Emanuel and Secretary, Department of Social Services (Social services second review)

[2021] AATA 1591

Emanuel and Secretary, Department of Social Services (Social services second review) [2021] AATA 1591 (4 June 2021)

Division:GENERAL DIVISION

File Number(s):      2020/7705

Re:Stefany Emanuel

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member A Poljak

Date:4 June 2021

Place:Sydney

The decision under review is set aside and in substitution I find that:

(a)the applicant’s circumstances amount to special circumstances and are sufficient to warrant the exercise of the discretion under s 1184K of the Act, shortening the CPP to 28 March 2020; and

(b)subject to the applicant satisfying all other requirements, the applicant’s claim for JSP lodged on 28 March 2020 should be granted.

..................................[sgd]......................................

Senior Member A Poljak

CATCHWORDS

SOCIAL SECURITY – application for JobSeeker Payment – where applicant received lump sum compensation payment – compensation preclusion period imposed – whether special circumstances exist – whether applicant’s claim for JobSeeker Payment was correctly rejected – decision under review set aside and substituted

LEGISLATION

Social Security Act 1991(Cth) ss 17, 1170, 1171, 1184K

CASES

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

Beadle v Director-General of Social Security (1985) 60 ALR 225

Hogan v Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162

REASONS FOR DECISION

Senior Member A Poljak

4 June 2021

1. On 30 June 2011, Ms Emanuel, the applicant, suffered an injury at work. She claimed compensation from her employer and on 11 November 2015, she received periodic compensation payment for the injury until 31 December 2014, as well as a lump sum compensation payment of $37,537.50. On 25 November 2017, her compensation claim was settled in its entirety by agreement for a gross lump sum of $950,000.00. On 8 January 2018, the Secretary, Department of Social Services (Secretary) issued the applicant with a notice advising her that a decision had been made to impose a lump sum compensation preclusion period (CPP) in accordance with the Social Security Act 1991 (Cth) (the Act) for the period from 24 November 2017 to 23 January 2025.

2. On 28 March 2020, the applicant lodged an online claim for JobSeeker Payment (JSP). On 25 April 2020, the Secretary rejected the applicant’s claim due to her being subject to the CPP. This was affirmed by an Authorised Review Officer (ARO) on 21 July 2020.

3. On 7 September 2020, the Social Services and Child Support Division of the Administrative Appeals Tribunal (SSCSD) affirmed the decision of the ARO. This is the decision under review in these proceedings.

4. The issues for determination are:

   (a)whether a CPP applies to the applicant as a result of the applicant receiving a lump sum compensation payment and if so, the correct length of that CPP;

   (b)whether it is appropriate in the special circumstances of the case to treat the whole or part of the lump sum compensation payment as not having been made (thereby reducing the length of the CPP); and

   (c)whether the applicant’s claim for JSP was correctly rejected as a result of the CPP.

   Consideration

5. It is not in dispute that the lump sum compensation payment of $950,000.00 was partly in respect of lost earnings or lost capacity to earn. In accordance with s 1171 of the Act, the compensation payments of $950,000.00 and $37,537.50 are to be aggregated and treated as a single payment. That payment is compensation as defined in s 17(2) of the Act. The applicant is therefore subject to a CPP.

6. The Secretary has re-calculated the preclusion period. This does not appear to be in dispute. It has been calculated as follows:

   For the purposes of the formula set out in s 1170(4), the compensation part of the lump sum is 50% of the net amount of the lump sum payment less the repaid periodic compensation payments ($222,097.79) being $382,719.85. The result of dividing that amount by the prescribed weekly sum of $978.40 – the income cut-out amount used when settlement occurred– is a preclusion period of 391 weeks (rounded down) (see s 17(3) and s 17(8) of the Act). In accordance with paragraph 1170(1)(a) of the Act, the CPP commenced on 24 November 2017, the day following the date periodic compensation was last paid and ends 391 weeks later, on 25 May 2025.

   7.       The next issue to consider is whether it is appropriate in the special circumstances of this case to treat the whole or part of the lump sum compensation payment as not having been made and thereby reducing the length of the CPP.

   8. Section 1184K of the Act provides a discretion to disregard some or all of a lump sum compensation payment for the purposes of Part 3.14 of the Act. It relevantly states:

   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.

   (2) If:

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

   (b) the person receives compensation; and

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

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

   Special Circumstances

7. The term ‘special circumstances’ is not defined in the Act. What may amount to special circumstances has been considered in a number of cases in the Federal Court and in the Tribunal. It has been generally accepted by this Tribunal that special circumstances are those that are unusual, uncommon or exceptional, making the case markedly different from the usual run of cases.

8. In Beadle v Director-General of Social Security (1985) 60 ALR 225, the Full Court did not think it possible to lay down precise limits or rules to circumscribe the discretion of the decision maker when considering whether special circumstances exist. Rather, the Court said that what constitutes special circumstances in any particular case is a matter for the Departmental head having regard to the purpose for which the power is given. However, because no precise limits or rules can be set, whether or not a particular kind of circumstance could (not should) be considered special is not merely a matter for the administrative decision maker.

   11.     In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25, Besanko J considered the observations in Beadle at first instance that special

   circumstances are those that are “unusual, uncommon or exceptional.” His Honour opined at [33] that it:

   … was not the intention of Parliament to confine the exercise of the discretion to

   an exceptional case. There is less risk of overstatement if the words ‘unusual’ or

   ‘uncommon’ are emphasised.

9. Generally, in Hogan v Secretary, Department of Employment, Education and Workplace

   Relations [2011] AATA 162 at [82] it was held that in determining whether “special circumstances” exist the Tribunal has “a broad discretion to respond to a wide variety of circumstances”.

10. The Secretary submits that on balance, there are no special circumstances in this case that would make it appropriate to treat some or all of the applicant’s lump sum compensation payments as having not been made under s 1184K of the Act so as to reduce the length of the CPP.

    Consideration

11. The applicant received a total net amount of $390,000 in hand from her compensation payout. In September 2018, the applicant purchased a house in Woodberry with her then husband, Mr Emanuel. At hearing, the applicant accepted that the purchase price of the property at that time was around $450,000 (the property). She said she put approximately $230,000 of her compensation payments towards the purchase of the house and spent approximately $30,000 for two new cars. One for herself and one for Mr Emanuel. The remainder of the funds went towards paying off household debt, renovations to the property and towards the purchase of furniture. The applicant advised at hearing that on 6 March 2019, Mr Emanuel ceased making mortgage repayments on the property. They divorced on 24 July 2020.

12. The applicant has two young children with Mr Emanuel. Her youngest daughter is not of school age and currently attends childcare three days a week. Her oldest daughter (A) has been diagnosed with Autism Spectrum Disorder - level 2, learning difficulties (ADHD and dyslexia) and has presented with symptoms of anxiety. She has just started kindergarten in a mainstream school and attends Monday to Friday. The applicant receives funding of approximately $20,000.00 per year from the NDIS to assist with paying for A’s therapy costs. Despite this funding, the applicant says that she must borrow money to get A to and from multiple therapy appointments every week.  In a written statement, Mr Emanuel said that he has given the applicant “money on many occasions for groceries to feed our children and fuel to get our daughter [A] to her many therapy appointments”.

13. The Secretary accepts that since the CPP was imposed, the applicant separated from Mr Emanuel and no longer receives his financial support (other than from regular (minimum) child support payments) and is in arrears for her mortgage payments, utility bills and council rates.

14. At hearing, the applicant said that she was in severe financial distress. Caring for A impacts on the applicant’s ability to find and maintain work as does her own medical conditions. She advised that her regular monthly mortgage repayments on the property were $1,120 per month and that she had not been able to make the repayments for some time. She said her mother was making payments of $150 a fortnight towards the mortgage and that this was, at the date of hearing, $18,177.20 in arrears. Regarding other bill and expenses, the applicant said that she was overdue and on payment plans for most utilities. She advised her electricity was $3,573 overdue and that she was on a payment plan of $50 a fortnight; her gas bill was $644 in arrears and she was on a $50 a fortnight payment plan; council rates were $2,000 overdue; and her mobile phone was overdue by $800 and she was on a payment plan of $150 a fortnight. The applicant said that she receives a total of $350 a week from Centrelink benefits and child support payments and that she often cannot afford to feed herself. She said she always makes sure her children have food first, which means she often goes without and that the longest period she has gone without food is nine days.

15. In addition to A’s medical conditions, the applicant also suffers from several medical conditions. The applicant currently receives treatment for mental health conditions and requires further spinal surgery in the future. In his report dated 27 September 2017, Dr Best, Orthopaedic Surgeon, noted that the applicant had planned further surgery within the next three to four years to relieve the intensity of her symptoms.

16. Lynette Bainbridge, consultant psychologist, said in a report dated 23 November 2020 that the applicant was suffering from generalised anxiety disorder, borderline personality disorder, major depressive disorder, chronic pain (result of car accident) and financial stress. She was of the opinion that the applicant “is experiencing severe distress in the management of her daily functioning, a result of her financial hardship and requires support in this area as a matter of urgency”.

17. The respondent contends that the applicant chose to use her lump sum compensation payments to purchase her home. The purchase was made after she received the compensation payments and after she had been notified of the decision to impose the CPP. The respondent further contends that the applicant has the option of selling her home to remedy her family’s financial situation and that the requirement to do so does not constitute special circumstances.

18. While I acknowledge that compensation payments received by the applicant have been used to acquire an asset, however the unique circumstances of this case preclude the applicant from realising that asset and using the proceeds as contended by the Secretary. The applicant is currently in severe financial hardship. Her prospects of employment are severely limited due to her medical conditions and her role as carer for her young daughter. At hearing she impressed me as a very devoted and caring mother in need of urgent help. Her circumstances are unique in that the severity of her daughter’s condition has a significant impact on the applicant’s ability to sell the property. 

19. In a report dated 17 February 2021, Lisa Manning, provisional psychologist, under the supervision of consultant psychologist Lynette Bainbridge, advised [Emphasis added]:

    [The applicant’s] daughter [A], has permanent developmental disabilities with underlying mental health concerns, causing clinically significant impairment in her daily functioning, an impairment that will exist during her lifetime. [A] is not neurotypical, with both language and learning difficulties significantly impacting on her daily adaptive functioning including socialization and communication.

    Moving [A] would cause significant regression and an increase in stress to not only herself but all those around her. [A’s] future and progress strongly relies on stability as [A] is unable to process change effectively, especially that of dramatic impact, such as moving home. [A] has settled within her community and has started school where she is supported with her provisions, please note the difficulty in gaining this support in schools – moving may remove this causing clinically significant distress and regression to her behaviour, mental health and functional abilities. I cannot stress enough the risk of trauma and regression moving homes would cause this family.

20. In a report dated 17 February 2021, Isabella Gallimore, occupational therapist advised:

    [A’s] team believe it is not in her best interest to alter or change her schooling environment due to relocation of their family home and movement into a rental. [A] has recently transitioned into kindergarten and would not cope with the level of change that would be required to relocate. [A] is a child who requires routine and becomes easily distressed when faced with unexpected change. I, her speech pathologist and her psychologist spent 2020 working towards equipping [A] with the skills necessary to transition from preschool to her new kindergarten environment. As the move has been positive and her progress is encouraging, it would be detrimental to disrupt her schooling and place of residence. We are under the opinion that this would hinder her progress and has the potential for [A] to regress.

21. Having regard to the specific circumstances of this case and the available medical evidence, I find that moving A from her current home could potentially lead to trauma and regression in A’s conditions. Requiring the applicant to sell the property as contended by the Secretary is untenable for this young family.

    Decision

22. The decision under review is set aside and in substitution I find that:

    (a)the applicant’s circumstances amount to special circumstances and are sufficient to warrant the exercise of the discretion under s 1184K of the Act, shortening the CPP to 28 March 2020; and

    (b)subject to the applicant satisfying all other requirements, the applicant’s claim for JSP lodged on 28 March 2020 should be granted.

I certify that the preceding 25 (twenty five) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak  

................................[sgd]........................................

Associate

Dated: 4 June 2021

Date of hearing:	28 May 2021
Applicant:	Self-represented
Solicitors for the Respondent:	Dr S Thompson, Services Australia