Feeney and Secretary, Department of Family and Community Services

[2005] AATA 222

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 222

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No  N2004/989

GENERAL ADMINISTRATIVE DIVISION )

Re LUKE FEENEY

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Senior Member M D Allen

Date11 March 2005

PlaceSydney

ADMINISTRATIVE APPEALS TRIBUNAL         )       No.      N2004/989
  )
GENERAL ADMINISTRATIVE DIVISION            )

Re          LUKE FEENEY

Applicant

And       SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal        :      Senior Member M D Allen

Date               :      11 March 2005

Place             :       Sydney

Decision:       For the reasons given orally at the conclusion of the hearing in this matter the decision under review is AFFIRMED.

(Sgd)          M.D. ALLEN
  .............................
   Senior Member

CATCHWORDS

SOCIAL SECURITY –application of preclusion period – lump sum compensation – lost earnings – whether special circumstances exist – decision under review affirmed.

Social Security Act 1991 – ss 17, 1184K(1)

Secretary, Department of Social Security v Ellis (1997) 46 ALD 1

REASONS FOR DECISION

Senior Member M D Allen

1. At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally. After service upon the Applicant of a copy of the decision that was in fact made, the Applicant pursuant to Sub‑section 43(2A) of the Administrative Appeals Tribunal Act 1975 requested the Tribunal to furnish to the Applicant a statement in writing of the reasons of the Tribunal for its decision.

2.      The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service.  Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reasons for the said decision.

3.        The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reasons for the Tribunal's decision.

I certify that this and the preceding page are a true copy of the decision and reasons for decision herein of:

Senior Member M D Allen

Signed:         (E.Pope)
          ..................................................................................……………………………….

Associate

Date of Hearing  11 March 2005

Date of Decision  11 March 2005

Solicitor for Applicants                 Self-represented

Advocate for Respondent           Mr John Kenny, Department of Family and Community Services

DRAFT DECISION
ADMINISTRATIVE APPEALS TRIBUNAL
N2004/989
BY MR M.D. ALLEN, Senior Member
FEENEY and SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICES
SYDNEY, FRIDAY, 11 MARCH 2005

MR ALLEN: Pursuant to an application lodged with the Tribunal on the 5th day of August 2004 the applicant sought review of a decision by a Social Security Appeals Tribunal made the 1st of July 2004 affirming a prior determination that a preclusion period applied to him following a settlement of a damages action in the District Court of New South Wales. The facts are within a relatively small compass and are set out largely not only in the decision of the Social Security Appeals Tribunal which is document T2 in the documents prepared for the Tribunal pursuant to section 37 of the AdministrativeAppeals Tribunal Act 1975, but also in the respondent’s statement of facts and contentions which became exhibit R1 in these proceedings.

Without going into too much detail, it can be said that the applicant was injured on the 25th day of August 1998 and as a result sued the Commonwealth in the New South Wales District Court.  On the 26th of November 2003 the applicant settled his damages claim in the sum of $550,000 inclusive of costs.  Now, from that sum there was repaid to Alliance Insurance Limited the sum of $176,818 in respect of a repayment of workers compensation payments.

It is quite clear that part of the settlement related to lost earnings.  I say that because the fact is that there was a repayment of workers compensation payments which included weekly payments for lost wages.  Section 17 of the Social Security Act 1971 deals with compensation recovery and preclusion periods.  The relevant subsections of section 17 read, subsection 2, paragraph (a):

For the purposes of this Act compensation means a payment of damages.

Subsection three then reads:

For the purposes of this Act the compensation part of a lump sum compensation payment is

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

(i)  the payment is made in settlement of a claim that is, in whole or in part,                    related to a disease or injury.

And it is abundantly clear that this is the type of payment it was.  Subsection four of section 17 then reads:

Where a person

(a) has received periodic compensation payments in respect of lost earnings or lost capacity to earn; and

(b) after receiving those payments receives a lump sum compensation payment in respect of the lost earnings or lost capacity to earn and (in this subsection called the LSP); and

(c) because of receiving the LSP becomes liable to repay an amount (in this subsection called the repaid periodic compensation payment – RPCP) equal to the periodic compensation payment received;

then for the purposes of subsection (3) the amount of the lump sum compensation payments is LSP ‑ RPCP.

All that means in this case is that having received the sum of $550,000 as a lump sum settlement for a claim for damages for personal injury and lost earnings there was subtracted from that sum an amount of $133,915.38 in relation to repaid periodic compensation.  In other words, the weekly amounts for lost wages.  That then left a sum of $416,000 in round figures.  50 per cent of that sum is the amount of $208,000.  Now, that sum is the amount upon which the preclusion period is based according to formulas set out in the Social Security Act.  And I don't intend to go into the mathematics of that.

In this matter the applicant suggested that somehow that sum should not be applied in his case.  However, the short answer to that is that it was a settlement being a lump sum settlement.  He did receive periodic compensation payments and therefore section 17 in particular subsection three of section 17 applies.  It may operate unfairly in his case but that cannot be taken into account in considering whether the formula applies.  Another matter which seemed to confuse the applicant was the term "future earnings" or "loss of future earnings" as opposed to lost earnings.  It is clear on perusal of section 17 that so long as the settlement sum relates to lost earnings whether it be past earnings or future earnings then section 17 and the preclusion period applies.

The only way in which the applicant could obtain relief from the full rigours of the preclusion period is if I were to find that special circumstances existed pursuant to section 1184K(1) of the Social Security Act.  That subsection reads inter alia:

The Secretary may treat the whole or part of a compensation payment as

(a) not having been made;

if the Secretary thinks it is appropriate to do so in the special circumstances of the case.

There have been numerous decisions of both this Tribunal and the Federal Court as to what constitutes special circumstances.  I need only refer to the decision in the Federal Court of Secretary, Department of Social Security v Ellis (1997) 46 ALD 1. There His Honour, Carr J said:

In Beadle v Director General of Social Security a Full Court of this Court had to consider whether the Administrative Appeals Tribunal had erred in its interpretation of section 102(1)(a) of the Act which provided for an extension of time in which to claim a family allowance in special circumstances. At ALR 228 the Full Court said "Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate.  It would depend upon the circumstances of the particular case whether these constituted special circumstances.  We do not think it possible to lay down precise limits or precise rules.  The matter is one for the Director-General bearing in mind the purpose for which the power is given.  The phrase "special circumstances" although lacking precision is sufficiently understood in our view not to require judicial gloss."

His Honour continued citing from Groth v Secretary, Department of Social Security where Kiefel J said:

For present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case.  That was, I consider, the only enquiry to be undertaken in this 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.  The enquiry I have referred to would involve considering what would be the effect if the provision in question or the principle of liability it creates is applied.

Later in that case Kiefel J approved the AATs' holding that Mr Groth's circumstances were not out of the ordinary when the effect of the Act had the same effect on him as it did on other persons qualified to receive, in his case, a disability support pension.

Her Honour stated:

The Tribunal went on to find that his circumstances and those of his family although difficult, did not constitute hardship and they could not be said to be different from other pension recipients.

In other words, I take account that most people in receipt of benefits or who have been affected by a preclusion period are in straitened financial circumstances but there is nothing before me which to my mind indicates that Mr Feeney's circumstances are so out of the ordinary as to constitute special circumstances. In saying that, I must refer to the following matters. The first is that Mr Feeney considers that the sum which he had to pay being costs to his solicitors was excessive and he submitted that I should take this into account as a special circumstance. A copy of the solicitors' bill occurs at document T14 of the section 37 documents but I am in no position sitting here to say whether that bill is excessive in the circumstances of Mr Feeney's case. I am not and should not proceed to act as a taxing officer.

The proper way for Mr Feeney to challenge his solicitors' bill is to ask for the bill to be taxed and I understand from what he has said that he has done this.  It therefore seems to me that it will result in either of the following conclusions.  One, that the taxing officer will hold that the bill is excessive and reduce it accordingly or two, will hold that the bill is not excessive but that is a decision for the taxing officer of the appropriate court and I believe it to be totally misconceived for a member of this Tribunal without more to say whether a solicitors' bill is excessive or not.  I also note that the applicant seems to argue that he received some incorrect advice from an officer of Centrelink.  I have not explored that in any great detail as I do not believe it affects the decision in this matter except to comment that from the notes which are in evidence as exhibit R2 the Centrelink officer gave the applicant certain advice as to what would happen if he deposited the sum of $150,000 into superannuation.

I note that the applicant apparently still has the sum of $170,000 invested in superannuation but he has had to withdraw some $20,000 from his superannuation account in order to meet his commitments.  I might also say as an aside that as I see it Centrelink officers are not investment advisers.  I also understand from the material before me that the applicant and his wife live in a house which is now unencumbered and that the applicants' wife is in receipt of social security benefits.  In those circumstances I am satisfied that special circumstances cannot be said to exist in the applicants' case.  As I see it this is purely a matter of applying section 17 which has been done and therefore the decision under review will be affirmed.