Jensen and Department of Family and Community Service

[2001] AATA 37

DECISION AND REASONS FOR DECISION [2001] AATA 37

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q00/650

GENERAL ADMINISTRATIVE  DIVISION       )       
           Re      WAYNE DAVID JENSEN
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Deputy President DP Breen, Presidential Member      

Date24 January 2001

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.           

(Sgd)          DP BREEN
  PRESIDENTIAL MEMBER
CATCHWORDS
SOCIAL SECURITY – compensation preclusion period – whether "special circumstances" existed to permit waiver – whether use of compensation monies to accumulate assets constituted a "special circumstance"
Social Security Act 1991 ss 1184
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1996) 40 ALD 541
Lukic and Secretary, Department of Social Security, AAT Decision 6944 delivered 6 May 1991
Secretary, Department of Social Security and Winterbotham, AAT Decision 6499 delivered 11 December 1990

REASONS FOR DECISION

24 January 2001     Deputy President DP Breen, Presidential Member                  

1. This was an appeal against a decision of the Social Security Appeals Tribunal dated 1 June 2000 which affirmed the decision of an Authorised Review Officer to impose a compensation preclusion period on the applicant from 26 February 1994 to 26 April 2002.

2. The matter was heard by me in Bundaberg on 12 December 2000.  Mr Wayne Jensen, the applicant, represented himself.  Mr R McQuinlan, Departmental Advocate, represented the respondent.  Mr Jensen gave oral evidence at the hearing and the "T" Documents were made Exhibit 1.

3. Mr Jensen suffered an injury at work in February 1993.  He still has trouble with his right hip, knee and ankle.  He received social security payments from 10 May 1994.  In May 1998 Mr Jensen's claim for personal injuries settled out of court for $380,362.02 covering both economic loss and damages for pain and suffering.  On the date of settlement Centrelink provided Mr Jensen's legal advisers with a correct estimate of the length of the preclusion period.

4. In early 1999 Mr Jensen purchased land in the Bundaberg region with the intention of farming tea trees.  He also purchased a car and farm equipment.  He expended around $133,000 on these purchases but he left enough money to live on for 18 months.  He had no experience in farming or running a small business.  It was only after he had planted his crop of tea trees that it became apparent to him that the venture would not be viable.

5. Mr Jensen said that he had just enough money to pay the current rates on the land but that he was relying on the charity of friends for food and money for other living expenses.  He said he had put the land up for sale but no-one was buying property in that area.  He has tried to sell his car by approaching people involved in V8 Car Clubs but had not found any interested buyers.  He had been unable to obtain employment as the labour market was very slow and his injuries restricted his ability to work.

6. Mr Jensen did not dispute the calculation of the preclusion period.  The only issue for the Tribunal to assess is whether there are any "special circumstances" under subsection 1184(1) of the Social Security Act 1991 which would permit the finding that all or a part of the compensation payment can be regarded as not having been made for the purpose of calculating the preclusion period.

7. There is no statutory definition of "special circumstances".  However, this Tribunal in the case of Re Beadle and Director-General of Social Security (1984) 6 ALD 1 provided guidance for the interpretation of this phrase. It was held that the circumstances faced by the applicant must be "unusual", "uncommon" or "exceptional" in order to be classed as "special".

8. Kiefel J in the case of Groth v Secretary, Department of Social Security (1996) 40 ALD 541 observed that, when determining whether a person's circumstances are "special", one should look at the effect upon the claimant if the waiver provisions were not applied.  If the consequences were unintended by the legislation, or the effect on the person concerned was different from that which would be felt by others, then the circumstances may be "special".

9. While the legislation never intended to leave people destitute and starving, it is framed to ensure that people use compensation settlements for the purpose they are paid – namely, the replacement of income.  Mr Jensen received $256,751.24 after all costs in May 1998.  This money was more than sufficient to support Mr Jensen for four years.  As pointed out in the cases of Lukic and Secretary, Department of Social Security AAT Decision 6944 delivered 6 May 1991 and Secretary, Department of Social Security and Winterbotham AAT Decision 6499 delivered 11 December 1990), the mere fact that a person chooses to convert their compensation monies into assets does not of itself constitute a special circumstance.

10. Mr Jensen retains the benefit of his compensation settlement, albeit in a non-liquid form.  On his evidence he has made some attempts to sell his car but has not approached any car yards in order to do so.  His farm is unencumbered and if not sold could be borrowed against to provide income until the preclusion period expires.

11. To effectively waive the remainder of the preclusion period so that Mr Jensen can receive social security payments again, would be to give him an advantage over those people who, rather than putting their money into assets, used it to support themselves during the relevant period.

12. While many people seeking the benefit of this wavier have not acted illogically in seeking to set themselves up with a house or a small business for the future out of the proceeds of their settlements, this does not mean they have acted prudently.  The starting of a business which eventually fails, when one has no training in small business in general or the particular industry in question, does not constitute of itself a special circumstance.  The purpose of compensation is, for the most part, to replace lost income, not to assist in the purchase of assets.

13. Mr Jensen is currently in serious financial difficulty.  However, he has retained the benefit of his compensation payments through his assets which may be used, through various means, to support him until the end of the preclusion period.  As such, his circumstances, whilst unfortunate, cannot be described as "special".

14. Therefore, the Tribunal is not persuaded to exercise its discretion under Section 1184 of the Social Security Act 1991 and affirms the decision under review.

    I certify that the 14 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President DP Breen, Presidential Member

    Signed:         Denise Burton
      Secretary

    Date/s of Hearing  12.12.00
    Date of Decision  24.1.01
    Rep. for the Applicant              Applicant appeared in person
    Solicitor for the Respondent    Mr R McQuinlan, Departmental Advocate