Mark Ian McLauchlan and Secretary, Department of Social Services

[2013] AATA 714

[2013] AATA 714  

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2013/1819
Re	Mark Ian McLauchlan
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Deputy President PE Hack SC
Date	26 September 2013
Place	Perth

The decision under review is affirmed.

...(Sgd) P E Hack........................

Deputy President PE Hack SC

CATCHWORDS

SOCIAL SECURITY – compensation payments – preclusion period – whether special circumstances exist

LEGISLATION

Social Security Act 1991 (Cth), s 1184K(1)

CASES

Beadle v Director-General of Social Security (1985) 60 ALR 225

Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 451

REASONS FOR DECISION

Deputy President PE Hack SC

26 September 2013

1. The applicant, Mr Mark McLauchlan, has been a long-term recipient of a disability support pension because he is permanently blind[1]. Such pensions are exempt from the usual assets and income tests that apply to a disability support pension. In June 2009 Mr McLauchlan was seriously injured in a motor vehicle accident. He is now apparently permanently unable to work. He commenced common law proceedings for damages arising from that accident. Those proceedings were settled in August 2012. On 12 September 2012 Centrelink, on behalf of the respondent, the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs, determined that Mr McLauchlan was precluded, by s 1169 of the Social Security Act 1991 (Cth), from receiving his pension between 11 June 2009 and 16 October 2019.

   [1]See s 95(1), Social Security Act 1991 (Cth).

2. Mr McLauchlan accepts that the preclusion period was correctly calculated and correctly imposed. He says however that his circumstances amount to “special circumstances” such that, by virtue of the discretion in s 1184K(1) of the Social Security Act, all or some of the compensation payment should be treated as not having been made. It is neither necessary nor possible to define what may amount to special circumstances in a particular case. It will suffice for present purposes to say it requires something to distinguish the particular case from others, to take it out of the usual or ordinary case[2]. Mr McLauchlan relies on four matters that he says constitute special circumstances,

   (a)the “anomaly” that Mr McLauchlan’s pension is not subject to the income and assets test;

   (b)the emotional impact on him of losing the pension;

   (c)the further emotional impact on him of alleged “inadequate” advice from Centrelink and from his former lawyers;

   (d)financial hardship.

   [2]Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 451 at [12].

3. In my view none of these matters, individually or collectively, amount to special circumstances. My reasons follow.

4. Whilst Mr McLauchlan’s submissions referred to the anomaly said to arise from the fact that his pension is not subject to the ordinary assets or income tests his oral evidence was to the effect that what he regarded as anomalous was that he was unable to be compensated in his common law claim for the loss of his pension, his advisors having apparently concluded that that loss was too remote to be recoverable. Thus, he said, he lost the benefit of his pension as a result of the motor vehicle accident without being able to be compensated for that loss in the damages he received on settlement. My impression of his evidence was that he understood, and agreed with, the operation of the preclusion period regime; his concern was that he had suffered a loss that could not be compensated. If that be an anomaly, it is not the type of anomaly that features in discussions in this area of law. Those discussions tend to revolve around unintended consequences of the operation of the legislation, circumstances where events rendered the operation of the statute in a particular case “unfair or inappropriate”[3]. That is not the case here. The legislation has operated in precisely the way that the parliament has intended. Those who, like Mr McLauchlan, recover damages for economic loss, cannot retain benefits from the public purse for the same period. It may be thought to be unusual that parliament has chosen not to subject a disability support pension for blindness to the ordinary assets and income tests however that does not create an anomaly that affects Mr McLauchlan adversely.

   [3]           See e.g. Beadle v Director-General of Social Security (1985) 60 ALR 225, 228.

5. Mr McLauchlan submits that losing the benefit of his pension has had an adverse effect on his emotional well-being. That effect, he says, was the direct consequence of the fact of the loss and, indirectly, was a consequence of the timing of his realisation of the extent of the loss. The Secretary’s submissions point out that there is no medical evidence of that emotional impact and there is evidence of other life events that might have been expected to have contributed to any emotional impact. There is considerable force in that submission however I propose to assume, favourably to Mr McLauchlan, that he has suffered some emotional impact from the loss of his pension. Even if that be so it is not, in my view, at all unusual or out of the ordinary. I imagine most people in a similar situation would suffer some emotional upset at losing the benefit of a fortnightly pension. I cannot see how Mr McLauchlan is in any different position to others similarly affected by compensation preclusion.

6. Additionally, Mr McLauchlan’s evidence suggested that there was some particular effect arising from the timing of his discovery that he could not be compensated for the loss of his pension. His evidence hinted at the possibility that he settled his common law claim at a time when his emotions were at a low ebb.   Had this been the case I would have expected that Mr McLauchlan, or those who advised him at the time, to have put off the occasion where the common law claim was settled by a process of negotiation. The fact that he did not seek to do so rather suggests that his emotional state was not adversely affected by events at the time.

7. Next Mr McLauchlan suggested that he was negatively impacted by inadequate advice from Centrelink and his former solicitors. I do not accept that Centrelink advised him inadequately. When pressed, his present solicitor, Mr Barclay, articulated the case as one where Centrelink did not provide a timely response to a letter from Mr Barclay of 9 July 2012. That letter, on one interpretation, might be thought to have been an appeal for the exercise of the special circumstances discretion. In circumstances where Centrelink had been advising Mr McLauchlan consistently, from November 2010 onwards, that he might have to repay Centrelink benefits and might be precluded from receiving benefits if he were to receive lump sum compensation, I am unable to see how what is, at most, a quite modest delay in answering a letter could possibly have affected Mr McLauchlan adversely. The argument relating to the former solicitors came down to an assertion that those solicitors were unable to advise Mr McLauchlan that he could not be compensated in the common law action for the loss of his pension. Even if that had been the case I am unable to see how that could have adversely affected Mr McLauchlan or could amount to special circumstances.

8. Finally it was suggested that Mr McLauchlan is suffering financial hardship. I do not accept that to be so. In reality his position is not dissimilar to many others; if anything, he is in a much better position. He has considerable funds available for use, an amount of $75,000 at the present time, and considerable assets.

9. I am not satisfied that Mr McLauchlan’s circumstances amount to special circumstances such as would enliven the discretion in s 1184K of the Social Security Act. It follows that the decision under review ought be affirmed.

I certify that the preceding 9 (nine) paragraphs are a true copy of the reasons for the decision herein of Deputy President PE Hack SC

..(Sgd) T Freeman...........................

Administrative Assistant

Dated  26 September 2013

Date(s) of hearing	24 September 2013
Solicitors for the Applicant	Bradley Bayly Legal
Solicitors for the Respondent	Australian Government Solicitor