Dixon and Secretary, Department of Social Services (Social services second review)
[2015] AATA 694
•10 September 2015
Dixon and Secretary, Department of Social Services (Social services second review) [2015] AATA 694 (10 September 2015)
Division
GENERAL DIVISION
File Number
2015/0833
Re
Paul Dixon
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal The Hon. Brian Tamberlin QC, Deputy President
Date 10 September 2015 Place Sydney The Tribunal affirms the decision under review.
...............................[sgd]........................................
The Hon. Brian Tamberlin QC, Deputy President
CATCHWORDS
SOCIAL SECURITY – application for Disability Support Pension and Newstart Allowance – compensation preclusion period – whether special circumstances exist to warrant reduction or elimination of preclusion period – purchase of property – expenditure on extended holiday – financial hardship – whether circumstances out of the ordinary – decision affirmed
LEGISLATION
Social Security Act 1991 ss 17, 1169, 1184K
CASES
Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Waters [2011] AATA 666
Re Manafikhi and Secretary, Department of Employment and Workplace Relations [2007] AATA 1529
Director-General of Social Security v Hales (1983) 47 ALR 281
Dranichnikov v Centrelink [2003] FCAFC 133SECONDARY MATERIALS
Guide to Social Security Law
REASONS FOR DECISION
The Hon. Brian Tamberlin QC, Deputy President
10 September 2015
The Applicant seeks review of a decision of the Social Security Appeals Tribunal (SSAT) of 22 January 2015. The SSAT affirmed the decision of an authorised review officer at Centrelink that the Applicant’s claim for Disability Support Pension (DSP) and Newstart Allowance (Newstart) were correctly rejected on the basis that he was subject to a compensation preclusion period from 15 November 2010 to 4 December 2016 (the relevant period) and that there were no special circumstances which would allow all or part of the compensation payment to be treated as not having been made for the purposes of calculating the preclusion period.
There are two issues raised for determination, namely whether the Applicant was precluded from receiving compensation affected payments during the relevant period, and if so whether they can or should be reduced due to special circumstances.
In relation to the first question, the Applicant does not dispute the duration or application of the preclusion period. His position on the application before this Tribunal was that there are special circumstances which would warrant the reduction or elimination of the preclusion period.
SUMMARY OF LEGISLATION
Under s 1169 of the Social Security Act 1991 (the Act), where a person receives or claims a compensation affected payment and the person receives a lump sum compensation payment, the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.
Sections 17 and 1169 of the Act have the effect that income support payments, such as DSP and Newstart, would be affected by a lump sum or periodic payment of compensation. A lump sum payment generally results in the imposition of a preclusion period during which the income support payment is not payable. Under s 1184K of the Act, allowance can be made for all or part of a compensation payment to be treated as not having been made if special circumstances can be established in the particular case.
The Guide to Social Security Law (the Guide) provides guidelines in relation to the circumstances in which special circumstances should and should not be applied.
FACTUAL BACKGROUND
The Applicant was born in 1970 and is presently 45 years of age. On 5 July 2007 the Applicant was injured in a work-place accident and was paid weekly compensation until 14 November 2010.
On 20 May 2010 the Applicant was paid a compensation lump sum of $40,010. On 22 November 2010 the Applicant entered into a settlement of his compensation claim and received a gross compensation lump sum of $460,000.
On 7 December 2010 the Department wrote to the Applicant advising that he was subject to a compensation preclusion period from 15 November 2010 to 4 December 2016 and explaining how the preclusion period was calculated. On 25 February 2011 the Applicant wrote to the Department accepting that he was subject to a compensation preclusion period and not eligible for income support payments during the period.
On 23 September 2014 he claimed DSP and on 25 September 2014 he claimed Newstart. At that time he indicated that he had $84,362 in financial investments, as well as $5,800 worth of assets in the form of his motor vehicle and household contents. He was also receiving $75 a week from a boarder. The Department rejected his claim for Newstart because he had received a lump sum compensation payment. Shortly after, the Department rejected his claim for DSP as he was subject to a preclusion period.
The Applicant requested an internal review of the decision to reject his claims. On 5 November 2014 the Department wrote to the Applicant advising him of the preclusion period, and referring the matter to an authorised review officer, who affirmed the decision under review.
The Applicant on 17 November 2014 applied to the SSAT for review of the decision and on 22 January 2015 the decision was affirmed by the SSAT.
CONSIDERATION
The Applicant gave evidence before this Tribunal that he received a net figure of $400,000 from the settlement, of which $315,000 was spent on the purchase of a three bedroom brick home.
The Applicant claims that he currently has no money to live on and no money for medication for his illness. He contends that his circumstances are “special” within the meaning of the Act.
The Respondent’s position is that having regard to the purpose of the provisions and to the interpretation of the legislative discretion, considered in the light of the guidelines set out in the Guide, the Applicant’s circumstances, when considered as a whole, are not of a nature that would take the case out of the ordinary.
The Respondent relies on the fact that the Applicant owns a property which he purchased for $315,000, which is not subject to any mortgage or other encumbrance and which places him in a better position than most income support recipients. His other assets as noted include contents of the house and a motor vehicle worth $800.
The Respondent also notes that at the time when the claims were lodged the Applicant had $84,361 in available funds, which he subsequently spent on an extended holiday.
When asked questions in relation to this holiday expenditure, which on its face seems extravagant, the Applicant indicated that he had been depressed and went to see friends and acquaintances and in effect take an extended vacation, and in the course of these activities he spent in the order of $80,000.
In support of their contention the Respondent also relies on the fact that although the Applicant has ongoing health issues, medical services are available to him under the public health system, and there is no new evidence before this Tribunal to suggest that such services would not be sufficient for the Applicant’s needs or that he is unable to pay for his medical treatment with his available funds.
The Respondent also contends there is no evidence that the Applicant has any significant unpaid debts and he has no unusual living expenses beyond his medical costs.
The Applicant claims to be in financially straitened circumstances despite owning the three bedroom brick home, in respect of which he has been able to rent half of the home for a regular income. At the moment he does not appear to have a tenant in the house. There was no evidence before me as to the increase or decrease in the value of the house which appears to be a substantial building which is well-kept and tidy.
I have had regard to the guidelines, the purpose of the legislation, and a number of decided cases in relation to the meaning of the expression “special circumstances”, including the decisions in Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Waters [2011] AATA 666 and Re Manafikhi and Secretary, Department of Employment and Workplace Relations [2007] AATA 1529.
I note in particular the useful definition given by Hill J in Dranichnikov v Centrelink [2003] FCAFC 133, where His Honour said at [66] that “...what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary”.
In the present case the Applicant indicated that he did not wish to encumber or borrow on the equity in the home and he is entitled to adopt that position. Nevertheless, the availability of a substantial asset, and the possibility of down-sizing and the taking in of a boarder or leasing other premises, are all available options to assist him in his financial difficulty.
I have also taken into account the fact that he spent $84,000 on his extended holiday.
He clearly has expenses such as council rates, maintenance of the house and equipment in the house. However, his personal expenditure falls within his control and does not take his case out of the ordinary circumstances where there is some financial hardship.
The authorities make it clear that for financial hardship to be a “special circumstance” it must be more than “straitened” circumstances and must be truly exceptional. I note the observation of Sheppard J in Director-General of Social Security v Hales (1983) 47 ALR 281 that “the legislation provides for the payment of a variety of benefits to different classes of people who usually have one thing in common: they will be impecunious and in difficult straitened circumstances”.
After taking into account the difficult financial circumstances of the Applicant and the health problems he has, I am not satisfied, having regard to the whole of the evidence, that his circumstances satisfy the requirement that they be “special” in order to justify any variation of the preclusion period.
DECISION
Accordingly, for the above reasons, the decision under review is affirmed.
I certify that the preceding 29 (twenty -nine) paragraphs are a true copy of the reasons for the decision herein of The Hon. Brian Tamberlin, QC, Deputy President ..........................[sgd]..............................................
Associate
Dated 10 September 2015
Date(s) of hearing 9 July 2015 Applicant In person Solicitors for the Respondent Department of Human Services
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