Massoud and Secretary, Department of Social Services (Social services second review) - [2017] AATA 1366

Massoud and Secretary, Department of Social Services (Social services second review) [2017] AATA 1366 (24 August 2017)
Division:GENERAL DIVISION
File Number:2016/6961
Re:Dennis Massoud
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member J Sosso
Date:24 August 2017
Place:Brisbane

The Tribunal affirms the decision under review.
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Senior Member J Sosso
CATCHWORDS
SOCIAL SECURITY - Compensation Preclusion Period – disability support pension (blind pension) – evidence does not support special circumstances – decision under review affirmed.
LEGISLATION
Social Security Act 1991

CASES
Secretary, Department of Social Security v Rurak (1990) 26 FCR 1
Secretary, Department of Social Security and Winterbotham [1990] AATA 808
Morgan and Secretary, Department of Family and Community Services (1999) 56 ALD 579
Secretary, Department of Social Security v Banks (1990) 20 ALD 19
Haidar v Secretary, Department of Social Security [1998] FCA 994; 52 ALD 255
Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3.
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Secretary, Department of Employment and Workplace Relations v Homewood [2006] FCA 779; 91 ALD 103
Director General of Social Services v Hales (1983) 47 ALR 281 at 321
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Davis and Secretary, Department of Family and Community Services [1999] AATA 84
Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Gartside and Secretary, Department of Social Services [2017] AATA 45
Taylor and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2013] AATA 161
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580
Secretary, Department of Social Security and Galea [1993] AATA 32; 35 ALD 749
Department of Social Security and Turner [1993] AATA 160.
Topp and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 99
Hanrahan v Secretary, Department of Employment and Workplace Relations (2007) 47 AAR 1

REASONS FOR DECISION
Senior Member J Sosso
24 August 2017
INTRODUCTION

On 22 August 1996 Mr Dennis Massoud (the Applicant) was granted the disability support pension (DSP) – Exhibit 2.
It is of importance in this matter that the Applicant was paid the DSP pursuant to s 95 of the Social Security Act 1991 (the Act).
Section 95 establishes blindness as an alternative ground for eligibility for the DSP, and the pension is granted free of the ordinary income, assets and maintenance income tests. This principle is of longstanding, and its history was set out by the French J (as he then was) in Secretary, Department of Social Security v Rurak (1990) 26 FCR 1 at 7-11. It was pointed out in that decision that an underlying policy of social security law since 1947 has been that the permanently blind should not be subject to a means test on their basic pensions.
On 8 March 2014 the Applicant was injured in a motor vehicle accident and as a consequence received, on 19 May 2016, $300,000 plus standard costs and outlays in settlement of his claim – Exhibit 1 T5 pp.61-64.
On 1 June 2016 Centrelink communicated with the Applicant about the consequences of his lump sum compensation payment on his income support payments. Centrelink advised as follows (Exhibit 1 T6 p.65):
“We have been advised that you are entitled to receive a lump sum compensation payment of $312,399.61. As a result, we have calculated that you have a preclusion period that starts on 8 March 2014 and will end on 21 April 2017. During this period you are not able to receive income support from us. You have already received $36,548.06 in this period and it must be repaid.”
On the same day the Applicant was advised by Centrelink that his DSP had been cancelled and he would not get a pension until after 21 April 2017 – Exhibit 1 T7 p.68.
The decision to cancel the Applicant’s DSP was reviewed by an authorised review officer (ARO), whose reasons are set out below (pp.97 – 98):
“You have lodged an appeal against the preclusion period on the grounds that you are in financial hardship…
In the papers you have supplied to the department in support of your appeal, you have advised of the following disbursement of your compensation settlement money:
Compensation settlement     $300,000.00
Added Costs:  $ 50,636.98
Total:  $350,636.98
Centrelink refund:                  $ 36,548.06
Medicare  $ 1,310.12
Legal Costs:  $ 87,997.03
Net compensation received: $224,781.77
You have also advised of how some of this compensation settlement money has been spent. The details you provided are as follows:
Westpac Credit Card:            $ 12,046.90
ANZ credit card:  $ 20,870.33
$8000 ANZ credit card:         $     295.00
Personal loan  $ 30,000.00
Unity Water:  $ 3,983.80
School fees:  $ 12,000.00
AMX credit card   $ 2,800.00
Total   $81,996.03
Net compensation received: $224,781.77
Less expenditure:                  $ 81,996.03
  $142,785.74
At the time of lodging these financial details, you had approximately 44 weeks remaining on your preclusion period. This means you had access to approximately $3,245.13 per week for the remainder of the preclusion period.
For a customer to be considered as being in financial hardship, their circumstances need to be severe and worse than the majority of Centrelink recipients. Based on the above calculations, it cannot be said that you are in severe financial hardship.”
The Social Services and Child Support Division (AAT 1) of this Tribunal affirmed, on 7 November 2016, the decision to impose a preclusion period on the Applicant ending on 21 April 2017.
Member White was informed by the Applicant that he needed about $113,000 per annum to maintain his lifestyle, and while he owned a house which was worth approximately $1 million, he had a mortgage of $315,000 which had to be repaid. At the time of the AAT 1 hearing the Applicant retained approximately $142,785.74 of his compensation payout. Member White concluded as follows – Exhibit 1 T3 p.11:
“27 Mr Massoud is a homeowner. He has over $1,000,000 in equity in his property and cash at hand. It is true that the balance of what he maintains from his award would not be sufficient to pay out his current mortgage of about $315,000. However, Mr Massoud is not in financial hardship, because of the equity he has in his property and the financial options that gives him. Also, he cannot rely on his own excessive expenditures to set up a case for special circumstances. Ultimately, his ownership of real estate taints his claim for special circumstances overall and for financial hardship in particular.”
On 21 December 2016 the Applicant sought a second review by the Tribunal – Exhibit 1 T2 p.4.
A hearing was convened on 13 July 2017 in Brisbane. The Applicant appeared in person, was self-represented and called no witnesses. The Secretary, Department of Social Services (the Respondent) was represented by Mr Hawker of Sparke Helmore Lawyers. Mr Hawker also called no witnesses.
LEGISLATION AND CASE LAW
The Act contains provisions dealing both where a person, the recipient of social security payments, receives a lump sum compensation payment and where a person who has received a compensation payment subsequently applies for social security.
The Act is focused either on recovery of social security paid, or preventing the payment of social security during the preclusion period. The principle underpinning these provisions is that “double dipping” should not be allowed, and that a person should not simultaneously obtain the benefit of a compensation payment and also receive the benefit of a social security pension or allowance.
The Commonwealth Parliament enacted legislation with the specific objective of ensuring that if a person receives a compensation payment for economic loss, the recipient should draw on those funds for a reasonable period before again benefitting from social security payments.
This overriding objective was explained by Deputy President Burns in Secretary, Department of Social Security and Winterbotham [1990] AATA 808 as follows:
“This particular piece of legislation….was aimed specifically at preventing those people receiving compensation for loss of income because of incapacity for work, from being able also to receive benefit from the public purse…Primary responsibility for the payment of such compensation lies at the feet of those responsible for the compensable injury. Once that responsibility has been met, by way of a settlement sum agreed to by both parties, it is inequitable for the recipient to seek supplementary funds from the taxpayer.”
Subsection 1169(1) of the Act provides that if a person receives a “compensation affected payment” and also receives a lump sum compensation payment, then the compensation affected payment is not payable to the person during the lump sum preclusion period.
The term “compensation affected payment” is defined in s 17(1) of the Act to mean one of a number of enumerated pensions and allowances. Paragraph 17(1)(a) of the Act provides that the DSP is a compensation affected payment.
The definition of “compensation affected payment” so far as it applies to the DSP does not distinguish between the general DSP and that applying to blind persons. In short, there is no basis for contending that the “double dipping” regime is restricted to the general class of DSP recipients. Whilst blind persons have the benefit of not being subject to a means test, that benefit does not extend to exempting such persons from the compensation affected payment regime: Morgan and Secretary, Department of Family and Community Services (1999) 56 ALD 579 at 580-581.
Subsection 17(2) of the Act contains an expansive definition of “compensation”, including a payment of damages, a payment under a scheme of insurance or compensation under a State law, a payment in settlement of a claim for damages under such a scheme or any other compensation or damages payment.
It is not contested that the Applicant received compensation payments as defined by s 17(2) of the Act.
The compensation part of a lump sum payment is defined by s 17(3) to be 50% of the payment if it is made in settlement of a claim related, inter alia, to an injury. The 50% rule was designed to avoid manipulation of the system by obscuring the economic loss component of the payout. Parliament therefore deemed 50% to be in respect of economic loss - Secretary, Department of Social Security v Banks (1990) 20 ALD 19 at 24 per von Doussa J.
The calculation of the lump sum compensation preclusion period is made pursuant to s 1170 of the Act. Subsection (4) provides that the number of weeks in the lump sum preclusion period is calculated by using the formula:
Compensation part of the lump sum
Income cut out amount
If the number calculated by using the above formula is not a whole number, it is to be rounded down to the nearest whole number- s 1170(5).
In this matter Centrelink applied the above formula and calculated a preclusion period of 163 weeks, running from 8 March 2014 until 21 April 2017.
The Applicant raises no objective ground for challenging the soundness of the calculation of the compensation preclusion period by Centrelink.
I therefore find that the Applicant was subject to a compensation preclusion period, and that the length of that period as calculated by Centrelink was correct.
It should be noted that the preclusion period has concluded. The fact that it has ended is an irrelevant consideration, and the Tribunal would be in error if it factored in this fact in reaching its determination – Haidar v Secretary, Department of Social Security [1998] FCA 994; 52 ALD 255.
The key issue to be addressed flows from the operation of s 1184K of the Act, which vests in the Respondent the discretion to treat the whole or part of a lump sum compensation payment as not having been made or not liable to be made if the Respondent thinks it appropriate to do so in the special circumstances of the case.
In short the matter to be determined by the Tribunal is whether the evidence discloses “special circumstances” which would allow the disregarding of part or all of the lump sum payout, thereby shortening the preclusion period.
“Special circumstances” is not defined in the Act, but it has generally been accepted that “special circumstances” are “unusual, uncommon or exceptional” or “markedly different from the usual run of cases” per Toohey J, Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3. The discretionary nature of the “special circumstances” provision requires a consideration of the particular facts and merits of each case. Certainly, in undertaking this exercise the Tribunal is required to consider the scope and purpose of the compensation preclusion provisions so as to avoid making determinations that would frustrate the legislative intent – Re Ivovic (1981) 2 ALN 95.
However, Branson J cautioned against overstating the test by emphasising “exceptional” – Ryde v Secretary, Department of Family and Community Services [2005] FCA 866. Her Honour said (at [26]):
“the statutory requirement for ‘special circumstances’ discloses an intention to proscribe waiver in ordinary cases. The hardship or unfairness…must be understood to be hardship or unfairness sufficient to justify departure from the general rule in the particular case.”
This approach was also endorsed more recently by Besanko J in Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; 100 ALD 9 at [33]:
“…the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.”
Although these cases concern different provisions in the Act their approach to what constitutes special circumstances applies with equal force to those words in s 1184K – Secretary, Department of Social Security v Hulls (1991) 22 ALD 570 at 580-581 per O’Loughlin J.
Finally, reference can be made to the decision of French J (as he then was) in Secretary, Department of Employment and Workplace Relations v Homewood [2006] FCA 779; 91 ALD 103. His Honour outlined how the Tribunal should address the question whether special circumstances in the context of s 1184K exist (at [34]):
“The decision before the Tribunal in this case arose under s 1184K of the Act. It was necessary to the exercise of the power conferred by that section that the Tribunal identified ‘special circumstances of the case’ in which it thought it ‘appropriate’ to treat the whole or part of the relevant compensation payment as not having been made. In giving its reasons for a decision under that section to treat the whole or part of a compensation payment as not being made it would be expected, consistently with s 43, that the Tribunal would:
1Identify the circumstances of the case which it found to be ‘special’ and the reasons for which it arrived at that finding.
2Explain why, in the special circumstances so found, it thought it appropriate to treat the whole or part of the compensation payment as not having been made.
3Explain why it selected the particular quantum (ie the whole or part) of the compensation payment as not having been made.”
CONSIDERATION
Are there any special circumstances?
The Applicant was born in 1952, and, at the date of the hearing, was 65 years of age – Exhibit 1 T9 p. 74.
The Applicant sustained an injury to his right eye when aged 15 and is now blind on that side – Exhibit 4 p. 9. The Applicant has partial vision in his left eye, however he was the victim of an unprovoked assault by a drug addicted male person on 13 January 2010. As a consequence the retina in his left eye was detached. His left eye has continued to experience problems, and he informed the Tribunal that he may totally lose his eyesight in the not too distant future - Exhibit 1 T8 p. 70, Exhibit 5.
The Applicant has been involved in multiple motor vehicle accidents. A partial medical report of Dr David Morgan (Exhibit 4) lists three relatively recent ones: 2003, 2005 and 2015 (p.9). Dr Morgan notes that the Applicant suffered spinal injuries in both the 2003 and 2005 accidents.
The Applicant states that he has been diagnosed with incomplete paraplegia twice in his life, but on both occasions was subsequently able to walk. However, he is totally deaf in his left ear and his balance has been impacted. As a result of these ailments he suffers from panic attacks and has, he claims, a history of severe depression – Exhibit 1 T8 p.70, Exhibit 5.
Finally, the Applicant was involved in a catastrophic motor vehicle accident on 8 March 2014. He outlined in a statement the nature and consequences of that accident – Exhibit 1 T8 p.70:
“On the 8^th March 2014 My passion my health and my income were taken away from me. My son and I were Assaulted. A man who was Drunk, 5 times over the legal limit to be exact. Smashed into us at high speed. It was 7.45 am and he was swigging on a bottle of Jack Daniels and driving. As a result he lost his license and was jailed for two years. My son received a temporary Brain injury and a broken collarbone. I was in the impact zone. All my ribs were shattered. My right lung punctured, both collar bones broken. My heart and liver were very badly bruised. My right arm was hanging off at the elbow as an open fracture requiring screws and plates. Both my legs were broken as well as my right ankle. All the bones in my right foot were shattered.”
The Applicant lives at Noosa Heads and his occupation prior to this accident was a sand sculptor – Exhibit 1 T 11 p.101. Evidence was presented at the hearing that the Applicant excelled in the art of sand sculpting, and won a world championship in 2003 in Denmark. Approximately 20 years ago the Applicant formed a company “Sand in your eyes”, and has employed, on a contract basis, numerous sand sculpting artists. Clients of his company have included QANTAS, the Brisbane City Council, City of Melbourne, Tourism Australia, Tourism Queensland, Lexmark, Crown Casino, Emirates, Jupiter’s Casino and Hyatt Regency. The evidence before the Tribunal suggests that the business was a very successful one, and both the business in general, and the Applicant in particular, were well known and regarded nationally and internationally.
The Applicant agreed, when giving evidence, that “Sand in your eyes” was a successful business, that the website for the business was still operational and that the business was ongoing.
In his Statement of Financial Circumstances dated 7 November 2016, the Applicant lists his gross pay as $560 per week with an additional $220 from rental income – Exhibit 1 T11 p.102. In the assets section of this document the Applicant valued his home at Noosa Heads at $900,000 with a mortgage of approximately $300,000. Three bank accounts are listed with respective balances of $3336, $217,237 and $278. The Applicant also states that he owns a boat valued $10,000 – Exhibit 1 T11 p.104.
The Applicant, when giving evidence, said that his home had four bedrooms and two boarders were living with him and paying rent. The Applicant has owned his home since approximately 2002.
In terms of expenses, the Applicant stated in this document that he needed $2179 per week “to break even” and required an income of $113,308 a year “to survive” – Exhibit 1 T11 p.103.

The most significant expenses incurred by the Applicant were mortgage repayments of $2302 per month and school fees for one of children at a private institution of $10,396 per annum – Exhibit 1 T9 p.94.
The Applicant also provided further information to the Tribunal that from the compensation moneys he received he has numerous other liabilities, including a $50,000 loan from his ex-wife, a supplementary loan of $58,993 and an outstanding loan debt to another friend of $2700. The Applicant stated- Exhibit 1 T11 p.108:
“So if I pay these I will have $28,091.96 left and I will owe $304,833.24 on my home.”
There was a degree of ambiguity about the extent of the Applicant’s liabilities and assets and the manner and extent of the disposition of the compensation payments.
However, if one strips away the layers of ambiguity a few key and undisputed facts emerge.
The first is that the Applicant retains significant equity in his home. The value of this asset is not absolutely certain, but during the hearing the Applicant agreed that on today’s property market it was worth somewhere between $900,000 and $1,200,000. It is also clear that the Applicant is yet to repay approximately $300,000 on a mortgage held by ANZ Bank over the property. Accordingly, the Applicant’s net equity in his home is somewhere between $600,000 and $900,000.
The second is that despite the Applicant stating that he has various family repayment obligations, he still retains a considerable amount of his compensation payout. He informed AAT 1 that as at 16 July 2016 he had $142,785.74 remaining of his payout, and at the hearing of this matter he informed the Tribunal that he retained approximately $100,000 of the payout.
It is also undisputed that the Applicant is a sick man and the injuries he suffered in 2014 have had a devastating physical and emotional impact. Perhaps the most significant impact is that the Applicant finds it difficult to engage in the passion of his life, sand sculpting. The Tribunal was presented with a brochure containing images of some of the Applicant’s sculpting – Exhibit 8. The Applicant is an artist in his field, and clearly is one of the world’s greatest exponents of this unique art form. To be injured in a manner which inhibits him engaging in this field of enterprise is not only devastating for him but deprives Australia of a unique and extraordinarily talented artist.
Financial hardship
There have been a number of Federal Court and Tribunal determinations which have dealt with the many factors that can be taken into account when exercising the discretion in relation to special circumstances. Clearly, any attempt to enumerate such factors can only be indicative, at best. Whilst a checklist of factors based on previous decisions and determinations is helpful as a guide, the discretion vested in the Tribunal is broad and not subject to statutory limitation. Consequently, any attempt to arbitrarily limit or restrain the exercise of this discretion would not only be futile but legally impermissible.
The many cases and determinations do not require the Tribunal to find that special circumstances exist simply because an applicant is in straitened financial circumstances. Whilst it is open for a Tribunal member to find that special circumstances exist in such a circumstance, there is no obligation to do so. The Tribunal is required to consider all matters and straitened financial circumstances is one factor, albeit an important one, but certainly not the sole one. As Sheppard J said in Director General of Social Services v Hales (1983) 47 ALR 281 at 321:
“The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common: they will be impecunious and in straitened circumstances. Very often their stories will be quite tragic.”
Other factors which may outweigh straitened financial circumstances include the consideration of the general administration of the social security system (Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114) and whether an applicant’s disposition of their compensation payment has been reckless (Davis and Secretary, Department of Family and Community Services [1999] AATA 84).
A matter that weighs heavily against the Applicant claiming financial hardship is the fact that he has substantial equity in his home. The Respondent drew the Tribunal’s attention to the determination of Senior Member McMahon in Hajar and Secretary, Department of Social Security (1988) 16 ALD 716. The applicant in that matter was the joint owner with his estranged wife of a house with a value, then, of $175,000. Senior Member McMahon made the following observations (719-720):
“(45) On the question of hardship, I find it impossible to ignore the existence of the house, which is valued at approximately $175,000 and which is free of encumbrances. It is true that it may be impractical for the applicant to borrow money on the house as title is in the joint names of himself and his estranged wife and he has no apparent source of income which would be available to service such a loan. There is, however, no reason whatsoever why proceedings could not be taken in the Family Court for a property settlement. In view of the fact that he is intending to commence divorce proceedings after the 12-month separation period is over, such proceedings for property settlement should have been taken a long time ago. He gave evidence that he wished to sell the house. There is reason to believe that such a goal could be achieved, if appropriate proceedings were taken. It is inequitable for the applicant to claim financial hardship when he owns such a valuable asset and does nothing to realise on it, particularly, when the lack of encumbrances has been brought about by the diversion of some of the compensation moneys that led to the present application…”
In one sense Hajar is distinguishable from the current matter, but not in a way beneficial to the Applicant. Hajar is one of the many, and not consistent, Tribunal determinations on whether special circumstances exist where an applicant has expended some or all of the compensation payment on the purchase of a house, but the operation of the preclusion period may force the sale of the property.
It is not relevant for the disposition of this matter to delve into the Tribunal jurisprudence on this aspect of special circumstances. What is clear, however, from that jurisprudence, is that where an applicant has expended some or all of the compensation payout on a property whose worth is above average, then this raises a presumption against the finding of special circumstances.
In this matter, no part of the compensation payment has been expended on the purchase of a family home. Nor is there is any evidence that any part of the compensation payment has been expended on extinguishing any of the debt on the family home.
The Applicant owns a very valuable asset, and his equity in this valuable asset (his home) is far in excess of the outstanding mortgage amount. It is inconceivable in these circumstances for the Applicant to claim that he is in any financial hardship.
This conclusion is further buttressed by the fact that the Applicant received $224,781.77 net from his compensation payout, has substantial sums of money in his bank accounts, receives $220 per week rent money from boarders, receives $560 per week gross from other sources and owns a car and a boat. In addition, the Applicant still has an interest in his sand sculpting business.
On whatever basis, and considered from whatever perspective, it cannot be said that the Applicant’s position is worse than the average recipient of social security benefits. On the contrary, if not for the unique blind DSP provisions, the Applicant would never have been the recipient of social security in the first place.
Conduct and health of the Applicant
There have been a number of Tribunal decisions that have dealt with persons who have squandered their compensation payments on drugs, alcohol or gambling. Where evidence is presented to the Tribunal that an applicant has been grossly irresponsible, and such irresponsibility does not of itself arise from a psychiatric condition or an intellectual incapacity to manage money, then this militates against a finding of special circumstances: Davis and Secretary, Department of Family and Community Services [1999] AATA 84 and Gartside and Secretary, Department of Social Services [2017] AATA 45.
There is no evidence before the Tribunal that the Applicant has acted in a profligate or irresponsible manner in the use of his compensation payout.
Conversely, as the Respondent submits (SSIFC para 4.37), there is little probative or corroborative evidence before the Tribunal as to how the compensation moneys have been expended. The Tribunal’s attention was drawn to the following observations made by Senior Member McDermott (as he then was) in Taylor and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2013] AATA 161 at [16]:
“In considering the issue of financial hardship it becomes necessary to consider the nature of expenditure of settlement funds…The applicant states that he has no money in the bank but has not provided any documentary evidence to show how settlement funds have been applied. I would be reluctant to exercise the discretion under s 1184K of the Act in circumstances where there is no documentary evidence of how settlement funds have been applied.”
The evidence before the Tribunal as to the expenditure of much of the Applicant’s compensation payout is based on his own account. The bulk of the disposition of the compensation payout appears to be on repaying personal debts, much of which is undocumented.
The Tribunal has before in the “T documents” (Exhibit 1), extracts from various credit card statements, insurance policies and a Statement from the Noosa Christian College – Exhibit 1 T9 pp. 84-94. However, there is no documentation outlining the Applicant’s financial dealings and debts with third parties.
The absence of documentation necessarily requires the Tribunal to make an assessment of the credibility of an applicant’s evidence. Moreover, the absence of documentation to substantiate alleged expenditure, weighs against an applicant.
In this matter the absence of documentary evidence to support the Applicant’s claims about the expenditure of the compensation payout for repaying large personal loans, weighs against exercising the special circumstances discretion.
A further factor that has been considered in various Tribunal determinations is ill health. Whilst ill health is, of itself, not necessarily determinative it can be an important consideration. The width of the discretion is broad and “extends to all the circumstances of the case” including ill health – Secretary, Department of Social Security v Thompson (1994) 53 FCR 580 at 586 per Einfeld J.
The Applicant is in bad health, but in most cases involving the preclusion period that would be expected. The fact that an applicant has been injured and received a compensation payout usually results in that person being in ill health during the preclusion period or immediately thereafter. The various Tribunal determinations focus on the consequences of that ill health in making a determination as to special circumstances. In short ill health is the starting point of the exercise, not the determining factor. Further, it is usually the case when determining that ill health is a special circumstance, the ill health being experienced by an applicant is more severe than the majority of DSP recipients.
Two Tribunal determinations are of relevance in this context. The first is Secretary, Department of Social Security and Galea [1993] AATA 326; 35 ALD 749. The applicant was a reformed heroin user who had settled down and had a partner, family and a home. Both the applicant and one of the children were sick, and the evidence before the Tribunal was that if the preclusion period was enforced the family home would have to be sold with deleterious impacts on both the applicant and the family. The Tribunal found there were special circumstances.
The second Tribunal determination is Secretary, Department of Social Security and Turner [1993] AATA 160. The applicant in this matter had purchased a home from the proceeds of his payout, but would be forced to sell his home with potentially disastrous health consequences both for him and his family. Again, the Tribunal found special circumstances.
In this matter the application of the preclusion period has had no impact on the ownership of the Applicant’s home, as he still owns it and the preclusion period has concluded. Moreover, there is no evidence before the Tribunal that the application of the preclusion period caused any deleterious health impacts for the Applicant.
Clearly the Applicant was in very bad health during the operation of the preclusion period, and remains in a state of ill health. It is also obvious that the operation of the preclusion period had a negative impact on the Applicant’s financial position, both in terms of the quantum of the net payout, and also in terms of ceasing any social security payments during the preclusion period.
However, there is no evidence that the operation of the preclusion period forced the Applicant to sell needed assets, impacted on his access to needed medical treatment or in any way, caused him to take a course of action that was deleterious to his overall immediate or long term well-being. Consequently, the Applicant’s ill health is not a factor that can be considered in the favourable exercise of the special circumstances discretion.
The Applicant’s Blindness
This matter, however, raises a very special consideration, namely that the Applicant was receiving a DSP which was not subject to the income or assets tests. In short, the usual application of the principle of preventing “double dipping” is already compromised by the eligibility criteria for the granting of the DSP to blind persons.
A number of Tribunal determinations have established that the mere fact that a person has been granted a blind DSP is not, of itself, a special circumstance. However, it is a relevant matter that can and should be taken into account when exercising the discretion. The key issue is how the discretion should be exercised in such circumstances.
Reference can be made, firstly, to the observation of Senior Member Taylor in Topp and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 99 at [111] – [113]:
“111. Despite the special considerations that determine a blind person’s entitlement to DSP, and the rate at which it is paid, DSP is nevertheless a ‘compensation affected payment’ for the purpose of Part 3.14 of the same Act. That circumstance is a general indication that permanent blindness, despite its otherwise special social security entitlements, may not constitute a ‘special circumstance’ sufficient to justify the exercise of the s 1184K discretion. Where the disentitlement provisions of ss 1169 and 1170 apply to a blind DSP recipient – because of their receipt of lump sum ‘compensation’ – the 1184K discretion necessarily arises for determination against the background of that contrast between the ordinary case where the DSP rate may not be affected by other income, and the statutory requirement to take compensation payments into account. This is particularly the case where the person’s blindness is actually the result of the compensated injury – as was the case in both Parezanovic and Department of Social Security [1993] AATA 174 and Morgan and Department of Family and Community Services 56 ALD 579. Even people who have pre-existing permanent blindness may be faced with a preclusion period following receipt of unrelated compensation: see Lazarus v Secretary, Department of Family and Community Services [2003] AATA 120.
112 On the other hand, both the fact of a pre-injury disability and a person’s blindness remain relevant considerations…
113 Permanent blindness may have a particular relevance because of its impact on the particular person. Blindness has an inherent capacity to isolate – because it can significantly impede mobility, social interaction and the mundane imperatives of daily life. Depending on the extent of the particular person’s blindness, overcoming those difficulties can impose financial demands, just to enable the blind person to maintain an acceptable quality of life: see Hanrahan (2007) 47 AAR 1 especially at paras [21]-[25], [29]. If the blindness either pre-exists, or is causally unrelated to, the compensable injury, those additional costs will not be reflected in the amount of any compensation payments, and must be met from other sources. And if such a blind DSP recipient has no other income or assets their blindness may in conjunction with other considerations, justify a finding that ‘special circumstances’ exist. This is so notwithstanding that (i) the same circumstances might not do so in the case of sighted person and (ii) that significant financial hardship is a foreseeable consequence of Part 3.14s ordinary application to persons who receive DSP payments: Hanrahan (2007) 47 AAR 1 at paras [32] and [43]-[47].”
Senior Member Taylor refers to the Tribunal determination in Hanrahan v Secretary, Department of Employment and Workplace Relations (2007) 47 AAR 1. It is instructive to look at the factual matrix in that matter. The applicant in that case was involved in a motor vehicle accident that resulted in compensation payments and subsequently he contracted a disease causing progressive blindness. He was granted the DSP which was later terminated. Senior Member Isenberg made the following pertinent comments (at 9-10):
“45…Mr Hanrahan apparently relied on Centrelink’s advice that this pension would be unaffected by re-instatement of his compensation payments. Mr Hanrahan is also disadvantaged compared to other recipients of the blind pension who are capable of work in that because he has been incapacitated for work, he does not receive the DSP. Mr Hanrahan’s financial circumstances have significantly deteriorated in recent times. Even Centrelink conceded things were ‘not easy’. This is an understatement. Put bluntly, the support and love that Mrs Hanrahan provides comes at a price: the family’s financial situation is burdened by debt and unproductive legal expenses. Added to this is the trauma associated with the withholding of the children by Mrs Hanrahan’s ex-husband. Another result of these domestic circumstances is the fluctuating entitlement to child support, FTB and compensation. On top of all this is Mr Hanrahan’s progressive blindness. He knows that relatively soon he will be able to see nothing at all, just as his siblings are affected. He is apparently unable to access support from the Royal Blind Society. Even a guide dog will not be able to assist him…
47 I find that, considering Mr Hanrahan’s circumstances in their totality, his circumstances are ‘special’ within the meaning of s 1184K of the Act. As such, it is appropriate to exercise the discretion under s 1184K to disregard his compensation payments when assessing his pension rate. The breadth of Mr Hanrahan’s difficult situation is striking, although he is strident in his attempts to maintain his independence. Because of his exceptional circumstances, including the actions of Centrelink in ceasing his DSP payments which have led to an unfair result, the serious financial strains on him and his family, his worsening eye condition, the limited support available from the Royal Blind Society, his inability to work, despite his desire to do so, and the sacrifices, financial and otherwise, that his wife has had to make because of his situation, I have decided that the whole of Mr Hanrahan’s compensation payments are to be treated as not having been made.”
The Tribunal in Hanrahan found special circumstances existed having regard to the totality of the enumerated circumstances. As was pointed out, some of those circumstances were truly exceptional, including the insurer’s error in terminating compensation payments and that without the DSP he would not be able to access visual aids and that his living expenses exceeded his income. The totality of the evidence before the Tribunal was that the actions of Centrelink were considered unfair, that the applicant and his family were in desperate financial circumstances and he was unable to obtain support from the Royal Blind Society.

In Topp the applicant was a young man (32 years old) with no significant assets who was unable to earn an income and suffered from profound disabilities. Senior Member Taylor described the applicant’s situation as follows (at [8])
“In addition to his permanent blindness, he has other significant disabilities. His aural comprehension is practically nil and he is unsuited to receive a cochlear implant. Deprived of both sight and hearing, and unable to read Braille, his verbal comprehension relies on interpreted tactile finger spelling. Fortunately his oral expression is functional, but dysarthric.”
In this matter the Applicant has not been treated unfairly in the settlement of his compensation claim or subsequently by Centrelink. He is not in the terrible financial circumstances of Mr Hanrahan and there is no suggestion that he is unable to access appropriate medical assistance.
Whilst blindness of itself is not a special circumstance, as Topp and Hanrahan highlight, sight impaired persons are at a unique disadvantage, and this disadvantage is a factor that the Tribunal has to appropriately weigh when considering the operation of s 1184K. When blindness, whether partial or total, combined with other factors, results in a situation of manifest hardship for an applicant, then, prima facie, there is scope for finding special circumstances exist.
Here there is no manifest unfairness or hardship. Certainly, the evidence suggests that the Applicant is progressively going blind, but he is in a healthy financial situation, is continuing to receive cash injections from rental payments and still takes an interest in his sand sculpting business. Further, the preclusion period ended on 27 April 2017, and on 2 June 2017 the Applicant lodged a further claim for the DSP – SSIFC para 4.55.
The hardship and unfairness that was manifest from the evidence submitted in Topp and Hanrahan is absent in this matter.
CONCLUSION
The Appellant has been the victim of a number of disabling incidents during his life. A reading of all of the material discloses that the Applicant has suffered from many unfortunate events, which cumulatively have had a devastating impact on him both physically and emotionally.
Despite this sad history, the Applicant has many natural talents, and he has used those talents professionally. He is, as previously stated, an artist in the unusual enterprise of sand sculpting. His sculpting is of international renown and he ranks as one of the greatest exponents of this art in the world. In short, the Applicant despite his physical ailments, including partial blindness and partial deafness, has excelled, and for this he deserves great credit and appropriate recognition.
However, the issue to be determined by the Tribunal is not an assessment of the Applicant’s significant contributions to Australian society despite his physical ailments, but simply whether special circumstances can be found to exist such as to enliven the discretion granted by s 1184K of the Act.
The evidence does not support the exercise of this discretion for the following reasons:
(a)the Applicant has substantial capital assets, including his home which is valued at least $ 1 million, and after factoring in the secured bank loan, the Applicant has an equity of somewhere between $600,000 and $900,000;
(b)the Applicant is not in straitened financial circumstances. He still receives rental payments as well as maintaining an interest in his sand sculpting business;
(c)there is no evidence of any personal hardship experienced by the Applicant during the preclusion period. In particular there is no evidence that the Applicant was unable to access medical treatment or that he was at risk of losing his property;
(d)there is no evidence of any unfairness in the application of the preclusion period by Centrelink;
(e)the Applicant, though suffering from multiple ailments, is still able to function and lead a relatively normal life;
(f)there is no evidence, vis-a-vis other persons who receive the blind DSP and are subject to the preclusion period, that the Applicant’s circumstances are exceptional, unusual or uncommon. Indeed, the converse could be said to the case, that insofar as his circumstances are unusual, the quality of unusualness lies in his relative prosperity and good lifestyle.
DECISION
The decision under review is affirmed.

I certify that the preceding 90 (ninety) paragraphs are a true copy of the reasons for the decision herein of Senior Member J Sosso

.........................[Sgd]...............................................
Associate
Dated: 24 August 2017

Date of hearing: 13 July 2017

Applicant: In person

Solicitors for the Respondent: Sparke Helmore Lawyers

Date of hearing:	13 July 2017
Applicant:	In person
Solicitors for the Respondent:	Sparke Helmore Lawyers