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

[2017] AATA 1734

Flenley; Secretary, Department of Social Services and (Social services second review) [2017] AATA 1734 (17 October 2017)

Division:GENERAL DIVISION

File Number(s):      2017/5533

Re:Secretary, Department of Social Services  

APPLICANT

Brett FlenleyAnd  

RESPONDENT

DECISION

Tribunal:Member K. Parker

Date:17 October 2017

Place:Melbourne

The Tribunal orders a stay of the operation of the decision on 2 August 2017 in review number 2017/M110118 of the Social Security and Child Support Division of the Administrative Appeals Tribunal, until the final determination of review number 2017/5533 before the General Division of this Tribunal.

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

Member K. Parker

PRACTICE AND PROCEDURE – disability support pension – eligibility decision under review – request to stay decision – section 41 of the Administrative Appeals Tribunal Act 1975 (Cth) – merits of substantive application – prejudice to persons affected by the review – public interest considerations – whether review would be rendered nugatory if a stay were not granted – whether desirable to grant a stay

Legislation

Administrative Appeals Tribunal Act 1975 (Cth) s 41

Social Security Act 1991 (Cth) s 94

Secondary Materials

Social Security (Active Participation for Disability Support Pension) Determination 2014 s 7

Social Security (Tables for the Assessment of work-related Impairment and Disability Support Pension) Determination 2011

REASONS FOR DECISION

Member K. Parker

17 October 2017

INTRODUCTION

1. On 13 September 2017, the Secretary of the Department of Social Security (Secretary) lodged an application for review of a decision by the Social Security and Child Support Division of the Administrative Appeals Tribunal (SSCSD) made on 2 August 2017 in review number 2017/M110118. 

2. The SSCSD set aside a decision by a Centrelink authorised review officer on 31 March 2017 to reject a disability support pension (DSP) claim made by Mr Brett Flenley (Mr Flenley) on 2 February 2016 under the Social Security Act 1991 (Cth) (Act).   Instead, the SSCSD decided that Mr Flenley satisfied the DSP eligibility requirements as at 2 February 2016 under subsections 94(1)(a), (b) and (c) of the Social Security Act 1991(Cth) (SS Act).

3. The Secretary has requested that the Tribunal make an order to stay the operation of the SSCSD decision until the final determination of its review application by the General Division of this Tribunal.

4. Mr Flenley opposed the making of such an order to stay the SSCSD decision. 

5. A stay application hearing took place by telephone before this Tribunal on 3 October 2017 and both parties were provided with the opportunity to make submissions and/or provide further evidence in relation to the Secretary’s stay request and Mr Flenley’s opposition to it. 

6. The Tribunal’s power to stay the operation of a decision arises under s 41 of the Administrative Appeals Tribunal Act 1975 (AAT Act).  Subsection (1) states as a general proposition that the making of an application for review does not affect the operation of the decision under review.  However, subsection (2) confers discretion on the Tribunal, if a request is made to it by a party to the application, and the Tribunal considers is desirable to do so after taking into account the interests of any persons who may be affected by the review, make orders staying the decision or part of it, as appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

7. The Tribunal will consider the following factors when deciding whether to exercise discretion under subsection 41(2) of the AAT Act:

   (a)The merits of the substantive application;

   (b)Any prejudice to Mr Flenley or the Secretary or any other person who may be affected by the review;

   (c)Whether it is in the public interest to grant a stay; and

   (d)Whether the review application, if successful, would be rendered nugatory or pointless if a stay was not granted.

   CONSIDERATION

   The merits of the substantive application

8. The Secretary contended that there were strong prospects of success in relation to the substantive application to review and set aside the SSCSD’s decision about whether Mr Flenley qualified for the DSP as and from 2 February 2016, for the following reasons:[1]

   (a)Mr Flenley did not have any record of active participation in a program of support in the three years immediately prior to his claim;

   (b)The only way for Mr Flenley to avoid the program of support requirements was if one of his conditions attracted a severe impairment of 20 points (or more) under a single Impairment Table.  The Impairment Tables are set out in the Social Security (Tables for the Assessment of work-related Impairment and Disability Support Pension) Determination 2011 (2011 Determination);

   (c)While Mr Flenley’s impairment to his spinal function was fully diagnosed, treated and stabilised, there was no corroborating evidence to support a severe impairment of 20 points under Table 4 of the Impairment Tables;

   (d)None of the other claimed conditions of Mr Flenley were fully treated and stabilised; and

   (e)Mr Flenley’s work capacity had been assessed at 15 to 22 hours per week.

   [1] Refer page 5 of Secretary’s submissions seeking the grant of a stay dated 27 September 2017.

9. Mr Flenley did not accept that the Secretary had strong prospects of success. He said he did not understand why Centrelink should not be required to commence his DSP payments immediately.  He stressed his poor financial position and how important it was for him and his family to receive the DSP payments.  He said that he and his wife were both not working, he was on newstart allowance and his wife only received a carer’s benefit so that she could look after him.  I will deal with these practical considerations in the following section of my decision.

10. Returning to the merits of the substantive application, the Tribunal’s role for the purpose of considering the request for a stay is not to undertake a detailed assessment at this stage of the merits of the SSCSD’s decision that Mr Flenley qualified for the DSP.   Appropriately, a detailed examination of this question will take place at the hearing of the substantive application for review.  For the purpose of the stay application, the task of the Tribunal is to form an impression from the material put before it at the hearing of the stay application, as to Secretary’s prospects of success.    If this Tribunal forms an impression that the Secretary’s prospects are good, it will be more inclined to grant the stay and if not, it will be less inclined to do so. 

11. The Tribunal has considered the SSCSD’s reasons for decision as they deal with Mr Flenley’s claimed condition of Low Back Pain (see paragraphs [15] to [31] of the SSCSD’s reasons for decision).[2] 

    [2] Refer T-Documents T2.

12. On the face of the SSCSD’s reasons for decision, at this preliminary stage, the Tribunal has formed an impression that there appears to be gaps in the availability of corroborating evidence as to the symptoms that were present in relation to Mr Flenley’s spinal function as at the time of the relevant qualification period for his claim, which was 2 February 2016 to 3 May 2016 (Qualification Period).   

13. Section 8(1) of the 2011 Determination provides that, “Symptoms reported by a person in relation to their condition can only be taken into account where there is corroborating evidence” with a note that examples of the type of corroborating evidence are set out in the Impairment Tables.   The Introduction to Table 4 (Spinal Function) provides as follows:

    …

    oSelf-report of symptoms alone is insufficient.

    oThere must be corroborating evidence of the person’s impairment.

    oExamples of corroborating evidence for the purpose of this Table include, but are not limited to, the following:

    o    a report from the person’s treating doctor;

    o   a report from a medical specialist … [not applicable as this deals with the confirmation of the diagnosis];

    o   a report from a physiotherapist or other rehabilitation practitioner confirming loss of range of movement in the spine or other effects of spinal disease or injury.

    …

14. Notably, the SSCSD did not identify, in paragraphs [30] and [31] of its reasons for  decision, any specific references to corroborating evidence of Mr Flenley’s symptoms arising from his spinal condition, upon which its findings about the level of impairment under Table 4 were based. Instead, these paragraphs referenced in detail only symptoms and restrictions self-reported by Mr Flenley.  At the start of paragraph [31] of the reasons for decision there is a general reference by the SSCSD to Mr Flenley’s evidence being “consistent with the plethora of medical evidence on his file”.  However, there was no specificity provided to explain this broad proposition, or to show that the unspecified medical evidence taken into account by the SSCSD was referable to the relevant Qualification Period.

15. Mr Flenley did not take the Tribunal to examples of such corroborating evidence in the materials filed with the Tribunal, nor did he present at the stay hearing before this Tribunal any new evidence, medical or otherwise (not previously considered), which may have corroborated his self-reported symptoms.  As mentioned above, it is not for the Tribunal as part of the process of considering a request for a stay for it to meticulously review the evidence of the health practitioners in an attempt to discover possible arguments as to why the SSCSD made its decision based on the proper corroborating evidence as required under the legislative regime, despite the appearance from the face of its reasons for decision, that it did not.

16. The Tribunal also notes that it is not clear whether the self-reported evidence of Mr Flenley as referred to in paragraphs [30] and [31] of the SSCSD reasons for decision relates to the Qualification Period.  In fact, to the contrary, it appears to describe Mr Flenley’s symptoms, restrictions and limitations as at the time of the hearing before the SSCSD (i.e. 2 August 2017) which was more than one year after the end of the Qualification Period.

17. Accordingly, based on a reading of the SSCSD’s reasons for decision, and in the absence of any new corroborating evidence and/or a comprehensive review of the existing evidence by the health practitioners filed to date, this Tribunal has formed an impression at this preliminary stage that the Secretary has good prospects of establishing that a rating of 20 points under Table 4 for spinal function did not apply and instead, a rating of less than 20 points applied as at the time of the Qualification Period. 

18. In relation to Table 5 for impairment to mental health function, the SSCSD decided that it attracted an impairment rating of 10 points.  Even if the Secretary is able to persuade this Tribunal in the substantive application that no rating should apply to this impairment, as it arose from a condition which was not fully treated or stabilised at the time of the Qualification Period (as presently contended by the Secretary), this would not absolve Mr Flenley from his need to satisfy the program of support requirements under the Social Security (Active Participation for Disability Support Pension) Determination 2014 (Participation Determination), in circumstances where this Tribunal has separately formed the impression that it is likely that a rating of less than 20 points would be assigned under Table 4 for impairment to Mr Flenley’s spinal function.  The reason for this is that Mr Flenley’s impairments for his various conditions must attract a point rating of 20 points or more under any one table, in order for him to be absolved from the requirement to meet the program of support requirements. 

19. Further, based on the evidence as summarised in the SSCSD reasons for decision, the Tribunal did not form an impression that 20 points or more would be afforded to any of the impairments arising from the other various conditions claimed by Mr Flenley, including the claimed conditions of renal disease, sleep apnoea and obesity.   The SSCSD did not assign any point ratings to those conditions and the impression of this Tribunal at this preliminary stage, is that it was not appropriate to do so.

20. At the stay hearing, the Secretary also contended that Mr Flenley had not met the program of support requirements with respect to the DSP claim under review, as he had not participated in a program of support for at least 18 months in the 36-month period before the end of the Qualification Period. No evidence was tendered or submissions made by Mr Flenley to persuade the Tribunal that he had met those requirements, either by showing that he had in fact participated in such a program for the requisite period of time, or otherwise, that one of the exceptions set out in subsections 7(3), (4) or (5) of the Participation Determination applied to him.

21. For this reason, the Tribunal formed an impression at this preliminary stage, that Mr Flenley was unlikely to be able to demonstrate that he had a continuing inability to work as at the Qualification Period, being one of the mandatory eligibility requirements under subsection 94(1)(c) of the Act.

22. In conclusion, the Tribunal accepts the Secretary’s contention that there are “strong prospects of success” in relation to the substantive application to set aside the SSCSD’s decision.  Accordingly, the Tribunal concludes that this consideration weighs in favour of the Tribunal granting a stay.

    Prejudice to any persons who may be affected by the review

23. The Secretary contended that the Department would be prejudiced if the stay were not granted by the Tribunal because if the SSCSD decision was implemented, any amounts of DSP paid to Mr Flenley would become debts owed to the Commonwealth if the SSCSD’s decision was later set aside as a result of the substantive application.  The Secretary contended that the Department would incur administrative costs in the recovery of such debt and may experience difficulty with repayment from Mr Flenley.

24. At the hearing, Mr Flenley gave evidence that he was in a financially difficult position.  He explained he had not worked since his last employer had made him redundant.  He said he did not have any financial assets.   Mr Flenley said that his wife was not working as she cared for him on account of his disabilities and his family was presently relying on his newstart allowance and his wife’s carer’s allowance, which he intimated did not go far to pay the bills.   The Secretary contended, and it was not disputed, that Mr Flenley’s family income from the various Commonwealth government allowances amounted to $1,662.00 per fortnight.  Mr Flenley said the current mortgage repayment obligation for their family home was $450.00 per week and that there was approximately $320,000 balance remaining on the home loan.  

25. Mr Flenley contended he would be prejudiced if the stay was granted because he needed the additional payments to provide further financial support to his family given the matters raised in paragraph [24].

26. The Tribunal has carefully considered the contentions of the parties.  The Tribunal notes that if the stay is granted, it would not result in any change to the present level of income received by Mr Flenley’s family, upon which they have been able to, until now, live on and sustain their home loan payments.  The Tribunal acknowledges the evidence given by Mr Flenley that he and his family have struggled to keep these things afloat. 

27. However, the Tribunal is also mindful that if a stay is not granted and the Secretary succeeds in the substantive application (which at the moment the Tribunal considers to be more probable than not), later giving rise to a substantial overpayments debt, this would place further significant financial pressure on Mr Flenley and his family.  Mr Flenley will be required to repay this debt to the Commonwealth with little or no asset-base from which they could do so, short of selling the family home (or being required by their financial institution to do so).

28. On balance, the Tribunal concludes that this consideration weighs in favour of granting the stay. 

    Public interest

29. The Secretary contended that the public interest would be best served by avoiding overpayments of public monies in circumstances where there were questions regarding Mr Flenley’s qualification for payments.  Mr Flenley did not make any response to this contention or point to any public interest that might arise in favour of not granting the stay. 

30. The Tribunal is mindful that DSP payments are funded from contributions made to consolidated revenue by Australian taxpayers who would expect such payments to only be paid to those persons who have demonstrated an entitlement to DSP upon satisfying the various evidentiary criteria as prescribed by legislation which has been enacted by the Commonwealth.

31. The Tribunal is mindful that the general position under subsection 41(1) of the AAT Act is that an application for review does not affect the operation of the decision under review, or in other words, it should take effect or start to operate, subject to the discretion to order a stay as set out in subsection 41(2). However, in Mr Flenley’s case, because the Tribunal has formed an impression that the Secretary has good prospects of being able to establish that the eligibility requirements were not met by Mr Flenley (meaning there is a real likelihood that the overpayments referred to by the Secretary would arise in this case), unless a stay is granted, the Tribunal accepts the Secretary’s contention as set out in paragraph [29] and concludes that this consideration weighs in favour of granting a stay.

    Whether the application for review would be rendered nugatory if a stay were not granted

32. Neither party made any submissions in relation to this consideration.  The Tribunal did not treat this consideration as weighing for or against the granting of a stay.

    CONCLUSION

33. The Tribunal is satisfied that there are significant considerations weighing in favour of granting a stay, specifically:

    (a)The impression formed by the Tribunal that the Secretary has good prospects of success in the substantive application;

    (b)The Tribunal considers that the likely prejudice to the Secretary if a stay is not granted in the form of administrative costs to recover overpayments and/or the risk of being unable to recover them, weighs in favour of the stay; 

    (c)A stay would serve the public interest of avoiding such overpayments, bearing in mind the expectations of Australian taxpayers, and at a practical level, a stay would prevent Mr Flenley from being placed under increased financial pressure in the future if he were unsuccessful in the substantial application. 

    (d)If the Tribunal ultimately finds in favour of Mr Flenley, he will receive the full amount of substantial DSP back payments at a later point in time which will assist him and his family financially. 

34. For these reasons, the Tribunal considers that in this case, the general position as provided for in s 41(1) of the AAT Act should not apply, as the Tribunal considers it desirable to grant the stay request made by the Secretary and to stay the operation of the SSCSD’s decision until such time at the final determination of the substantive application before this Tribunal.

    FURTHER OBSERVATIONS OF THE TRIBUNAL

35. Mr Flenley was encouraged at the hearing to consider making a new claim for DSP as it appeared to be common ground between the parties that his condition had deteriorated since he made his claim on 2 February 2017.  Mr Flenley was asked at the hearing if he had made a further DSP claim at any time before the stay hearing, to which he said he had not.  Mr Flenley was asked whether he had been advised to do so at any stage, to which he answered he had not.  However, it is noted that a Centrelink authorised review officer advised him by telephone of his right to do so on 31 March 2017 when he was notified of the decision to reject his DSP claim.[3] 

    [3] Refer T-Documents T30/98.

1. The Tribunal notes that Mr Flenley contacted Centrelink by telephone on the day of the stay application hearing to commence the process of lodging a new claim for DSP based on the current state of his medical conditions and level of impairments arising from them.  Purely by way of observation, the Tribunal encourages Mr Flenley to follow through with making a new DSP claim and to seek legal advice to assist him to understand the various eligibility requirements, including the temporal aspects of those requirements, as explained to him during the hearing.  The Tribunal informed Mr Flenley at the stay hearing that he must submit the written claim form within 14 days.   The Secretary’s representative at the stay hearing indicated that he would do what he could to assist with respect to the expeditious assessment of Mr Flenley’s new DSP claim should he complete the claim process. 

I certify that the preceding 36 paragraphs are a true copy of the reasons for the decision herein of Member K. Parker.

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

Associate

Dated: 17 October 2017

Date of hearing:

3 October 2017

Advocate for the Applicant:

Solicitors for the Applicant:

Mr James Henderson

C/- Department of Human Services, FOI and Litigation Branch

Advocate for the Respondent:

Self-represented

Solicitors for the Respondent:

Self-represented