Jin and Secretary, Department of Family and Community Services

[2004] AATA 504

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 504

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2003/1320

GENERAL ADMINISTRATIVE  DIVISION

Re:         YIN CHENG JIN

Applicant

And:SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:             20 May 2004

Place:            Melbourne

Decision:The Tribunal sets aside the decision under review and substitutes a decision to refuse the applicant’s claim for disability support pension because he was subject to a compensation preclusion period from 3 August 2002 to 4 February 2005, calculated on the basis that the amount of $21,990.15 is to be treated as not having been received by the applicant. 

(sgd) G.D. Friedman
  Member

SOCIAL SECURITY ‑ lump sum compensation ‑ preclusion period ‑ purchase of property and other items ‑ whether special circumstances exist

Social Security Act 1991 s17(1), 1169(1), 1170(1), 1171, 1184K(1)

Social Security Legislation Amendment Act (N○. 1)1995

Groth v Secretary, Department of Social Security (1996) 40 ALD 541

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

20 May 2004  G.D. Friedman, Member

1.      This is an application by Yin Cheng Jin (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 12 November 2003.  The SSAT set aside a decision of an authorised review officer of Centrelink dated 22 September 2003 to refuse an application for disability support pension because a compensation period had been imposed for the period 3 August 2002 to 10 June 2005 (the relevant period).  The SSAT remitted the matter to Centrelink with a direction that the duration of the preclusion period be re‑calculated on the basis that the amount of $21,990.15 is to be treated as not having been received.

2.      At the hearing on 6 April 2004 and 14 May 2004 the applicant represented himself, with the assistance of an interpreter in the Mandarin language, and Ms K. Navarro, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (the respondent).

3. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1‑T55), plus one exhibit (Exhibit A1) lodged by the applicant.   

BACKGROUND

4.      On 16 July 1992 the applicant suffered an injury at work.  On 6 September 1993 he received $15,000 and on 13 September 1996 he received $43,980.30 in relation to the injury.  On 24 July 2002 the applicant settled his compensation claim for $141,316, which included weekly payments totalling $7607.80 for the period 25 March 2002 to 2 August 2002.  Therefore, the net amount of compensation received in 2002 was $133,708.20.  

5.      On 28 March 2002 Centrelink wrote to the applicant and estimated that the compensation preclusion period would be 119 weeks, based on the settlement amount of $141,316 provided by the applicant.  On 30 July 2002 the compensation insurer advised Centrelink that the settlement amount was $133,708.20.  It also advised Centrelink of the previous lump sum payments of $15,000 and $43,980.30.  Based on this advice, on 14 August 2002 Centrelink calculated a preclusion period from 3 August 2002 to 10 June 2005.  On 2 September 2002 Centrelink informed the applicant of this preclusion period.

6.      On 8 May 2003 the applicant lodged a claim for disability support pension.  On 24 June 2003 Centrelink refused the application because the compensation preclusion period did not permit compensation affected payments during the relevant period.  On 22 September 2003 an authorised review officer affirmed the decision.    

7.      On 22 September 2003 the applicant sought review of the 22 September 2003 decision by the SSAT.  On 2 December 2003 the applicant lodged an application with the Tribunal for review of the SSAT decision.

8.      The issues before the Tribunal are whether a compensation preclusion period should be imposed, and if so, for what period, and whether special circumstances exist to disregard some or all of the compensation payment.

EVIDENCE

9.      In oral evidence the applicant said that he suffered a lower back injury in 1992 resulting in lumbar disc prolapse, and suffers constant pain as a result.  He told the Tribunal that since then he has also suffered from depression and has been treated by psychiatrists.  The applicant also said that in 2001 he was assaulted and suffered an injury to his left shoulder, which required surgery and added to the pain.  He said that this latter injury reduced the range of movement in his shoulder.

10.     The applicant explained that originally Centrelink calculated the preclusion period as 119 weeks, but after it considered the 1996 payment Centrelink increased the period to about 150 weeks.  He said that he had devised a plan to survive until the end of the preclusion period, but poor advice and other factors had prevented this from occurring.  He said that in 1996 his solicitor had not told him that the compensation payment would affect his Centrelink entitlement, and he had spent most of the 1996 lump sum payment on solicitors’ fees and repayment of debts he had incurred while in receipt of Workcover payments.

11.     The applicant said that in 1998 he purchased a house in Richmond for $200,000, as he had been living in a high‑rise unit and needed ground floor accommodation because of his medical conditions.  He said that he borrowed $140,000 from family and friends.  The applicant stated that he and his wife were divorced in 2002, and they had an agreement that he would make a payment to her as she had contributed to the cost of the house.  He said that he was also forced to spend money on necessary house repairs to the bathroom, floors and pathways.

12.     In respect of his current arrangements, the applicant explained that he lives alone.  He said that he suffers constant pain in his neck, shoulder, legs and back and will never work again.  He said that he sees a psychologist regularly and takes prescribed medication for depression.  He said that the nature of his injuries has had an impact on his long‑term prospects.  The applicant said that he had received inadequate legal advice over many years, and that his poor understanding of English had contributed to his unsatisfactory financial situation.  He produced documentation (Exhibit A1) showing that he has judgement debts to solicitors.  He told the Tribunal that he still owes about $40,000 to friends who lent him money to purchase his house.

13.     The applicant stated that he was unhappy with his treatment by Workcover and other government agencies, and his health has suffered as a result of administrative and legal difficulties.  In respect of the preclusion period, the applicant disagreed with Centrelink’s method of calculation.  He said that a sum should be deducted from the compensation amounts to take account of expenses involved in coping with trauma and other issues arising from his injuries.  

14.     The applicant told the Tribunal that he is unable to afford basic necessities or to pay household expenses, and cannot manage until the end of the preclusion period because he has only $3000 in cash.

CONSIDERATION OF THE ISSUES

15. Section 1184K(1) of the Social Security Act 1991 (the Act) provides:

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.

16.     Ms Navarro submitted that the three payments received by the applicant constitute compensation affected payments under s17(1) of the Act. She stated that s1169(1) of the Act provides that a compensation affected payment is not payable during a lump sum preclusion period. Ms Navarro referred to the Social Security Legislation Amendment Act (No. 1) 1995, which came into effect on 29 September 1995, and amended the operation of the compensation provisions of the Act by enabling two or more lump sum compensation payments to be treated as one lump sum compensation payment.  She said that under Centrelink policy, payments made prior to 1995 were not aggregated, so the $15,000 received by the applicant in 1992 should not be taken into account when calculating the current compensation preclusion period.  Ms Navarro submitted that the lump sum payments received in 1996 and 2002 should be aggregated, as they were made in respect of the same compensable event (s1171 of the Act).

17. Ms Navarro submitted that the exercise of the discretion in accordance with s1184K(1) of the Act was warranted only to the extent decided by the SSAT, and that no other circumstances existed to disregard any more of the compensation payments received by the applicant. She said that the correct compensation preclusion period is from 3 August 2002 to 4 February 2005.

18.     In reaching its decision the Tribunal takes into account the oral evidence and written material, including the submissions made by the parties.

19.     The Tribunal accepts the submission by Ms Navarro that the three payments received by the applicant were compensation affected payments for the purpose of the Act.  The Tribunal accepts that the preclusion period began on 3 August 2002, being the day following the last day of periodic payments (s1170(1) of the Act).  The Tribunal also accepts Ms Navarro’s submission that two or more lump sum payments may be treated as one lump sum compensation payment in calculating the preclusion period in accordance with the Social Security Legislation Amendment Act (No. 1) 1995, but that payments made prior to 1995 should not be aggregated in this manner.  For this reason the $15,000 received in 1992 should not be taken into account in the calculation of the preclusion period, but the payments received in 1996 and 2002 should be aggregated. 

20. Section 1184K(1) of the Act allows the decision‑maker to consider the particular circumstances of each case. There must be something to distinguish the case from others, or to make it stand out from the usual or ordinary (Groth v Secretary, Department of Social Security (1996) 40 ALD 541). In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal held that special circumstances must be unusual, uncommon or exceptional. 

21.     The Tribunal accepts that the applicant migrated to Australia in 1989 and that his limited command of English has contributed to his difficulties and confusion regarding complex administrative and legal aspects of his compensation claims and social security applications.  The Tribunal takes into account that the applicant has experienced frustration with a number of legal practitioners and that he believes he has been treated unfairly.  The Tribunal notes the applicant’s evidence that as a Workcover recipient he felt disadvantaged in his attempts to obtain loans from financial institutions, forcing him to borrow money from friends and relatives.

22.     In respect of the original estimate of the compensation preclusion period provided to the applicant, the Tribunal accepts that his legal advisers and Centrelink contributed to the error of about 30 weeks, resulting in significant disadvantage to him.  In addition, the Tribunal concludes that any plans made by the applicant were adversely affected by incomplete or inaccurate information given to him concerning legal fees and periodic payments.  The applicant has also suffered financially because of the necessity to move to ground floor accommodation.

23.     The Tribunal takes into account the long‑term nature of the applicant’s injury and its impact on his ability to work, and the circumstances in which he was the victim of an assault in 2001, resulting in further injury.  The Tribunal notes the debts owed to various persons including friends, relatives and former legal advisers.   

24.     On balance the Tribunal finds that the applicant’s circumstances are unusual, uncommon or exceptional, and constitute special circumstances for the purposes of the Act.  Under s1184K of the Act the Tribunal considers that $21, 990.15, being half of the compensation payment of $43,980.30 the applicant received in 1996, should be disregarded.  Therefore, the aggregate compensation equals $155,698.35 ($21,990.15 + $133,708.20).  The compensation part of that aggregate is 50% of $155,698.35, which equals $77,849.17.  The preclusion period is calculated by dividing the $77,849.17 by the cut‑off amount ($592.50), which gives 131.39 weeks.  On this basis, the preclusion period, which began on 3 August 2002, will end on 4 February 2005.

25. Therefore, the decision to refuse the application for disability support pension was correct. However, it is appropriate in the circumstances for the Tribunal to exercise the discretion under s1184K(1) of the Act, to disregard part of the compensation received by the applicant, and to amend the expiry date of the compensation preclusion period.

DECISION

26.     The Tribunal sets aside the decision under review and substitutes a decision to refuse the applicant’s claim for disability support pension because he was subject to a compensation preclusion period from 3 August 2002 to 4 February 2005, calculated on the basis that the amount of $21,990.15 is to be treated as not having been received by the applicant. 

I certify that the twenty‑six [26] preceding paragraphs are a true copy of the reasons for the decision of:

G.D.Friedman, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Dates of hearing:  6 April 2004 and 14 May 2004 
Date of decision:  20 May 2004
Advocate for applicant:                Self‑represented
Advocate for respondent:            Ms K. Navarro, Centrelink