior Member
Date 10 February 2012 Place Brisbane The Tribunal affirms the decision under review.
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Mr R G Kenny, Senior Member
CATCHWORDS
SOCIAL SECURITY – Pensions, benefits and allowances – Settlement of compensation claim – Lump-sum compensation payment includes component referable to lost earnings and capacity to earn – Imposition of preclusion period – Special circumstances not established – No part of settlement treated as not having been received – Preclusion period not shortened – Decision under review affirmed.
LEGISLATION
Social Security Act 1991 (Cth) ss 17, 23, 95, 1163, 1169, 1170, 1184K
Social Security (Administration) Act 1999 (Cth) s 237
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Director-General of Social Services v Hales (1983) 47 ALR 281
Groth v Secretary, Department of Social Security (1995) 40 ALD 541Secretary, Department of Family and Community Services v Allan (2001) 66 ALD 147
Secretary, Department of Social Security v Smith (1991) 23 ALD 277
REASONS FOR DECISION
Mr R G Kenny, Senior Member
10 February 2012
BACKGROUND
As a result of injuries sustained in a motor vehicle accident on 20 January 2005, the applicant was awarded a lump sum damages payment of $800,000 on 27 February 2008. On 3 March 2008, a Centrelink delegate determined that, as a result of that settlement, the applicant would be subject to a preclusion period from 20 January 2005 until 29 April 2015. By letters dated 3 March 2008, Centrelink notified both the applicant and her solicitor of that outcome. The effect of the Centrelink decision was that the applicant would be precluded from receiving some forms of income support payments under the Social Security Act 1991 (Cth) ("the Act") during the preclusion period. This included disability support pension for permanent blindness as provided for in s 95 of the Act.
On 16 March 2011, the applicant completed a claim for disability support pension for permanent blindness. The decision to reject that claim because of the preclusion period was made by a Centrelink officer on 1 April 2011. It was affirmed by an authorised review officer on 15 July 2011 and, in turn, by the Social Security Appeals Tribunal on 12 September 2011.
ISSUES AND LEGISLATION
There is no dispute in this matter in relation to the calculations made by Centrelink for the length of the preclusion period. I am satisfied that the relevant provisions of the Act have been correctly applied and that the preclusion period has been correctly calculated.[1] The applicant contended that she had not been notified by Centrelink of the preclusion period in March 2008 and that she was not advised by her solicitor until after her claim was rejected in 2011. Her main concern was that there were special circumstances applying to her situation which require that some part of her settlement monies be disregarded so that the preclusion period would be shortened. The provision of the Act, in so far as relevant to that issue, reads:
[1] See ss 17, 1163, 1169 and 1170 of the Act.
1184K Secretary may disregard some payments
1For 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.
…
EVIDENCE
As a result of the accident in 2005, the applicant sustained a brain injury which resulted in a loss of vision sufficient for her to be disqualified from holding a driver licence. She also described a loss of feeling in her right foot as a result of the accident. She experienced depression during 2008 but said this resolved in the following year.
The applicant returned to full-time work in June 2005 but was unable to perform at the same level as she had previously. She was allocated less significant tasks but managed to gain promotion such that she was earning approximately $80,000 per year by 2011. However, she found her work to be less satisfying and she resigned her position in June 2011. Since then, the applicant has undertaken a course in dispute resolution and hopes to get work in that field. Currently, she is doing casual work as a receptionist, from which she has earned approximately $2,500 in the last seven months. She maintains herself on those earnings and the residue of a $30,000 loan she obtained from the ANZ Bank before she ceased her full-time work. The balance of this now stands at approximately $18,000. The applicant continues to work on a casual basis and has been seeking full-time employment.
The applicant's evidence was that she was unaware of the preclusion period until her claim for the disability support pension was rejected. She said that she did not receive the Centrelink letter, dated 3 March 2008, which sought to advise her of the preclusion period and noted that it was sent to an address from which she had moved at that time. She agreed that the address was the last one which she had provided to Centrelink but said that she had not updated the address because she had had no recent dealings with Centrelink. On learning of the preclusion period when her claim was rejected, the applicant contacted her solicitor who had also been sent a letter by Centrelink effectively in the same terms as that sent to her. She said that the solicitor acknowledged that he had received the letter and had been aware of the preclusion period but had not passed that information on to her because of her full-time employment and absence of any dealings with Centrelink.
The applicant was shown a statutory declaration she made which included a description of the detriment she experienced as a result of the accident. It was witnessed by a justice of the peace and dated 20 April 2011. Therein, the applicant gives the same address as that to which Centrelink sent information about the preclusion period in March 2008. Her evidence was that this document had been incorrectly dated and had been written before she changed her address some three years earlier.
The applicant said that, after all relevant expenses were met, she received approximately $580,000 from her settlement and that this had been expended. The bulk of it was used to purchase a residential unit in an inner Brisbane suburb. The applicant chose to live in that area because of its excellent public transport facilities which enabled her to minimise the impact of not being able to drive a car. The unit cost in the order of $500,000 and was not subject to a mortgage. She spent approximately $40,000 on furnishings and described her unit as containing "nice things", including a sound/video system which cost some $10,000. She also gifted monies to her family members, including $15,000 to her sister, and travelled overseas.
SUBMISSIONS
The applicant submitted that, in relation to special circumstances, her case should be considered on its own merits because it was unique. She submitted that it was significant that she had been seriously injured at a young age and was deprived of her driver licence. She had no partner to support her and needed to continue living in the inner city suburb because of the public transport facilities available there. For that reason, she submitted that it would be unreasonable for her to sell her unit and be forced to live in an outer Brisbane suburb. In any event, she submitted, her unit had fallen in value and she would incur a loss if she sold it in the current economic climate.
For the respondent, Mr McQuinlan submitted that no special circumstances arose in this matter. He conceded that the applicant's purchase of her unit was a sensible decision but noted that this was done on the basis that she was in full-time employment at that time and was not likely to be seeking Centrelink assistance. He submitted that, while she may not have been aware of the preclusion period prior to making her claim for disability support pension, she was well aware of it when she decided to cease work. He submitted that the monies currently available to the applicant were equivalent to a full year of pension payments and he identified her ability to obtain employment in the future as being significant to her financial circumstances. Mr McQuinlan submitted that the applicant's position was superior to that of typical recipients of income support payments under the Act because of her work capacity and the availability to her of extensive unencumbered assets which could be utilised by her to assist her during the remainder of the preclusion period.
CONSIDERATION
The purpose of the provisions relating to preclusion periods has been the subject of judicial comment. They have been described as operating as 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.[2]
[2] Secretary, Department of Social Security v Smith (1991) 23 ALD 277 at 281-282 per von Doussa J.
Similarly, they have been described as a safeguard against "double dipping" in that:
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.[3]
[3] Secretary, Department of Family and Community Services v Allan (2001) 66 ALD 147 at 148 per Heerey J.
Those considerations must be kept in mind when determining, for the purposes of applying s 1184K(1) of the Act, whether or not special circumstances exist in a given case. The issue of special circumstances arises in various parts of the Act. In the context of other aspects of the Act, it was observed that what is required is:
… something to distinguish ... [the] … case from others, to take it out of the usual or ordinary 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.[4]
[4] Goth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 per Kiefel J.
That observation is equally applicable to s 1184K(1) of the Act. Accordingly, there must be something about the applicant's situation which makes it “unusual” or “uncommon” such that it distinguishes it from the ordinary or usual case.[5] I am satisfied that the applicant's circumstances do not meet that description.
[5] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 at [33] per Besanko J.
The breadth of the discretion in s 1184K(1) of the Act is such as to accommodate health problems. The applicant experiences a degree of vision impairment and a loss of sensation in her foot. However, these are a direct result of the accident in 2005 for which she was compensated. She described depression in 2008 but she also advised that this was resolved in 2009. Special circumstances may be found in a person's inability to return to work as a result of injuries. But that is not the applicant's situation. She returned to full-time work earning a significant annual salary and made a conscious decision to surrender this to involve herself in other pursuits. This has not yet come to fruition but she continues to seek employment in the area of her recent training in dispute resolution.
It was the applicant's evidence that she was not aware of the preclusion period when she spent most of her compensation payment. Nonetheless, the Centrelink letter was sent to her last known address and I am satisfied that this constituted proper service on the applicant.[6] I have noted her contention about the sworn declaration, witnessed by a justice of the peace. That document, dated 20 April 2011, gives her address as the one to which the Centrelink letter was sent. The applicant's evidence was that the declaration had been incorrectly post-dated by some three years. She also said that her solicitor had not provided her with the information about the preclusion period in 2008.
[6] See the Social Security Act 1991 (Cth) s 23(12) and Social Security (Administration) Act 1999 (Cth) s 237.
The applicant’s claim for disability support pension was rejected on 1 April 2011 and, from then on, she knew about the preclusion period which would last until April 2015. Her resignation from full-time employment was in June 2011. Accordingly, even if the applicant was unaware of the preclusion period when she expended her compensation monies, she was aware of it when she decided to cease her employment, which is a factor that made a substantial contribution to any financial difficulty she may now face.
Special circumstances may be found in financial hardship where that goes beyond straitened circumstances and are truly exceptional.[7] Clearly, that is not the applicant's situation. She earns an income from casual employment and has funds available, in the amount of some $18,000, to assist her. She has assets available to her which may also be realised to enable her to maintain herself until the preclusion period ends. These include her unencumbered unit as well as the furniture and the other "nice things" therein. The compensation lump sum was paid, in part, to provide for loss of earnings by the applicant. I am satisfied that it would be contrary to the purposes of the Act for the applicant to retain assets purchased with that money and to receive income support payments from the Commonwealth.
[7] Director-General of Social Services v Hales (1983) 47 ALR 281 at 321 per Sheppard J.
I am satisfied that there are no circumstances, either individually or in conjunction with each other, that are special such as to meet the requirements of s 1184K(1) of the Act.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member.
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Associate
Dated 10 February 2012
Date(s) of hearing 2 February 2012 Applicant In person Advocate for the Respondent Rick McQuinlan, Departmental Advocate
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