Drury and Secretary, Department of Social Services (Social services second review)
[2019] AATA 5246
•7 November 2019
Drury and Secretary, Department of Social Services (Social services second review) [2019] AATA 5246 (7 November 2019)
Division:GENERAL DIVISION
File Number(s): 2019/2594
Re:Raymond Drury
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Emeritus Professor P A Fairall, Senior Member
Date:7 November 2019
Date of written reasons: 5 December 2019
Place:Sydney
The reviewable decision of AAT1 is affirmed.
...............................[sgd]......................................
Emeritus Professor P A Fairall, Senior Member
CATCHWORDS
SOCIAL SECURITY – compensation recovery – disability support pension – where applicant received compensation from NSW Dust Diseases Board for asbestos-related disease – where applicant not qualified for, and receiving DSP at date of event that gave rise to entitlement under s 1173 – where DSP reduced dollar for dollar – whether any special circumstances exists to allow for part or all of the periodic payment being treated as not having been made – decision under review is affirmed
LEGISLATION
Workers’ Compensation (Dust Diseases) Act 1942 (NSW) s 8
Social Security Act 1991 (Cth) (‘the SSA’) ss 17, 109, 1160, 1161, 1173, 1184K
CASES
Nuzzo and Secretary, Department of Family, Community Services and indigenous Affairs [2006] AATA 524
Vernon and Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 513
REASONS FOR DECISION
Emeritus Professor P A Fairall, Senior Member
5 December 2019
The applicant is a 71 year old pensioner. He is not physically well and has the responsibility of caring for a partner who is not residentially qualified to receive social welfare, and a 99 year old neighbour, for whom he receives a carers’ payment. His medical ailments will be referred to later.
For more than thirty years, most of his working life, he worked in heavy industries such as refineries and power stations, labouring in the construction and maintenance of blast furnaces in and around the Hunter Valley. From 1 July 1967, he was exposed to levels of dust in the workplace.[1] Unfortunately, his work environment took its toll and on 4 September 2003 he was diagnosed with asbestos pleural disease (APD).
[1] Date of first exposure noted as 1 July 1967: T5, 35.
The applicant received periodic compensation payments (‘dust payments’) under the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (‘Dust Diseases Act’).[2] The NSW Dust Diseases Board (‘the DDB’) assessed his degree of impairment at 20%.[3] However, he did not receive any dust payments until he retired from active employment five years later, on 28 October 2008.
[2] Under the Dust Diseases Act a person is entitled to periodic compensation payments (‘dust payments’) if he or she is totally or partially disabled for work by a dust disease. The test is whether the disease is ‘reasonably attributable to … exposure to the inhalation of dust in an occupation to the nature of which the disease was due …’: s 8(1)(a).
[3] Respondent’s Statement of Facts, Issues and Contentions (‘SFIC’): para 41.
On 15 April 2009, he received the first of a series of dust payments of $155.70 from the DDB. The first payment ($2001.15) was made on 29 April 2009. It picked up payments back to 29 October 2008,[4] his first day after retirement from full time work. The dust payments will continue until his demise.
[4] Compensation Payments Enquiry Form: T5, 35; T8, 48.
The applicant also receives a disability support pension (‘DSP’) under the Social Security Act 1991 (Cth) (‘the SSA’). He was granted a DSP, on the basis of prostate cancer, cervical spondylosis conditions, as well as APD,[5] with effect from 13 November 2008.
[5] The diagnosis date is either 9 April 2003 (T5, 35) or 4 September 2003 (T8, 58).
The present dispute between the applicant and the respondent concerns the interplay of these two sets of payments; the pension from Centrelink and the dust payments from the DDB.
In 2009, to his dismay, the applicant discovered that his DSP payments would be reduced dollar for dollar by the amount he received by way of dust payments. He felt in 2009, and feels today, that this is unfair and unjust. He says, with some justification, that if he was still working, he would be entitled to supplement his DSP payments to a certain degree. His dust payments reflect the fact that he is not able to work. So he says it is unfair that these payments cannot be treated as “other income”. [6]
[6] Letters from the applicant dated 28 May 2019, 1 July 2019.
On 23 April 2009, the applicant made enquiries to Centrelink about the DSP.[7] On 7 May 2009, he made further inquiries, specifically referencing his dust payments.[8] On 12 May 2009, he contacted Centrelink again and advised that as at 1 April 2009 he was receiving dust payments.[9] A Centrelink file note on 22 May 2009 indicated that the applicant had called Centrelink, very upset, because his DSP payments had been reduced from $587 to $320.[10] This action was taken under provisions of the SSA.[11] The file notes records that the applicant said that it was not fair and that he would be better off cancelling his dust payments.
[7] T8, 42.
[8] T8, 43.
[9] T8, 46.
[10] T8, 48.
[11] T8, 47; SSA s 17 and Part 3.14.
On 5 June 2009, the decision was internally reviewed and upheld. The delegate of the respondent confirmed the basis for reduction, and found that there were no special circumstances so as to justify a departure from the normal rule.[12] He also wrote to the applicant, explaining the way the law operates. He said:
The way the Department treats these payments is based on the law set out in the Social Security Act 1991. This Act describes how the receipt of the compensation would affect your entitlement to a Centrelink payment. Put basically the effect is this: For every dollar that you receive in workers compensation your entitlement to a Centrelink payment is reduced by a dollar. The compensation direct deduction is designed to ensure that people who receive compensation do not also receive Centrelink payments for the same period.[13]
[12] T12, 121.
[13] T4, 31.
The applicant has been consistent in his belief that this explanation of the law is wrong and that he is entitled in the circumstances of his case to compensation from the State government for his dust disease while holding a full DSP from the Commonwealth. He has written to Centrelink officers and even the relevant Minister to express his concern.[14] There are numerous records of the applicant’s interactions with Centrelink staff, some acerbic and hectoring, and he has never wavered from his sincere belief that the dollar for dollar reduction of his pension by reason of receiving period compensation payments is wrong.
[14] T8, 79. On 7 March 2011 he wrote to The Hon. Tanya Plibersek, MP’s office.
He has had some wins with Centrelink. In 2011, he was advised that he did not need to pay back an overpayment of $2,082.29 that resulted from the failure to deduct dust payments from his DSP payments for the period 13 November 2008 to 21 May 2009. He was also released from a further overpayment of $204.22 in respect of an adjustment for the period 1 October 2009 to 10 March 2011.[15] In 2011, he received a lump sum payment of compensation of $150,000 and Centrelink determined that it was not subject to any preclusion period.[16] In July 2017, Centrelink elected to treat him not as a member of a couple, even though he had a partner. This discretion was applied because his partner was not yet residentially qualified for an income support payment and had no other means of support.[17]
[15] T12, 134.
[16] T12, 125 and 132.
[17] T8, 87.
THE 2019 PROCEEDINGS
The perceived injustice regarding the dollar for dollar reduction continued to stress the applicant and on 15 February 2019 he requested a further review. On 19 February 2019, an Authorised Review Officer (‘ARO’) affirmed the decision, made almost ten years prior, to treat the applicant’s periodic compensation payments as a dollar for dollar reduction from the applicant’s DSP payments.[18]
[18] T7, 38; T8, 92.
On 9 April 2019, the Social Services and Child Support Division (‘AAT1’) affirmed the ARO’s decision.[19] AAT1 confirmed the lawfulness of the deduction and held that there were no special circumstances to enable dust payments to be treated as other income.
[19] T2, 5.
On 9 May 2019, the applicant asked the Administrative Appeals Tribunal (the Tribunal) to review the decision made by AAT1.[20]
[20] T1, 2.
The matter came before me on 7 November 2019. After hearing from both parties I formed the view that the AAT1 decision was the correct and preferable decision and indicated that I could provide oral reasons. After hearing this, the applicant berated the Tribunal and counsel for the respondent and removed himself from the hearing room. The respondent’s solicitor requested written reasons for my decision which I now provide.
The application turns on the answer to two questions:
(a)Was the decision to apply a dollar for dollar reduction to his DSP payments in the amount of his dust payment properly based on the relevant legislation?
(b)Is it appropriate in the special circumstances of the case to treat the whole or part of the DDB payments as not having been made?
In my respectful opinion, the first question should be answered in the affirmative, the second in the negative. For these reasons I affirmed the decision under review.
The legislative context
Section 17 of the SSA defines ‘compensation affected payment’ and ‘compensation’ as:
17 Compensation recovery definitions
(1) In this Act, unless the contrary intention appears:
compensation has the meaning given by subsection (2).
Note: See also section 1163B.
compensation affected payment means:
…
(a) a disability support pension; or
…
(c) a social security benefit; …
Compensation
(2)Subject to subsection (2B), for the purposes of this Act, compensation means:
(a) a payment of damages; or
(b) a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c) a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.
(emphasis added)
Part 3.14 of the SSA includes provisions that deal with compensation payments, and s 1160 outlines the general effect of the Part:
1160 General effect of Part
(1) This Part operates in certain specified circumstances to do one or more of the following:
(a) reduce a person's compensation affected payment;
(b) render a person's compensation affected payment not payable;
(c) require the repayment of some or all of a person's compensation affected payment;
because of the receipt of compensation by the person or the person's partner.
(2)This Part applies whether or not there is any connection between the circumstances that give rise to the person's qualification for the compensation affected payment and the circumstances that give rise to the receipt of compensation by the person or the person's partner.
Section 1161 provides as follows:
1161 Application of Part
(1) Subject to subsections (2) to (7), payments of a compensation affected payment are affected under this Part if:
…
(b) in the case of any other kind of compensation affected payment, the compensation was received on or after 1 May 1987 and the claim for the compensation affected payment was made on or after 1 May 1987.
Section 1173 of the SSA provides:
1173Effect of periodic compensation payments on rate of person’s compensation affected payment
(1) If:
(a) a person receives periodic compensation payments; and
(b) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the rate of the person’s compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2).
(2)The person’s daily rate of compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.
(3)The reference in subsection (2) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.
(4)If:
(a) a person receives periodic compensation payments; and
(b) at the time of the event that gave rise to the entitlement of the person to compensation, the person was qualified for, and was receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the periodic compensation payments are to be treated as ordinary income of the person for the purposes of this Act.
Was the decision to apply a dollar for dollar reduction to his DSP payments in the amount of his dust payment soundly based?
The applicant has asked that his dust payments are assessed as ordinary income under s 1173(4) of the SSA, and not as a deduction from his DSP payments. His dust payments might be assessed as ordinary income if at the time of the event that gave rise to the entitlement of dust payments, he was qualified for, and was receiving, a compensation affected payment.
DSP is explicitly recognised as a ‘compensation affected payment’.[21] Furthermore, payments received from the DDB clearly satisfy the definition of periodic compensation payments under s 17(2) of the SSA. In the case of the applicant, such payments were clearly made ‘wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.’[22] His degree of impairment was assessed at 20%.[23]
[21] SSA s 17(1)(a).
[22] SSA s 17(2)(d).
[23] See also Nuzzo and Secretary, Department of Family, Community Services and indigenous Affairs [2006] AATA 524.
Whether one regards the relevant date as that on which dust payments commenced (29 October 2008), or the date of original diagnosis (4 September 2003), ‘he was not qualified for, and receiving’ DSP, at the time of the event that gave rise to the entitlement to dust payments. He was not receiving DSP on either of those dates. The applicant was granted DSP with effect from 13 November 2008. He did not receive DSP until after the latest of the two dates that might be selected as satisfying the statutory definition.[24]
[24] T8, 92.
Given the nature of dust diseases, it is usually not possible to assert a precise date on which an injury was sustained. Centrelink indicated 4 September 2003 as the date of injury in its letter of 2 March 2011 to the DDB.[25] The response from the DBB does not identify a diagnosis date but refers to an “effective” date (9 April 2003).[26] The ARO stated that the applicant was diagnosed with APD on 4 September 2003,[27] and sustained a compensable injury on 27 November 2006. These dates are all well before the commencement of the DSP. Even if one treats 29 October 2008 as the date of the event, giving rise to compensation payments as referred to in s 1173(1)(b), the applicant was not receiving DSP on that date.[28] Therefore s 1173(2) applies and the original decision to reduce the DSP payments received by the applicant on a dollar for dollar basis was correct.
[25] Letter from Centrelink to DDB dated 2 March 2011: T5, 33.
[26] Record from Dust Disease Board T5, 35.
[27] ARO decision: T7, 39.
[28] T8, 92.
For the record, I find that the applicant started receiving periodic compensation payments on 15 April 2009, with effect from 29 October 2008, the day after he retired from work. His DSP payments commenced on 13 November 2008, well after the date of his compensable injury, on or about 9 April 2003.
The applicant was clearly not in receipt of DSP when he suffered the injury in respect of which the dust payments were made. When he commenced receiving DSP, it was therefore liable to be adjusted to offset his dust payments so as to avoid double compensation, consistent with the policy of the social security law. Under these circumstances, his ‘daily rate of compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.’[29]
[29] SSA, s 1173(2).
Therefore, his subsequent grant of periodic compensation was correctly assessed by the respondent as a direct deduction from his DSP, in accordance with ss 1173(1) and 1173(2) of the SSA.
Is it appropriate in the special circumstances of the case to treat the whole or part of the DDB payments as not having been made?
Section 1184K of the SSA invites the question ‘is it appropriate in the special circumstances of the case to treat the whole or part of the [DDB] payments as not having been made?’
I note in passing that by reason of s 109(2) of the SSA, any adjustment in the applicant’s favour by reason of s 1184K would apply from 15 February 2019, the date of his application for review.
The legislation is intended to operate in exactly the way it did in the applicant’s case. The fact that it worked in the way intended cannot of itself be considered as a special circumstance.[30]
[30] See Vernon and Secretary, Department of Education, Employment and Workplace Relations [2008] AAATA 513.
The applicant claims that the determination in question has placed him in a situation of extreme financial hardship. The material provided by the applicant does not support a finding that his position is worse than the majority of social security recipients. His financial statement shows that, taking into account his non-reducible compensation payments from the DDB as well as his DSP, and other benefits, he has a slight fortnightly surplus. His position is likely to improve by the end of December 2019, when certain loans will be fully repaid. His position will improve further when his partner becomes residentially qualified for social welfare, which is expected in the near future. It is true that the applicant does not have much in the way of resources behind him, but this does not create a circumstance of present financial hardship. It would not be unkind to suggest that his past habits and addictions have contributed to his present lack of savings.
The applicant also refers to various health conditions including celiac disease and the existence of tumours and some prostate issues. However, those health conditions do not appear to be chronic and are not so serious that he is unable to get about and perform a substantial service as a carer; indeed, above and beyond the hours expected. Illnesses and ailments such as those from which the applicant suffers are all too common for those of his age, especially those who have not spared their bodies from the rigours of smoke and strenuous exertion over many years.
The applicant also refers to the fact that he is a reformed gambler and that his gambling was addictive and damaging and resulted in bankruptcy, from which he is now discharged. It is hard to justify the proposition that a special circumstance should be found in the frippery and folly of gambling, no matter how addicted one might be, and I am reluctant to do so. At one point the applicant suggested that he might as well resume gambling if he were to be treated so harshly by the social welfare authorities. Given the damage that gambling has done to his life, this is not a thought he should act on.
Perhaps the most pressing special circumstance is that the applicant has worked hard for most of his life, that he has developed a serious illness in the course of his employment, and that he has little to show for it all. He has had a hard life, with a fair share of tragedy, including the death of his father from homicide and the early death of his mother. Perhaps the unkindest cut was the untimely death of one of his children. These are matters which occasion considerable sympathy, and it would be churlish to resent his efforts to keep every cent he has received by way of compensation for his work related illness. But it would be very much in his interests to come to terms with the law and its underlying policy and especially the need to harness the resources of the social welfare machine in the cause of many worthy recipients. He is amongst their number, but to each according to law.
DECISION
The reviewable decision of AAT1 is affirmed.
I certify that the preceding 36 (thirty-six) paragraphs are a true copy of the reasons for the decision herein of Emeritus Professor P A Fairall, Senior Member
.................................[sgd]....................................
Associate
Dated: 5 December 2019
Date(s) of hearing: 7 November 2019 Applicant: In person Solicitors for the Respondent: Department of Human Services
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