Crittenden and Secretary, Department of Family and Community Serv Ices

[2003] AATA 506

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 506

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2002/1359

GENERAL ADMINISTRATIVE  DIVISION		)
Re		MILTON CRITTENDEN

Applicant

And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms N Bell, Member

Date30 May 2003

PlaceNewcastle

Decision The decision under review is affirmed. 

[sgd] Ms N Bell, Member

CATCHWORDS

SOCIAL SECURITY – age pension – special circumstances - lump sum compensation – compensation preclusion period calculated incorrectly.

Social Security Act 1991 section 1184K

REASONS FOR DECISION

30 May 2003 Ms N Bell, Member

1.      This is an application by Mr Milton Crittenden ("the Applicant") for review of the decision of Social Security Appeals Tribunal ("the SSAT") on 29 July 2002 to preclude the Applicant from receiving age pension from 8 December 2001 to 31 October 2003. The original decision had been made by the Secretary, Department of Family and Community Services ("the Respondent") by his Centrelink delegate on 8 January 2002 and affirmed by an authorised review officer on 3 April 2002.

2.      At the hearing before the Tribunal Mr Crittenden was represented by Mr Batchelor of Counsel and the Respondent was represented by Ms Andrea Garcia. The Applicant gave oral evidence to the Tribunal and the Tribunal had before it the following documentary evidence:

Exhibit	Description	Date
T1	Documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 being T1-T24, pp1-62
A1	Applicant's Statement of Facts and Contentions and attachments	2 December 2002
A2	Medical Report of Dr Ghabrial	4 October 2001
A3	Medical Report of Dr Laird	13 October 2000
R1	Respondent's Statement of Facts and Contentions and attachments	13 March 2003

background

3.      The following matters are common ground between the parties:

·     the Applicant sustained injuries in a workplace accident on 22 February 1999 and was in receipt of weekly workers compensation payments;

·     from 8 December 2001 to 2 January 2002 the Applicant was paid age pension;

·     on 20 December 2001 the Applicant's claim in the District Court for compensation was settled for a lump sum amount of $140,000 which included an amount of $30,000 party/party costs;

·     on 28 December 2001 the relevant insurer informed Centrelink of a settlement figure in the amount of $110,000;

·     on 8 January 2002 Centrelink calculated a compensation preclusion period on the basis of a lump payment of $110,000 and on the same date informed the Applicant of the effect that receipt of the lump sum would have on his future entitlements and the length of the preclusion period to be imposed.

4.      It is also agreed between the parties that although the Applicant currently has imposed on him a preclusion period of 95 weeks, given the lump sum compensation amount of $140,000, rather then $110,000, the preclusion period should have been calculated at 121 weeks.  The Respondent indicated that it does not propose to recalculate the preclusion period and is content for the Applicant to continue serving the shorter period.

issues & Legislation

5.      Counsel for the Applicant advised the Tribunal that the Applicant takes no issue with the imposition of a preclusion period or the calculation of that preclusion period. He noted that the Respondent had to calculate a shorter period than warranted under the relevant legislation by the amount of lump sum settlement received by the Applicant and that he does not wish to disturb the calculation of the preclusion period currently imposed.

6. Counsel for the Applicant raised the special circumstances of the Applicant as an issue in the context of section 1184K of the Social Security Act 1991 ("the Act"). Section 1184K provides:

1184K(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.

1184K(2) If:

(a)

a person or a person's partner receives or claims a compensation affected payment; and

(b)

the person receives compensation; and

(c)

the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person's or the person's partner's receipt of, or claim for, the compensation affected payment;

the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsection (1).

applicant's evidence

7.      The Applicant is 67 years old. He told the Tribunal that he is separated from his wife, but they reside in the same house. The home he has built is only partially complete. The Applicant's youngest son Scott lives there with him.

8.      The Applicant said that he worked at Comsteel as a Security Officer until November 1987 (29 years). He was retired as medically unfit due to conditions in his right knee and back. He received compensation in relation to these conditions in 1986. He did not work for the following ten years during which time he was on sickness benefits until 1988 and then thereafter on invalid pension until 1997, when he began to work with Kendall Oil Propriety Limited. He got the job through a friend who knew the owner of the company.  His job was as a Tanker Driver. He did this job until 26 February 1999 when he had an accident, falling from one tank to another and injuring his left knee. He has not worked since. He has had three operations on his left knee following the accident. He was paid weekly workers compensation payments from February 1999 until just after his 66 birthday in November 2001.

9.      The Applicant confirmed that he saw his solicitor in relation to the work accident and they commenced proceedings in the District Court. He said he settled his action on 20 December 2001 and received a total amount of $150,000 including costs.

10.     The Applicant said that in December 2001 he had debts of $8,000 each to the Council and Water Board which, with the addition of 22 per cent interest had to be paid back at $21,000. He said he also had a credit card debt of $9,000, which he used for meeting living expenses.

11.      The Applicant said that in December 2001 the state of the house he was building was that it was only half completed, with plastic against external walls and no plaster or eaves. He said he commenced building the house in 1981.

12.     The Applicant said that he bought a second hand utility with the proceeds of his compensation lump sum because he had sold his car in 2000 and, living 26 km outside of Maitland, he needed a car.

13.     He said he spent some of his monies on plaster, the services of an electrician, tools and building material.

14.     He said he also paid various sums to his children including $5,000 for his son Peter's sport injury operation, $2,500 for his son Scott's fines, $1,000 to his daughter Cathy, $1,000 to his daughter Nicole and $2,000 for a laser vision operation for his wife.

15.     The Applicant said that he received a letter from Centrelink dated 8 January 2002 that told him he must repay an amount of $700 and advised him about the imposition of the preclusion period. He said he rang his solicitor and told him about the letter and with his solicitor's assistance sought a review of the decision by the SSAT in July 2002.

16.     The Applicant said that he has no compensation monies left. He said the house is not finished but he has the material to finish it later on and needs more time, given that he is slower than he used to be. He said he is surviving through the help of his children who bring him groceries. He referred the Tribunal to a "schedule of out of pocket expenses" attached to his Statement of Facts and Contentions, and made up mainly of building supplies and equipment and confirmed its correctness.

17.     The Applicant described the number of medical conditions of which he currently suffers. While he said that his left leg is improving he now needs a total right knee replacement. He also has a problem with his oesophagus and every six months he requires an arthroscopy. He said he also suffers from non-insulin dependent diabetes and prostate problems for which he is scheduled to have an operation in May.

18.     The Applicant said that when he received the letter from Centrelink about the preclusion period he continued spending money because his solicitor told him that he thought that he would be able to get the pension back for him and he would be all right.

19.     The Applicant said that he has investigated selling his house but, given that it is not finished yet, he is unable to get a Council 317A Certificate, which he needs in order to sell it. He said that the house is on 22 acres of land and he has investigated having the land subdivided but he is unable to get Council approval for that.

20.     He has three daughters and two sons, none of them are dependent on him and all of them are in employment. He said his wife is in receipt of age pension.

21.     The Applicant said that he does not know whether he would have worked past 65 years if he had been able to and that he had no plans to become self employed after retirement. He said he understood about the preclusion period but could not believe it could apply to him after 15 years of working.

22.     The Applicant also said that from his settlement money the only items he purchased which were not for the purpose of finishing his house or for the benefit of his children were a television set and a $4,000 motorbike for his grandchildren.

submissions

23.     Mr Batchelor for the Applicant, submitted that the Applicant claimed in his common law proceedings wages loss until the age of the retirement. He submitted that at a rate of $550 per week from February 1999 to December 2001 the Applicant would have lost approximately $52,000 and there is thus no element in the settlement amount of future economic loss. He submitted that it is open to the Tribunal to consider the impact of the 50 per cent rule on the Applicant as special circumstances.

24.     Counsel also submitted that the advice received by the Applicant from his solicitor, which was consistent with the solicitor’s understanding of the preclusion period, should also be taken into account as a special circumstance.

25.     Counsel also submitted that the Applicant's inability to sell his property or subdivide it is an additional special circumstance as are his debts to the Water Board, Council and his credit card debt. He also submitted that the Applicant 's significant medical conditions and the cost associated with them are special circumstances and that the items on which the Applicant spent his settlement monies are reasonable and not extravagant. He submitted that the Applicant has no money left at all and is relying on the charity of his children and for those reasons the preclusion period should be shortened.

26.     The Respondent submitted that, in view of the direct advice to the Applicant from Centrelink as to the imposition of the preclusion period, the solicitor's advice to the Applicant is not a special circumstance. Ms Garcia also submitted that the use of compensation payments for home improvements or for the acquisition of assets does not constitute special circumstances.

27.     In addition Ms Garcia submitted that the Applicant 's claim in relation to a number of his medical conditions are not corroborated by expert's evidence. She submitted that the Applicant's children are very supportive of him and they will be able to continue to assist him until October when the preclusion period concludes. She noted that when the Applicant's house is completed he would be in position to sell it and repay his debts to his children.

28.     In reply Counsel for the Applicant noted the distinction between improving a home and finishing a home for sale. He also referred the Tribunal to the decision of the Federal Court in Kertland v Secretary, Department of Family and Community Services (57 ALD 600).

Consideration

29.     The preclusion period imposed on the Applicant by the Respondent and its calculation are not disputed by the Applicant.  The Tribunal notes that the Respondent has made a concession to the Applicant arising out of its initial miscalculation of the preclusion period.  This miscalculation is to the Applicant’s benefit and, given the Respondent’s willingness, the Tribunal sees no reason to disturb it.

30. The issue that remains, however, is whether all or any part of the Applicant’s lump sum settlement should be disregarded, in accordance with the provisions of section 1184K of the Act, in the special circumstances of his case.

31.     The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 is often quoted in relation to the interpretation of "special circumstances". In that decision, the Tribunal said at 6 ALD 3:

"An expression such as `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 upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."

32.     The breadth of the discretion in relation to “special circumstances” was also commented on by the Full Federal Court in Riddell v Secretary Department of Social Security (1993) 42 FCR 443 at 450:

“Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.”

33.     The Tribunal accepts the Applicant’s evidence as to the advice received from his solicitor, his inability to obtain a 317A Certificate on, and the current state of, his house, the Council’s refusal to allow him to subdivide his land and the manner in which he expended his settlement monies.  While the Tribunal notes the Respondent’s submission as to the absence of corroborative medical evidence of the Applicant’s various conditions, it accepts that the Applicant’s health is poor and that he is receiving treatment for a number of conditions.

34.     The Tribunal also accepts that the Applicant received a letter from Centrelink dated 8 January 2002 advising him of the imposition of the preclusion period and that he has spent a large proportion of his settlement monies on the completion of his house.

35.     As to the components of the Applicant’s compensation settlement lump sum, the Tribunal notes that the Applicant’s Statement of claim in the District Court includes a claim for diminution of earning capacity and loss of opportunity for self employment.  However, the Applicant submitted, through his Counsel, that the lump sum compensation received by him was limited to the economic loss sustained by him up until his retirement age.  The Applicant’s evidence was that he was unsure as to whether he would have continued working, had he been able to, beyond age 65.

36.     The Tribunal does not consider that the decision of the Federal Court in Kertland v Secretary Department of Family and Community Services (supra) applies to the circumstances of this case.  In that decision the Court held that the operation of a statutory scheme which rendered a person ineligible to receive compensation payments for a period could be taken to be a “special circumstance”.  No such scheme applies to the Applicant and the monies received by him were received after a common law claim, which included a range of heads of damage including loss of opportunity and loss of enjoyment of life and amenity.  It is not possible to dissect, with any accuracy, the lump sum settlement received by the Applicant, given the ambit of his claim.

37.     The Tribunal considers that, while the Applicant’s various medical conditions are unfortunate, they are not unusual in a man of his age.  Nor is it unusual for a person to have outstanding debts following a period of receipt of weekly compensation.

38.     The Applicant’s use of his settlement monies for materials and tools for the completion and repair of his house are not, in the Tribunal’s view, a special circumstance.  He will recover that expenditure on the sale of the property, which, it is acknowledged, requires its completion.

39.     The Tribunal accepts that the Applicant has no savings left and is currently dependent on assistance from his children.  However, the Tribunal notes that the Applicant expended some $9,000.00 on his children when he received his settlement monies. In the event that he may owe a debt to his children when the preclusion period is over, he will be able to apply the proceeds of the sale of his house, if completed, to discharging that debt.

40.     For the reasons outlined above, the Tribunal considers that the Applicant’s circumstances are not special as to justify treating any part of the Applicant’s compensation payment as having not been made

Determination

41.     The decision under review is affirmed.

I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Member

Signed:         Georgie Zuzak
  Associate

Date/s of Hearing  1 April 2003
Date of Decision  30 May 2003
Counsel for the Applicant         Mr Batchelor
Advocate for the Respondent   Ms Garcia