Hughes and Department of Family and Community Services

[2001] AATA 895

DECISION AND REASONS FOR DECISION [2001] AATA 895

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2001/75

GENERAL ADMINISTRATIVE DIVISION          )          
           Re      ANDREW HUGHES          
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES  
  Respondent

DECISION

Tribunal       Mr R D Fayle, Senior Member     

Date26 October 2001

PlacePerth

Decision      The decision of the Social Security Appeals Tribunal of 29 January 2001 is affirmed.           

...........(sgd R D Fayle)..........
  Senior Member
CATCHWORDS
SOCIAL SECURITY – lump sum settlement for compensable injury – whether special circumstances in terms of s1184(1) of the Social Security Act 1991.
Social Security Act 1991 – ss.17, 1184

REASONS FOR DECISION

26 October 2001     Mr R D Fayle, Senior Member                 

1. The facts, as set out in the respondent's statement of Facts and Contentions filed with the Tribunal on 15 May 2001 are not in dispute and are adopted as relevant for the purpose of this review.

2. The applicant appeared in person, representing himself, assisted by his spouse. The applicant gave evidence. Mr S Ellis of the Centrelink Administrative Law Team represented the respondent. The Tribunal had before it documents filed pursuant to s37 of the Administrative Appeals Tribunal Act 1975 ("the T documents"). Those include the decision of the Social Security Appeals Tribunal ("the SSAT") of 29 January 2001 (T2), the subject of this review. The T documents also include a lengthy letter from the respondent's Authorised Review Officer ("ARO") to the applicant, dated 31 October 2000, setting out in detail, the reasons for the applicant's claim in relation to this matter having been unsuccessful. In many respects those reasons are embodied in the decision of the SSAT which affirmed the ARO's decision.

3. The matter under review is whether the respondent, pursuant to s1184(1) of the Social Security Act 1991 ("the Act"), should have decided that it was appropriate, by reason of special circumstances applying to the applicant, to treat the whole or a part of the "compensation" payment received by the applicant on or about 28 April 2000, as not having been received. Should the respondent have so decided then the preclusion period, calculated in accordance with the provisions of the Act, would have been of lesser duration. As it stands the preclusion period calculation (the arithmetic of which is not in dispute) commenced on 29 April 2000 and continues until 1 August 2003.

4. It should be mentioned that at the hearing the applicant complained of the manner in which s17 of the Act arbitrarily deems half of the lump sum settlement sum received to be the "compensation part" for the purpose of calculating the lump sum preclusion period. The applicant's submission in this respect was that it took no account of the factual basis of the settlement and in his case, he believed that the portion of the lump sum compensation settlement for economic loss was considerably less than half the total settled sum of $146,000. Mr Ellis explained the history of the provisions contained in s17 of the Act in this regard. It is also noted that the ARO had previously explained the basis for the legislation in her letter to the applicant (T12, see particularly p.58). Mr Ellis also explained to the Tribunal the possible exceptions to the s17 deeming provision. The Tribunal agrees with the submission of Mr Ellis in regard to the appropriateness of applying s17(3) to the present circumstances. Indeed, it goes further that based on the facts of this case, it finds that the respondent has no discretion in this aspect of the calculation. Subsection 17(3) is mandatory in these circumstances.

5. The applicant's evidence and submissions in relation to "special circumstances" in the context of s1184 of the Act, were twofold. He said that he viewed as unfair the fact that the relevant State workers' compensation law was amended after he had made his claim (through his solicitor) and it being settled nearly 1 year and 9 months later. He submitted that the changes to the law restricted his rights to be fully compensated and for that reason he believes he received less by way of settlement for damages than he may have otherwise. His reasons for this were explored in some detail with him and it is not apparent to the Tribunal that his belief is necessarily soundly based. The Tribunal accepts that the applicant believes that he was forced into a settlement and that in the period from his injury to that settlement he was required to undergo rehabilitation which he believed did not help (it certainly did not get him back into the work force). Also, the Tribunal accepts that the applicant believes that much of the medical assessment (and to a lesser extent, the treatment he received), which he believes was paid for from his otherwise entitlement to a settlement, was ineffective. He believes in this respect that, given a choice, he would not have subjected himself to the rehabilitation (which he considers exacerbated rather than helped his condition) and also to many of the medical examinations. He said he was forced into these in the belief that if he refused then his entitlement to weekly compensation payments were in jeopardy. Mr Ellis submitted that what the applicant endured prior to the settlement of his compensation claim is of no relevance to the matter under review – the fact is that the applicant received $146,000 as a lump sum by way of settlement (T5).

6. The applicant summarised for the Tribunal his current financial position. He said that the only source of income which the family now has is his wife's entitlement to Family Payment being about $890 per fortnight. He and his wife have a house to the value of approximately $170,000 with a mortgage of approximately $75,000. They have a vacant block of commercial land of approximately 8.5 acres in Gin Gin. This he believes is worth $52,000 but has been up for sale for a long time. He has a motor car but that is subject to debt and if sold in the current market would not provide sufficient to defray the debt. His household debts (including credit card) and borrowing from family members come to approximately $13,000. The applicant said that the mortgage borrowing secured over their house, since settlement, was for the purpose of extending their home (which is in a rural town) to provide commercial short-stay accommodation. The extensions are yet to be finished. The applicant also told the Tribunal that at the time of the settlement his solicitor did mention something about the preclusion period but was not specific. The Tribunal notes that the T documents indicate that the applicant's solicitor would have been aware of the preclusion period at the time of settlement or soon thereafter and ought to have made sure that the applicant fully understood its import. To have since borrowed $75,000 in the circumstances cannot be taken as a contributory factor of straightened circumstances that may now be experienced by the applicant and his family.

7. Mr Ellis submitted that the circumstances of the applicant do not meet the tests for "special circumstances" required in cases such as this.  His submissions reflect the reasons advanced by both the ARO and the SSAT, reasons with which the Tribunal agrees.  Further, in the Tribunal's opinion the circumstances of the settlement, which the applicant believes was unfair, are not relevant.  The applicant, at all relevant times relating to his claim for compensation, was represented by his solicitor who negotiated on his behalf.  Whether the settlement was fair or not is a subjective matter and preceded the arm's length settlement negotiations.
   Decision

8. For the above reasons and pursuant to s43 of the Administrative Appeals Tribunal Act 1975, the decision of the Social Security Appeals Tribunal of 29 January 2001 is affirmed.

I certify that the 8 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R D Fayle, Senior Member

Signed:

................................(sgd S Railton)................................
Associate

Date of Hearing  18 October 2001
Date of Decision  26 October 2001
The Applicant appeared unassisted

Advocate for the Respondent  Mr Steve Ellis, Centrelink Advocacy and Administrative Law Team