Frelek and Secretary, Department of Family and Community Services
[2005] AATA 742
•19 July 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 742
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2005/76
GENERAL ADMINISTRATIVE DIVISION )
Re MARK FRELEK Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Dr KS Levy, Member Date19 July 2005
PlaceToowoomba
Decision The Tribunal sets aside the decision under review and in substitution, decides that the preclusion period be reduced to a period of three years i.e., 28 April 2002 to 27 April 2005, by treating the amount previously paid by Centrelink, which is equivalent to the remainder of the preclusion period, as not having been made.
..................[Sgd].......................
KS Levy
Member
CATCHWORDS
SOCIAL SECURITY – Social Services - Social Services Entitlement - Lump sum Damages Settlement - Compensation Affected Payment - Disability Support Pension - Preclusion period - Liability to repay benefit - Request for release from liability due to financial hardship - discretion to prevent recovery - special circumstances - S1184k Social Security Act.
Social Security Act (1991) 17, 29, 1170, 1178, 1884
Beadle v Director-General of Social Security 1985 60 ALR 225
Groth v Secretary, Department of Social Security (1996) 40 ALD 541
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
Haidar v Secretary, Department of Social Security (1998) 28 AAR 288
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Secretary, Department of Social Security v Banks (1990) 20 ALD 19, 95 ALR 605
Secretary, Department of Social Security v Smith (1991) 23 ALD 277
Secretary, Department of Social Security v a’Beckett (1990) 21 ALD 79; 12 AAR 212
Secretary, Department of Social Security v Thompson (1994) 36 ALD 563WRITTEN REASONS FOR ORAL DECISION
4 August 2005 Dr KS Levy, Member Introduction
1. This application by Mark Frelek is brought under section 29(1) of the Administrative Appeals Tribunal Act 1975, to appeal the decision of the Social Security Appeals Tribunal (the “SSAT”) of 7 January 2005. That decision rejected a claim of “special circumstances” under section 1884K(1) of the Social Security Act 1991 (“the Act”).
2. The decision of the SSAT was in response to decisions of Centrelink originally on 16 July 2004, and which was reviewed by the original decision maker on 23 August 2004 and by an Authorised Review Officer on 30 September 2004.
3. The following documentary evidence was submitted:
§Exhibit 1 Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” documents)
§ Exhibit 2 Report of Dr White dated 4 January 2005
§ Exhibit 3 Report of Dr White dated 31 March 2005
§ Exhibit 4 Report of Dr Venugopalan dated 18 May 2005
§ Exhibit 5 Weekly budget of the applicant (undated)
§ Exhibit 6 Summary of compensation expenditure of the applicant (undated)
§ Exhibit 7 Annexure A, B, & C detailing Centrelink records and payment (undated)
§ Exhibit 8 Witness statement of Carol Lee dated 11 July 2005
§ Exhibit 9 Statement of the applicant (undated)
§ Exhibit 10 Statement of applicant’s wife (undated)
4. The applicant was represented by Mr Dan Toombs, Barrister. The respondent was represented by Mr James Howard.
Issues
5. The issues in this case are:
(a)Have the legal requirements been correctly interpreted in this case and have the calculations for the preclusion period of 292 weeks (28 April 2002 to 1 December 2007) and the compensation charge of $8,665.32 been made correctly?
(b)Are there any “special circumstances” which indicate that any of the payments should be regarded as not having been made?
Background
6. Mr Frelek suffered workplace injuries on 28 February 2000. He subsequently lodged a compensation and damages module form (see Folios 27 and 38 of the T documents). At that time, the applicant was receiving WorkCover payments of $431.00 per week.
7. In response to this module, Centrelink advised Mr Frelek by note dated 8 December 2002 (see Folios 29 – 30), which was as follows:
“If you receive any payment of weekly compensation or a lump sum compensation payment, some or all of the Social Security payment paid to you since the date of injury may have to be paid back to us. Any compensation you receive may also stop you from receiving Social Security payments in the future.”
8. The applicant’s solicitors were advised that any compensation paid to Mr Frelek may affect any Social Security benefits he was then entitled to or to which he might otherwise become entitled in the future (Folios 31, 32 of “T” documents). Mr Frelek then continued to receive weekly compensation payments from WorkCover until 24 April 2002 (Folio 33, “T” documents) and with effect from 28 April 2002, Centrelink approved that Mr Frelek be paid disability support pension.
9. In March 2003, Mr Frelek’s solicitors Walsh Halligan Douglas approached Centrelink for an estimate of any preclusion period and debt that would accrue based on hypothesised settlement amounts of $450,000 and $650,000 (Folio 38, “T” documents) On 19 March 2003, the solicitors advised that Mr Frelek had settled his claim for $300,000 (Folio 76, “T” documents). Centrelink were subsequently advised that the applicant had intended purchasing a house with the settlement monies and that Mr Frelek was advised that the Centrelink calculations would take into account 50% of the settlement monies as required by the legislation. (Folio 76, “T” documents).
10. In April 2003, Walsh Halligan Douglas wrote to Centrelink and advised that the applicant had settled his claim and requested that any charge and lump sum preclusion period be calculated and advised to them. On 3 April 2003 Walsh Halligan Douglas were advised of the charge of $8,665.32 was refundable to Centrelink. In addition, Centrelink advised that Mr Frelek’s compensation lump sum preclusion period was 292 weeks or, from 28 April 2002 to 1 December 2007. A formal notice was forwarded to Mr Frelek on the same day.
11. Some 14 months later, on 17 June 2004, Mr Frelek enquired about disability support pension entitlement. He formally then claimed a Disability Support Pension on 15 July 2004. On 16 July 2004 that claim was rejected. Subsequent correspondence indicates that decision was reviewed by the original decision maker, an authorised review officer and subsequently by the SSAT on 7 January 2005 (see Folios 101 – 139; 4 - 14 T documents). On 8 February 2005 the applicant lodged his appeal with this Tribunal.
Legislation
“Section 17
Compensation recovery definitions 17(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
….
(e) a disability support wife pension; or
….
where, in order to be qualified for the allowance, payment or supplement, a person must be receiving, or receiving at a particular time, another kind of payment and that other kind of payment (the underlying compensation affected payment ) is a compensation affected payment to which any of paragraphs (aa) to (k) applies; or
….
"income cut-out amount", in relation to a person who has received a compensation payment, means the amount worked out using the formula in subsection (8), as in force at the time when the compensation was received.
17(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.
Compensation part of a lump sum
17(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.
17(4) Where a person:
(a) has received periodic compensation payments; and
(b)after receiving those payments, receives a lump sum compensation payment (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 payments received;
then, for the purposes of subsection (3), the amount of the lump sum compensation payment is:
Sect 1169
Compensation affected payment not payable during lump sum preclusion period 1169(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.
Sect 1170
Lump sum preclusion period
1170(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).
1170(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).
1170(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).
1170(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
Sect 1178
Repayment of amount where both lump sum and payments of compensation affected payment have been received
1178(1) If:
(a)a person receives a lump sum compensation payment; and
(b)the person receives payments of a compensation affected payment in relation to a day or days in the lump sum preclusion period;
the Secretary may, by written notice to the person, determine that the person is liable to pay to the Commonwealth the amount specified in the notice.
1178(2) he amount to be specified in the notice is the recoverable amount under section 1179.
Sect 1184K
Secretary may disregard some payments
1184K(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.
1184K(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).”
Evidence
§ Mr Mark Frelek
12. Mr Frelek provided evidence that he was born on 31 August 1969 and is now 35 years of age. He has three children, a boy aged 14, and two girls presently aged 13 and 11 years.
13. His injuries occurred on 28 February 2000 when he worked on a grape farm for 10-14 hours a day. Whilst working on the farm, he tripped over a watering system and was paralysed in his right leg. The injury penetrated the nerves in his lower back and now has impaired movement and constant pain. He has a spinal cord stimulator which helps to control the pain he experiences. Prior to having this device fitted by surgery, he took 12–14 Panadol per day and also used Vallium.
14. His evidence was that as a result of the pain and drugs over the past five years, he does not make decisions very well. Also, since he had the stimulator fitted, he was initially getting four to five hours sleep a night but as it is now defective on one side, he presently only gets two to three hours sleep. He described the consequential effect as being that he no longer can make any rational decision and it has taken over the whole of his life and the lives of all of his family.
15. He described his present life as one where he has no money and therefore can never give anything to his children. He described the earlier years of his marriage when he was working and obtaining an excellent income and supported his wife and children. He can no longer do this. Also, the relationship with his wife has become very strained and they have had marriage counselling from a number of sources. He said the counselling has not worked. He also described problems in the lower part of his body (incontinence).
16. In relation to decision making, he was provided with a letter after settlement about the preclusion period from Centrelink. The applicant stated that his solicitor at that time never gave him any advice about the preclusion period. The Centrelink letter he claimed, would have been sent to St George just before he moved to Toowoomba and could not recall getting this letter.
17. Under cross-examination, the applicant was referred to letters from Centrelink (Folios 29-30). The applicant indicated that he did not really understand this letter. He thought his wife may have read the letter. The applicant was also referred to Folio 76 of the T documents (an electronic file note of 19 March 2003) which indicates the 50% rule was explained to the applicant. The respondent’s advocate also referred to another letter to the applicant dated 3 April 2003 (Folios 90-92) and other records of telephone conversations with him (Folios 76-77).
§ Dr Ken White
18. Dr White provided telephone evidence in relation to the applicant. He described the applicant’s physical injuries and the spinal cord stimulator and various surgical procedures which he had had to date. Some of this surgery had been unsuccessful.
19. Dr White indicated that Mr Frelek was probably the most severe case he had looked after for a very long time. He emphasised that the applicant was reliant upon medication and is on maximal doses of oral morphine to reduce pain. He said the pain and medication can impact on his mental functioning.
20. Dr White also referred to the health of Mrs Frelek which he described as good although she had had surgery for cervical cancer in 2002.
21. On cross-examination by Mr Howard, Dr White reiterated that the applicant’s condition had deteriorated both physically and mentally. He said even though the applicant had seen a psychiatrist, Dr Venugopalan, he had seen no change in Mr Frelek’s condition. He thought he had been suffering from depression from some time and that it had worsened since the failure of the stimulator.
§ Mrs Frelek
22. Mrs Frelek provided evidence of the need to convey her husband from St George to Toowoomba and Brisbane on a number of occasions for medical attention and surgery. In relation to the letter from Centrelink, she could not recall receiving the letter. She said she had to be her husband’s carer for the past five years and even had to leave her children with whoever she could find to look after them when she had to accompany her husband to Brisbane for surgery.
23. She acknowledged she had had cervical cancer.
24. In relation to decision making, she indicated that her husband did most of the decision making and it was clear now that they never really spoke and that he made the decisions for their family even during the past five years. She was referred to Exhibit 5 which was the weekly budget and said that she does not receive that much from Centrelink. She therefore relies on the Salvation Army and others. Mrs Frelek tries to pay bills first and if there is no money available, then food or clothes cannot be purchased.
25. Describing her relationship, she said her husband sleeps in a recliner chair and she has no sexual relations with him. She described their relationship as a friendship as she is his carer, but they take their frustration out on each other. She felt like leaving him on a number of occasions but she stated that she remained because she feels obliged to stay with him. Her evidence was that if she left him, then he would be on the street or unable to cope by himself as he cannot even get dressed in the morning without assistance. Mrs Frelek also referred to the difficulties of living with her husband and said his bladder problem was one such example.
26. Under cross-examination by Mr Howard, she stated her children went to Catholic Schools and had to pay full price for their eldest child. For the other two children she receives a cut rate for them and pays $10 per child per fortnight to the school, although even that has fallen into arrears.
27. In response to a question, she indicated that she had not given much thought to selling the house and renting and using some of that money for living expenses. She indicated that the house has been designed for Mr Frelek’s circumstances. For example, the bench heights, the size of the shower and the toilet had been made to accommodate her husband’s special needs. If they sold the house and rented, they would be in the same position as they were previously, that is, in rented accommodation in which her husband could not use the facilities. Mrs Frelek indicated that previously, she would have to sponge her husband as he could not use the shower and would make their circumstances worse than at present.
28. Mrs Frelek also described the difficulty in their relationship and that they had sought counselling. Her eldest son had also required counselling.
§ Ms Carol Lee
29. Ms Lee was the Financial Information Services Officer of Centrelink. She had worked for Centrelink for 18 years. She did not provide financial advice but gave a number of options for Mr and Mrs Frelek to think about and advise them of the advantages and disadvantages of each. She believed he understood what a preclusion period was and that he had done some homework himself before they came to see her. She discussed the options of continuing to rent, buying a house, or buying an investment property to let out and then living in rented accommodation themselves. Under cross-examination, Ms Lee re-iterated that she thought the applicant was aware of the preclusion period when she discussed that with him.
Findings Of Fact
30. The following findings of fact are made:
(a)The applicant was aware of the preclusion period;
(b)The applicant consulted with the financial information services officer of Centrelink and the Bendigo Bank and made decisions with that knowledge ;
(c)His understanding of financial affairs is meagre, although that is not exculpatory;
(d)His spinal injuries are extensive, his pain is unrelenting and he suffers other indignities such as incontinence such that he lives in misery, and is depressed and has feelings of despair.
(e)Ms Carol Lee of Centrelink was a person of truth and did not advise the applicant financially, in the sense that she recommended that he should purchase a house, but rather, she presented options and advantages and disadvantages of each.
(f)Mrs Frelek is an honest person who, did not demonstrate any degree of insight into fundamental financial management but was frugal in expenditure as far as possible in the demands made on her by her family.
Consideration
31. I have taken account of all of the evidence, both oral and documentary evidence available to the Tribunal in arriving at the decision in this matter.
32. The evidence in this matter is essentially concerned with two issues. These are specified in paragraph 5. The first question is whether the legislation has been properly applied and the calculations properly made. On review of the calculations in accordance with the legislative provisions, I find that they have been correctly applied.
33. The main question in this case is the second issue, i.e., are there any “special circumstances” why any of the payments previously made by Centrelink should be regarded as not having been made. This question ultimately requires the exercise of a discretion given the legislative provisions and the case law applied to the circumstances of the applicant who has suffered appalling injuries. The Tribunal is asked to exercise its discretion in the applicant’s favour, notwithstanding the Tribunal’s decision that the application of the statutory law as to the length of preclusion periods and the debt have been applied in accordance with the tenor of the legislation. The power to consider whether there are special circumstances is provided in section 1184K of the Act. The term ”special circumstances” is not defined in the Act, and it has been a long held principle that the term is not susceptible to precise rules in determining its meaning (Beadle v Director-General of Social Security 1985 60 ALR 255).
34. Also, Kiefel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 referred to Beadle’s case above and further amplified the meaning of “special circumstances”. There, Her Honour stated that special circumstances “…would require something to distinguish … the 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”. Also in Department of Social Security v Smith (1991) 30 FCR 56, von Doussa J, in dealing with what might constitute unfairness as a relevant factor in “special circumstances”, said that the legislature must have recognised that an unfair, unreasonable or unjust result could sometimes occur, by including provisions such as consideration of “special circumstances” in the Act. But at the same time, it is clear that the purpose of the legislation is to avoid a claimant having access to both Social Security benefits and concurrently, benefits in the nature of income through lump sum payments as compensation for economic loss (see Hill J in Haidar v Department of Social Security (1998) 28 AAR 288.
35. Both counsel for the applicant and the advocate for the respondent have both referred the Tribunal to a number of decisions of this Tribunal and of the Federal Court which it is said justifies their contentions. A distillation of these decisions is relevant in determining this matter.
36. In the case of Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 at N97, the Administrative Appeals Tribunal referred to the dominate principle of the Act that an applicant should be precluded from “double dipping” but a decision-maker “………must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate”. In that case, it held that there was no reason why the applicant should be allowed to retain the double advantage of social security benefits and damages for the same period of incapacity, when the applicant had either deliberately or recklessly created the circumstances of his own hardship. In many respects, there is some behaviour of the applicant in this case which has some similarity to the applicant in Ivovic. However, the Tribunal also said that the purpose of the legislative provisions is “to allow the decision maker the fullest opportunity to consider the particular circumstances of each case”.
37. These principles have also been explained in some detail in a number of cases decided by Von Doussa J of the Federal Court of Australia. In particular, in Secretary, Department of Social Security v Banks (1990) 20 ALD 19, 95 ALR 605, and in Secretary, Department of Social Security v Smith (1991) 23 ALD 277 at 281, the “50%” rule was said to be an arbitrary way of striking a fair balance between the recipients’ interests and the public monies administered by the Government. But he also emphasised that the very nature of the arbitrariness can create unfairness in some cases and that the legislature recognised that there will be cases in which the arbitrary rule would result in an injustice.
38. Von Doussa J also said in Secretary, Department of Social Security v a’Beckett (1990) 21 ALD 79; 12 AAR 212 where the scheme in that case used different legislative provisions but involved the same principles as in the present case. There, His Honour said at 222-223:
“…the scheme introduces what may be described as a concept of presumed coincidence in time by applying an arbitrary formula … to fix a ‘lump sum payment period’. …
That the legislation should embody a notion of matching periods during which payments from two different sources are made or to be made is a reflection of the object of the legislation to avoid double payments for an inability to exercise an earning capacity. It would be contrary to this object to deprive a person otherwise entitled to a pension during a period when there was no coincidence (or presumed coincidence) between payments from the two sources. In such cases there would be no overlapping of benefit.”
39. In , Secretary, Department of Social Security v Smith (1991) 30 FCR 56
His Honour also qualified his previous remarks in A’Beckett by adding:
“If the operation of the scheme … would bring about special circumstances in the particular case which make it appropriate to exercise the discretion, the operation of the scheme is modified accordingly”.
40. That approach has been followed in Secretary, Department of Social Security v Thompson (1994) 36 ALD 563, where at 569 Einfeld J said:
“But when a special circumstance relates not to a specific element of the compensation award, but to the general circumstances of the recipient, the decision maker (in this case, the Tribunal) would rather direct its mind to the effect on the recipient of any reduction in the preclusion period. It may be that after such consideration the Tribunal decides on some time by which the period should be reduced.”
In also deciding that the Tribunal need not be overly mechanistic in justifying a reduction in the preclusion period, His Honour said that that :
“….would in my opinion take legalism and bureaucratic pedantry too far, especially in a socially beneficial framework where intuitive justice would often be as fair a criterion and as faithful to the legislative intention as any other approach.”
41. That case involved the loss of settlement monies “through no fault” of the applicant. In this case also, some of the settlement monies have been used and it is not clear how wisely they have been used. Nevertheless, the majority of the funds are still held. The difference in this case is that the majority of the settlement monies are in fixed assets and not in liquid assets or in an asset which can earn liquid assets or cashflow, which the applicant and his family require for their basic needs in their “special circumstances”.
42. The argument of the respondent in this case is that the provisions of section 1170 of the Act are to be read strictly and that section 1184K discretion should not be exercised in this case. I cannot agree with that argument. I accept the principle set out in section 1170 as the starting point and that the principle reflects that there should be no “double dipping”. Section 1184K provides for when a discretion is to be exercised in “special circumstances”. It is a gloss on the principles in section 1170 and 1178, and the circumstances of the present case are unusual and more than sufficient to justify the exercise of the statutory discretion provided.
43. I think “special circumstances” must show a circumstance, that is, an event or fact or condition, or the likelihood of an event or fact or condition on the balance of probabilities, which is not only unusual or highly unusual, but that the circumstance demands some immediate action to rectify the deviation from what might be regarded as being within the range of normalcy or usual circumstances. The principles guiding determination of “special circumstances” are also set out in the authorities referred to above. As a result of balancing the circumstances of this case with the principle elucidated in Ivovic and the other authorities and comments about “special circumstances” outlined previously, the Tribunal has determined that there are special circumstances in this case.
44. Special circumstances exist as a result of the cumulative affect of the following:
(a)The applicant’s incapacity is a work related injury;
(b)The facts are unusual and create special circumstances;
(c)The extreme nature of the impairment is indisputable and this is considered together with the fact that the applicant is now 35 years of age and was approximately 30 years of age when his injury occurred. In addition, Mrs Frelek has obviously provided dedication and support and been his constant carer for the past five years. She is clearly a person of some resilience who has endured frustration and hardship in dealing with Mr Frelek and his injuries and has concurrently, endeavoured to minimise costs in a responsible way whilst also managing a household of three children. She has often endeavoured to pay their legitimate debts as a priority over even basis items such as food.
(d)The pressure on Mr and Mrs Frelek and on their children for the past five years has been constant. The applicant’s enjoyment of life with his wife and children is very significantly reduced as is their enjoyment of a husband or father.
(e)If the applicant’s constant pain is to be reduced or controlled, he needs a machine and surgery which has been estimated to cost $34,000. This is not available through the public health system.
(f)The applicant suffers from a mood disorder of depression and that together with despair and hopelessness are contributing factors to their present circumstances (Re Woods and Secretary, Department of Family and Community Services (2002) 68 ALD 241).
(g)The advice of Dr White was compelling which was that the applicant’s state of physical and mental health have deteriorated.
(h)Financial stress on the applicant and his family is now more than just straitened circumstances. There is the physical, social and emotional health, not only of Mr Frelek, but also of his wife and three children, one of whom is now an adolescent and has required counselling.
(i)While some relief with school fees for the two younger children has been provided by the school, both these children will be in High School within a couple of years and Mr and Mrs Frelek will face the cost of full fees for these children, as they presently face for the eldest child. The Frelek’s have taken out a loan to cope with the needs of their ordinary living expenses.
(j)Mrs Frelek has over the past couple of years experienced cervical cancer.
(k)I also distinguish this case from other cases on the basis that the majority of the funds from settlement have not been entirely dissipated as they have much of the payout amount held in fixed assets. The difficulty is that they now have no liquid assets or cash flow for the ordinary incidents of living for a family with three children.
45. In taking account of the circumstances, the applicant did not have at the time of settlement and does not now have the knowledge to employ all his resources so as to make them work to his best advantage. I do not accept that the Centrelink Financial Information Services Officer provided professional financial planning advice nor is it within the mandate of that organisation to do so. The applicant needs to acquire financial advice to plan what income he and his wife have available to them from time to time, and live within those means. Incompetence cannot be a justification for the consolidated revenue fund to be an excuse to support individual cases of ignorance or ineptitude by those who are in extreme or unfortunate circumstances, merely because they have poor financial management or imprudent decision making in their personal lives. However, those comments are made by way of observation only and they are not a consideration in determining the “special circumstances” which have been found by the Tribunal.
46. It is noted that the applicant and his wife have since borrowed another $15,000 from the Heritage Building Society and mortgaged their property. That debt must be budgeted for and repaid by the applicant and his wife from the means at their disposal. Failure to do so could in future place them in similar dire circumstances to their present state, but without the benefit of the house they have so wisely invested in.
47. But returning to the special circumstances found, the Tribunal also recognises that in relation to the settlement amount, it is clear that the majority of the money has been used on the house and land which the Frelek’s now own. Therefore, they still have much of the settlement amount, but it is tied up as a fixed asset with the only liquid assets being Mrs Frelek’s social security income. This income is the cashflow or current assets that allows people to survive on an on-going basis. It is accepted that it is inadequate for the budgetary estimates of Mr Frelek’s special circumstances together his wife and three children, taking account of Mrs Frelek’s relatively frugal financial management.
48. The reasons outlined above amplify the oral decision given at the conclusion of the hearing of this matter, which was, that the Tribunal determines that the preclusion period be reduced to a period of 3 years, that is 28 April 2002 to 27 April 2005, by treating the amount which is equivalent to the remainder of the preclusion period, as not having been made.
I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Dr KS Levy, Member
Signed: Jeff Mills
Legal Research OfficerDate/s of Hearing 19 July 2005
Date of Decision 19 July 2005
Date of Written Reasons 4 August 2005
Solicitor for the Applicant Mr D Toombs, Disability Law Project
For the Respondent Mr J Howard, Departmental Advocate
1
3
0