Doelle and Secretary, Department of Family, Housing, Community Services and Indigenous Affairs

[2008] AATA 684

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 684

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/1747

GENERAL ADMINISTRATIVE DIVISION		)
Re		DOUGLAS DOELLE

Applicant

And SECRETARY, DEPARTMENT OF FAMILY, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr S Karas, AO, Senior Member

Date6 August 2008

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

.............[Sgd].................................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Administration of the Act – lump sum preclusion period – disability support pension – lump sum compensation payment included economic loss – disability support pension paid throughout preclusion period – no special circumstances – applicant’s circumstances are not unusual or exceptional – debt to be recovered – decision under review affirmed.

Social Security Act 1991 ss 1169, 1170, 1184K

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Re Ivovic and Director-General of Social Security (1981) 3 ALN no.61

Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531

REASONS FOR DECISION

6 August 2008 Mr S Karas, AO, Senior Member

INTRODUCTION

1.      Mr Douglas James Doelle (“the Applicant”) applied to the Administrative Appeals Tribunal (“the Tribunal”) on 24 April 2008 for a review of a decision made by a Centrelink Officer on 4 February 2008.  The Centrelink Officer found that the applicant was subject to a preclusion period and had to refund to Centrelink $7,069.28 of disability support pension paid during that period from compensation monies received by him for injuries sustained in a car accident on 15 November 2001.  On 5 February 2008 the Applicant sought reconsideration of that decision.  The original decision was affirmed on 7 February 2008.  The Applicant sought a further review of that decision by an Authorised Review Officer.  The Authorised Review Officer affirmed the earlier decision on 14 February 2008 to apply a preclusion period of 15 November 2001 to 24 July 2002 and recover $7,069.28 of disability support pension paid within this preclusion period as a result of the Applicant’s lump sum compensation settlement.

2.      On 22 February 2008 the Applicant appealed the Authorised Review Officer’s decision to the Social Security Appeals Tribunal (SSAT).  On 22 April 2008 the SSAT affirmed the decision under review.

3.      A hearing on this matter was held in Brisbane on 28 July 2008.  The Applicant appeared on his own behalf.  Mr Hamilton appeared for the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (“the Respondent”).  The Tribunal had before it the T-Documents lodged in accordance with s 37 of the Administrative Appeals Act 1975 together with other documents as follows:

·   A copy of the Respondent’s Statement of Facts and Contentions dated 14 July 2008;

·   A letter from the Respondent to the Applicant dated 22 July 2008 regarding the rent component paid by Centrelink to the Applicant as requested by the Applicant at the preliminary conference held in this matter on 12 June 2008.

BACKGROUND

4. The Applicant, who has been in receipt of a disability support pension since 1989, sustained injuries in a motor vehicle accident on 15 November 2001 for which he received damages to compensate him for injuries and his loss on 29 January 2008. It was a term of settlement that the Applicant would be paid the amount of $55,000. On 4 February 2008 Centrelink calculated a preclusion period of 15 November 2001 to 24 July 2002 that resulted in a refund to Centrelink of $7,069.28 of disability support pension paid during that period. As Centrelink had determined that the Applicant had secured a lump sum compensation payment that included an economic component he was subject to a preclusion period under s 1169 of the Social Security Act 1991 (“the Act”). The length of the preclusion period is calculated pursuant to s 1170 of the Act. Section 1184K of the Act confers a discretion on the decision maker to disregard some or all of a compensation payment should there be “special circumstances” that make it desirable to do so.

5.      It was found by the earlier decision maker and the SSAT that the Applicant’s settlement amount included a component for economic loss, that the amount of $7,069.28 should be recovered by the Respondent and that there are no “special circumstances” that militate against recovery of that charge or amount by the Respondent.

ISSUES

6.      The issues for the Tribunal to determine are:

(a)Whether a preclusion period should be applied in relation to compensation monies recovered by the Applicant for the injuries he sustained on 15 November 2001 and, if so,

(b)Whether a refund of $7,069.28 of disability support pension paid during the time of the preclusion period should be recovered by the Respondent.

EVIDENCE

7.      At the hearing of this matter on 28 July 2008 the Applicant gave evidence to the effect that:

·   There was nothing in the settlement documents relating to his accident that referred to an economic loss component being included in the settlement monies paid to him of $55,000.

·   In the document headed A3, a document annexed to the Respondent’s Statement of Facts and Contentions, there was no amount for economic loss and the entry figure against these items was “$0.00.”

·   It may have been the intention that if the settlement amount exceeded $35,000 that economic loss was to be a component but the solicitor never raised it nor was it contained in the settlement statement and no letter was written at the time about this by the solicitors.

·   He thought that the SSAT had glossed over his special circumstances that included his caring for his wife and daughter (who suffers intellectual problems) his heart condition, his “heaps of bills” and credit card debts, his need for home help (that he will have to pay for) when he is operated on for his heart condition, his living out of town and the need to travel 53 kms to town to shop etc.  No one in the family works, all are on welfare and the applicant has been on the pension before and since the accident.

·   He had a settlement of $55,000 but after the payment of legal fees, Medicare and the like he only received some $37,000 in the hand which he banked and from which he still has some $13,000 in the bank.

·   He has two cars.  One is an old 1977 model Mercedes and a 1988 or 1989 Ford utility.  Both are registered and he drives both cars.  Two cars are required in case one breaks down.

8.      The advocate for the Respondent referred to parts of the SSAT decision[1] and the Applicant agreed with the points highlighted or referred to in relation to economic loss and the Applicant’s solicitor’s role in the settlement negotiations and the like.  Further reference was made to the settlement negotiations by the parties and their solicitors and to subsequent correspondence between them regarding this matter and whether the settlement sum of $55,000 contained an economic loss component.

[1] Decision made by the SSAT on 22 April 2008; T2 at 5 (particularly 5^th & 6^th dot point) and T2 at 6 (particularly 3^rd & 4^th dot point).

9.      The Applicant referred to the solicitor for the Nominal Defendant at the time of the settlement negotiations as noting he was on a pension, had a heart problem and not working.  These remarks, the reference to the A3 document and the settlement statement signed by the parties that did not specify that economic loss were components that led him to conclude that economic loss was not included in the settlement and he should therefore not have to pay Centrelink the monies involved.  The Applicant reiterated his “special circumstances” and that with his heart problem he could “drop dead to-day”.  He needs $35 worth of tablets a month with his pensioner discount and he has to have water brought to the property out of town where he lives to save rental payments as it is cheaper to be where he is than in town.  Furthermore, this matter has caused him stress and concern with Centrelink.

10. The advocate for the Respondent submitted that the settlement monies of $55,000 contained a component for economic loss and that Centrelink was entitled to the payment pursuant to the Act. He noted that the document headed A3 was a starting point of figures in the negotiations for the settlement of the Applicant’s claim for the 2001 accident and the total in that paper was $19,800 a very different amount from the settlement figure of $55,000. Reference was made to other correspondence at the time involving the solicitors for the parties and how an economic loss component would have been included if the settlement amount exceeded $35,000. The advocate for the Respondent referred to parts of the SSAT decision regarding the settlement and evidence with which the Applicant agreed and to the manner of the settlement negotiations and correspondence after. Indeed, he stressed that if there had not been any economic loss component in the settlement then Centrelink would not have become or been involved as it was. He further noted that the Applicant may have misunderstood aspects of the settlement negotiations and that an economic loss component would be included if the settlement sum agreed on exceeded $35,000. The advocate for the respondent indicated that the settlement figure included an amount of some $20,000 for economic loss in the circumstances.

CONSIDERATION AND FINDINGS

11.     It appears from the evidence in this matter that the applicant agreed with parts of paragraph 8 of the SSAT’s decision regarding economic loss being claimed as a component of his settlement claim by his solicitor at and during the negotiations that led to the settlement of his injuries claim for $55,000.  Other material on the file indicates that had the settlement sum exceeded $35,000 then an economic component would have been included as reflected in the correspondence by the parties around the time of the settlement payment.

12.     Although the Applicant asserts that settlement of his injuries claim was reached on the basis that no component was included for economic loss, the Tribunal is unable on the evidence and material before it to accept this.  Perhaps he misunderstood or was confused regarding the economic loss aspect of the settlement.  The Tribunal prefers the evidence of the solicitor for the Nominal Defendant that there was an economic loss component in the settlement sum that exceeded $35,000.  Not only is the solicitor an officer of the court that is ethically bound to give a truthful account to Centrelink but other statements and material from the Applicant’s solicitors at the time do not refute this to the extent that other evidence is to be preferred.  Indeed, the Tribunal does find that there appears to be no or insufficient probative evidence that economic loss was not included in the settlement amount of $55,000 and the recorded remarks of the Applicant’s solicitor would support the Tribunal’s conclusion in this regard.  The Tribunal notes the Centrelink’s officer’s record of a conversation with the applicant’s solicitor in February 2008 where it is stated “he also advised that it may have been possible that the Nominal Defendant did include some economic loss in the settlement.”  This conclusion is further supported by the Applicant agreeing with parts of the SSAT’s decision and correspondence in the T –documents which were pointed out to him by the Respondent’s advocate regarding economic loss as being a component of the settlement at the hearing of this matter.  When all the evidence is taken together it tends logically to support the view that economic loss was a component of the settlement amount agreed to by the parties in this matter.

13.     To summarise, the Tribunal finds on the basis of the evidence and material before it:

·   the Applicant made a claim for damages for injuries he sustained in a car accident on 15 November 2001;

·   the Applicant settled the whole of his claim for $55,000 inclusive of statutory refunds and costs; and

·   the settlement sum included a component for economic loss.

Given the Tribunal’s findings that the compensation settlement monies received by the applicant did contain economic loss that means that the compensation provisions of the Act must be applied.

Section 1169 of the Act provides as follows:

“s1169 Compensation affected payment not payable during lump sum preclusion period

(1)  If:

(a)  a person receives or claims a compensation affected payment; and

(b)  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.

(2)  In this section:

"lump sum compensation payment" does not include a lump sum payment:

(a)  to which section 1164 applies; or

(b)  that relates only to arrears of periodic compensation payments.”

14. The Act defines a compensation affected payment to include a disability support pension. Section 1169 means that the Applicant is retrospectively precluded from being entitled to payment of a disability support pension for a period of time. That time period is calculated in s 1170 that provides as follows:

“s1170 Lump sum preclusion period

(1)  Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:

(a)  begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and

(b)  ends at the end of the number of weeks worked out under subsections (4) and (5).

(2)  If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:

(a)  begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and

(b)  ends at the end of the number of weeks worked out under subsections (4) and (5).

(3)  If neither of subsections (1) and (2) applies, the lump sum preclusion period is the period that:

(a)  begins on the day on which the loss of earnings or loss of capacity to earn began; and

(b)  ends at the end of the number of weeks worked out under subsections (4) and (5).

(4)  The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:

(5)  If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number.“

15.     In the circumstances the Tribunal finds that Centrelink’s calculation of the preclusion period is correct and that Centrelink’s calculation of the amount of debt at $7,069.28 is also correct.

16. The Applicant submitted that there were “special circumstances” applicable to his case so that the debt to Centrelink should not have to be paid. Section 1184K of the Act provides that where “special circumstances” apply Centrelink is to treat the compensation payment as not having been made. It is usually considered that for this section to apply that there must be something out of the ordinary about a person’s case that makes it unreasonable for the debt to Centrelink to be repaid.

17.     The Tribunal and the Federal Court have examined the term “special circumstances.  In Re Beadle and Director General of Social Security[2] per Toohey J stated:

“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 on 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 the cases.  This is not to say that the circumstances must be unique but they have a particular quality of unusualness that permits them to be described as special”.

[2] (1984) 6 ALD 1 at 3.

18.      In Re Ivovic and Director-General of Social Security[3] the Tribunal said:

“The reference to special circumstances ‘by reason of which’ a person liable ‘should be released’ requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes…Thus, whilst keeping the dominant principle of [recovery of a debt] in mind, [the decision maker] must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate”.

[3] (1981) 3 ALN no. 61.

19.      In Federal Court case of Boscolo v Secretary, Department of Social Security[4] per French J stated regarding the requirement of “special circumstances”:

‘It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened[5]…The core of the requirement for “special circumstances” or “special reasons” is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course[6]”

[4] (1999) 90 FCR 531.

[5] (1999) 90 FCR 531 at 535.

[6] (1999) 90 FCR 531 at 536.

20.      The Applicant relies on his living situation, family and financial circumstances as well as his ill health to constitute “special circumstances” in this case.  The Tribunal accepts that he and his family suffer a degree of ill health resulting in their all being recipients of welfare.  The Applicant’s wife and daughter appear to rely and depend on him for assistance and support.  Nevertheless the Tribunal notes that the Applicant still has some $13,000 available from the settlement monies, that he and his family continue to live out of town for a number of reasons, they have two cars available to them and their living circumstances have not undergone substantial change.  Consequently, the Tribunal finds that payment of the Centrelink debt arising from the application of the preclusion period has or would result in something unintended, unfair or unjust in this case.  Indeed, there is no or insufficient probative evidence that the Applicant’s circumstances are somehow unusual or exceptional such that there are “special circumstances” enough to warrant the debt being waived.

21. The Tribunal notes the concerns and stress articulated by the Applicant in this matter, however, the Tribunal is bound by legislation and must apply the law as expressed in the Act.

CONCLUSION

22.      The Tribunal affirms the decision under review.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Karas, AO, Senior Member

Signed: .............................[Sgd]...............................................
  Elizabeth Young, Research Associate

Date/s of Hearing  28 July 2008
Date of Decision  6 August 2008
For the Applicant  Mr D Doelle was self-represented
For the Respondent                  Mr B Hamilton, departmental advocate