Lubcke and Department of Family and Community Services - [2002] AATA 642

DECISION AND ORAL REASONS FOR DECISION [2002] AATA 642

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2002/44

GENERAL ADMINISTRATIVE DIVISION       )
           Re      STEVEN JOHN LUBCKE
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Senior Member WJF Purcell

Date10 July 2002
PlaceAdelaide

Decision      The Tribunal affirms the decision under review.
  (Signed)
  WJF PURCELL
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Disability Support Pension – whether the applicant's ill health and inability to work is a special circumstance – whether section 1184K should be exercised in the applicant's favour
Social Security Act 1991 section 1168
Family and Community Services Legislation (Simplification and Other Measures) Act 2001 sections 1173, 1184K

ORAL REASONS FOR DECISION

10 July 2002 Senior Member WJF Purcell

This is an application for review of a decision of the Social Security Appeals Tribunal (the SSAT) of 4 January 2002, which affirmed the decision of an Authorised Review Officer of 25 October 2001, which in turn had affirmed a delegate's decision of 20 September 2001, to cancel the applicant's Disability Support Pension because of the amount of his weekly compensation payments.
The evidence before the Tribunal comprised the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the T Documents), together with an exhibit tendered by the applicant, who appeared on his own behalf and gave oral evidence. Mr Underwood represented the respondent (the Department).
The applicant, who is 39 years of age and married with 4 children, suffered a work-related injury on 13 January 1998; and on 25 September 1998 he underwent spinal surgery, a laminectomy of the L4-5 and spinal fusion of the L5-S1 discs. He had been in receipt of weekly payments of Workers' Compensation and Disability Support Pension from January 1999. His compensation was treated as ordinary income and he received Disability Support Pension of $215.58 per fortnight. When the Family and Community Services Legislation (Simplification and Other Measures) Act 2001 (the 2001 legislation) repealed and replaced the compensation provisions in part 3.14 of the Social Security Act 1991 (the Act), with effect from 20 September 2001, the changes to the legislation resulted in the applicant's periodic compensation payments of $912.52 per fortnight being treated as a direct deduction from the rate of Disability Support Pension. This resulted in no Disability Support Pension being payable, as the rate would be nil. A Departmental officer decided on 20 September 2001 to cancel payment of Disability Support Pension. Section 1173 of the 2001 legislation provides for the treating of periodic compensation as a direct deduction, and provides, in part, as follows:
"(1) If:
(a) a person receives periodic compensation payments; and
(b)the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c)the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the rate of the person's compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2).
…"
Section 1184K of the 2001 legislation provides discretion to the Secretary in the following terms:
"(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.
(2)If:
(a)a person or a person's partner receives or claims a compensation affected payment; and
(b)the person receives compensation; and
(c)the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person's or the person's partner's receipt of, or claim for, the compensation affected payment;
the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsection (1)."
The applicant applied for review of the delegate's decision and on 25 October 2001 an Authorised Review Officer affirmed the decision. The applicant applied for review of that decision and on 4 January 2002 the SSAT affirmed the decision. He has applied to this Tribunal for review of the SSAT decision.
The applicant submits that it is appropriate in his special circumstances that the discretion provided by section 1184K of the 2001 legislation should be exercised in his favour; that so much of the compensation payment should be treated as not having been made as would result in his being in the same position as he was before the implementation of the 2001 legislation, namely in receipt of Disability Support Pension of $215 per fortnight, in addition to his weekly payments of compensation.
The applicant maintains that because of the continuing deterioration of his back condition, he will not return to any form of employment, and he is unable therefore, to earn any additional income. He faces also, the necessary costs associated with his disability, such as lawn mowing expenses, car washing, and car repairs, all of which he performed himself before his injury. He was in receipt of Disability Support Pension for 3 years before the 2001 legislation, and overnight he was "tarred with the same brush" as those who rort the system. He has lost the benefit of the pension card, the extra income, and, in effect, the legitimacy of being a Disability Support Pension recipient. He and his family had been able to survive financially on their social security income, but now their financial hardship has increased.
The Department contends that the cancellation of the applicant's pension has arisen solely from the changed treatment of compensation effected by the 2001 legislation. The applicant's wife was receiving Parenting Allowance, a compensation affected payment, at the time of his injury, and in accordance with section 1168 of the Act, the applicant's compensation payment was to be treated as ordinary income. That provision was removed with the introduction of section 1173 of the 2001 legislation. Although this is a changed treatment of periodic compensation, it was intended by Parliament to have this effect. Had Parliament intended existing compensation recipients to be exempt from the new scheme, it could have introduced a saving provision. That no saving provision was included demonstrates that Parliament intended no relief for existing recipients.
It is the Department's contention that some relief may be provided if the person has sufficient factors to warrant treating all or part of the compensation as not being made, pursuant to section 1184K of the 2001 legislation; and had these factors been evident prior to 20 September 2001, there could already have been favourable treatment of the applicant's compensation payments. There has been no change to his personal situation. The effect upon his pension entitlement stems solely from the legislative change, which cannot of itself constitute a special circumstance.
The Department submits finally, that the only factor that might give rise to special circumstances is the applicant's health. However, although he believes he will never work again, he is already being compensated for that fact. Should his compensation entitlement reduce, he may at that time receive the pension again. In any event, ill health by itself is not sufficient reason for exercise of the discretion in section 1184K of the 2001 legislation.
On the evidence, the applicant receives now, $936.52 per fortnight compensation payments. His wife receives Carer Payment and Family Payment for 3 dependent children, of $792 per fortnight from the Department, a total of $1,728 per fortnight or $864 per week. The applicant's eldest son, who is 17, is in year 12, receives Youth Allowance and has a part-time job. The applicant gave evidence that he owes his father $2,000, a friend $3,000 and the balance of his Radio Rentals debt is now reduced to $1,000. He agreed in evidence, that he has not incurred any new debts since the implementation of the 2001 legislation. He needs to purchase a new bed, which the compensation insurer refuses to supply, but he has the Radio Rental commitment reduced now, by about $40 per week.
It is not in dispute that the applicant suffers a high level of disability and will be unable to return to the workforce. He is clearly angry and dismayed at the effects upon him and his family of the change in the legislation and the loss of the benefit of the pension card. The 2001 legislation has affected him harshly, but that is the legislation Parliament has enacted, and which the Secretary of the Department, and hence this Tribunal, must apply. It was Parliament's intention that the weekly compensation payments be treated now as a direct deduction, a dollar for dollar deduction, without a threshold amount, instead of being treated as ordinary income.
In relation to the applicant's submission that his ill health and inability to work is a special circumstance; he is currently being compensated by the insurer in accordance with Workers' Compensation legislation, and in my view, it is the role of the Disability Support Pension to support a disabled person unable to work, and who has no other source of income and ability to maintain himself. I do not consider that his disability is a special circumstance for the purposes of the legislation.
In relation to the applicant's financial circumstances, he and his wife and 3 of the children, have an income of $1,728 per fortnight or $864 per week, and the eldest son is in receipt of Youth Allowance. I do not consider, on the whole of the evidence, that the applicant's financial circumstances are so straightened and unusual, as to satisfy me that it is appropriate in all the circumstances of this matter, that the discretion provided by section 1184K of the 2001 legislation should be exercised in the applicant's favour.
For these reasons, the Tribunal affirms the decision under review.
I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member WJF Purcell
Signed:         .....................................................................................
  Associate
Date of Hearing  10 July 2002
Date of Decision  10 July 2002
Counsel for the Applicant        In person
Solicitor for the Applicant         -
Counsel for the Respondent    Mr J Underwood
Solicitor for the Respondent    Centrelink