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

[2020] AATA 236

Henry and Secretary, Department of Social Services (Social services second review) [2020] AATA 236 (29 January 2020)

Division:GENERAL DIVISION

File Number:           2019/5126

Re:Mr Leo Henry

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Dr Damien Cremean, Senior Member

Date of decision:                   29 January 2020

Date of written reasons:        19 February 2020

Place:Melbourne

The Tribunal affirms the decision under review.

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

Dr Damien Cremean, Senior Member

Catchwords

SOCIAL SECURITY – age pension – lump sum compensation period – whether preclusion period applies – whether preclusion period correctly calculated – special circumstances – no special circumstances found – decision affirmed

Legislation

Social Security Act 1991 (Cth)

Cases

Re Groth and Secretary, Department of Social Security (1995) 37 ALD 727

REASONS FOR DECISION

Dr Damien Cremean, Senior Member

19 February 2020

1. The Applicant, Mr Leo Henry, has requested written reasons for the oral decision I gave on 29 January 2020.

2. These written reasons for decision follow my perusal of the transcript of the hearing and are substantially the same as those which appear there.

3. The Applicant sought review of the decision dated 25 July 2019 made by the Social Services and Child Support Division (‘Tier 1’) of this Tribunal. Tier 1 affirmed the decision of the Centrelink authorised review officer made on 17 April 2019 which rejected the Applicant’s claim for age pension.

4. At the hearing conducted on 29 January 2020, the Applicant represented himself and Mr Cameron Munro, a lawyer from Department of Human Services appeared for the Respondent.

5. The Applicant gave affirmed evidence by telephone at the hearing which included evidence about his dealings with Centrelink over his lump sum compensation payment (obtained in settlement of court proceedings) (‘the compensation payment’) and about the uses to which he had put that payment subsequently.

6. The compensation payment was in fact a total of $201,304: payment of $185,000 on       25 August 2018 and a payment of $16,304 on 23 January 2018.

7. These payments attracted the operation of s 93V(1) of the Social Security Act1991 (Cth) (‘the Act’) which provides for a preclusion period in the event that a person receives a lump sum compensation payment.

8. Section 1169(1) of the Act states that certain social security payments, regarded as ‘compensation affected payments’, are not payable during a ‘lump sum preclusion period’. The ‘compensation part’ of any compensation payment is ascertained in accordance with s 17(3) of the Act.

9. In accordance with s 17(3) of the Act, it was determined that the Applicant’s compensation part of his lump sum for economic loss was $100,652.

10. Having determined this, the start of the Applicant’s lump sum preclusion period was calculated in accordance with s 1170(4) of the Act, and deemed to start on 25 August 2018 and to end on 31 July 2020. This means that until the latter date, the Applicant is not entitled to claim age pension. That date is some months hence.

11. The Applicant submitted that at the time he received the compensation payment, he was not advised in detail about the operation of a preclusion period, and sought to argue (as best I could understand) that the calculations wrongly took into account the amount he was allowed for pain and suffering. He said the breakdown of the amount involved was $100,000 for pain and suffering, $50,000 for economic loss and $35,000 for future economic gain. Those amounts totalled $185,000, but the Applicant agreed that he was paid a further $16,000 or so some months earlier, totalling then about $201,000. Lawyers’ fees came to $20,000 and a $15,000 Centrelink debt was recovered from the total, so the Applicant said he received only about $165,000 in my hand.

12. My understanding is that the Applicant sought to argue that the amount for pain and suffering should not have been included, he stated: I’m entitled to pain and suffering and any economic loss, right? Later, he stated: Pain and suffering is my money, it’s got nothing to do with anything, that’s for the actual injury. My impression was that somehow he may have been addressing (without realising it) s 17(3)(b) of the Act but he did not mention it.

13. As to the claimed breakdown of the figures, the Applicant provided a copy of the Release and a copy of a Centrelink Compensation Advice of Lump Sum Payments form, showing at item 12 (‘Were other components paid with this lump sum (e.g. pain and suffering, medical costs, interest)?’) a sum of $100,000 with the instruction ‘Refers to attached release’.

14. I do not have any confidence I can make any findings (apart from ones of doubt) as to the origin of this Centrelink Compensation Advice of Lump Sum Payments form or about the provenance of the handwritten figure of $100,000. Moreover, the entry in item 12 is not found in a document of the same name dated 16 August 2018.

15. The document provided by the Applicant with the handwritten entry on it (of $100,000) is not a document I can rely upon as having established anything at all in the Applicant’s favour.

16. I am therefore suspicious about the document provided by the Applicant, and I consider overall he was not given to being frank with me. I refer in particular to his explanation for a $3,000 cash deposit which appears in his bank account records categorised as an Income deposit on 27 December 2018. During the hearing, when the Respondent queried its origin, the Applicant initially stated it was only $300 and paid to him for some work he had done and, as such, the only income he had earned in two years. After what, in my opinion, I regard as stalling for time, the Applicant then said the $3,000 deposit was money paid back to him by a friend. Overall I did not find the Applicant’s evidence to be very reliable on this point concerning earnings.

17. In any event, I consider the Applicant thought that if he spent the compensation payment he could claim the age pension when he became entitled, and I consider he realises now that he miscalculated. In fact that is the expression he used: I miscalculated – that was my fault. When I observed well, your mistake was thinking you were going to get the pension. That’s where your mistake was. That’s where you went wrong, he answered correct.  Further, I continued and that’s caused you to have financial hardship because you didn’t get the pension. His answer was that’s correct mate.

18. The Applicant indicated his view now was that he should have waited to spend his compensation payment (on building a residence for retirement in Thailand) until after he got his pension but, mistakenly, he said I thought I would get the pension.

19. I should indicate that I am satisfied that the Applicant has spent his compensation payment in the ways generally he indicated. I do not think he was misleading me on this point at least.

20. Having got to this point, where I was satisfied the preclusion period was properly calculated in that nothing said to me by the Applicant satisfied me I should find otherwise under the Act, the proceeding turned to whether there were special circumstances under s 1184K of the Act to justify disregarding all or part of the Applicant’s lump sum compensation payment. The effect of this would be that the Applicant’s preclusion period would be reduced or disregarded, and he would be eligible for the age pension if or when otherwise qualifying.

21. I accept that the circumstances must be out of the ordinary to be ‘special’, as derived from the decision in Re Groth and Secretary, Department of SocialSecurity (1995) 37 ALD 797.

22. I went through the Applicant’s evidence carefully with him and could not make a finding that his circumstances were ‘special’ in the required way. He is divorced man, twice married previously. He has three adult sons and is living with one of them now and paying $150 per week in board. I believe he may have a partner, a good friend as he termed it, here or in Thailand. He is aged 67 years and his mother is alive. He sometimes uses her car.

23. The Applicant gave evidence that many years back he had heart problems and that he may lose balance if he stays on the toilet too long. Otherwise, he seemed to be in reasonably good health, despite some back pain (due to disc issues) from time to time for which he takes (he said) Panadol Forte. 

24. I consider the only special circumstance I can find in the Applicant’s case is financial hardship, which he wants me to rely upon to disregard or reduce the preclusion period. I asked what are you relying upon apart from special circumstances—apart from hardship—to show special circumstances?   I clarified the question for him what else are you relying upon? Apart from financial hardship?  His answer was nothing.

25. That in my view does not suffice on its own to bring this matter under s 1184K of the Act.

26. I told the Applicant this and said I would be affirming the decision under review to which he responded by that time I’ll get the pension anyway.

    DECISION

27. In all the circumstances, the decision under review was affirmed.

I certify that the preceding 27 (twenty-seven) paragraphs are a true copy of the written reasons for the decision herein of Dr Damien Cremean, Senior Member.

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

Associate

Dated: 19 February 2020

Date of hearing:

29 January 2020

Advocates for the Applicant:

Self-Represented

Advocate for the Respondent:

Solicitors for the Respondent:

Mr Cameron Munro

Department of Human Services