Khashadorian and Secretary, Department of Family and Community Se Rvices
[2003] AATA 774
•10 February 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 774
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2002/1470
GENERAL ADMINISTRATIVE DIVISION ) Re ALBERT KHASHADORIAN Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr S. Webb Date10 February 2003
PlaceSydney
Decision The Tribunal determines to set aside the decision under review and, in substitution therefor, decides to treat the whole of the compensation payment to the Applicant as not having been made.
The matter is remitted to the Respondent to assess the correct rate of pension that is payable to the Applicant.
[SGD] Mr S. Webb, Member
CATCHWORDS
SOCIAL SECURITY - Disability support pension - compensation preclusion period - whether preclusion period calculated correctly - whether special circumstances
LEGISLATION
Social Security Act 1991 ss 17, 1170, 1184
AUTHORITIES
Secretary, Department of Family & Community Services v Allan [2001] FCA 1160
Re Beadle and Secretary, Department of Social Security (1984) 6 ALD 1
Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Secretary, Department of Social Security and VIS (1995) 40 ALD 745
Re Martin and Secretary, Department of Social Security [1990] AAT 6482
Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681
Re Secretary, Department of Social Security and VYS (1995) 40 ALD 745
Jess v Scott (1986) 12 FCR 187
Re Secretary, Department of Social Security and Hill (1995) 2(1) SSR 9
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Re Secretary, Department of Social Security and Anderson [1997] V96/1544
REASONS FOR DECISION
10 February 2003 Mr S. Webb 1. This application by Mr Albert Khashadorian (“the Applicant”) is for review of a decision of the Social Security Appeals Tribunal (“the SSAT”) dated 11 September 2002 to affirm the decision of an authorised review officer (“ARO”) dated 1 August 2002. The ARO decided the Applicant’s circumstances were not special circumstances and a compensation preclusion period would apply from 21 February 2002 until 15 October 2003, affirming a previous Centrelink determination.
2. The Tribunal convened a hearing in this matter on 17 January 2003 at which the self represented Applicant and his wife gave oral evidence and Ms Cheryl Collis, an advocate from Centrelink’s Advocacy and Administrative Law Team, represented the Secretary, Department of Family and Community Services (“the Respondent”).
BACKGROUND
3. The following information is provided by way of background and is not in contention between the parties.
4. The Tribunal finds:
(a)The Applicant was injured at work on 19 November 1990 and on 7 January 1997, as a consequence of which he sustained a back injury and chronic pain.
(b)The Applicant sought compensation and settled his claims for $100,000 on 20 February 2002, as a consequence of which Centrelink imposed a preclusion period from 21 February 2002 to 15 October 2003.
(c)The Applicant is married with three dependent children and was in receipt of disability support pension and periodic compensation payments prior to receiving a lump sum compensation settlement.
ISSUES BEFORE THE TRIBUNAL
5. The issues before the Tribunal are:
(a)whether the compensation preclusion period has been correctly calculated and applied; and if so
(b)whether special circumstances exist whereby the correct and preferable decision would be to treat the lump sum compensation payment, in whole or in part, as not having been made.
LEGISLATION
6. The relevant legislation in this matter is the Social Security Act 1991 (“the Act”), in particular sections 17, 1169, 1170 and 1184.
EVIDENCE BEFORE THE TRIBUNAL
7. The Tribunal had before it the following documents.
EXHIBITDESCRIPTION
T1-T14Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.
A1Letter from Dr Newman Harris, Consultant Psychiatrist, dated 6 December 2002.
A2Receipt from Hurst Auto Group dated 9 December 2002.
A3The Applicant’s list of household items and personal effects.
R1The Respondent’s Statement of Facts and Contentions dated 10 January 2003 with Attachments A - V.
R25 computer print outs of Centrelink records dated 16 January 2003.
evidence of the applicant
8. The Applicant told the Tribunal he injured his back in January 1997 while working as a fork-lift driver at Doubleday Books, whereafter he experienced neck, middle and lower back pain. He gave evidence he manages the pain with regular use of cannabis, being with the Rastafarian religion, and avoids things that make the pain flare up, such as prolonged sitting, standing, walking, bending, twisting and lifting. The Applicant stated he suffered three “breakdowns” and became suicidal after the injury. He told the Tribunal he attends his treating psychiatrist, Dr Harris, once or twice per month, or more often if necessary, and takes 20 milligrams of the antidepressant Arapax daily.
9. The Applicant told the Tribunal he suffers from a number of ailments that adversely affect his ability to work and cope, and is unable to undertake normal daily activities. He told the Tribunal he had a cancerous colonic polyp removed in 2000 and is currently undergoing further tests. He expressed concern that he may suffer the same fate as his father, who died of bowel cancer at the age of 44.
10. The Applicant told the Tribunal that a Physiotherapist had conducted an assessment of the house in 1997, after his injury, and recommended some improvements, including a deck, in consideration of his medical conditions. He stated that a number of the improvements have been completed, but these were paid for out of the compensation settlement monies because the Department of Housing refused to pay for them.
11. The Applicant informed the Tribunal he lives with his wife and three children in a government house. He gave evidence that all their possessions, which were uninsured, were destroyed in a house fire in October 2000. He recalled they were left with nothing and were not able to replace items at the time for lack of money as the family was relying on social security payments and he was unable to work. The family, he recalled, relied on hand-outs and was relocated while the house was being refurbished, during which period a number of items, including building tools and materials, were stolen.
12. The Applicant gave evidence that the compensation settlement of $100,000 was paid in equal parts by QBE and GIO Insurance, whereby he received two payments of $45,000 after an amount of $10,000 had been disbursed to the Health Insurance Commission. He recalled receiving the first payment two weeks after settlement and the second payment approximately four weeks later.
13. The Applicant told the Tribunal he had experienced difficulties with his legal representatives in the compensation process, to the extent that his solicitor withdrew leaving him unrepresented and without advice for a time. He stated that he had not been informed about the extent of the preclusion period by his lawyers or by Centrelink prior to the compensation settlement in February 2002, only being advised of it by Centrelink two weeks after the settlement.
14. The Applicant gave evidence that the compensation settlement funds have been entirely expended, leaving him with only $40 in the bank. In explanation of this expenditure, the Applicant gave evidence that he had repaid outstanding loans to family members, credit card debts, a car loan, a personal loan from a “loan shark” and a tax debt. He told the Tribunal he had spent money buying clothes and essential items for his family, as well as a musical instrument for his daughter that had been destroyed in the fire. Additionally, monies had been expended on house improvements, in accordance with the occupational therapist’s assessment, and as a consequence of legal problems with a builder. The Applicant stated that he had attempted to “double up” their money by gambling “about $1,000” playing Keno and poker machines over a period of time.
15. The Applicant gave evidence that his family’s financial circumstances were dire as he is unable to work and his wife gave up a cleaning job because he could not cope with the children alone. He was not able to provide a detailed explanation in justification of the high rate of expenditure in excess of the family’s estimated weekly needs. He stated the stress of the financial situation and the difficulty dealing with Centrelink was damaging his health and his family.
evidence of mrs khashadorian
16. Mrs Khashadorian told the Tribunal the family is in serious financial difficulty and her husband’s disabilities and medical conditions exacerbate their difficulties. She gave evidence that she and her husband experienced marital problems and separated after the house fire in October 2000, although a reconciliation was effected and the family was rejoined in October 2001. She stated the house fire and separation had an adverse effect on the children, especially her eldest daughter, who required psychological counselling.
17. Mrs Khashadorian gave evidence that the expenditure of the compensation settlement monies had not been extravagant, although she admitted that some expenditure may have been frivolous. She estimated the family’s weekly expenditure to include:
· $300 food and groceries,
· $105 rent,
· $100 cannabis for medicinal purposes,
· $70 fuel,
· $100 children’s holiday activities, and
· amounts for car registration and repairs, electricity, gas, clothing, school fees and excursions, household maintenance and medical treatment costs.
Mrs Khashadorian told the Tribunal the family weekly budget increased from approximately $500 per week prior to receiving the compensation monies to over $600 because the children have grown and are more expensive to feed and clothe, and prices have increased.
18. Mrs Khashadorian informed the Tribunal she sought information from Centrelink regarding the possible effect of the compensation settlement on their social security payments on two occasions. She recalled a telephone conversation with a Centrelink officer during which she had been given information she did not understand, as a consequence of which she visited the Centrelink office and had another unsatisfactory conversation with a female officer that was curtailed due to lack of time. Mrs Khashadorian was concerned that the Centrelink officers she spoke with gave different explanations, which she did not understand. She considered this symptomatic of other problems in the family’s dealings with Centrelink.
19. Mrs Khashadorian told the Tribunal she worked as a cleaner for a short period, but left this position to care for her family and husband in June or July 2002. She gave evidence her husband is significantly disabled and depressed, having increasing gastrointestinal problems, which cause him to experience loss of appetite and frequent nausea, as well as chronic unrelenting pain. She expressed the emotional upheaval and stress this caused to her and her children on a daily basis, noting that she was having difficulty coping and had been prescribed antidepressant medication. She informed the Tribunal she is currently taking 50 milligrams of Zoloft daily.
20. Mrs Khashadorian stated the family is experiencing severe financial difficulties, as the compensation monies have been fully expended and the family cannot live on her social security payments alone. She told the Tribunal, even though she is experiencing difficulties coping, she has no option but to seek employment as her husband has no capacity in that regard.
SUBMISSIONS AND FINDINGS
21. The Tribunal finds the Applicant, essentially, is a witness of truth although his evidence is diminished by his confused state of mind and difficulty recalling events with any clarity or precision. Mrs Khashadorian impressed the Tribunal as a person of integrity who gave her evidence honestly, openly and without guile.
Is a preclusion period applicable?
22. The Tribunal finds the Applicant received a lump sum compensation payment on 20 February 2002 and was, up to that date, receiving disability support pension and periodic compensation payments. Under section 1169 of the Act a person who has received a lump sum compensation payment and compensation affected payments is not entitled to receive or claim the compensation affected payment during a lump sum preclusion period. “Compensation affected payment” is defined to include disability support pension at subsection 17(1) of the Act.
23. The Tribunal finds, therefore, that a lump sum preclusion period is applicable during which the Applicant is not entitled to receive disability support pension.
Lump sum preclusion period calculation
24. Section 1170 of the Act sets out the formula to be used to calculate the applicable lump sum preclusion period. The lump sum preclusion period is to commence on the day following the cessation of periodic compensation payments. In the case at hand, the periodic compensation payments ceased on settlement of the Applicant’s compensation claim on 20 February 2002. The Tribunal finds, therefore, the lump sum preclusion period is to commence on 21 February 2002.
25. The number of weeks in the preclusion period is to be worked out using the formula:
Compensation part of lump sum
______________________________________________________________________
Income cut-out amount
The compensation part of the lump sum payment is to be worked out in accordance with subsection 17(3) of the Act. The Tribunal finds, in the case at hand, the compensation part of the lump sum payment is 50 per cent of the total amount, that is $50,000. The “income cut-out amount” is a threshold amount under the pension income test, above which no pension is payable to a single person. The “income cut-off amount” that was applicable on 20 February 2002 was $576.38. The Tribunal finds, therefore, that the number of weeks in the preclusion period that is to be applied in this case is 86 weeks, whereby the preclusion period will end on 15 October 2003.
26. The Tribunal finds, therefore, the correct preclusion period that is applicable as a consequence of the Applicant’s lump sum compensation settlement commenced on 21 February 2002 and will conclude on 15 October 2003.
Special circumstances
27. Section 1184 of the Act provides the Secretary with discretion to treat a compensation payment, in whole or in part, as not having been made if it is appropriate to do so in the special circumstances of the case.
28. The Applicant submitted the circumstances in which he and his family find themselves are special circumstances sufficient to justify exercise of the discretion. The Applicant contended the following circumstances comprise special circumstances that are either exceptional or uncommon:
(a)severe health problems requiring his wife to cease her employment in order to care for him and requiring the construction of household improvements;
(b)a house fire in October 2000, resulting in the destruction of and the need to replace personal and household effects that were uninsured;
(c)Centelink’s failure to provide the Applicant or his wife with adequate information prior to settlement of his compensation claim regarding the potential impact of a lump sum compensation payment on social security benefits, on which the family was solely dependent, and the imposition of a lump sum preclusion period;
(d)his solicitor’s failure to provide the Applicant or his wife with adequate information regarding the precise details of the lump sum preclusion period; and
(e)severe financial hardship resulting from the strict application of a preclusion period, even though neither the Applicant nor his wife could work and the compensation monies had been expended on essential household items, family living expenses, paying out accumulated debts and ongoing health-related costs.
29. Ms Collis for the Respondent submitted that no special circumstances are to be found in the Applicant’s case, contending the Applicant had not managed his compensation monies in order to adequately provide for his family during the preclusion period. Ms Collis contended that the Applicant had proceeded to expend the compensation monies frivolously and without due regard to the consequences of such expenditure, and should not receive special treatment at the cost of the taxpayer and that the funds have been expended through his own fault.
30. The Tribunal is mindful of the authorities in relation to ‘special circumstances’ and notes the conclusions of Heerey J in Secretary, Department of Family & Community Services v Allan [2001] FCA 1160 at paragraph 17:
“It is not sensible to lay down precise limits or precise rules as to what may constitute special circumstances: Beadle v Director General of Social Security (1985) 60 ALR 225 at 228. Ill health, financial circumstances and the unfairness of a strict application of the Act are some matters which may in an individual case, constitute special circumstances: Kirkbright v Secretary, Department of Family and Community Services (2000) 32 AAR 120 at 123, 127; see also Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64 at 71.”
Toohey J in Re Beadle and Secretary, Department of Social Security (1984) 6 ALD 1 said that circumstances must be unusual, uncommon or exceptional for them to be considered ‘special circumstances’.
31. Considering the Applicant’s submission, the Tribunal notes that the Applicant’s ill health, which prevents him from earning, is multifactorial and not related to his work injury alone. The Tribunal finds, the Applicant suffers from chronic pain that is not responsive to treatment and has gastrointestinal problems that are currently being investigated following removal of a malignant colonic polyp. The Tribunal accepts evidence that the Applicant became depressed and suicidal after the injury in 1997, suffering three nervous breakdowns thereafter, and is being treated for clinical depression with suicidal tendencies.
32. The Applicant gave evidence he is receiving regular psychiatric and pain management treatment at the University of Sydney Pain Management and Research Centre, which is supported by his treating psychiatrist Dr Harris (Exhibit A1) and the Tribunal so finds. The Tribunal finds the Applicant is taking antidepressant medication (Arapax 20 milligrams) and uses cannabis as an adjunctive analgesic agent to manage his pain. The Tribunal notes the Applicant’s treating psychiatrist does not condone his use of cannabis (Exhibit A1):
“Mr Khashadorian is aware that I am uncomfortable with his use of this substance as it is both illegal and likely to be unhelpful in regards to his mental state. Nevertheless, he appropriately points out that conventional medications would also be injurious to him and he is disinclined to use those instead of cannabis.”
The Tribunal finds the Applicant’s use of cannabis is a facet of his claimed religion, Rastafarianism, and is not supported or overseen by his treating doctor. There is no evidence before the Tribunal concerning the efficacy or therapeutic effects, if any, of cannabis in the management of chronic pain. The Tribunal notes the Applicant’s complaints that the side effects of anti-inflammatory and analgesic medications exacerbate his gastrointestinal problems.
33. The Tribunal accepts Ms Collis’ submission that it is neither uncommon, unusual or exception for persons receiving a disability support pension to be experiencing health problems of some severity, whereby ill health, alone, is unlikely to establish special circumstances; Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464, Re Secretary, Department of Social Security andVYS (1995) 40 ALD 745. The Tribunal, having the benefit of witnessing the Applicant in person at the hearing, does not doubt the depth of his depression, fuelled by a genuine sense of hopeless despair, and finds he has a serious and genuine potential to suicide. Dr Harris reports the Applicant attempted suicide on a previous occasion (Exhibit A1). Suicide, or the genuine potential for suicide, is a condition that cannot be considered common and must be accepted as exceptional for present purposes. The Tribunal finds, therefore, the Applicant’s health circumstances are exceptional and unusual, the present case being distinguished on the facts from Re Secretary, Department of Social Security andBolton (supra) and Re Secretary, Department of Social Security andVYS (supra).
34. The Applicant gave evidence his wife left her employment to care for him, as a consequence of which their combined income reduced. Mrs Khashadorian stated she left her part time cleaning position “because he wasn’t coping, especially with the children in the mornings – taking them to school”.. There is, however, no medical evidence the Applicant requires full time care and the Tribunal so finds. The evidence is that Mrs Khashadorian earned $125 each week as a cleaner, as a consequence of which her social security payments were reduced, and, following cessation of her employment, were increased to the full rate.
35. The Tribunal finds that Mrs Khashadorian is currently being treated with antidepressant medication (Zoloft 50 milligrams). Her evidence is that she is experiencing difficulty coping with her husband’s health problems and the responsibility of bringing up three children in difficult circumstances. The Tribunal accepts that it is not unusual for a person on social security benefits, experiencing straitened financial circumstances, to become distressed and notes there is no evidence that Applicant requires constant care.
36. Ms Collis submitted that the building works paid for by the Applicant were not necessitated by his ill health, contending that the Department of Housing would have paid for the improvements or provided suitable alternative public housing if there was sufficient medical justification. The Applicant contended the building works were carried out in accordance with the recommendations of a report prepared by a physiotherapist in 1997, after his first nervous breakdown and attempted suicide. The Applicant told the Tribunal the report was destroyed in the house fire in October 2000 and that prior to February 2001 they did not have any money to carry out the improvements. The Tribunal finds the building works undertaken by the Applicant included the construction of a level deck and repairs to a damaged carport. On the evidence, the Tribunal accepts that the works were necessitated, at least in part, to provide the Applicant with improved access, and egress and a level external area above the sloping rear yard of the property.
37. Mrs Khashadorian submitted that they had applied to the Department of Housing for the works to be paid for, but had not been successful. Mrs Khashadorian contended that the difficulties with the Department of Housing exacerbated her husband’s depressive condition to the extent that it was preferable to carry out the improvements themselves, spending “close to $20,000” from the compensation monies. Communications on this point between the Applicant and the Department of Housing are not in evidence before the Tribunal. Considering the evidence, the Tribunal accepts the Applicant paid for the construction of improvements to his home that were necessitated, in part, by his health conditions.
38. Mrs Khashadorian submitted that they had “fought” with the Department of Housing about the refurbishment of their government house following the house fire and about returning to those premises following an extended period in unsuitable temporary accommodation on a busy road. She told the Tribunal, on returning, they discovered the carport had been badly damaged during refurbishment works and the Applicant’s remaining tools and materials, which had not been burnt having been stored in a locked shed, had been stolen. Mrs Khashadorian submitted that these events and the difficulties with the Department of Housing had a deleterious effect upon her husband’s health and contributed to exceptional circumstances in the present case. The Tribunal accepts this submission.
39. Ms Collis submitted the Tribunal should not consider the destruction of the Applicant’s possessions in a house fire as a special circumstance because it occurred in October 2000, fourteen months before settlement of the his compensation claim. The Applicant submitted that he had not been able to replace items destroyed in the fire (Exhibit A3), which were uninsured, because he was incapacitated for work and neither he nor his wife had any money until receipt of the compensation settlement monies in February 2002. The Applicant could not recall the amount of the compensation monies expended replacing such items, noting only important or essential items had been replaced, such as his daughter’s musical instrument and a computer. The Tribunal accepts that the loss of possessions in a house fire prior to settlement of compensation may contribute to a finding of special circumstances, but is not, alone, persuasive of that conclusion and so finds in the present case.
40. The Applicant submitted that Centrelink failed to provide him or his wife with adequate information regarding the potential impact of a lump sum compensation payment on their social security benefits, on which the family was solely dependent, prior to finalisation of the settlement amount. This failure, the Applicant contended, denied him the opportunity to take relevant information into account when settling his compensation claim.. Ms Collis submitted and the Tribunal finds that Centrelink provided detailed information, including estimates of repayment amounts and preclusion periods based on projected settlement amounts at the request of the Applicant’s solicitor (Exhibit R1 Attachments C, D and G). The Applicant contended that his solicitor did not inform him of this information, noting that his solicitor ceased representing him in August 2001, whereby he was without legal representation for a period until another solicitor assumed that role in December 2001.
41. Mrs Khashadorian gave evidence that she had telephoned Centrelink in October 2001 seeking information about the implications of her husband achieving a compensation settlement, but did not understand what she was told. Subsequently, she submitted she attended a Centrelink office and was provided with different information that further confused her. She contended neither she nor her husband had been properly informed by their solicitor or Centrelink about the implications of a compensation on their social security entitlements or the precise details of the lump sum preclusion period that would apply consequent upon such a settlement. Correspondence between the Applicant and his previous solicitor is not in evidence before the Tribunal.
42. Ms Collis submitted that the failure by a person’s legal advisers to advise of the existence of a preclusion period is not, as a general principle, a factor in establishing special circumstances: Re Martin and Secretary, Department of Social Security (1990) and Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681. The Tribunal has found in subsequent cases, however, that the provision of incorrect legal advice may be persuasive in establishing special circumstances; refer Re Secretary, Department of Social Security and VYS (supra). In the present case, the Applicant contends the legal advice he was given was deficient and, therefore, incorrect in failing to explain the implications and extent of a preclusion period consequent upon settlement of his compensation claim.
43. The Tribunal accepts the general principle that the inadequacy of legal advice is essentially a private matter between the Applicant and his solicitor, as contended by Ms Collis and found in Re Secretary, Department of Social Security andVXY (supra) and similar cases. The Tribunal is mindful of the authorities regarding this issue and the need to consider the discretion under section 1184 of the Act in “the broad measure of justice for the individual case”; Jess v Scott (1986) 12 FCR 187 at 195.
44. The Tribunal has found as a fact that Centrelink provided detailed information to the Applicant’s previous solicitors. The evidence reveals, however, that Centrelink did not provide the Applicant with adequate information about the effect of a lump sum compensation payment on his social security entitlements prior to settlement of the compensation claim. The Applicant and his wife, despite Mrs Khashadorian’s attempts to gain information from Centrelink, were, in effect, left in ignorance of the dates and implications of the preclusion period prior to the date of settlement and, as a consequence, agreed to the terms of settlement without that information. The Tribunal finds, therefore, that the Applicant’s state of mind when agreeing to the terms of settlement may have been affected by the absence of information that was of particular relevance. This alone, however, does not indicate a finding of “special circumstances”.
45. Considering the Applicant’s difficulty gaining adequate legal advice and Centrelink’s failure to provide him with adequate information prior to settlement of his compensation claim, it is necessary to consider the impact of these failings on the Applicant’s circumstances and other relevant factors.
46. The Applicant submitted his health, the house fire and the lack of information contributed to the financial hardship his family is forced to endure in their present circumstances. He contended that the compensation monies had been reasonably expended on the purchase of essential household and family expenses (including items previously destroyed by fire), paying out accumulated debts and ongoing health-related costs (including house improvements). Ms Collis referred to Re Secretary, Department of Social Security and Hill (1995) 2(1) SSR 9 and Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716, submitting the Applicant’s financial circumstances were straitened but not unusual or exceptional to the extent that special circumstances are found.
47. The Tribunal is mindful of the authorities on this point and agrees that unusual or exceptional financial hardship is but one factor that may contribute to the establishment of special circumstances. It is necessary, therefore, to consider the Applicant’s financial circumstances and the manner of the expenditure of his compensation monies. The evidence is the family was entirely dependent upon social security payments prior to the compensation settlement and, having expended the compensation monies, is likely to remain so. Mrs Khashadorian submitted that she intends seeking employment in order to improve their financial circumstances. The Tribunal notes that Mrs Khashadorian is currently taking antidepressant medication as a consequence of her difficulty coping with the circumstances in which she finds herself. The Tribunal finds the Applicant has no prospect of improving his financial situation through paid employment because of his ill health. The Tribunal finds the Applicant possesses few realisable assets, such as an aging family car, a computer and musical instruments that are used by the children in their education The Tribunal accepts that the forced sale of these items would, in all likelihood, provide the Applicant only minimal short term financial relief and, in the circumstances, would be harsh.
48. The Applicant gave evidence that he has expended the compensation monies he received in February 2001, having an amount of approximately $40 remaining in his bank account. Weighing the evidence before it, the Tribunal accepts the Applicant expended the compensation monies in the following approximate amounts in the period 21 February 2002 to date:
· $32,825 retiring debts (personal loans, car loan, taxation debt and credit card debt) accumulated over time prior to the compensation settlement,
· $4,000 purchasing a bed necessitated by his back injury,
· $20,000 constructing home improvements necessitated by health and safety issues,
· $4,000 purchasing musical and computer equipment previously destroyed by fire,
· $3,000 on medical treatment costs,
· $5,000 purchasing cannabis for medicinal use,
· $10,000 to the Health Insurance Commission,
· $1,000 gambling in desperation to “double up” the money, and
· $20,000 on clothing, footwear, vehicle maintenance, vehicle registration, household living and other costs.
49. The Tribunal finds the Applicant expended approximately 33% of the monies paying out previously accumulated debts and approximately 37% of the monies on legitimate health related costs, leaving approximately 30% of the monies to provide for his family during the preclusion period.
50. Taking into account the Applicant’s circumstances, especially his incapacity for work and the loss of uninsured family possessions in a house fire, the Tribunal does not find it unreasonable, albeit ill advised, that the Applicant accumulated debts that he was required to repay from his compensation monies. In the Applicant’s submission, which the Tribunal accepts, he had no choice but to repay the debts because he had delayed making repayments pending settlement of his compensation claim. The Tribunal accepts that it is reasonable for a person who has been compensated for a work-related injury to expend a part of their compensation monies on the cost of medical treatment and health related amenities in their place of residence. The Applicant, however, would have been well advised to take these liabilities and expenses, which were foreseeable and comprise approximately 70% of the compensation settlement monies, into account when considering settlement of his compensation claim.
51. Discounting these amounts, the Applicant was left with approximately 30%, $30,000, to provide for his family during the 86 week preclusion period. On the Tribunal’s calculation, this would provide the Applicant with approximately $350 each week, which with careful management, when combined with Mrs Khashadorian’s social security payments, should have been sufficient, albeit in straitened circumstances, to meet the family’s essential needs. However, the evidence reveals that the Applicant expended the entire amount over a period of approximately 48 weeks, equating to $625 each week, during which period he submitted he spent $5,000 purchasing cannabis and $1,000 gambling. While the Tribunal accepts the Applicant’s submission that the cannabis was purchased for medicinal reasons, the substance was purchased and used without legal or medical authority and cannot, therefore, be accepted as reasonable. The Tribunal accepts, however, that the Applicant would incur costs accessing suitable alternative pharmacotherapy.
52. Taking these matters into account, the Tribunal finds the Applicant mismanaged the expenditure of the compensation monies, whereby his family lived beyond its means, expending the compensation monies without due regard to the inevitable consequences that must follow. In making this finding, the Tribunal notes that the Applicant’s mismanagement did not extend to extravagant excess but was manifest in minor indulgences and a lack of forethought.
53. As a consequence of the expenditure of the compensation monies, the Applicant’s family must live on the social security benefits paid to Mrs Khashadorian, comprising a total of approximately $402 per week. The Tribunal accepts the Mrs Khashadorian's submission that the family cannot live on this income alone and finds the family has no other means of support until the conclusion of the preclusion period, whereupon the Applicant will be entitled to receive disability support pension. It is common ground that the Applicant remains eligible for disability support pension but is not entitled to receive it during the preclusion period.
54. The Tribunal finds the Applicant has exhibited poor financial management skills and exercised bad judgement in the expenditure of his compensation monies, but notes the Applicant was not provided with adequate information and advice when agreeing to the compensation settlement and suffers from a severe depressive disorder. The Tribunal finds the resulting financial circumstances in which the Applicant, his wife and three children find themselves is desperate and likely to have serious deleterious effects upon the health and well-being of each family member.
55. Weighing all the evidence before it, the Tribunal is persuaded the several factors pointed to by the Applicant in his submissions are, in combination, unusual, uncommon and exceptional to the extent that they are “special circumstances”.
56. The Tribunal finds similarities in the present case and Re Secretary, Department of Social Security and Anderson [1997] V96/1544, in which the Applicant’s suicidal depression was found to be persuasive of special circumstances. In the Anderson case (supra) the Tribunal considered relevant the factors used by the Royal Australian College of General Practitioners to assess depression and risk of suicide. These factors included resistance to medication, depression, suicide ideation, access to means of suicide (a gun, for example), hopelessness about the future, male gender and co-existing illness. The Tribunal finds these factors exist in the present case. In the case at hand, Dr Harris reports (Exhibit A1):
“My involvement was initiated due to his depression and related suicidality in the context of chronic pain. Mr Khashadorian has had a broad range of pain related treatments which have failed to provide him with sufficient impact as to allow him to function without painkiller drugs.
Mr Khashadorian also suffers intercurrent gastrointestinal disturbance for which he is under specific treatment from a gastroenterologist. He complains that the common side effects of anti-inflammatory and analgesic drugs exacerbate his abdominal difficulties, which is certainly very possible.”
57. The Tribunal is left in no doubt the Applicant is in a severely depressed mental state, suffering a profound sense of hopelessness about his future and the future of his children. The Applicant’s psychological state during the hearing caused him to leave the hearing precinct, interrupting proceedings with emotional and disturbing threats of self-harm. Dr Harris’ evidence reveals the Applicant is resistant to anti-inflammatory and analgesic medication, has suicide ideation and concurrent illnesses. While the Tribunal has no evidence concerning the Applicant’s access to means of suicide, there is little doubt such means may readily be found in the accoutrements and amenities of daily city life, as has been so tragically demonstrated from time to time.
58. The most significant and disturbing consideration in making this decision is the Applicant’s suicidal inclination, which the Tribunal has found as a fact.
59. It is clear the Applicant’s depressive disorder, anger and suicidal behaviour subsequent to his work injury are manifested and exacerbated by the difficulties he has endured since 1997, most notably his injury and consequent chronic pain and incapacity to work, the destruction of his family’s uninsured possessions in a house fire, the difficulties in his marriage and the consequent effect of these events upon his children, as well as his dealings with and treatment by his former solicitors, the Department of Housing and Centrelink. The Tribunal so finds.
60. The Tribunal has found a constellation of events that may aggravate the Applicant's mental health problems and thereby raise the potential he may give further expression to his suicidal tendencies. It is not reasonable to set aside this potential as a concern solely within the ambit of the Applicant’s responsibility for which he and his family must bear the consequences; Re Secretary, Department of Social Security and Anderson (supra). The Applicant is entitled to fair treatment in special circumstances in accordance with a scheme of beneficial legislation, with due regard to the broader interest of the taxpayer in ensuring the efficient and appropriate provision of social security benefits according to law; Re Jess v Scott (supra) and Re Secretary, Department of Social Security and VYS (supra). It is neither just nor reasonable in the circumstances to pursue the strict application of a lump sum preclusion period, whereby the Applicant and his family must face the prospect of destitution without hope of relief, suffering medical incapacity an increased potential for suicidal behaviour, to their very great detriment.
61. The Tribunal determines to set aside the decision under review and, in substitution therefor, decides to treat the whole of the compensation payment to the Applicant as not having been made.
62. The matter is remitted to the Respondent to assess the correct rate of pension that is payable to the Applicant.
I certify that the 62 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Webb, Member
Signed: .......................................................................................
AssociateDate of Hearing 17 January 2003
Date of Decision 10 February 2003
Representative for the Applicant SelfRepresentative or the Respondent Ms C Collis
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