Kolakusic and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2009] AATA 132

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 132

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/4478

GENERAL ADMINISTRATIVE   DIVISION		)
Re		MARIA KOLAKUSIC

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr B.H. Pascoe, Senior Member

Date3 March 2009

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) B.H. Pascoe

Senior Member

SOCIAL SECURITY- disability support pension – husband received arrears of workers compensation – compensation affected payments - recovery from compensation - whether member of couple - whether special circumstances - primarily financial hardship alleged - discretionary expenditure.

Social Security Act 1991

REASONS FOR DECISION

3 March 2009 B.H. Pascoe, Senior Member  

1.      This is an application to review a decision of the Social Security Appeals Tribunal dated 20 June 2008 which affirmed a decision of the respondent dated 28 December 2007 to recover a compensation charge debt of $14,745.62 in respect of the period from 13 July 2000 to 3 July 2002.  

2.      At the hearing the applicant, Mrs M Kolakusic, was unrepresented.  The respondent was represented by Mr T. Noonan, a Legal Services Officer with Centrelink.  Evidence was given by Mrs Kolakusic and her husband Mr M. Kolakusic. 

3.      Mrs Kolakusic had been paid disability support wife pension of $1,233.01 for the period from 13 July 2000 to 3 September 2000 and disability support pension (DSP) of $13,512.61 for the period from 4 September 2000 to 3 July 2002.  Mr Kolakusic had been injured in the course of his employment.  In August 2007 settlement was reached in his claim for compensation resulting in the receipt of arrears of compensation at rates varying between $750 per week and $899 per week for the period from 13 July 2000 to 3 July 2002.  A debt of $32,310.44 was raised and recovered from the insurer being the $14,745.62 paid to Mrs Kolakusic and $17,564.82 of DSP paid to Mr Kolakusic during the period of compensation payments.  On 31 December 2008 Centrelink recalculated the debt at $27,903.96 of which $13,951.98 related to Mrs Kolakusic and a refund of the difference of $4,406.48 was made to Mr Kolakusic. 

4.      It is clear under the Social Security Act 1991 (the Act) that, if a person is a member of a couple and that person’s partner receives compensation, any payments of disability support wife pension or DSP are compensation affected payments and recoverable from such compensation. 

5.      The primary argument of Mrs Kolakusic was that her special circumstances should allow the compensation to be disregarded.  Section 1184K(1) of the Act provides:

…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.

It is clear from the decisions of the Courts and this Tribunal that special circumstances require the circumstances of the applicant to be unusual, uncommon or out of the ordinary which distinguishes them from the usual case.  While financial hardship may amount to special circumstances, such hardship must be severe and unusual. 

6.      The factors which were submitted by Mrs Kolakusic as being special circumstances were:

(a) she and her husband are financially independent and it would be wrong to   recover her benefits from his compensation;

(b) while they are legally married they live independently and, since 1999 have not been in a normal marriage like relationship;

(c) her husband has severe heart problems and post traumatic stress disorder and is dependant upon her for his care;

(d) their 15 year old son requires braces and surgery to correct a lower jaw problem;

(e) her health is poor and she is currently unable to work to generate additional income;

(f) her son attends a private school and fees in excess of $10,000 are required;  and

(g) between her husband and herself, some $10,000 per annum is required for medication, much of which has to be imported from Germany.

7.           The first two factors raised by Mrs Kolakusic raise the issue of whether she is a member of a couple so as to have part of the compensation payment attributed to her.  The evidence was that she and her husband were married in 1991 with a son born in 1993.  It was a second marriage for Mr Kolakusic, who has two sons from a former marriage.  Both Mr and Mrs Kolakusic said that it has not been a proper marriage since 1999.  They do not share a bedroom, have no sexual relationship, have no joint social life, have no joint assets or bank accounts, pay their own living costs and generally eat meals separately.  It was said that they have to live together in the same house for the sake of their now 15 year old son and, in any event, their financial position does not allow them to separate.  It is relevant to note that Mrs Kolakusic was reluctant to speak of the marriage relationship and did not want to pursue that issue.  It is relevant, also, that both are in receipt of DSP at the rate applicable to members of a couple and have not sought to claim DSP at the single rate.  It was said that they do not want their son to be subject to a finding that they are not in a marriage-like relationship. 

8.      While it may be possible that their circumstances may allow a finding that they are living separately and apart from each other on a permanent and indefinite basis, I am unable to make such a finding for the purposes of this application.  First, Mrs Kolakusic specifically refused to seek such a finding.  Secondly, such a finding must relate to the period from July 2000 to July 2002.  At that time the son was between 7 and 9 years of age and it is likely that circumstances of the relationship were different and there was no direct evidence of those circumstances other than a general reference to 1999 as the commencement of the marriage difficulties.  Finally, neither Mr nor Mrs Kolakusic has sought to change the basis upon which they are entitled to DSP from being members of a couple to the single rate. 

9.      This leaves the sole issue as to whether there are special circumstances.  In evidence, the circumstances put forward as special are financial, being primarily the cost of the son’s education, potential medical costs of the son, and costs of medication.  It has to be said that much of this existing or prospective expenditure is discretionary.  The justification for an expensive private school education for the son was said to be a threat by him that he would refuse to attend any other school if taken out of the present school.  While it is possible that he does suffer from emotional problems it is difficult to accept that special circumstances are made out in relation to the costs of an education which is clearly available in the public system at subsequently lower cost.  Much of the medication said to be required appears to be what might be described as alternative medication.  The doctor who was said to have prescribed the imported medication appears to be one who specialises in a range of natural therapies.  No evidence was available as to the necessity of such expensive medication outside the national health service and whether suitable lesser cost medication is available.  Again, I am unable to find that this cost amounts to special circumstances.  While I accept that the son may require dental braces and surgery, it appears that the expected cost of some $15,900 is based on private hospital and orthodontist treatment.  Given the purpose of social security payments is to provide benefits to a class of person who would be otherwise in impecunious and straitened circumstances it is difficult to accept that it is appropriate to disregard compensation income to allow such private and discretionary expenditure.  It is accepted that, if the treatment is necessary, there may be disquieting and excessive delays in obtaining such treatment through the public health care system but that is not something which should be regarded as out of the ordinary for people reliant on social security. 

10.     In the SSAT decision, it was said that, of the total compensation money received, Mr Kolakusic had repaid $29,000 previously drawn down on their home loan.  The Tribunal stated that though there was considerable financial hardship, Mr and Mrs Kolakusic retain their home and the ability to redraw on their mortgage if required.  In his evidence to this Tribunal, Mr Kolakusic said that the home was owned by his elder son from the former marriage.  He said that the mortgage was by the son who had used the funds borrowed to help support his father and the repayment from the compensation money was to the son.  He noted that this son was having marriage problems which may result in the residence being sold leaving the need to find new accommodation.  Which version of evidence, that given by Mrs Kolakusic to the SSAT or that given to this Tribunal by Mr Kolakusic, is correct is not a matter on which a finding is necessary.  Even if the latter evidence is correct and there is no reason to disbelieve it, I am unable to say that this position amounts to special circumstances.  In fact, the ability of Mr and Mrs Kolakusic to have rent free accommodation since the date of their marriage should have materially suited their financial position compared to the majority of pension recipients. 

11.     On balance I am not satisfied that there are special circumstances within the meaning of s 1184K of the Act to allow any part of the compensation payment as not having been made.  It follows that the decision under review should be affirmed. 

I certify that the eleven [11] preceding paragraphs are a true copy of the reasons for the decision herein of Mr B.H. Pascoe

signed: Cassie Renfrew
  Clerk

Date/s of Hearing  17 February 2009

Date of Decision  3 March 2009
Self Represented  Mrs Maria Kolakusic

Advocate for the respondent     Mr T. Noonan, Legal Services Officer,

Centrelink Legal Services Branch