Marmont; Department of Family and Community Services
[2001] AATA 908
•5 November 2001
DECISION AND REASONS FOR DECISION [2001] AATA 908
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2001/302
GENERAL ADMINISTRATIVE DIVISION )
Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Applicant
And LOLA MARMONT
Respondent
DECISION
Tribunal M J Sassella, Senior Member, G A Mowbray, Member
Date 5 November 2001
PlaceCanberra
Decision The decision under review is set aside and in substitution the Tribunal affirms the decision of the Authorised Review Officer.
...........M J Sassella (sgd)...........
Senior Member
CATCHWORDS
Compensation recovery - compensation affected payment - lump sum preclusion period - compensation affected payment not payable during lump sum preclusion period - debts arising from lack of qualification, overpayment - carer payment and/or carer allowance - reduction or waiver of the preclusion period – ongoing medical expenses – special circumstances
Social Security Act 1991, ss 17(1) definitions of "compensation affected payment" (paragraph (f)), "lump sum preclusion period", (2), (3), 1163(1), (3), (8), (9), 1165(1A), (5), (8), (9), 1184(1), 1223(1).
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 60 ALR 225
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Re Secretary, Department of Family and Community Services and Szoke [2001] AATA 353
Re Mourtitzikoglou and Secretary, Department of Social Security (1991) 23 ALD 249
Re White and Secretary, Department of Social Security (AAT 9794, 6 September 1994)
Re Lukic and Secretary, Department of Social Security (AAT 6944, 6 May 1991)
Secretary, Department of Social Security and Winterbotham (AAT 6499, 11 December 1990)
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Secretary, Department of Social Security and Turner (AAT 8739, 26 May 1993)
Re Secretary, Department of Social Security and Lugovskoy (AAT 13058, 3 July 1998)
REASONS FOR DECISION
M J Sassella, Senior Member G A Mowbray, Member
History of the application
On 9 January 2001 Lola Marmont ("the Respondent") lodged a claim for Carer Payment and/or Carer Allowance with Centrelink (T4). The claim related to her care responsibilities for her son, Adam Wray, who suffered anoxic brain damage (in a drowning accident) on 31 March 1981. The claim indicated that Mr Wray lives with the Respondent, that he himself receives a Centrelink payment, and described a wide range of care needs related to physical, cognitive and behavioural problems (T4, pp.19-22). The second half of the claim form (T4, p.24 onwards) related specifically to Carer Payment, which is income and assets tested. The Respondent's answers to questions 76 and 77 in Part J (T4, p.40) indicated that she had received compensation or damages for an illness or injury. The claim form indicated that she would therefore need to complete another form, "Mod[ule] C" (not in T documents).
On 16 January 2001 Dr Hutchins completed a Health Professional Assessment of the Respondent's son in connection with her claim (T5).
On 2 February 2001 the Respondent was awarded a lump sum of $138,000 in settlement of a compensation claim for work injuries suffered in and before March 1997 (T6 original compensation claim, T8 total and permanent disablement claim, T16 settlement). Prior to the settlement she had been receiving fortnightly compensation payments which she elected to redeem.
On 27 February 2001 a Centrelink officer wrote to the Respondent (T19) informing her of the decision to impose a "preclusion period" under Part 3.14 of the Social Security Act 1991 ("the Act") during which the Respondent would not be eligible to receive payments, except payments made for children, because of the lump sum compensation. The affected entitlements included a Carer Payment (s 17(1)(f) of the Act). Based on the amount of the lump sum, the preclusion period would commence on 3 February 2001 (the day after the settlement) and end on 20 June 2003. The correctness of this calculation is not in dispute.
On 28 March 2001 the claim was referred to a Centrelink Authorised Review Officer ("ARO") (T20). The referral stated that the Respondent was seeking the reduction or waiver of the preclusion period.
On 11 April 2001 the ARO wrote to the Respondent informing her of her decision to reduce the preclusion period, in the light of her ongoing medical costs (T21). The preclusion period would now end on 24 May 2002 instead of 20 June 2003. A file note written on the same day (T22) contains details of the calculation used to reduce the preclusion period.
On 19 April 2001 the Respondent lodged an appeal with the Social Security Appeals Tribunal ("the SSAT"). The appeal was heard on 14 June 2001.
Reviewable decisionThe SSAT set aside the decision under review and substituted the decision that the whole of the compensation amount should be disregarded for the purposes of calculating a preclusion period. (T2 – decision is dated 14 June 2001, reasons for decision dated 19 June 2001). The SSAT noted that the reasonableness of expenditure of a lump sum is a factor in determining whether there are special circumstances (as required by s 1184 of the Act for reduction of a preclusion period). It then considered several different factors in the Respondent's situation (T2, pp.7-8):
·The Respondent's ongoing medical expenses, which had been accepted as a special circumstance by the ARO. The SSAT agreed with the ARO's approach although finding some difference in calculations (the details of this difference are not disclosed).
·The Respondent's decision to build a new house ("the new house") to meet the needs of her son, Mr Wray. Having considered the poor condition of the present house ("the old house"), its unsuitability for a disabled person, and the suitability of the new house, the SSAT held the construction of the new house to be a reasonable use of money. Its cost should therefore be disregarded for the purpose of calculating the exclusion period.
·The Respondent's plan for her ailing mother to also move into the new house. The SSAT held this not to be a special circumstance; as the Respondent's mother was not dependent on her and providing for her care would be a personal choice.
The cost of the new house alone was more than the lump sum the Respondent had received. Therefore, the entire amount was to be disregarded for the purposes of calculating the preclusion period, the practical effect of which was to waive the preclusion period.
On 20 July 2001 the Secretary of the Department of Family & Community Services ("the Applicant") lodged an application with the Administrative Appeals Tribunal ("the Tribunal") for review of the SSAT's decision (T1). The reason given for the application is that the SSAT erred in finding the Respondent's circumstances were special within the meaning of s 1184 of the Act, and therefore erred in finding the whole of the compensation payment ought to be disregarded.
Relevant legislationLegislative provisions in the Act relevant to this matter are sections 17(1) definitions of "compensation affected payment" (paragraph (f), "lump sum preclusion period", (2), (3), 1163(1), (3), (8), (9), 1165(1A), (5), (8), (9), 1184(1), 1223(1):
"17 (1) Compensation recovery definitions
In this Act, unless the contrary intention appears:
…
compensation affected payment means:
(aa) an age pension; or
(a) a disability support pension; or
(b) a parenting payment; or
(c) a social security benefit; or
(e) a disability support wife pension; or
(f) a carer payment; or
(g) a special needs disability support pension; or
(h) a special needs disability support wife pension; or
(i) mature age allowance; or
(j) mature age partner allowance; or
(k) a former payment type.
…
lump sum preclusion period means either an old lump sum preclusion period within the meaning given by subsections 1165(3) to (4) (inclusive) or a new lump sum preclusion period within the meaning given by subsections 1165(5) to (8) (inclusive), as the case requires.
…
17(2) For the purposes of this Act, compensation means:
(a) a payment of damages; or
(b) a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c) a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments) that is:
(e) made wholly or partly in respect of lost earnings or lost capacity to earn; and
(f) made either within or outside Australia.
…
17(3) For the purposes of this Act, the compensation part of a lump sum compensation payment is:
(a) 50% of the payment if the following circumstances apply:
(i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(ab) 50% of the payment if the following circumstances apply:
(i) the payment represents that part of a person's entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and
(ii) the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and
(iii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(b) if those circumstances do not apply—so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn.
…""1163 General effect of Part
(1) If a person is or may be entitled to or receives compensation, payments of a compensation affected payment to the person or the person's partner might be affected under this Part.
…(3) If the compensation is a lump sum compensation payment, the compensation affected payment might cease to be payable for a period (based on the amount of the lump sum) and some or all of the payments of the compensation affected payment might be repayable.
…(8) The amendments of this Part relating to carer pensions made by the Social Security Legislation Amendment Act (No. 2) 1992 affect carer pensions only if:
(a) the compensation is received on or after 1 January 1993; and
(b) the claim for the pension is made on or after 1 January 1993.
…(9) This Part operates in certain specified circumstances to affect a person's compensation affected payment because of compensation received by the person or the person's partner. This Part is not intended to contain any implication that, in addition to those specified circumstances, there needs to be some connection between the circumstances that give rise to the person's qualification for the payment and the circumstances that give rise to the person's or the partner's compensation.
…"
"1165 Compensation affected payment not payable during lump sum preclusion period
…
(1A) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person is not a member of a couple; and
(c) the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) on or after 20 March 1997;
no compensation affected payment is payable to the person for the new lump sum preclusion period.
…(5) If periodic compensation payments are made in respect of the lost earnings or lost earning capacity, the new lump sum preclusion period is the period that:
(a) begins on the day after the last day of the periodic payment period; and(b) ends after the number of weeks worked out under subsections (8) and (9).
…
(8) If a compensation lump sum is received on or after 20 March 1997, the number of weeks in the preclusion period is the number worked out under the following formula:
Compensation part of lump sum
Income cut-out amount(9) If the number worked out under subsection (4) or (8) is not a whole number, the number is to be rounded down to the nearest whole number.
…""1184Secretary may disregard some payments
(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.
…"
"1223Debts arising from lack of qualification, overpayment etc.
(1)Subject to this section, if:
(a)a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
…"
Hearing and appearances
The Tribunal convened a hearing in Canberra on 10 September 2001. Mr J Walsh from Centrelink represented the Applicant. Ms N Behan from the Welfare Rights and Legal Centre in the ACT represented the Respondent.
The Tribunal had access to a considerable quantity of documentary evidence which was accepted and exhibited as follows:
Exhibit TD1 – Section 37 Statement and associated documents, 2 August 2001.
Exhibit A1 – Applicant's outline of submissions, 5 September 2001.
Exhibit R1 – Letter dated 6 September 2001 from Mr C Smith, psychologist, to the Respondent's representative.
Exhibit R2 – News item from The Sydney Morning Herald, 25 October 1999.
Exhibit R3 – Australian Federal Police report provided under cover of letter dated 9 November 1999.
Exhibit R4 – Photographs of the Respondent's former and current housing.
Exhibit R5 – Building contract for Respondent's new house, 26 March 2001.
Exhibit R6 – Floor plan of Respondent's new house.
Exhibit R7 – Undated statement from Robert Rampton Constructions.
Exhibit R8 – Letter dated 9 August 2001 from Dr I Hutchins, general practitioner, to Centrelink ARO.
Exhibit R9 – Report by Ms L Knipe, counsellor, Southern Area Health Service, Goulburn.
Exhibit R10 – Letter dated 12 September 2001 from the Respondent to the Tribunal.
In relation to Exhibit R10 the Tribunal notes that the Respondent sent this letter to the Tribunal after the hearing but before the decision was handed down. The Applicant had no objection to its being admitted at that late date and wished to make no submissions on it.
BackgroundThe Respondent was born on 20 January 1952. Adam Wray, her only child from her first marriage, was born on 1 February 1976. On 31 March 1981 he drowned in a backyard pool but was revived and was left with permanent brain damage. Mr Wray apparently does not have any contact with his biological father.
The Respondent worked for some 30 years as a legal secretary. From 1994 to 1997 her working environment became increasingly stressful, to the point where she suffered from chronic work-related anxiety. She stopped work on 17 March 1997 and has been unfit for work since then due to her fragile psychological state, although her ability to function generally has substantially improved over that time. She claimed compensation, which was paid to her regularly up until the lump sum redemption accepted by her on 2 February 2001.
Adam Wray lived in Young from about 1996 to May 2000. For most of that time he was living at Lambing Flat Enterprises for the purpose of learning independent living skills. According to the Respondent, this was not a success, particularly when Mr Wray was placed in his own apartment – he had frequent falls, drank heavily and lived in a state of neglect (as the Respondent demonstrated to the SSAT with photos of the apartment). Mr Wray came back to live with the Respondent in May 2000. Shortly before this, the Respondent had separated from her second husband, and although he lives on the same property in outer Goulburn in another house, there does not appear to be any prospect of reconciliation.
Documentary Evidence/ChronologyOn 19 March 1997 the Respondent lodged an Employee's Compensation Claim (T6). In it she described the details of her "injury". The claim was dated 14 March 1997, although the Respondent indicated she had been suffering since 1994. Incidents of verbal and physical abuse at work of an unpredictable nature had led to chronic work-related anxiety. Her symptoms included severe weight loss.
On 25 September 1997 Dr Goodwin completed a statement for a Total and Permanent Disablement Claim (T8). He diagnosed the Respondent as suffering severe chronic anxiety disorder, with a range of symptoms including loss of concentration, memory, confidence and appetite, disturbed sleep and an inability to drive a motor vehicle. She was not considered fit for work or rehabilitation at that time or in the foreseeable future.
On 7 May 1999 psychologist Mr C Smith wrote a letter regarding the Respondent's condition (T7). He stated she was not fit for work or any rehabilitation program.
On 29 June 2000 a Limited Guardianship Order was made concerning Adam Wray, at the application of the Respondent. The Public Guardian was appointed to make decisions relating to Mr Wray's accommodation, health care, consent to treatment and access to services. At that time the order was for one year.
On 25 October 2000 Mr S Borenstein, a psychologist, wrote a report after assessing Adam Wray (T10). The report noted that Mr Wray's test results were largely consistent with previous assessments, and concluded that he has significant and ongoing intellectual and cognitive deficiencies and will always need a degree of supervision in his life. The effect of alcohol was a particular concern.
On 9 January 2001 the Respondent lodged her claim for Carer Payment and/or Carer Allowance with Centrelink, and on 16 January 2001 Dr Hutchins completed the associated Health Professional Assessment described earlier.
On 16 January 2001 a Centrelink Compensation Recovery Officer wrote to the Respondent (T11), outlining the effects of both weekly and lump sum compensation on social security payments. He or she included a description of how the preclusion period is calculated.
Two Centrelink file notes, also written on 16 January 2001 (T12, pp.67-8), indicated that that the Respondent was already aware that a preclusion period would be imposed if her compensation claim settled. She rang that day asking how to appeal against the preclusion period being imposed and was told this could not be done until after the period had actually been imposed. She said she would send documentation in advance on how she was to intending to spend the money; in particular, she had "already committed herself" to building a new house suitable for her disabled son.
A Centrelink file note written on 22 January 2001 (T12, pp.68-9) recorded a conversation with the Respondent in relation to the letter of 16 January 2001. She was aware of what the preclusion period would be if her compensation claim settled for $138,000, which was expected to happen within a couple of weeks. She was putting together information in order to have the preclusion period reviewed.
On the same day the Respondent wrote a letter to Centrelink (T14) requesting that her preclusion period be waived because of special circumstances set out in the letter. These mostly relate to the reasons for using her lump sum payment to build a new house, the needs of her son, the unsuitability of the old house and the lack of other options.
Also on 22 January 2001, a letter was written to Centrelink from Robert Rampton Constructions (T13). It stated that the Respondent's old house was in poor condition and structurally unsound, and would be difficult to renovate for the needs of a handicapped person. The writer of the letter was building a new house next door with appropriate facilities, at a contract price of $130,000. At the SSAT hearing the Respondent said the cost would then be approximately $140,000 (T2).
On 30 January 2001 Centrelink received the Respondent's appeal letter together with medical reports and building plans (T12, p.70). As details of the settlement had not been received, this documentation would be stored until a preclusion period had actually been imposed.
On 1 February 2001 Ms S Lee, an occupational therapist, wrote a report after assessing the Respondent's old house and the plans for the new house (T15). The assessment was conducted with the Respondent present, but not Adam Wray. The report concluded that the plans for the new house indicated it would be much more accessible for him, and would provide greater opportunity for independence and privacy. The existing property had limited circulation space in many areas.
On 2 February 2001 the Respondent's compensation claim was officially settled and weekly payments redeemed for $138,000 (T16).
On 5 February 2001 the Respondent wrote to Centrelink (T17) advising of the settlement and referring to Ms Lee's report. The letter also outlined further problems with the existing house.
On 16 February 2001 details of the Respondent's settlement were sent to Centrelink by CGU Workers Insurance (T18).
On 27 February 2001 the initial decision to impose a preclusion period was made (T19).
A Centrelink file note written on 27 March 2001 (T12) records the Respondent as saying she had signed contracts on the construction of the new house. She was advised this was unwise as a review of the initial decision was incomplete.
A file note written on 28 March 2001 (T12) indicated that the original decision-maker affirmed the decision on or about that date, having found there were no special circumstances. After discussing this with the Respondent, the matter was referred to an ARO (T20).
On 11 April 2001 the ARO reduced the preclusion period (T21, T22).
Two file notes written on 17 April 2001 (T12) record that the Respondent rang inquiring how to continue her appeal, and was advised to wait until she received the letter of 11 April 2001. She also stated that a house left to her mother would be sold.
On 13 June 2001 the Office of the Public Guardian wrote a letter to the SSAT (T23). It stated that the old house was completely unsuitable for Mr Adam Wray, and that, even with extensive alteration, it would remain inferior. It also strongly expressed the opinion that the new house under construction would meet Mr Wray's needs and that the expenditure on this house was completely justified.
On 14 June 2001 the SSAT heard the Respondent's appeal (T2). It subsequently waived the preclusion period. On 20 July 2001 the Applicant lodged an application for review with the Tribunal (T1).
On 24 July 2001 Mr Smith wrote a letter to Centrelink regarding the Respondent's condition (T24). In it he expressed concern that financial problems will add to her anxieties and are likely to disrupt her treatment as she will not be able to afford medications and psychotherapy. He asked that these matters be taken into consideration in reviewing her application.
On 2 August 2001 the Respondent and her son moved into the new house which finally cost $150,000.
On 5 September 2001 the Applicant filed an Outline of Submissions (Exhibit A1). It addressed "the substantive issue in the case", whether there are special circumstances under s 1184(1) of the Act (paragraph 2). It contended that the SSAT failed to recognise that Carer Payment is included among the payments affected by compensation (paragraph 7). The Applicant also placed emphasis on the fact that the Respondent did not receive social security prior to receiving a lump sum (paragraphs 8-9).
Paragraph 10 of the outline contended that the SSAT's finding that the construction of a new house was reasonable ignored the intent of the preclusion provisions. It also cast doubt on whether reasonableness of the expenditure is a relevant consideration. Paragraphs 11 and 12 cast doubt on the approach of the ARO in reducing the preclusion period at all, but the Applicant is content for the ARO's decision to be reinstated rather than reverting to the initial decision.
On 6 September 2001 Mr Smith wrote another letter relating to the Respondent's condition and outlining her circumstances in the last two years (Exhibit R1). It included his explanation of the decision to build a new house. It also indicated that the Respondent's mother would no longer be moving to the new house when it is completed.
Findings on material questions of fact with reference to the evidence and other materials in support of the findingsThe Tribunal makes the following uncontroversial findings:
Carer Payment is a "compensation affected payment" in accordance with the definition in ss 17(1), 1163(8) of the Act.
The amount of $138,000 received by the Respondent was "compensation" in accordance with s 17(2)(c) of the Act.
The Respondent's compensation was lump sum compensation. It was a sum paid in redemption of ongoing fortnightly payments (T16).
The "compensation part of the lump sum compensation payment" was $69,000 in accordance with s 17(3) of the Act, ie 50% of the total award.
The Respondent is presumptively subject to a preclusion period in accordance with s 1165(1A) of the Act.
The preclusion period commenced on 3 February 2001 in accordance with s 1165(5) of the Act.
The length of the preclusion period was calculated in accordance with s 1165(8), (9) of the Act to conclude on 20 June 2003.
The length of the preclusion period was reduced by a delegate such that it is now to end on 24 May 2002 (T22).
The points of controversy arise in relation to application of s 1184(1) of the Act. The issues which arise under that provision are:
Issue 1 – Whether there are "special circumstances of the case" that make it appropriate to treat the compensation payment as not having been made.
Issue 2 – If issue 1 is resolved in the Respondent's favour, whether the whole or only part of the compensation should be treated as not having been made.
The Tribunal now moves to consider these issues. If issue 1 is resolved against the Respondent then there will be no requirement to consider issue 2.
Issue 1 – Whether there are "special circumstances of the case" that make it appropriate to treat the compensation payment as not having been made.As both representatives recognised, the test used to ascertain whether special circumstances exist was laid down by the Tribunal in ReBeadle and Director-General of Social Security (1984) 6 ALD 1 at 3 where the Tribunal said:
"An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. That is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."
This passage was endorsed by the full Federal Court in Beadle v Director-General of Social Security (1985) 60 ALR 225 at 228.
It is necessary to consider the evidence to ascertain whether the Respondent's circumstances here are "special". The matters from the Section 37 Statement and associated documents that might be regarded as contributing to special circumstances are:
The Respondent's medical expenses. The SSAT (T2) accepted that these amount to $748 a month to see psychiatrist, Dr Koller, in Sydney; $660.00 a month to see Mr Smith, the psychologist, each week in Goulburn; $260 a month for her medications. The Respondent has severe chronic anxiety disorder and depressive illness.
The house in which the Respondent and her son previously lived was structurally unsound, lacked circulation space, contained steps, could not accommodate grab rails, and had an outside toilet (T2). Her son could not use the shower in the old house because he is insecure using an over-bath shower (T14). The Respondent's son is aged 25, has brain damage, has a diplegic gait (meaning he is prone to falling over) and is intellectually disabled. The previous house was unsuitable for a disabled person such as the son. The septic tank attached to the old house leaks (T17). Expenditure on a house suitable for the Respondent's son was said to be a reasonable expenditure. The Applicant considered that the previous house was not worth renovating and that it would be cheaper to build a new house (T14). Robert Rampton Constructions (T13) wrote on 22 January 2001 that the existing house was in poor condition, was structurally unsound and would take a lot of time and money to bring up to a condition suitable for a handicapped person. The Senior Guardian in the NSW Office of the Public Guardian wrote on 13 June 2001 (T23) that the old house was completely unsuitable for the Respondent's son. There would need to be considerable alterations and extensions to address his needs. It would still be an inferior dwelling not worth the money needed for the alterations. The photographs in Exhibit R4 certainly indicated that the previous house was very basic accommodation. Occupational therapist, Ms S Lee (T15) strongly supported the building of a new house for Adam's needs.
The Respondent's desire to provide accommodation in her house for her ageing mother who has had two strokes and who is contracting dementia (T2).
The Respondent's son requires expensive dental treatment (T9, T14).
The Respondent feels that her son must live with her because the experiment whereby she released him to live away from home to learn independent living skills had failed. She had to bring him to live with her in May 2000. He requires a certain amount of care and supervision, consistent with the Respondent qualifying for Carer Allowance and Carer Payment. He is at risk of overconsumption of alcohol if not watched closely. He was one of the persons with an intellectual disability sent to prostitutes by a non-government organisation caring for him, in accordance with the newspaper item in Exhibit R2, according to the Respondent. Exhibit R3 consists of reports from the police about the Respondent's son walking along public roads in Canberra in September 1998 in a disoriented or intoxicated state.
According to Mr Smith, the psychologist, when in August 2000 the Respondent decided to build a new house on her property using the money from her workers' compensation settlement, she was under exceptional pressure and her anxiety symptoms were particularly pronounced (Exhibit R1). The decision to build the new house was said to be reasonable under the circumstances. Dr Hutchins wrote on 9 August 2001 (Exhibit R8) that the Respondent did not take lightly the decision to use her settlement money to rehouse herself and son. The Public Guardian had supported the decision. She was under pressure from a marital break-up and her son's needs. She had great emotional problems.
Additional information from the Respondent in her oral evidence consisted of the following:
Her son also has weakness in the hands since he put them through a plate glass window.
Her son has occasional incontinence problems.
Her son can be aggressive, although this is controlled by medication. He can also behave inappropriately in public.
The Respondent's son has a full-time job in a sheltered workshop and studies one day a week at the TAFE college.
The Respondent's son has a weakness for alcohol. He never drank before he left the Respondent at age 19 to join the living skills institution. He started to drink there. He had no drink when he returned to the Respondent in 2000 but after a couple of months he began drinking in bars and coming home needing assistance to get to bed. This has emerged as a problem that the Respondent is trying to resolve. Contrary to a comment by psychologist, Mr Borenstein (T10), the Respondent's son does not have two stubbies of beer every day.
The Respondent had lived in the old house for 14 years. It is owned jointly by her with her estranged husband. The house was built in the 1800s. The Tribunal was shown the photographs of the old and new houses in Exhibit R4 and the salient points were indicated. The Respondent indicated the differences between the old and the new houses in the fashion shown in the following table.
Old house New house
Peeling paint Cracks in the walls Paint and walls excellent
Rising damp Fungus at base of wardrobe walls Damp in Respondent's son's room No damp
Gap widening between top of wall and roof Structurally sound
Wash basin in bathroom coming adrift from wall because Applicant's son uses it for support Railings fitted through house
Damage from multiple lightning strikes never repaired
Steps into room occupied by son Steps in other parts of house Steps to be negotiated to reach outside toilet Son has own entrance to room from exterior
Outside toilet Inside toilet
Hot bath water feeds from kitchen cooking range Water hose from outside house into laundry Temperature controlled hot water (40 degrees maximum)
Son unable to use shower because over bath and he is too unsteady Non-slip bathroom tiles Serviceable shower for son Shatterproof shower screen
The Respondent explained that her aged mother is now in a nursing home in Cabramatta. The Respondent intends to have her at her house for respite care for a couple of weeks periodically. Her new house has four bedrooms and can accommodate the Respondent, her son, her mother and possibly another person.
When considering the expenditure of the compensation money the Respondent had considered several options. One was to live at her mother's residence, a five-bedroom house. However, there is nothing in that location for the Respondent's son. There is no sheltered workshop. Another option was to buy an existing house in Goulburn. This was rejected because it was better to build on the Respondent's own land which amounts to 11 acres. Elsewhere in evidence the Respondent praised the lifestyle available for herself and for her son on the existing land. The Respondent had considered subdividing the 11 acres but the Council has stopped approving such subdivisions. The Respondent considered upgrading the old house but concluded it was not an option.
The Respondent agreed that she was aware of the preclusion period. Nevertheless she signed the contract for the building of the new house (Exhibit R5) on 26 March 2001. The contract price was $120,500. However, extras took the final price to $150,000. The extras included a cut-out switch for hot water to the bath and shower (to stop Adam from burning himself), shatterproof glass, an "auto-off" for the kitchen stove, grab-rails, ramps, pre-testing of the soil for the septic tank (a $9,000 item in itself) and a rear verandah to do away with the precipitate drop from the house there would otherwise have been. At the date of the hearing the Respondent had paid $140,000 and she had $9,000 remaining in the bank. This included some $5,000 paid to her by Centrelink when the Applicant failed to obtain an order from the Tribunal staying the SSAT's decision in this matter.
The Respondent reported that her son had reacted well in the new house. He makes his own breakfast, washes his clothes and keeps his room tidy.
The Respondent said that her only income is her Carer Payment and Carer Allowance. Carer Payment will cease if the Secretary wins this appeal. Her ongoing costs are for electricity and fuel (in amounts she could not recall), the telephone (about $100 a quarter), food (about $150 a week), excess water, the medical costs listed earlier and her son's medical expenses. The Respondent's assets are a motor vehicle worth around $3,000, half the value of the 11-acre property ($120,000), jewellery (about $5,000) and her cash at bank ($9,000).
In cross-examination the Applicant established the following points:
The Respondent's son had lived in the old house for a total of nine years of his life, although the Respondent pointed out that he was at school or TAFE for much of the time.
Up to 1997 when the Respondent and her husband were both working they could have built a new house on the property. However, the Respondent's husband was satisfied with the old house as it was.
The Respondent had never obtained a quote for repair and renovation of the old house. She had ascertained in 1994 that it would cost $14,000 to renovate the bathroom and an additional room would cost $40,000. The old house contained only two bedrooms. The Respondent had not sought a quote from her builder to upgrade the old house because she had seen too many people throw money away on an old house trying to make it right. It was cheaper to build, she said. Later she pointed out that she could not have carried out the works recommended by the occupational therapist (T15) for the old house. Structurally it could not accommodate grab-rails and there was too little circulation space for rails, ramps and her son's gait problems. In Exhibit R10, the letter received by the Tribunal after the hearing, the Respondent wrote that her estranged husband would not agree to renovate or rebuild the old house because he saw it as some type of shrine and he would not want to leave the new dwelling for the benefit of someone else after he dies.
The Respondent had been in receipt of fortnightly workers' compensation payments of $589 (T18 suggests $676-40 less tax), in addition to compensation for pharmaceuticals, medical attendance, psychiatric help and travel, when her son rejoined her at home.
The Respondent discussed some of her thoughts in proceeding to have the house built. She thought in March 2001 that she would have some money left over after paying the builder. However, when the building started in April she realised that she would not have any left over funds. The Respondent settled her workers' compensation claim on 1 February 2001. She had contacted Centrelink in January 2001 to try and have the preclusion period lifted. She did this because she considered that her excess funds would be too low. She was formally notified that the preclusion period would apply late in February 2001 (T19). She promptly sought a review. Prior to receiving a result of the review she signed a contract to have the house built. As Mr Walsh for the Applicant put it, she was committed to proceed regardless of the outcome of the internal review. The Respondent explained in response that her medical condition can cause her sometimes to go ahead and do things without giving them adequate thought. Mr Walsh queried whether this was an accurate characterisation. He suggested that she had thought her position through. She had mounted a formidable appeal with considerable evidence having been gathered. The Respondent replied that she did that on Centrelink advice.
The Respondent said that she had been advised by Centrelink late in 2000 to settle her workers' compensation claim because the days of large payouts were over. Later she said that it was a Centrelink social worker who had advised her. The Respondent told Mr Walsh that she had been happy with her fortnightly payments of compensation, which would have meant staying in the old house. However, she had come under pressure to find ready cash to see to the needs of her mother and her son. Although she had seen a solicitor in connection with the compensation position, he knew nothing about Centrelink preclusion periods. He gave her no advice.
It was in July or August that the Respondent decided to build the new house. In September 2000 the Respondent had sought Council approval for the building of the new house. In about November 2000 Centrelink alerted her to the possibility that she might receive a part pension.
The Respondent agreed that she had known about preclusion periods for a long time as a result of her work as a legal secretary. She had decided to build the house and fight the preclusion later. No one at Centrelink had suggested that the preclusion period appeal was likely to be successful.
The Respondent had decided not to sell the property and rent elsewhere because her husband, a half-owner, would not agree to sell. She did not want to buy her husband out and lease elsewhere because no other property was attractive or suitable. She said that she would probably have sold had her husband been interested.
If the Applicant succeeds in this appeal the Respondent would survive with assistance from the pensions of her mother and her son. Her son is paid $150 a fortnight by his employer and $476-50 a fortnight as pension and rent assistance. She could look to reducing the costs of seeing the psychiatrist and psychologist by seeing a psychiatrist in Goulburn rather than in Sydney. She has already reduced her monthly living expenses since the SSAT case.
The evidence suggests that in 2001 the Respondent has had access to the following funds. She had $31,000 (T4, p. 33) when she claimed Carer Payment on 9 January 2001. She received $138,000 from the compensation settlement available to her from 1 March 2001 (T16). She has received about $4,000 Carer Payment from Centrelink. She has spent $140,000 on the house, with another $10,000 to be paid. Deducting the house money, the Respondent has had access to at least $23,000 in 2001.
The Respondent's mother's house cannot be sold. An executor has never obtained a grant of probate relating to the property despite her father's death 12 years ago. The house is worth little, partly because it has an asbestos roof.
In his final submission for the Applicant Mr Walsh said that the Respondent chose not to continue to receive her fortnightly workers' compensation. She saw an opportunity to build a better house. "This was a choice, not a need." The Respondent and her son had lived in the old house for many years. The Respondent was aware of the consequences and of preclusion periods.
The statutory provisions in question do not assume that a social security recipient has ownership of a home. The provisions focus on income support. They deem the derivation of an income stream from compensation received.
Mr Walsh equated the Respondent's case to that in Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 where the Tribunal said:
"The Director-General indicated that he intended to recover the amount of sickness benefit paid to the applicant. The applicant did not dispute his liability. His case was that the payment of the money would impose severe financial hardship upon him and his family that the Director-General should therefore exercise the discretion conferred upon him by a 115(4A) and release him from liability. The Director-General refused to so exercise his discretion and appeal to the Social Security Appeals Tribunal was dismissed.
"The evidence established that at all times before the damages settlement the applicant and his solicitors had been aware of the applicant's liability to repay out of any settlement moneys an amount equal to the total amount of sickness benefit paid to the applicant. There was further evidence that after the settlement the applicant was advised by the Director-General that he was then liable to repay the amount of the sickness benefit.
"Despite the failure of the applicant's appeal for release from his liability the Applicant proceed to purchase some land for $22,000 upon which he began the construction of the house. The estimated cost of the house was approximately $80,000. It was clear from the evidence that the project was never within the applicant's financial competence. At the time of the application the applicant had exhausted both the settlement moneys and other funds available to him in the payment of construction costs but the house was still a long way from completion. The applicant contended that if he was obliged to repay the $6607 64 claimed by the Director-General he would have to sell the house in its incomplete state and consequently suffer great loss and hardship." (Page N96)
The Tribunal found against the applicant in that matter and said in its decision:
" ... it may well impose hardship on the applicant and his family if he is obliged to sell the premises in their present incomplete state in order to pay the moneys claimed by the Director-General. But any hardship which would thereby ensue is primarily of the applicant 's own making due to his decision to proceed with the construction of the residence which was beyond his financial resources and to utilise for that purpose the whole of the moneys made available by his solicitors without making any provision for payment of his acknowledged debt.
"We are not satisfied therefore that there exist any special circumstances in this case, by reason of which the Tribunal should release the applicant from any part of his liability to pay the Director-General the sum [in question]." (Page N97)
The similarities between the Ivovic case (supra) and Ms Marmont's case are that the social security recipient in both cases knew of his or her debt to the permanent head of the relevant department and proceeded to spend the compensation funds regardless.
Mr Walsh pointed out that the Respondent's estranged husband remains in the old house and finds it satisfactory and that the Respondent refrained from considering improving the old house at a lower cost than building a new house.
Mr Walsh indicated that the ARO's decision to reduce the compensation part of the lump sum by $31,000 was extremely generous. Because of the operation of the 50% rule in s 17(3) of the Act this was equivalent to reducing the total amount by $62,000 in recognition of the Respondent's medical expenses.
In Exhibit R9 Ms Knipe referred to a suicidal ideation in the Respondent. Mr Walsh referred the Tribunal to a recent decision where suicide entered as a factor. In Re Secretary, Department of Family and Community Services and Szoke [2001] AATA 353 the Tribunal noted in paragraph [18] of its reasons "from Exhibit 2 that the Respondent has been described as having suicidal ideation in conjunction with the anxiety/depressive conditions and in association with abuse of alcohol." This case, like the instant matter, was a "spent it all" case (paragraph [23]). The Tribunal said in finding against the Respondent in that case:
"28. In the ultimate the Respondent's case is that she is now impoverished by her failure to make financial provision for the lump sum preclusion period. That was, on her own case, clearly the result of voluntary actions by the Respondent to dissipate the money received by her in settlement of her compensation claim. She did not experience misfortune, nor did she experience circumstances not envisaged by the legislation.
"29. We are satisfied that the Respondent deliberately spent the money without regard to the consequences of her action. Her behaviour in relation to the money was reckless with no regard to the consequences."
The import of the Szoke case (supra) is that where a social security recipient has spent all of the compensation money in disregard of the Secretary's claims the existence of a suicidal ideation is not automatically a special circumstance for the purposes of s 1184(1) of the Act. The Tribunal in the instant case would, however, suggest that such a factor might be relevant if there is some indication that suicide by the compensation recipient is a likely or possible consequence of retention of the preclusion period.
Mr Walsh sought to distinguish two decided cases, Re Mourtitzikoglou and Secretary, Department of Social Security (1991) 23 ALD 249 and Re White and Secretary, Department of Social Security (AAT 9794, 6 September 1994). Each of these cases provides some support for the notion that expenditure of compensation money to improve the standard of housing might be a special circumstance.
In Mourtitzikoglou (supra) the applicant's husband received a compensation lump sum of $14,500 and the applicant sought to have a preclusion period not applied. She and her family lived in a poorly maintained 30-year-old weatherboard house with broken windows, a leaking roof, an outside toilet and a kitchen and bathroom in need of repairs. A social worker's report confirmed the need for urgent major repairs to the house. At paragraph (15) (page 251) of the reasons for decision the Tribunal said as follows:
"In writing these reasons I considered whether it could be said that it is 'special circumstances' for a family in receipt of social security payments to live in a house with a leaking roof and broken windows. I was satisfied that there are some standards of housing which are so poor that to live in such housing would be 'special circumstances' such as to justify the exercise of the discretion under s 156 of the Act. On the other hand the system of social security does not guarantee, to recipients of benefits, accommodation to a certain standard. I considered that a line must be drawn between accommodation so poor that is exceptional, and would render it unjust to apply the conclusion period as provided for in s 153 of the Act, and accommodation which requires improvements, but is unfortunately not exceptional or unusual amongst those who are in receipt of benefits under the Act."
In the White case (supra) the applicant received over $600,000 compensation in 1990. He was precluded from receiving social security benefits until 2001. The applicant and his family lived in rental accommodation when he was injured in 1985. The applicant's wife bought a new house for $40,000 at about the time of the injury, borrowing $35,000 on mortgage. The applicant paid off his debts when he received his compensation, including the mortgage. He invested funds with GIO. The invested funds were used for day-to-day expenses. He also bought five acres of real estate for $41,000 and contracted to build a house on that land for over $220,000. After four years the invested funds were reduced to nil. He had spent money on such items as motor vehicles, a caravan, a trailer, a motorised wheelchair, a four wheel motorcycle, ride-on lawn mowers, a post hole digger, pumps and sheds.
When the appeal reached the Tribunal both Mr and Mrs White were out of work, had debts of $10,000 but had some assets, including the original house. The Tribunal recorded that Mr White said that the family was in effect required to move from the original property. It was more than 100 years old and in substantial need of repair. It required new stumping, was damp and cold, and was in a low-lying area where water frequently rested under the house. It was also largely inaccessible to the applicant because of its absence of ramps. A builder had estimated that it would cost in the vicinity of $100,000 to renovate the old house.
The Tribunal considered a number of the assets held by the applicant and his wife should not be realised. This would be because of the costs involved in selling the assets or because the assets were of particular use to a person with disabilities afflicting the applicant. In paragraph 25 of its reasons for decision, the Tribunal wrote:
"Whilst some Tribunal decisions have found that owning unencumbered assets would be inequitable in the recognition of financial hardship, one thing is however certain and that is that in this country, particularly in the context of social security legislation and having regard also to the formal premise of a parent being able to adequately support and provide care for children is that poverty should not be a consequence of the provision of basic care. For the purposes of these reasons and in the context also of families with children I have decided that provision of adequate and safe housing is encapsulated within the concept of care."
The Tribunal proceeded to say, in paragraph 25, "I accept that the applicant and his family were required to move from the property at Main Street. No person should be required to live in sub-standard housing and the applicants obviously sought to improve the quality of their housing for both themselves and their children upon receipt of compensation moneys." Later, in paragraph 31, the Tribunal wrote, "The accommodation at Main Street was so poor that it may be regarded as exceptional and would permit a finding of circumstances special, to the applicants."
Mr Walsh distinguished the Mourtitzikoglou case (supra) in that, in that case, the applicant expended only $14,500 and that was on repairs to an existing house. Here, the expenditure was of $150,000, more than the compensation amount, on building a new house. He distinguished the White case (supra) on the basis that only a relatively small part of the compensation sum was deemed not to have been paid (ie $100,000 of the total of over $600,000) and on the basis that an insurance company had erroneously advised the applicant that the preclusion would run for only about two years (not eleven as turned out to be the case).
Mr Walsh suggested that single instance decisions are of limited value. General principles are difficult to distil from them. It is best to return to basics and they are provided in the legislation. These include that the compensation recovery legislation is not designed to foster home ownership and that money from compensation that is available to provide continuing support, even if in the form of a house, should be used for support.
Ms Behan, for the Respondent, made the following points.
The Respondent's decision to build the new house was related to her needs, as well as her son's, given her medical conditions. The Tribunal takes this argument to suggest that the Respondent's tendency to depression is ameliorated by her access to a new house. The issue is not simply one of the Respondent's choice. The old house was structurally unsafe. The Respondent took the cheapest option open to her. She took the option incurring the least disruption. Ms Behan argued hat the effort devoted to her appeal by the Respondent was evidence of her mounting anxiety.
Ms Behan referred to Ivovic (supra) as authority for the proposition that a decision-maker must consider the particular circumstances of each case and be prepared to respond if the results appear to be unjust, unreasonable or inappropriate.
Ms Behan pressed that the Respondent suffers from anxiety and depression and also has incontinence problems. She has an adult disabled son in her care. She was living in a house more than a century old, the house was structurally unsound, and the Public Guardian had declared the accommodation unsatisfactory. The Respondent could not subdivide the 11 acres block. No suitable rental accommodation appeared available. The Respondent had built a modest home with modest extras. The $9,000 drainage testing had been an unforeseen expense. The expenditure was reasonable given that the Respondent has a severe chronic anxiety disorder and depressive illness. Exhibit R1 demonstrates that she is still under treatment, that she has problems currently and that she has concerns for her son and her mother.
Ms Behan cited the Mourtitzikoglou (supra) and White (supra) decisions, discussed earlier in these reasons, as authorities in the Respondent's favour. She referred also to Re Lukic and Secretary, Department of Social Security (AAT 6944, 6 May 1991), Secretary, Department of Social Security and Winterbotham (AAT 6499, 11 December 1990), Groth v Secretary, Department of Social Security (1995) 40 ALD 541 and Re Secretary, Department of Social Security and Turner (AAT 8739, 26 May 1993). In general these cases suggest that it is more likely that a tribunal will find the existence of special circumstances where a social security recipient has expended compensation moneys on a relatively modest house, a house not at the top of the market. The Groth case (supra) suggests that mere financial impecuniousness on the part of a social security recipient is not sufficient to attract a finding that special circumstances exist. The Federal Court has said over the years that most social security recipients are impecunious and live in straitened circumstances. There must be something in addition to this general situation to take the recipient into an area of special circumstances. Ms Behan submitted that there were specific and unusual circumstances prompting the Respondent to build and she had resolved her problems in a modest way.
Ms Behan referred to Dr Hutchins's recent letter (Exhibit R8) which identified the Respondent's poor social structures, her ongoing treatment and her likely deterioration if left without money from Centrelink as factors in favour of waiver of the preclusion period.
Ms Behan submitted that the Tribunal has tended not to require of recipients that they resort to renting premises when they were homeowners before receiving compensation.
That being the state of the evidence and submissions before the Tribunal, the Tribunal finds that the Respondent has established a number of factors which could help in convincing the Tribunal that her circumstances are special. They really reduce to:
The substandard living conditions in the old house.
The unsuitability of the old house for the Respondent, her son and her mother.
The unsuitability of the old house for any renovation or upgrade.
The blowout in costs of building the new house.
The Respondent's (and her son's) medical expenses.
The Respondent's general living expenses.
The Respondent was under exceptional pressure and suffered severe anxiety symptoms when she made the decision to use the compensation money to build the house.
The Respondent's medical condition can cause her sometimes to go ahead and do things without giving them adequate thought.
The suggestion that the Respondent has a suicidal ideation.
Without more, and on the basis of the propositions related to substandard housing appearing in the Mourtitzikoglou (supra) and White (supra) cases, the Tribunal would be inclined to find that special circumstances exist. This would be for several reasons. First, the condition of the old house was such that its deficiencies seem comparable with those in the houses described in the two decided cases. Second, the needs of the Respondent's son are relevant, in the Tribunal's view. He has a disability which has attracted payment to him of a Disability Support Pension and Rent Assistance. His disability has also permitted the Respondent to qualify for Carer Payment and Carer Allowance. The Tribunal is convinced by the evidence from an occupational therapist and the Public Guardian that the old house was unsuitable for occupation by a person with Ms Marmont's son's disabilities. It is true, as Mr Walsh said, that Ms Marmont's son lived in the old house for nine years. However, the Tribunal considers that the premises had become increasingly unsuitable for a person with Ms Marmont's son's disabilities. The Tribunal is also satisfied that the old house was not suitable for upgrading, given the evidence of the builder, and despite the lack of any quotation as to the cost of such an upgrade. To this extent, then, the Tribunal upholds the decision under review.
The Tribunal notes, however, that there is force in Mr Walsh's submission that the ARO's decision to ignore $31,000 of the compensation amount because of the Respondent's ongoing medical expenses was generous in the circumstances. The Applicant is not pushing for a decision less favourable to the Respondent than that made by the ARO but the fact remains that, in order to achieve the impact that the ARO, probably justifiably in the Tribunal's view, sought all that was necessary was to ignore $15,500 of the settlement, because of the operation of the 50% rule in s 17(3) of the Act.
The Tribunal does not accept the other factors advanced as special. The Respondent's general living expenses are expenses shared by anyone else in her situation. In any event, given the overly generous allowance for ongoing medical expenses, the Tribunal considers that the ARO has inadvertently already more than compensated the Respondent in this regard.
The Tribunal does not accept the argument that the Respondent's medical condition caused her to proceed to take actions in this instance without giving them adequate thought. She gave the relevant issues here considerable thought. This is so in relation to her knowledge all along of the operation of the preclusion period. It is true also of her decision, planning, and the execution of those plans, over a period of eight months leading up to the commencement of the building of the new house. It is true too of her resolve to proceed to commit to the building of the house, and worry about having the preclusion period waived as soon as possible thereafter, in the knowledge that she might fail in that quest. The Respondent agreed in her evidence to this description of events.
The Tribunal for similar reasons does not accept that the pressure and anxiety affecting the Respondent at the time of the decision to build had any effect on her exercise of judgment at the time. The Tribunal accepts Mr Walsh's submissions that the Respondent knew full well what she was doing, what risks she was taking, and she proceeded regardless.
The Tribunal is not convinced by any suggestion that the Respondent has a suicidal ideation and that that should be regarded as a special circumstance. The Applicant presented to the Tribunal as a person happy in her new home, admittedly with some financial difficulties, but looking forward to establishing an improved lifestyle with her son in their new accommodation.
The Tribunal is not convinced that the increased costs involved in building the new house contribute to special circumstances. It is commonplace for building costs to rise above quotation partly as a result of rising costs, but also because of unforeseen additional costs such as the soil testing required here. In addition, some of the extras chosen by the Respondent, while desirable, were not strictly necessary. The back verandah falls into this category.
The Tribunal also considers that there are economic factors that make it unnecessary to recognise the special circumstances affecting the Respondent to any extent beyond that already recognised by the ARO. The first of these is the quantum of funds to which the Respondent has had access during 2001. As at 9 January 2001 the Respondent had $31,000 in the bank (T4, p. 33). As of 1 March 2001 she had access to an additional $138,000 (T16), that is a total of $169,000 (less living expenses). In July 2001 the SSAT decision resulted in the Respondent receiving some $4,000 arrears of Carer Payment when the Applicant was not granted a stay of the SSAT's decision by the Tribunal. That means a total of $173,000 (plus ongoing Carer Payment instalments, minus living expenses). When the cost of the house, $150,000, is accounted for a considerable amount of money remains. This sum of money is not inconsiderable when compared to the annual rate of Carer Payment. It should be borne in mind that the preclusion period is due to expire in only eight months.
The Tribunal notes too that the household has ongoing income from several sources. There is the Respondent's Carer Allowance. There is the Respondent's son's income. The Respondent told the Tribunal that she felt that she could also find ways to reduce her living expenses. She also told the Tribunal that she could in the longer term consider taking in a boarder to use the fourth bedroom. This was not an attractive proposition immediately as the Respondent and her son are working out a modus vivendi in the new house. The Tribunal understands this, but the Tribunal also considers that there is an option here open to the Respondent which she could consider more actively in the not too distant future.
The Tribunal therefore finds that there are special circumstances in this case but that they were at least adequately reflected in the decision of the ARO, which was to ignore the payment of $31,000 of the Respondent's compensation.
This disposes also of the second issue, as to whether the whole of the compensation should be treated as not having been made. To that question the Tribunal answers no, for the above reasons.
ConclusionThe Tribunal's decision means that the decision of the SSAT under review is set aside and the decision of the ARO is restored.
As regards the Carer Payments made to the Respondent as a result of the SSAT's decision, the Tribunal notes the decision of the then President of the Tribunal in Re Secretary, Department of Social Security and Lugovskoy (AAT 13058, 3 July 1998) which was to the effect that s 1223(1) of the Act means that any payments made to the Respondent between the date of the SSAT decision and the date of the Tribunal decision would be recoverable by the Commonwealth if they were not payable to the Respondent. Here the payments were not payable and so are recoverable under s 1223(1) of the Act. It is a matter for Centrelink and the Applicant whether recovery is deferred until the Respondent is in receipt of Carer Payment instalments.
DecisionThe decision under review is set aside and in substitution the Tribunal affirms the decision of the Authorised Review Officer.
I certify that the 96 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M J Sassella, Senior Member and Mr G A Mowbray, Member.
Signed: Anna Stephens (Sgd) .....................................................................................
AssociateDate of Hearing 10 September 2001
Date of Decision 5 November 2001
Advocate for the Applicant Mr J WalshSolicitor for the Respondent Ms N Behan
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