Eime and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 138

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 138

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/3765

GENERAL ADMINISTRATIVE DIVISION		)
Re		MONICA TERESE EIME

Applicant

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

Respondent

DECISION

Tribunal Senior Member R W Dunne

Date21 February 2008

PlaceAdelaide

Decision The decision under review is affirmed.

..............................................

R W DUNNE
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Disability Support Pension – series of lump sum payments – preclusion period – health considerations – violent relationship – gambling episodes – circumstances unrelated to preclusion period – whether special circumstances – decision affirmed.

Workers Rehabilitation and Compensation Act 1986 (SA) ss 42, 43

Social Security Act 1991 ss 17(1), 17(2), 17(3), 1160(1), 1169, 1170, 1171(1), 1184K

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Beadle v Director-General of Social Security (1985) 7 ALD 670
Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 44 AAR 436
Re Secretary, Department of Social Security and Rodgers (AAT 7911, 23 April 1992)
Re Platel and Secretary, Department of Social Security (AAT 8250, 17 September 1992)
Re Department of Social Security and Bray (AAT 8440, 18 December 1992)
Re Davy and Secretary, Department of Employment of Workplace Relations [2007] AATA 1114
Re Secretary, Department of Social Security and Norman (AAT 13005, 22 June 1998)
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60

REASONS FOR DECISION

21 February 2008   Senior Member R W Dunne   

1.      Due to a work-related injury she suffered in May 2001, Monica Eime (the “applicant”) had been in receipt of a Disability Support Pension (“DSP”).  She subsequently received a series of lump sum payments pursuant to the Workers Rehabilitation and Compensation Act 1986 (SA) (“WRC Act”).On 6 June 2003, 26 March 2004 and 15 June 2006 she respectively received for her disability the sum of $41,400.38, the sum of $8,591.96 and the sum of $35,489.62, pursuant to s 43 of the WRC Act. Then, on 22 June 2006 she received the sum of $50,000 as a redemption of the liability to pay further periodic payments, pursuant to s 42 of the WRC Act. As the lump sum payments included a payment for lost earnings or lost capacity to earn, a preclusion period from receiving Social Security benefits was calculated and the applicant was precluded from receiving payments under the Social Security Act 1991 (“Act”) for 97 weeks, commencing on 29 June 2006 and continuing until 7 May 2008.  That decision was made by a delegate of the Secretary to the Department of Employment and Workplace Relations (as it was known at the time) (the “respondent” and “Centrelink”) on 26 July 2006.

2.      The applicant sought a review of the delegate’s decision, which was affirmed by the delegate by letter dated 13 April 2007 and by an Authorised Review Officer of the respondent by letter dated 17 April 2007.  It was then reviewed by the Social Security Appeals Tribunal (“SSAT”) and, on 16 July 2007, the SSAT affirmed the decision under review.

3. At the hearing, the applicant was represented by Ms Deborah Bates, an advocate with UnitingCare Wesley. The applicant gave evidence before the Tribunal, as did her daughter, Desiree Eime. Mr Christian Goldsworthy, a Centrelink advocate, represented the respondent. The Tribunal received into evidence the T documents tendered under s 37 of the Administrative Appeals Tribunal Act 1975 (Exhibit R1), together with the following:

·     an extract from “The Red Book Australia” on used car prices, printed 25 October 2007 (Exhibit R2);

·     a character reference for the applicant from Ms Jane Barr, UnitingCare Wesley, dated 20 August 2007 (Exhibit A1);

·     a character reference for the applicant from Ms Deborah Bates, UnitingCare Wesley, dated 24 September 2007 (Exhibit A2);

·     a further character reference from Ms Deborah Bates, UnitingCare Wesley, dated 17 October 2007 (Exhibit A3);

·     a letter from Dr Bill Tolis, medical practitioner, dated 31 July 2007 (Exhibit A4);

·     a further letter from Dr Bill Tolis, medical practitioner, dated 11 October 2007 (Exhibit A5); and

·     an extract from a report titled “Battle-scars: Long-term effects of prior domestic violence” (Exhibit A6).

issues for the tribunal

4.      The Tribunal has to consider the following issues:

(a)whether all the lump sum payments of compensation received by the applicant can be added together and treated as one lump sum for the purposes of calculating the preclusion period; and

(b)whether there are any special circumstances that would allow the Tribunal to disregard some or all of the compensation that has been paid to the applicant in calculating the preclusion period.

legislation

5. The following provisions of the Act and the WRC Act relevantly apply to the issues for the Tribunal:

The Act

“17Compensation recovery definitions

(1)      In this Act, unless the contrary intention appears:

…

‘compensation’ has the meaning given by subsection (2);

...

‘compensation affected payment’ means:

…

(a)      a disability support pension; or

…

(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.

…

(3)Subject to subsection (4), for the purposes of this Act, the compensation part of a lump sum compensation payment is:

(a)      50% of the payment if the following circumstances apply:

(i)the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and

(ii)the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or

(ab)     50% of the payment if the following circumstances apply:

(i)the payment represents that part of a person’s entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and

(ii)the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and

(iii)the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or

(b)if those circumstances do not apply—so much of the payment as is, in the Secretary’s opinion, in respect of lost earnings or lost capacity to earn, or both.

…

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;

…

1169  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.

…

1170  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:

Compensation part of lump sum

Income cut-out amount

…

1171  Deemed lump sum payment arising from separate payments

(1)      If:

(a)a person receives 2 or more lump sum payments in relation to the same event that gave rise to an entitlement of the person to compensation (the multiple payments); and

(b)at least one of the multiple payments is made wholly or partly in respect of lost earnings or lost capacity to earn;

the following paragraphs have effect for the purposes of this Act and the Administration Act:

(c)the person is taken to have received one lump sum compensation payment (the single payment) of an amount equal to the sum of the multiple payments;

(d)      the single payment is taken to have been received by the person:

(i)on the day on which he or she received the last of the multiple payments; or

(ii)if the multiple payments were all received on the same day, on that day.

(2)A payment is not a lump sum payment for the purposes of paragraph (1)(a) if it relates exclusively to arrears of periodic compensation.

…

1184K  Secretary may disregard some payments

(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.”

WRC Act

“42—Redemption of liabilities

(1)Any of the following liabilities may, by agreement between the worker and the Corporation, be redeemed by a capital payment to the worker—

(a)      a liability to make weekly payments;

(b)      a liability to pay compensation under section 32;

(c)a liability to make a capital payment for loss of future earning capacity.

…

43—Lump sum compensation

(1)Subject to this Act, where a worker suffers a permanent disability and the disability is compensable under this Act, the worker is entitled (in addition to any entitlement apart from this section) to compensation for non-economic loss by way of a lump sum.”

background and evidence

6.      Although the factual background to this case was not related to the Tribunal by the parties in any detail, it was largely not in dispute and may be briefly stated from what appears in the decision of the SSAT.  The applicant was in receipt of a DSP, which appears to have been granted in late 1996.  In May 2001, she was injured in the course of her work and claimed Workers’ Compensation.  She received periodic compensation payments until 28 June 2006.  Her claim was settled by consent on or about 22 June 2006.  Prior to settlement and as detailed in paragraph 1 of these reasons, she received lump sum compensation payments for non-economic loss in respect of her injuries on 6 June 2003, 26 March 2004 and 15 June 2006.  These payments totalled $85,481.96.  As part of the settlement the applicant also received a lump sum of $50,000, determined on 22 June 2006 to redeem the liability to pay further periodic compensation.  On 29 June 2006, Centrelink wrote to the applicant indicating that, on the basis of a lump sum compensation payment of $50,000, the preclusion period from compensation affected payments would be from 29 June 2006 to 14 November 2007.  The letter from Centrelink also stated:

“If you receive more than one lump sum payment of compensation as a result of injuries arising from the same compensable event, we can add all the lump sums together to calculate the preclusion period.  This means that, if you receive a further lump sum payment as a result of injuries arising from the same compensable event, we will need to work out a new preclusion period.”

The applicant received a total sum of $135,481.96 in settlement of her compensation claim, which sum included a component for lost earnings or lost capacity to earn.  On 26 July 2006, following the receipt by the applicant of the lump sum compensation payment of $35,489.62, Centrelink advised her that she was precluded from compensation affected payments for the period from 29 June 2006 to 7 May 2008.

7.      In her evidence, the applicant said that she believed the preclusion period for her Centrelink payments would not be based upon the total compensation payments she received.  She said:

“When I was given the preclusion period it was based on the full amount over the six years with all the section 43s taken into consideration, along with the final pay out figure. Because I was given it in separate amounts over those five years, I think it was, I was under the misconception that – well, I believed – I was informed that my section 43s – through my lawyers at the time – were not affected, as such, so I thought that my preclusion period would be based on the last payment.” (Transcript, page 13)

Then, in apparent reference to the two preclusion periods that Centrelink had referred to in their letters dated 29 June 2006 and 26 July 2006, the applicant said:

“Yes, well, the first one – well, it was just a verbal conversation over the phone and then they sent me the letter saying that it will be – I think it was 12 months – and then when I received the second part of the payment, I received another letter saying it would be for the 22 months. …

The original payments. They said, they can’t penalise me on any of those section 43s, unless down the track – this was what I was told at the end of it – that when I take a final pay out, I was told then, they will add all those section 43s from the past into that final pay out.” (Transcript, pages 13-14)

She said she had to make a “snap decision” whether to accept the lump sum payment of $50,000 and without knowing what effect this would have on her preclusion period.  When she received the lump sum payments, she had been advised by a financial planner against placing the monies into a deposit account.  She was advised to place the monies into an E-Saving account and to transfer them, when needed, into an every day Access account to pay rent and bills.  She was also advised by the Housing Trust housing manager not to pay her rent in advance until May 2008, but to continue paying it periodically as she had been doing.

8.      Ms Bates asked the applicant about her “medical situation” and about her “physical and mental issues”.  She asked about the period in which she received the lump sum compensation payments and, when they had all gone, about the period in October 2007 when she started to receive Newstart Allowance.  The applicant said she had been in a violent relationship with a boyfriend/partner for 6 years.  He would come to her home every other day, drunk and violent, demanding and borrowing money and promising to pay it back.  That never happened.  She was unable to say how much money was involved because she was taking a lot out of her bank account, often every day.  She was able to withdraw $1,000 daily, but only needed enough to cover her rent, bills and living expenses.  However, her boyfriend “harassed her physically” and “mentally abused her”, and she was continually withdrawing money from her bank account for him.  She thought she would get it back or that things would change, but they didn’t.  She said the bulk of her compensation went in this way – she didn’t get much out of it herself.  She bought a refrigerator and a washing machine and important things that she really needed, which came out of the 2006 compensation payments.  She used the 2003 and 2004 payments to buy a lounge suite and a bedroom suite.  She bought each of her daughters a washing machine, bought Christmas and birthday presents for the family, paid bills for them now and then and bought them food.  When asked by Ms Bates whether she had considered what effect all these purchases might have on her own livelihood going forward, she said they were “peanuts” compared to the monies she had withdrawn and used for the “wrong reasons”.  These wrong reasons were giving money to her partner when he wanted it for gambling and drinking, and for her own drinking, which she said she had started to get away from him.  She was always hiding and running away, so that she would not be at home when he came.  She said that, in using the compensation payments, she didn’t feel she had any control over herself.  She was scared, she was worried and she was stressed.   Then, sometime in 2006 she started frequently playing the poker machines, trying to get back what she had been “dishing out”.  She said a lot of her compensation went in this way. 

9.      Eventually, she found the strength to end the relationship with her partner.  She could not let her family be subjected to his abusive conduct.  She had reached breaking point and felt like she had “just snapped”.  She was very confused, stressed and said she was at a suicidal point.  In July 2007, she had been in touch with counsellors at UnitingCare Wesley.  She had seen Jane Barr, who was a drug and alcohol counsellor and another who was a gambling counsellor.  When asked by Ms Bates why she had not seen counsellors when her compensation started going, she said she had tried telephoning Crisis Care and Lifeline for help, but found she was speaking to a different person each time, which was of no real assistance, and was not able to attend help meetings in the city.  She thought she “could get through it and cope on her own”.  Between January 2007 (when her compensation ran out) and July 2007, she didn’t seek any help because she didn’t think she needed to and because she didn’t have any money to do anything.  She became part of the “Supported Tenancy Program” at UnitingCare Wesley at Port Adelaide.  She found out about the Program because of an eviction notice she was getting from the Housing Trust.  When questioned by Mr Goldsworthy, the applicant said that no eviction date had been set and the Housing Trust was awaiting the outcome of this hearing.  

10.     In her further evidence, the applicant said that, although she had used all her compensation monies, it was impossible for her daughters to assist her financially.  Her elder daughter (Eloise) was only in receipt of a supporting parent’s benefit.  She had a five-year-old son, did not have a motor car and was attending Flinders University.  They did not live together because her daughter had a lot of emotional and psychological problems herself, which had worsened through the applicant’s own problems in the last few years.  Her younger daughter (Desiree) had used some of her own daughter’s funds to help the applicant for as long as she could, but those funds had been exhausted.  Desiree was in much the same situation as her older sister.  She had completed her university studies and was to return as a post-graduate.  However, she had a six-year-old daughter, who suffered from ADHD, she was living on a supporting parent’s pension and had to postpone her post-graduate studies. 

11.     Ms Bates also asked the applicant about her motor car, a Nissan Pulsar LX 2000.  She said it was damaged when she bought it and had been damaged further by her partner and also her daughter.  She had no money for her car insurance, which had lapsed, and she could not have the damage fixed.  Because of the damage, if she tried to sell the car, she believed no-one would buy it.  She needed the car to go to her medical and other appointments, she found it difficult to board public transport and, once on board, she suffered anxiety attacks.  In cross-examination, Mr Goldsworthy referred the applicant to the income and assets statement she lodged with Centrelink on 20 February 2007 (Exhibit R1, T12, page 119).  She acknowledged that the value of her motor car in the statement was shown as $13,000.  Mr Goldsworthy then referred the applicant to photographs of her motor car and the damage she said it had sustained.  When asked about the overall condition of the vehicle, she said:

“I’d be lucky to get that [$5,000] – that’s with the damage.  Even if I did, where is $5,000 going to take me?  It may pay two and a half thousand dollars back-pay rent and maybe a couple of more months rent. … I don’t think that selling that asset is going to benefit me in any way.”  (Transcript, page 39)

In further cross-examination, the applicant admitted that she had not applied for work of any sort.  She said that she was told that she would never work again and she knew that she would not be able to do a lot.  She could attempt to find a job, but she did not know whether she would last more than a day or a week.

12.      In her evidence, the applicant’s daughter (Desiree) said that, when her mother was to receive the final lump sum compensation payment of $50,000, she was unclear about what effect the payment would have on her preclusion period.  Her mother did not believe all the payments would be “lumped together” in determining the preclusion period.  Desiree said that she had been given a washing machine by her mother, which was meant for birthdays and Christmas going forward.  Her mother had also helped out in other ways, such as paying bills and buying school uniforms for her grandson.  In turn, she confirmed that she had supported her mother for the past year by using money that had been put aside for her six-year-old daughter from gifts made by the family of her daughter’s father.  She had paid her mother’s bills and bought her food.  She did not understand why she should be seen as having to further support her mother, since her compensation payments had run out.  She had barely enough to support herself and her daughter, she was currently on anti-depressants and she was drinking heavily to cope with her stress and the stress caused by her mother’s predicament.  She said her mother, who had hypertension and high blood pressure that required “cardiologist management”, needed her motor car to visit her doctor.  She also needed the car to take her grandchildren to school.  The car had been seriously damaged and would be too costly to repair, even if her mother had the money to do it.  When asked by Ms Bates about the spending of her compensation payments, she said she did not believe her mother was in control of what she was doing.  She was in a violent domestic relationship and, in relation to the partner, Desiree said:         

“… if she lent him money or whatever, he would take her out and he would take her down the corner to the hotel and borrow money, I guess, for gambling.  He gambled on horses and then if he lost, tell her she is bad luck, go away, go sit next door and play on the pokies and stuff like that.  And, of course, because she wanted to avoid upsetting him because he was abusive, she went and sat on her own next door.  And if she lost something, tried to make it back.”   (Transcript, page 48)

Then, in referring to the partner’s violent conduct, Desiree said:

“… and I came in behind them and found them Andy in my mum’s bedroom with his hands against her throat holding her up against the wardrobe.  And he didn’t stop even though the children and I were there and then later denied to my face that I had even seen that and told me I was imagining it. …”  (Transcript, page 48)

13.     In her further evidence, Desiree said she eventually felt that she could no longer take her daughter to visit her grandmother.  Her sister felt the same in relation to her son.  The partner would drink and become aggressive and there would always be problems.  She said she thought that the partner exercised quite a lot of control over her mother’s life.  It had reached the stage where she and her daughter could not visit the applicant because the partner did not want anyone around.  She believed that this was because he wanted to “dominate and control and isolate” her mother.  This was something her mother had never experienced before.  In cross-examination by Mr Goldsworthy, Desiree said that her mother had five living brothers.  However, the family unit was dysfunctional and had broken down and her mother could not expect any financial help from anyone else in the family.  This included the applicant’s mother (Desiree’s grandmother) who was on a pension and struggled to care for herself.

consideration

14. Following her work-related injury, the applicant received two lump sum compensation payments awarded under s 43 of the WRC Act. Section 43(1) expressly refers to compensation for “non-economic loss”>  There was no loss of earnings component in either of these two payments. On 15 June 2006, a further lump sum compensation payment was made to the applicant under s 43. Then, a week later, a final lump sum was paid which contained an economic loss component, being a s 42 payment under the WRC Act. This payment was made to redeem the liability to pay the applicant further periodic compensation.

15. The first issue for the Tribunal is whether all these payments (totalling $135,481.96) can be added together for the purpose of calculating the applicant’s lump sum preclusion period for her compensation affected DSP payments. The applicant does not accept that the payments made in June 2003, March 2004 and on 15 June 2006 (under s 43) should be added to the final payment made on 22 June 2006 (under s 42) in determining her lump sum preclusion period. She argued that none of the first three payments contained an economic loss component and that it was not correct or fair to add these payments to the final payment to extend her lump sum preclusion period. She also argued that, as she understood her s 43 payments in the past had been exempt from income tax, they should not be added to the final s 42 compensation payment.

16. The law regarding the lump sum preclusion period and the repayment of compensation affected payments is largely contained in Part 3.14 of the Act. In relevant circumstances, s 1160 operates to render a person’s compensation affected payments (such as the applicant’s DSP) not payable. In this regard, s 17(2) of the Act defines “compensation” to mean a payment made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury, whether in the form of a lump sum or a series of periodic payments. Section 1169 provides that, if a person receives or claims a compensation affected payment and then receives a lump sum compensation payment, the compensation affected payment is not payable to the person during the lump sum preclusion period. Section 1170 sets out the commencement day and duration of the lump sum preclusion period. If periodic compensation payments are involved (as was the case with the applicant’s DSP), the lump sum preclusion period is the period that begins on the day following the last day for which periodic compensation was received and ends at the end of the number of weeks worked out using the following formula:

Compensation part of lump sum

Income cut-out amount

Under s 17(3) of the Act, the “compensation part of a lump sum” is 50 percent of the total payment, irrespective of whether an amount is specified as being for lost earnings or lost capacity to earn.  Under s 17(8), the “income cut-out amount” is the amount above which no pension is payable to a “single” person. In the applicant’s case, at the time of her lump sum compensation settlement, this amount was $693.88. Section 1171(1) provides that, if a person receives two or more lump sum payments in relation to the same event that gave rise to an entitlement of the person to compensation, and at least one of those payments is made wholly or partly in respect of lost earnings or lost capacity to earn, then the person is taken to have received one lump sum compensation payment equivalent to the sum of the multiple payments. The total payment is taken to have been received on the day on which the person received the last of the multiple payments.

17. The Tribunal is of the view that the provisions of Part 3.14 of the Act applied (and were properly applied) in the applicant’s case in determining her lump sum preclusion period. There is no argument that all of the lump sum payments were not made in relation to the same injury event. In the circumstances, the Tribunal is satisfied that, under s 1171(1) of the Act, the applicant must be taken to have received one lump sum compensation payment equivalent to the sum of all of the multiple payments she received, and that the total payment was received on the day on which she received the last of the multiple payments. Based on the formula contained in s 1170(4), the preclusion period of 97 days (which commenced on 29 June 2006) has been correctly calculated by dividing the compensation part of the lump sum (50 percent of the total payment of $135,481.96 or $67,740.98) by the income cut-out amount of $693.88. The applicant clearly knew, when she applied for a Health Care Card on 10 July 2006, shortly after she had received the lump sum payment of $50,000, what her preclusion would be. In her Health Care Card application, she said (Exhibit R1, T10, page 108):

“I have received a lump sum payment which will cut me off my DSP for 97 weeks preclusion period which means I must live on the money and pay full rent to SAHT $216.00 wk.” 

18. The applicant said that she had not been given correct information by Centrelink concerning her preclusion period (Exhibit R1, T13A, page 170). She said she was also told that her previous s 43 payments would not be included with her final s 43 payment (Exhibit R1, T13A, page 172). Whether these circumstances were correct and whether the applicant believed her s 43 payments should be excluded because it was her understanding that they were exempt from income tax, are all factors that are not relevant to the question of whether the lump sum preclusion period has been correctly determined. In the Tribunal’s view, this question must be answered in the affirmative.

19. The further issue for the Tribunal to determine is whether there are special circumstances such that, pursuant to s 1184K(1) of the Act, some or all of the compensation payments made to the applicant can be disregarded. This would have the effect of reducing or removing altogether the preclusion period.

20.     In the case of Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal said (at page 3):

“An expression such ‘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 then permits them to be described as special.”

21.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court’s decision in Beadle v Director-General of Social Security (1985) 7 ALD 670, observed that special circumstances:

“… would require something to distinguish Mr Groth’s 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. …”

22.     A recent analysis of the meaning of “special circumstances” was given by Besanko J in the Federal Court in Angelakos v Secretary,Department of Employment and Workplace Relations (2007) 44 AAR 436. The learned judge considered that the test would be overstated if the word “exceptional” was emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There was less risk of overstatement if the words “unusual” or “uncommon” were emphasised. Those words indicate the fact that there must be something that distinguishes the case from the ordinary or usual case.

23.     Special circumstances must be considered on a case by case basis.  As was said by the Tribunal in Re Beadle, it is not helpful to focus too closely on each particular circumstance of the applicant and ask whether it is special. The question is whether, when the relevant circumstances of the applicant are looked at in their entirety, can they fairly be described as unusual, uncommon or exceptional so as to reduce or vary her lump sum preclusion period? The applicant said that she had been given two days by her lawyers to decide whether to accept the offer of the final payment of $50,000 under s 42 of the WRC Act. When she tried to find out from Centrelink what affect this would have on her preclusion period, they told her that they could not provide her with that information until she had received the settlement documents from her lawyers. She said she had received incorrect financial advice concerning the investment of her lump sum payment(s) and had been advised by the Housing Trust against pre-paying her rent. These were all matters which affected or impacted upon decisions the applicant had to make with respect to her lump sum preclusion period. They are not factors that would ordinarily constitute special circumstances, whether by themselves or with others. When questioned by Mr Goldsworthy about support from members of her family the applicant said that, for various reasons (which the Tribunal had no difficulty in accepting), her daughters were not in a position to assist her financially. She gave evidence about her various medical conditions and said that, until recently she had been unable to obtain prescriptions for them. However, she had obtained a temporary Health Care Card, but did not have funds to use the Card. She was relying on help from UnitingCare Wesley and the Salvation Army. Although other oral evidence was not given about her medical conditions, the Tribunal noted the letter from Dr Bill Tolis dated 11 October 2007 (Exhibit A5) which listed, amongst her active conditions – insomnia, depression, irritable bowel syndrome, psoriasis, arthritis, dermatitis and reflux (gastro-oesophageal). The Tribunal observes that, as the existence of medical conditions is often the reason for the provision of Social Security benefits, their presence in the applicant’s overall circumstances is not sufficient to regard them as “special”.

24.     The applicant’s main evidence of special circumstances centred around the six year relationship with her former partner and her own gambling and drinking habits that had come about as a result of that relationship.  She said her partner would visit her regularly, become drunk and violent, demand and borrow money, whilst at the same time promise to pay her back.  She could not recall how much of her compensation money was involved, but she was withdrawing funds regularly.  Although funds were withdrawn and used for other reasons (such as the purchase of appliances for herself and her daughters and for expenses associated with her grandchildren), the bulk of her compensation monies were “used for the wrong reasons”.  When asked by Ms Bates what these wrong reasons were, she said:

“Giving my partner money every time he wanted it for gambling and drinking.  Then I got into the position where I started drinking and doing the same thing with him but, in the end, to escape from him because I was always hiding and running away and didn’t want to be in the house.  I became suicidal, I just wanted to escape and I didn’t know how to get out of the situation. …”  (Transcript, page 20)

25.     Then, sometime in 2006, she turned to the poker machines and started gambling.  She said she did this because her partner followed her when she left home and, to avoid him, she started playing the poker machines.  Later, she said she continued playing the machines, trying to recover some of the funds that she was “dishing out”.  In reviewing this evidence of the applicant, the Tribunal notes that drinking and gambling have been found not to be special circumstances (Re Secretary, Department of Social Security and Rodgers  (AAT 7911, 23 April 1992).  So have gifts and loans to family members (Re Platel and Secretary, Department of Social Security (AAT 8250, 17 September 1992) and being generally extravagant (Re Department of Social Security and Bray (AAT 8440, 18 December 1992).  However, the Tribunal is conscious of the evidence of the applicant’s daughter (Desiree) concerning her mother’s relationship with her former partner and how the partner had become increasingly violent and domineering, leading up to her mother ending the relationship in about March or April 2007. 

26.     The applicant gave evidence about her motor car, the cost of repairing it and what she might receive if she should sell it.  Mr Goldsworthy cross-examined her on her evidence.  The Tribunal is of the view that this evidence is of no assistance in considering whether there are special circumstances in the applicant’s case.  The Tribunal also notes and has given due consideration to the contents of the character references given by Ms Jane Barr and Ms Deborah Bates in support of the applicant’s case.   Although the character references refer to the various health and medical, relationship and financial problems of the applicant during the period in which she received her lump sum compensation payments, the Tribunal is concerned that she did not take positive steps to seek counselling and other independent professional advice until the end of the relationship with her former partner and leading up to the hearing before the SSAT. 

27.     In Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, Deputy President S A Forgie (in considering the waiver provisions under s 1237AAD of the Act) observed:

“… The ‘special circumstances’ are not merely directed to the person’s own circumstances. Rather, they are directed to those that are ‘special circumstances ... that make it desirable to waive’. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system.  Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it.  Certainly, he did not know that his father was giving him his own money but the fact that he was deceived by his father does not mean that it is desirable to waive the debt.  He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement.  His not knowing that his father had continued to receive the money does not take him outside the expectation that all social security recipients should repay money when they receive money but are not entitled to it. …”

As was submitted by Mr Goldsworthy, if some or all of the applicant’s lump sum compensation payments were disregarded and her preclusion period reduced, this would mean she would have the benefit of part of her DSP in circumstances in which she was not entitled to it.  Further, in Re Secretary, Department of Social Security and Norman (AAT 13005, 22 June 1998) at paragraph 15, the Tribunal found it inappropriate to exercise the “special circumstances” discretion where, despite knowledge of the preclusion period, Mr Norman had “in fact not managed the expenditure of his funds in accordance with either their intended purpose or the spirit of the Social Security Act 1991”. The Tribunal further found at (at paragraph 18):

“It is not an unusual circumstance that a person to whom a preclusion period is applied spends their funds in a way which is unwise. That is frequently the impetus for them seeking relief through sec 1184.  Financial hardship alone will not of itself constitute special circumstances under this section (See Director-General of Social Services v Hales (1993) 47 ALR 281). The provisions in the Act are there to ensure that money received in place of income as part of the Worker's Compensation system is not also paid by way of Social Security benefits. (See, for example, Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797 at 798. This prevention of double dipping reflects the idea that the money is there to provide a person with income, not capital for investment.”

28.     As was held in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68, the question for the determination of the Tribunal is not whether the decision which the decision-maker made regarding “special circumstances” was the correct or preferable one on the material before him, The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal. In the present case and like many others, the answer is not an easy one. The Tribunal has sympathy for the applicant’s position. However, she was not misinformed about the need to make her compensation last. She was aware of the preclusion period when she began to dissipate her funds, including the purchase of various appliances and goods, the making of gifts to her family, the expenditure on gambling and the forced giving of monies to her former partner. All this was done in the knowledge that she would not be entitled to receive a Social Security benefit for 97 weeks. Her hardship is financial only. Although her circumstances in relation to her former partner were indeed unfortunate, she had the capacity to seek independent counselling and advice when she first received her compensation payments. She did not do so until her compensation had run out and she was to appear before the SSAT. She had the capacity to seek counselling and assistance in relation to the relationship with her former partner and to end it. She did not do so and only acted when it appears the violence became so serious that it impacted directly upon her family. As to her gambling, there was no evidence that her behaviour was the result of an addiction or a psychological condition and beyond her control. She appears to have gambled by choice, with particular aims in mind, rather than a psychological compulsion. She made little or no effort to conserve her funds. Taking all her circumstances into account, on balance, the Tribunal does not accept that the applicant’s circumstances are so special as to be deserving of the exercise of the available discretion in her favour. While s 1184K(1) allows the Tribunal to treat the whole or part of a compensation payment as not having been made if the Secretary thinks it appropriate in the special circumstances of a particular case, the applicant’s case falls outside what are special circumstances. To enforce the usual preclusion period is not unfair and there is no unintended or unjust consequence.

decision

29.     The decision under review is affirmed.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne

Signed:         .....................................................................................
  Associate

Date of Hearing  7 November 2007
Date of Decision  21 February 2008

Advocate for the Applicant       Ms Deborah Bates

UnitingCare Wesley

Advocate for the Respondent   Mr Christian Goldsworthy

Centrelink Legal Services Branch