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

[2016] AATA 34

Fairthorne and Secretary, Department of Social Services (Social services second review) [2016] AATA 34 (29 January 2016)

Division	GENERAL DIVISION
File Number	2014/4554
Re	Alan Fairthorne
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Regina Perton, Member
Date	29 January 2016
Place	Melbourne

The Tribunal sets aside the decision under review and exercises its discretion under section 1184K of the Social Security Act 1991 to treat part of the compensation as not having been made due to special circumstances.  The Tribunal remits the matter to the Secretary for recalculation of the preclusion period in accordance with the direction that $20,000 of the lump sum compensation should be treated as if it has not been paid to the applicant.

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

Regina Perton, Member

SOCIAL SECURITY – lump sum compensation – preclusion period – whether special circumstances

Social Security Act 1991 ss 17, 1184K

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

REASONS FOR DECISION

Regina Perton, Member

29 January 2016

1. Alan Fairthorne has suffered from a serious workplace-caused disease, Q Fever, since 20 October 2006.  The condition continues to cause him difficulties.  Mr Fairthorne received weekly payments for a time after the onset of the illness.  He lodged proceedings in the County Court of Victoria to obtain compensation.  On 24 February 2009 Mr Fairthorne received a lump sum payment of $50,500.  On 24 May 2013 Mr Fairthorne settled his compensation case for a lump sum of $375,000, which he received on or about 5 June 2013. The lump sum included a component for future economic loss.

2. On 13 May 2013 Mr Fairthorne signed a document entitled Solicitor Authority and Instructions to Settle Proceeding.  The document contained the following sentence:  I will be precluded from receiving Centrelink benefits for a period of time estimated by Centrelink to until approximately end of 2014.  Centrelink wrote to Mr Fairthorne at his home address on 30 May 2013 advising him that he was subject to a compensation preclusion period from 18 May 2013 to 22 December 2017.  Centrelink also wrote to his solicitor on the same day advising of the length of the preclusion period. 

3. On 5 June 2013 Mr Fairthorne applied for disability support pension (DSP).  On 29 July 2013 Centrelink advised Mr Fairthorne that his claim for DSP had been rejected because he was subject to the compensation preclusion period. 

4. Mr Fairthorne sought internal review of Centrelink's decision to refuse DSP.  On 20 August 2013 a Centrelink authorised review officer (ARO) affirmed the decision to refuse DSP on the basis of the preclusion period. 

5. Mr Fairthorne then applied to the Social Security Appeals Tribunal (SSAT).  On 24 July 2014 the SSAT affirmed the decision under review.  Mr Fairthorne lodged an application for review of the SSAT decision with this Tribunal on 4 September 2014. 

6. The issue before the Tribunal is whether there are grounds to waive part or all of the preclusion period that Mr Fairthorne had been subject to due to special circumstances. 

   SHOULD PART OR ALL OF THE PRECLUSION PERIOD BE WAIVED?

7. Section 17(1) of the Social Security Act 1991 (the Act) provides that compensation affected payments include DSP. Sections 17(2) and 17(3) of the Act at the relevant date stated:

   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.

   …

   Compensation part of a lump sum

   (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.

8. Section 1184K(1) of the Act gives the decision maker discretion to treat the whole or part of a compensation payment as not having been made or not liable to be made, if the decision maker thinks it is appropriate to do so in the special circumstances of the case.

9. For the Tribunal to use the discretion provided in s 1184K it must be satisfied that there is something to make the case stand out from the usual or the ordinary. The term special circumstances is not defined in the legislation.  However, many court cases have discussed the term.  In those cases, the term has generally been defined as requiring a departure from the norm.  For example, in Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 Branson J stated (at paragraph 26) that the circumstances of a particular case must give rise to hardship or unfairness sufficient to justify departure from the general rule.

10. The existence of special circumstances needs to be considered on a case-by-case basis.  In considering this concept, the Tribunal must maintain a balance between the circumstances and difficulties of the individual involved and the purpose of the legislation, which is to prevent people being paid by two sources for the same period.

11. The Tribunal accepts that Mr Fairthorne has serious medical problems which he will face for the rest of his life.  The circumstances in which the disease arose and the stress under which Mr Fairthorne was at the time of settlement -  with his brother suffering from a terminal illness coupled with initial incorrect advice about the length of the preclusion period - have added to his woes.   However, the Tribunal notes that Mr Fairthorne was compensated by a considerable sum of money.  He was also made aware, within less than three weeks of being awarded that sum, that it had to sustain him for the next four and a half years rather than for the one and a half years that he thought it would be at the time of signing the settlement. 

12. The settlement instructions Mr Fairthorne signed on 13 May 2013 had originally included an amount of $450,000, $75,000 more than the amount agreed to.  However, that was amended to $375,000 and Mr Fairthorne initialled the amendment.  The final sentence of the settlement instructions stated:

    I also acknowledge that should the proceeding be compromised on the terms set out above, I will be precluded from receiving Centrelink benefits for a period of time estimated by Centrelink to until approximately end of 2014.

13. On 24 May 2013 Mr Fairthorne’s solicitor, Mr Felipe Tellez, wrote a letter to the employers’ solicitors  which was delivered by hand:

    Find enclosed duly executed by the Plaintiff Mr Fairthorne.

    We confirm that payment of the settlement funds is due to be received in our office on 14 June 2013 and that in view of the impending suspension of our clients weekly payments time in relation to the payment of the said settlement sum is of the essence

14. The Release was presumably signed on a date between 13 May 2013 and 24 May 2013 (it is undated). It was agreed that the employers’ solicitors would pay the settlement sum to Mr Fairthorne’s solicitors within 21 days of receiving the signed release (presumably from 24 May 2013) and would pay costs to his solicitors as agreed.

15. On 30 May 2013 Centrelink advised CGU Insurance that Mr Fairthorne’s payment could be released as there were no monies owing to Centrelink.   On that same day Centrelink sent separate letters to Mr Fairthorne at his home address and to his solicitor advising that the preclusion period started on 18 May 2013 and ended on 22 December 2017.  The letters also set out how the preclusion period had been calculated and Mr Fairthorne’s ineligibility for most pension benefits during that period.

16. On 5 June 2013 Mr Fairthorne attended the Warrnambool Centrelink office with DSP application forms.  A file note states that he was advised by a staff member that he had a preclusion period until 22 December 2017.  The note states that Mr Fairthorne was shocked to hear this as he was advised prior to settlement his preclusion period would be until 2014.  He was advised to contact the compensation team to discuss the matter further.  It is noted that Mr Fairthorne stated he would contact his solicitor and get back to Centrelink if need be.

17. Ms Janet McAnulty, who has assisted Mr Fairthorne throughout the review process, contacted Centrelink by telephone on 6 June 2013, with Mr Fairthorne also part of the conversation. The T Documents, provided to the Tribunal by the respondent, contain a Centrelink officer’s electronic notes following conversations that day. 

18. It was noted that Ms McAnulty wished to clarify the preclusion period.  There is a description of the explanation provided by the Centrelink officer as to how the calculations had been done.  The officer then writes:

    ***BOTH customer and Janet … agreed with the calculations… 

    Janet then alleges that Alan was told by his solicitor …that he estimates a PP would end in the year 2014.  Customer has mentioned several times while discussing this with me that this was an estimate provided verbally during an alleged phone call on the 8/4/13 by a Centrelink officer by the name M…K….  Customer advised several times an email was also sent to his solicitor from M...  on the 08/04/2013.  I have check [sic] the customers file.  ES no activity on the 08/04/2013 has been recorded.

    I advised customer that I will need to contact his solicitor.  Customer has asked I call him back to discuss further once I speak to his solicitor…. 

    Contacted solicitor at approx. 11:20 there was no answer I left a message asking that … [he] contact me back…I waited 10 minutes and then tried again – contact was made with SOL @ approx. 11.05am (6/6/13)

    I spoke to solicitor… who advised the following:

    -    Sol alleges telephone conversation occurred the 8/4/13 between himself and M…K… of department of human services.

    -    - Sol advised he contacted the department to discuss estimate request for his clients claim

    -    - Sol alleges that he was informed by M… that estimate service is no longer provided and was advised by officer that there was an online estimator for external agency/legal professional use.

    -    - Sol alleges that he provided M…with a figure of $350,000.00.  Sol then went on to state that the claim ended up settling for a higher figure.  Plus an email sent to Sol by CSA?

    -    - Sol alleged that M… provided him with a verbal estimate which stated PP end date to be in the year 2014.  No full dates can be provided by solicitor

    ***I asked solicitor to provide a copy of the email sent.

    Copy of email received …@ 11.10am (6/6/13)

19. The file note then goes on:

    I then tried to call customer back on alternative contact number provided to me by customer…there was no answer at this time I did not leave a message I  wanted to see if I could work out how this alleged estimated PP and date of the yr 2014 had come about.  I hung up the phone and went to and accessed the Compensation online estimator.

    I now understand how this estimated PP end date came about.

    HOWEVER I cannot confirm WHO actually utilised the online tool.

    Nevertheless, On the online estimator it asked ‘proposed gross lump sum amount I input as solicitor had mentioned earlier $350,000.00 Nxt I was asked ‘Total amount of lump sums advanced for the same incident.  I input the same common law settlement estimate of $350,000.00 (even though this is not the figure you would put here, I did it to see if this has been done when online tool used.  Im then asked ‘Have you received any periodic payments?’.  I input ‘NO” (when in actual fact customer was paid up to the 17/05/2013).

    Lastly, I was asked ‘what is the date of incident’.

    I input the 20/10/2006.

    ***By clicking on calculate I obtained the following estimated PP end date 16/5/2014 ****

    …

    Its clear that online estimator had been used & clear the details input were incorrectly input thus providing an inaccurate estimate.

    ..

20. Eventually the Centrelink officer managed to explain the situation to Mr Fairthorne and Ms McAnulty late on 6 June 2013.

21. On 11 June 2013 Mr Fairthorne sought review by the ARO of the length of the preclusion period.  A file note dated that day states:

    …Customer is not wanting to appeal this decision in order to claim a Centrelink benefit.  Customer is appealing the preclusion period that has actually been applied based on the cus’s claim settling on the 24/05/2013 compared to the ESTIMATED PP end date

    …

22. After the ARO’s decision to affirm that Mr Fairthorne’s preclusion period ran until 22 December 2017 and he was therefore not eligible for DSP until then, an application was lodged with the SSAT.  In a submission to the SSAT dated 24 July 2014 after a hearing, Ms McAnulty explained the reasons Mr Fairthorne had given for choosing to purchase a home from his compensation award.

    …

    Alan asked me to give you a quick email as he just wanted to explain a little more about the purchase of his home.

    He said when he was asked about this, this morning, during the hearing his brain was starting to shut down (this often happens when he thinks back to the stress of his settlement and legal issues, it just gets overwhelming for him to think clearly).  He said he knew he wanted to explain it more but could only get the basics out ie. that he did his maths at the time and knew his financial situation was looking very grim and he purchased the home for this reason.  He said that what ever date the preclusion period was going to be for his DSP he felt that he needed to make the right decision for his accommodation needs for now and in his future years as he is ageing and has an ongoing permanent chronic illness that could potentially worsen with age.

    In addition he wishes to add to the case……..

    From the beginning of 2013 he knew he had to make a decision that year whether to keep renting or purchase a home.

    He did his maths and to rent for the rest of his life was a huge amount of money with no security at the end.

    He didn’t want to have the stress of insecure rental accommodation, and the thought of renting became a nightmare, and one he felt would cause him a huge amount of stress for the rest of his life.

    Due to his mental illness and his chronic physical illness of Q Fever the prospect of packing up and moving the rest of his life was causing significant worry for him.  This was discussed in detail with his Psychiatrist.

    He worked out if he paid the minimum of $200 a week for a 1 bedroom flat he would need around $10,000 a year and at age 76, in 20 years time, this would have used $200,000.

    With suffering a permanent chronic illness, his senior years could potentially me much worse and there could realistically be a need to go into a nursing home for care.

    If he rented he wouldn’t have any assets to liquidate for the care.

    It wasn’t realistic to have the option to live forever with his son in the home they are in, as his son would very likely move on in his life in the very near future as he is 26 y.o.  Potentially he could move up to Melbourne to further his career.

    His son suggested Alan purchase the property from him, for $200,000 and this seemed like the best financial option for short term and longer term financial security.

    As mentioned in the hearing, the home is not a grand home, it is a basic farm house that will eventually need maintenance ie roofing and stumping.

    ….

23. At his hearing before this Tribunal, Mr Fairthorne gave evidence about how his compensation money has been spent. He confirmed that he bought a farm house in Garvoc, located between Warrnambool and Terang in western Victoria, for $200,000.  Mr Fairthorne said that he worked out how much it would be to rent a property and thought that the purchase of a house would give him some security and the opportunity to modify the property to suit his future needs.

24. He told the Tribunal about the circumstances of his condition, brought on by inhaling noxious fumes while cleaning out a factory.  Had he been inoculated before undertaking the work, he would have been unlikely to contract Q Fever. 

25. One of the unexpected financial difficulties he currently faces is the need for urgent roof repairs to his home.  The roof is leaking in several places which has also impacted on the plaster.  He said that every time there is a storm or medium to heavy rain, further leaks appear.  There are rooms he cannot use because of the roof problems and subsequent damage to plaster and carpet. 

26. Mr Fairthorne stated that it costs him more for day-to-day expenses because of the distances he needs to travel to the supermarket, to obtain his medication and to attend medical appointments.  The only general store in Garvoc has closed down and he has no option but to travel to the nearest regional centre more than 20 kilometres away.

27. Mr Fairthorne had also put some capital aside to sustain himself.  He is anxious about being able to meet his financial needs until the end of the preclusion period.  The SSAT reported on the situation in its decision of July 2014 as follows:

    28.  For some years, Mr Fairthorne had been living at his son’s house in Garvoc, paying $150 a week rent.  When he knew he was getting the settlement, he decided to buy the property from his son for $200,000.  He bought the property in around June 2013 after he had been informed about the preclusion period running until 2017.  At the moment he has about $100,000 in a term deposit which he draws down upon from time to time to pay for his everyday living expenses.  Workcover is still meeting some of his medical expenses such as hydrotherapy and they are paying for a neurological assessment he is having next month.  As he lives in the country he uses a fair bit of petrol getting about.  He now lives in the house by himself as his son mainly stays with his girlfriend.

    29….Mr Fairthorne is on 25 pills a day for pain relief, anxiety, depression and heart problems. Mr Fairthorne also sees a psychiatrist every six weeks for counselling and medication.  Most of his medication is paid for by Workcover but he also takes fish oil and glucosamine on his GP’s advice and he has to pay for that himself.  Mr Fairthorne owes his mother $40,000 from when she helped him out financially while he was on weekly compensation payments.  She is now in a nursing home and is not pressing him for repayment of the loan.  Apart from the money he owes his mother, Mr Fairthorne has no debts apart from the usual utilities bills.

    30.  The Tribunal noted that Mr Fairthorne has approximately $100,000 in a term deposit.  Allowing for interest, the Tribunal calculated that Mr Fairthorne has at least $400 per week for each week of the preclusion period and he has no outlay for mortgage or rent…. 

1. In its decision, the SSAT reported that Mr Fairthorne was to be assessed by a neuropsychologist soon.  Dr Adrian Kramer, clinical neuropsychologist, prepared a report dated 12 August 2014 which was directed to Mr Fairthorne’s doctor and his physiotherapist.   Extracts from that report follow:

   …

   Medical and Psychiatric History

   Mr. Fairthorne reported that he was diagnosed with Q Fever in October 2006 and is currently under the management of Dr. Ian Jennins, an infectious disease specialist.  He stated that since his diagnosis his physical health has dramatically deteriorated and that he experiences constant aches and pains for the majority of the day and nights.  Mr. Fairthorne stated that he has significant pain in his neck, jaws, knees, shoulders and back which limits his ability to do many activities that he would like.  He also stated that he is easily fatigued and has erratic sleep patterns.  To address these issues he is currently seeing Fiona Maskell, physiotherapist, who is also managing his rehabilitation.

   Mr Fairthorne is currently under the care of a psychiatrist, Dr. Erin Richmond.  He stated that in the year 2000 he had a “nervous breakdown” after a close friend of his committed suicide…He currently has a number of stressors in his life including the death of his brother, his diagnosis of Q fever and related symptoms, and ongoing frustration regarding his recent Workcover settlement.

   …

   Summary

   Mr. Fairthorne is a 56 year old man who was referred for neuropsychology assessment to describe his cognitive strengths and weaknesses and to  provide strategies to assist with day-to-day functioning.

   Formal neuropsychological testing revealed that the majority of performances in the domains of attention/concentration, visual learning and memory, idea generation, visuo-constructional ability, visual problem solving were in the average to high average range….These results are not consistent with an acquired brain injury and the difficulties that he is experiencing in his thinking skill are most likely the result of fatigue and ongoing pain brought on by Q Fever.

   The testing did reveal that Mr. Fairthorne does have difficulty with verbal abstract thinking and as a result may display rigid or concrete thinking….

   Mr. Fairthorne also can become overwhelmed with increased amounts of verbal information and as a result is unable to remember a great deal of material.  However repetition of information does aid his memory….

   In regards to his current mood it is suggested that he continue to work with his psychiatrist, Dr. Erin Richmond, to address his increased level of stress, anxiety and depressive symptoms…

   …

2. The Tribunal also had before it a report prepared by Dr Richmond dated 30 April 2013 which had been prepared prior to settlement of Mr Fairthorne’s compensation case.

3. On 9 December 2014 Annette Lumsden, Team Leader, Financial Counselling Service, of Bethany Community Support in Warrnambool provided a written statement in which she stated:

   Alan has engaged with the Financial Counselling Service for assistance in dealing with his current financial difficulties.

   He is very concerned about his capacity to manage financially if he is precluded from Centrelink payments until 2017. 

   He purchased his house to provide stability of housing, and be able to make alterations to the property to assist with the likely deterioration of his physical capacity.  He currently uses a Walking Frame and Wheelchair at times and the property will need to be modified to cope with permanent use of mobility aids.  It is not easy to find a rental property that can accommodate these aids, or a landlord who is willing to pay for such alterations to an investment property…

4. The Tribunal adjourned the matter after the hearing to allow Ms McAnulty and Mr Fairthorne to obtain further material about matters raised during the hearing.  This included getting a quote for the urgent roof repairs. 

5. The Tribunal received a further undated statement from Ms Lumsden on 30 June 2015.  Ms Lumsden stated that Mr Fairthorne has been engaged with the Financial Counselling Service since November 2014.  She went on to state:   

   Alan needs to undertake urgent repairs to his house and is wary to spend the required amount as he uncertain of his future income.  Please find attached quote for the required repairs.

   The roof, guttering and spouting need to be replaced urgently as they are leaking and there is water damage to the plaster in some rooms.  The plaster will need to be replaced and painted.  If the repairs are not undertaken soon, further water damage will result in the carpets needing to be replaced.  There is also concern that there may be water damage to some of the wiring in the property as a result of dampness.

   Alan’s pharmaceutical costs are high as he does not have any Concessions and therefore pays full price for all other medication required for his condition.  His Psychiatrist and Specialists have prescribed supplements to assist in managing some of his Q Fever symptoms – muscle pain/spasms/weakness, chronic fatigue and stress and anxiety.  There is a supplement called “Reviver” which has been recommended, and Alan has found to help with chronic fatigue symptoms in the past.  However, at a cost of $100 per month, Alan feels he cannot afford to purchase this given his current financial situation.

   …

   The cost for Medical treatment varies due to the nature of Q Fever.  Workcover will cover some costs, but it is determined for each episode of illness and is not consistent.

   …

   Alan lives in a Rural area and needs a reliable vehicle to enable him to attend to his medical appointments.  His car currently needs mechanical repairs and he is waiting on the quote…There is no Public Transport available in this area….

   Alan, in consultation with his Psychiatrist, is currently attempting to give up smoking, but the stress of his current situation is making the process problematic.  He will most likely have a cost for Nicobate, or similar product, to assist with this matter.

   …

   Alan has made a number of changes to his outgoings in an attempt to reduce the drain on his savings.  However, his medical situation makes it very difficult to reduce his costs further.

6. As at 3 June 2015, Mr Fairthorne had a little over $50,000 in his credit union account.

7. Mr Fairthorne provided a quote for roof replacement of $18,879.31.  The quote also mentioned other additional works that may need to be done concerning guttering and the like. The quote sets out the difficulties that arise due to the mixed nature of the current defective roofing.  Mr Fairthorne had attempted to get other quotes without success.  On the day another quote was to be done, he contacted the contractor who had fallen from a ladder the previous day and was injured.  That man had recommended the roofer who gave him the quote provided to the Tribunal. 

8. The Tribunal asked Mr Fairthorne why he had applied for DSP in June 2013 and then pursued review when he knew he would have had a preclusion period for some 18 months longer at the time of settlement.  He said that he did not know why, but had been advised to do so.  However, given his later comments and those of Ms McAnulty, it would seem that they were attempting to have a declaration that the preclusion period conclude towards the end of 2014 on the basis of Centrelink’s erroneous advice, rather than the properly calculated 22 December 2017.  Mr Fairthorne has consistently said that he would not have settled for the amount he did had he known he was precluded from social security benefits for such a lengthy period.  Had his payout been larger the preclusion period would have been longer but he would obviously have received a greater lump sum. 

9. Ms McAnulty and Mr de Uray, who represented the respondent, provided further written submissions to the Tribunal after receipt of the quote for roofing and Ms Lumsden’s report.

10. The respondent submitted that Mr Fairthorne’s situation did not constitute special circumstances, stating amongst other things:

    10.  The Secretary contends that the Applicant is in a far better financial position that many other social security recipients, noting in particular that he owns his house outright and does not face mortgage or rental payments.

11. Ms McAnulty and Mr Fairthorne in a submission dated 17 September 2015 emphasized that:

    Administration error has clearly occurred…If this error hadn’t occurred the Applicant would not be in this predicament.  It is not “fair or just” that the Applicant should suffer the severe consequences of administration error by both Centrelink and Legal advice

    Emotional State/Psychiatric Illness and Chronic physical illness has greatly contributed to his cognitive difficulties which has affected his cognitive ability and decision making capacity over the last few years… Dr Redmond supported the Applicant’s overwhelming decision to purchase his modest home, in an attempt to provide him with emotional/financial and accommodation security for his future, while he continues to struggle to live and cope with a debilitating Chronic Illness for the rest of his life.

12. They also cite Mr Fairthorne’s strained financial circumstances, stating that he is not a recipient of a Health Care Card as he is not receiving DSP.  The Tribunal notes that Mr Fairthorne and his support persons do not appear to be aware of the Low Income Health Care Card which is available to people other than social security recipients.  The Tribunal has dealt with a number of matters involving persons subject to preclusion periods where the person affected holds such a card which, amongst other things, allows for reduced pharmaceutical costs.  Details of eligibility and how to claim are easily found on the internet or by contacting Centrelink.  Mr Fairthorne would not have been eligible in June 2013 as he had just settled for a large amount of money at that time. 

13. In this case, the Tribunal accepts that it was reasonable for Mr Fairthorne to purchase a modest home in a rural location rather than rely on renting a home when considering the medium to long term future.  The Tribunal also accepts his evidence that the roof is far worse than he realised it would be and has deteriorated far more quickly than he would have expected.  The existing leaks have damaged the plaster and there are concerns that the electrical system may be affected.  There are rooms he cannot use.  Furthermore it results in dampness in the house. 

14. Mr Fairthorne had around $50,000 in June 2015 and that amount would have decreased since in meeting his every day expenses.  He needs to sustain himself for almost two years on what he has.  The Tribunal is of the view that allowing a modest shortening of the preclusion period to take account of the urgent roof and ancillary repairs is appropriate. 

15. However, the Tribunal does not accept that it should shorten the preclusion period because of the initial advice from Mr Fairthorne’s solicitor that it would end in late 2014.  It is not certain that Mr Fairthorne could have settled for a larger amount or should have.  Furthermore, compensation cases are stressful for most, if not all, those taking court action following workplace incidents that have severely affected their health.  The decision as to whether to go to trial or accept a settlement features in all such matters.  There are many others who also fret about whether they made the right decision at the time.

16. Mr Fairthorne was advised of the correct length of the preclusion period by early June 2013 when he lodged his claim for DSP and sought the change to end date of the preclusion period.  He appears to have chosen to pursue this claim for what he believes was an injustice because of his reliance on the date given in the settlement instructions.  Centrelink remedied that advice on 30 May 2013 when it sent out letters advising of the correct date.   Mr Fairthorne was advised about how long he would be unable to obtain a social security benefit before or within a few days of actually obtaining the lump sum compensation.

17. While Mr Fairthorne’s financial position is difficult, it is a situation shared by many others who have spent part of their compensation moneys on houses, cars, failed businesses and the like.  He made a choice to invest a significant part of his compensation in a mortgage free property.  His other assets are relatively of low value.  He owned his motorbike and a 2001-model car before the compensation settlement and clearly needs to be able to travel to regional centres for medical appointments, shopping and the like.     

18. Mr Fairthorne was already aware of the amount of money and how long it needed to last before he settled the purchase of his son’s property.  While the Tribunal accepts that this may well be a good decision in the medium to long term, it may not have been so wise in the short term.  Nonetheless, the Tribunal does not believe anything would be gained by the community if he were forced to sell the house which may well be for much less than he paid given its current condition and location.  The Tribunal accepts that repairs are needed urgently and believes $20,000 to be a sensible figure to use given there are ancillary repairs to plaster, guttering etc that are required.

19. The Tribunal accepts and has sympathy for Mr Fairthorne’s state of health.  However, all people affected by preclusion periods are persons who have suffered significant work or accident related injuries or diseases. 

20. In summary, the Tribunal does not accept that the original preclusion date cited and Mr Fairthorne’s partial reliance on that date in deciding what level of settlement to accept constitutes special circumstances for effectively waiving three years of his preclusion period.  The amount he received results in 22 December 2017 being the end date.  Had he had a larger settlement, the date would have been even later.

21. After considering all relevant matters and viewing Mr Fairthorne's case in its entirety, the Tribunal is satisfied that the preclusion period should be shortened by taking into account the urgent house repairs and allocates $20,000 for that work.  The Tribunal finds that the situation in which Mr Fairthorne finds himself in relation to his damaged home and his need to make it liveable constitutes special circumstances.

22. Therefore, it is appropriate for the Tribunal to exercise the discretion under section 1184K(1) of the Act to disregard some of the compensation received. The preclusion date for DSP or other benefits calculated by the Department is 22 December 2017. Subtracting $20,000 off the lump sum compensation total will reduce the preclusion period by some months. However, it will not result in present eligibility for DSP.

23. As stated by the respondent, Mr Fairthorne is entitled to lodge a fresh application for DSP and to effectively further shorten the preclusion period at any time should his medical condition and general circumstances deteriorate further.

    DECISION

24. The Tribunal sets aside the decision under review and exercises its discretion under section 1184K of the Social Security Act 1991 to treat part of the compensation as not having been made due to special circumstances.  The Tribunal remits the matter to the Secretary for recalculation of the preclusion period in accordance with the direction that $20,000 of the lump sum compensation should be treated as if it has not been paid to the applicant.

I certify that the preceding 51 (fifty-one) paragraphs are a true copy of the reasons for the decision herein of Regina Perton, Member

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

Administrative Assistant

Dated 29 January 2016

Dates of hearing  8 April, 4 May and 2 June 2015

Advocate for the Applicant	Janet McAnulty
Advocate for the Respondent	Tim de Uray