Jeffery and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2009] AATA 830
•27 October 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 830
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2008/5920
GENERAL ADMINISTRATIVE DIVISION )
ReGary Glen JEFFERY
Applicant
AndSecretary, Department of Families, Housing, Community Services and Indigenous Affairs
Respondent
DECISION
TribunalSenior Member M D Allen
Date27 October 2009
PlaceNewcastle
DecisionThe decision under review is AFFIRMED.
...................[sgd]..........................
M D Allen
Senior Member
CATCHWORDS
SOCIAL SECURITY – preclusion period – whether special circumstances existed to abridge preclusion period – circumstances not special
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RELEVANT ACT/S
Social Security Act 1991 (Cth): ss 17, 1184K
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CITATIONS
Secretary, Department of Social Security v a’Beckett (1990) 12 AAR 212
Secretary, Department of Social Security v Ellis (1996-7) 24 AAR 535
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
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REASONS FOR DECISION
| 27 October 2009 | Senior Member M D Allen |
By application made 7 December 2008, the Applicant sought review of a decision by the Social Security Appeals Tribunal (SSAT) affirming a prior determination to preclude entitlements to a compensation affected payment from 18 July 1998 to 23 March 2018 and recover a charge of $57,986.18.
The sum of $57,986.18 related to social security benefits paid to the Applicant prior to his settling a civil claim for damages on 31 January 2005 in the sum of $1,350,000.
As the Applicant’s settlement included an amount for loss of earning, the provisions of s 17 of the Social Security Act 1991 (Cth) (the Act) applied.
The term “compensation affected payment” is defined in s 17(1) of the Act and includes a disability support pension or a social security benefit. Sections 17(2) and (3) then go on to provide that if a person settles (with or without admission of liability) a claim for damages that is made wholly or partly in respect of loss of earnings or lost capacity to earn, then 50 percent of that settlement amount is used to calculate the period during which that person is precluded from payment of any social security benefits.
In passing, I must state that the legislation operates unfairly and unjustly in respect of persons such as the present Applicant, whose settlement amount was inclusive of costs. If, as pointed in Secretary, Department of Social Security v a’Beckett (1990) 12 AAR 212 at 223, the intention of the legislature in imposing a preclusion period is to prevent so called “double dipping”, then it seems proper that only the amount actually received by the plaintiff in his or her hands should be taken into account when calculating the preclusion period. The legislation does not however make this adjustment.
In these proceedings there was no dispute as to the calculation of the preclusion period, rather the Applicant argued that special circumstances existed pursuant to s 1184K(1) of the Act, such as to treat all or part of the settlement sum as not having been paid.
Section 1184K(1) of the Act reads:
Secretary may disregard some payments
(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.
The term “special circumstances” was discussed by Carr J in Secretary, Department of Social Security v Ellis (1996-7) 24 AAR 535 at 539, namely:
“In Beadle v Director-General of Social Security (1985) 7 ALD 670, a Full Court of this Court had to consider whether the Administrative Appeals Tribunal had erred in its interpretation of s 102(1)(a) of the Act which provided for an extension of time in which to claim a family allowance “… in special circumstances…”. At 673-674 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 is 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.
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J, after referring to Beadle, 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 inquiry 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 inquiry 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 (on the same page) Kiefel J expressly approved the Tribunal’s reasoning in holding that Mr Groth’s circumstances were not out of the ordinary when Pt 3.14 of the Act (in which ss 1168 and 1184 are to be found) had the same effect on him as it did on other persons qualified to receive a disability support pension. Her Honour added:
It [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.”
The facts in this matter are relatively straightforward. In particular, the Applicant was aware prior to settling his damages claim that a preclusion period would be imposed.
As I understand the Applicant’s evidence, his solicitor had given him cause to believe that any award of damages recovered by him would be considerably more than the actual sum received. The settlement was recommended by his counsel at trial and, at the time, the Applicant had other financial concerns. He threfore reluctantly accepted the settlement offer rather than risk going to trial.
A few months before accepting the settlement, the Applicant had placed a deposit upon land at Barrington Tops. After accepting the settlement he subsequently realised that he would not be in a financial position to undertake the improvements necessary on the property in order to permit him and his wife and grandson to live there while also having enough money to cover the preclusion period.
As he had paid a deposit of $50,000 on the land, he did not wish to forfeit this sum by withdrawing from the contract. He therefore went ahead and purchased the land for the total sum of $612,000. At the same time he also sold a block of land at Pacific Palms and after paying out the balance of a mortgage over the land, received some $230,000.
The Applicant explained that following the settlement, he and his wife had to rethink their options. He did not wish to forfeit the deposit on the Barrington Tops property and thought that once improvements had been made to the property, he and his wife and grandson would be able to be self-sufficient. In making these plans he was expecting to be able to obtain employment at a ruby mine that is adjacent to the property.
The Applicant did obtain employment at the ruby mine as a plant operator however this only lasted a short time before the mine owners shut it down. He is now employed as a caretaker for the mine earning $160 per fortnight.
Following the purchase of the property, the Applicant spent some $316,700 to make the block and dwelling on it habitable. He also settled an outstanding tax bill and repayed loans he had received from his parents while awaiting his court proceedings.
Currently the Applicant and his family are in dire financial straights. The settlement monies have been exhausted and the hope of regular employment at the ruby mine has gone. The Applicant has severe incapacities and it would be impossible for him to attract an employer in the surrounding areas. The ruby mine was a particularly sympathetic employer and the Applicant had specialist skills as a gemmologist which that mining company found useful. I accept, given his incapacities, that the Applicant is unemployable.
From the evidence given by the Applicant and perusing various photographs, I am satisfied that the Applicant and his family can be said to be living as rural poor in straightened circumstances.
On the other hand, the Applicant and his wife own an unencumbered property that was purchased for some $612,000, and to which he has made improvements. The Applicant’s wife is in receipt of some social security benefits, which give a fortnightly sum of $808. To this must be added the Applicant’s $160 per fortnight payment as the mine caretaker.
Questioned on why he did not sell the land at Barrington Tops, the Applicant was quite insistent that that was where he wished to reside for a number of reasons, including its isolation and lack of pollution.
Even accepting that the Applicant and his family are in straightened financial circumstances, as pointed out by Kiefel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541, this is the lot of many social security recipients. The Applicant and his wife do receive some benefits and it is a lifestyle choice made by them to reside on a rural block of land remote from amenities. In my opinion there is nothing in their circumstances that could be claimed as special so as to invoke the discretion permitted by s 1184K(1) of the Act.
The decision under review is affirmed.
I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen
Signed:.........................[sgd].....................................................
Renée Wallace, Associate
Date of Hearing: 16 October 2009
Date of Decision: 27 October 2009
Applicant representative: Self represented
Respondent representative: Andrea Garcia, Centrelink Legal Services
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