Craig Austin and Secretary, Department of Social Services

Case [2014] AATA 516

[2014] AATA 516

Division GENERAL ADMINISTRATIVE DIVISION

File Number

2014/1658

Re

Craig Austin

APPLICANT

And

Secretary, Department of Social Services

RESPONDENT

DECISION

Tribunal

Mr R G Kenny, Senior Member
Date

29 July 2014
Place Brisbane

The Tribunal affirms the decision under review.

...........................Sgd.............................................

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 – Use of Guide to Social Security Law - Special circumstances not established for part of settlement to be treated as not having been received – Preclusion period not shortened – Decision under review affirmed

LEGISLATION

Social Security Act 1991 (Cth) ss 1170, 1184K

CASES

Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9

Brodley and Secretary, Department of Social Security [1991] AATA 669

Director-General of Social Services v Hales (1983) 47 ALR 281

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Lazarov and Secretary, Department of Family and Community Services [2004] AATA 743

Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716

Secretary, Department of Family and Community Services v Allan (2001) 66 ALD 147

Secretary, Department of Social Security v Smith (1991) 23 ALD 277

Winterbotham and Secretary, Department of Social Security [1990] AATA 808

SECONDARY MATERIALS

Guide to Social Security Law, Australian Government

REASONS FOR DECISION

Mr R G Kenny, Senior Member

29 July 2014

BACKGROUND

  1. Craig Austin (“the applicant”) was injured in a motor vehicle accident on


    10 December 2007. In settlement of the compensation claim associated with his injuries, he was awarded two lump sum payments which totalled $265,750. On 27 March 2012, Centrelink determined that, as a result of his lump sum payments, the applicant would be subject to a preclusion period from 22 March 2012 until 22 April 2015. The effect of the Centrelink decision was that the applicant was precluded from receiving forms of income support payments, including Newstart Allowance, under the Social Security Act 1991 (Cth) (“the Act”) during the preclusion period. On 6 January 2014, the applicant applied for Newstart Allowance. His claim was rejected on the same day and that decision was affirmed by an authorised review officer on 21 January 2014 and, in turn, by the


    Social Security Appeals Tribunal (“SSAT”) on 3 March 2014.

    ISSUES AND LEGISLATION 

  2. The applicant did not dispute the imposition of the preclusion period or its duration. I am satisfied that this has been correctly calculated in accordance with s 1170 of the Act.


    The applicant was concerned that there were special circumstances applying to his situation which required that some part of his settlement monies be disregarded so that the preclusion period would be shortened. That is the issue for determination. The relevant provision of the Act reads:

    Section 1184K Secretary may disregard some payments

    (1)For the purposes of this Part, the Secretary may treat the whole or part of…

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Craig Austin and Secretary, Department of Social Services [2014] AATA 516
Case
[2014] AATA 516
Decision Date

CaseChat Overview and Summary

Craig Austin, the applicant, sought to challenge a decision by the Department of Social Services to impose a preclusion period on his eligibility for social security benefits, following the receipt of a lump-sum compensation payment. This payment included a component attributable to lost earnings and capacity to earn. The dispute was heard and determined by the Administrative Appeals Tribunal (AAT). The central legal issue before the tribunal was whether the applicant's financial situation and health concerns constituted "special circumstances" that would justify an adjustment to the preclusion period under s 1184K of the relevant legislation.

The AAT found that the applicant's circumstances, though difficult, did not present special circumstances warranting a deviation from the statutory preclusion period. The tribunal acknowledged the applicant's financial difficulties, including the imminent need to replenish his insulin supply, and his health issues, particularly his low back pain and sciatica. However, the tribunal concluded that these factors, while regrettable, did not uniquely distinguish the applicant's situation from the norm in a way that would justify an adjustment to the preclusion period. The tribunal emphasized the purpose of the preclusion period provisions, which is to prevent "double dipping" and to maintain a fair balance between the interests of the recipient and the community.

The tribunal's reasoning hinged on the absence of any distinguishing feature in the applicant's situation that would make it unfair or unjust to apply the preclusion period as set. The tribunal noted that the applicant had purchased a house with full knowledge of the implications of the preclusion period and that the value of the house approximated the amount of compensation received. Consequently, the tribunal affirmed the decision under review, maintaining the preclusion period as determined by the Department of Social Services.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The applicant has health concerns. He has diabetes mellitus and needs medication in the form of insulin injections on a daily basis. His supply of this medication is almost depleted and he cannot afford to replenish it. He has developed a painful back condition which manifests itself in severe sciatic pain in his leg and foot. He said that was not associated with the injuries for which he received his compensation payments. He has received spinal injections for this but these have not relieved his pain. He is hopeful that he will overcome his sciatic pain to the extent that he will be able to return to employment as a driver.[1] Other evidence[1] After the hearing, the applicant provided two documents. On 5 July 2014 he advised that, on 3 July 2014, he had a further injection which failed to relieve his pain. On 23 July 2014 he provided a report, dated 17 July 2014, from In evidence was a letter to the applicant from a sales consultant with a real estate agency located near where the applicant lives. The consultant estimated the value of the house to be $220,000 to $240,000 with the option of a marginally higher listing price. Dr Michael McLean, the applicant’s general practitioner since April 2014, completed a medical certificate on 21 May 2014 in which he advised that the applicant was unfit for work because of “low back pain/radiculopathy”. SUBMISSIONS The circumstances which the applicant relied upon to show that his case was special, such that s 1184K of the Act would apply, were his financial position and his health concerns. He submitted that his financial situation was such that the preclusion period should be shortened to enable him to access income support payments, clear his debts, pay his bills and purchase medication. He submitted that, having bought his car for $25,000, he would be losing $20,000 if he sold it for $5,000 and would be disadvantaged without his own means of transport. He submitted that he was a victim of circumstance in having a vehicle accident and a house damaged by fire. For the respondent, Mr McQuinlan submitted that there were no special circumstances to justify making any adjustment to the preclusion period. He submitted that, based on the evidence concerning the value of the house, it was appropriate that the applicant sell it and that, by so doing, he would be in much the same position financially as he was when he received his compensation payment. He submitted that the current value of the house approximated the amount of compensation which he was paid. In particular, he submitted that the applicant purchased the house with full knowledge of the significance of the preclusion period. He submitted that it was not the intent of the Act to allow such an asset to be retained so that he could receive Centrelink benefits. He also submitted that the applicant should investigate further the selling of his car and noted that, even if it sold for $5,000, those monies would assist him with his immediate financial concerns. Mr McQuinlan submitted that the decision under review ought be affirmed.CONSIDERATION

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

For the respondent, Mr McQuinlan submitted that there were no special circumstances to justify making any adjustment to the preclusion period. He submitted that, based on the evidence concerning the value of the house, it was appropriate that the applicant sell it and that, by so doing, he would be in much the same position financially as he was when he received his compensation payment. He submitted that the current value of the house approximated the amount of compensation which he was paid. In particular, he submitted that the applicant purchased the house with full knowledge of the significance of the preclusion period. He submitted that it was not the intent of the Act to allow such an asset to be retained so that he could receive Centrelink benefits. He also submitted that the applicant should investigate further the selling of his car and noted that, even if it sold for $5,000, those monies would assist him with his immediate financial concerns. Mr McQuinlan submitted that the decision under review ought be affirmed.CONSIDERATION The purpose of the provisions relating to preclusion periods has 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. 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. 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] Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545. 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 unfair, 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) 100 ALD 9 at 18. The breadth of discretion in s 1184K(1) of the Act is such as to accommodate health problems. The applicant experiences problems with low back pain and sciatica which would seem to be unrelated to the accident which led to his compensation payment. He has undergone injection procedures with Dr McLean but these have not relieved his pain. He has insulin dependent diabetes and has almost depleted his current supply of this medication. Also, he has been unable to make payments of periodic expenditure on service items such as electricity.