Mathews and Secretary, Department of Family and Community Service S
[2003] AATA 327
•9 April 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 327
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/625
GENERAL ADMINISTRATIVE DIVISION ) Re RUSSELL MATHEWS Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr O Rinaudo Date9 April 2003
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
(Sgd) O Rinaudo
Member
CATCHWORDS
SOCIAL SECURITY – benefits and entitlements – lump sum compensation payment – preclusion period – whether lump sum preclusion period properly calculated – whether there are special circumstances that warrant treating part of all of the compensation monies as having not been made
Social Security Act 1991 s 1184
Secretary, Department of Social Security v a’Beckett (1990) 26 FCR 349
Secretary, Department of Social Security v Banks (1990) 23 FCR 416
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Re Beadle and Director-General of Social Security (1984) 6 ALD 1Haidar v Secretary, Department of Social Security (1998) 28 AAR 288
REASONS FOR DECISION
9 April 2003 Mr O Rinaudo Decision Under Review
1. Mr Mathews appeals against a Centrelink decision made on 3 May 2002 to:
(i)preclude Mr Mathews from receiving compensation affected payments for the period 11 February 1988 to 5 January 1999; and
(ii) recover Centrelink payments of $2,587.76 as a compensation charge.
This decision was reviewed by an Authorised Review Officer on 9 May 2002 and affirmed and was further affirmed by the Social Security Appeals Tribunal on 25 June 2002.
Summary of the Facts
2. Mr Mathews was injured in an accident on 11 February 1998. He made a claim for compensation. This claim was settled on 18 March 2002 when Mr Mathews received a lump sum compensation payment of $55,000 inclusive of all costs and outlays.
3. In accordance with the appropriate legislation, Centrelink calculated a preclusion period, based on the quantum of the lump sum payment, from 11 February 1998 to 5 January 1999. In addition Centrelink raised a charge of $2,587.76 representing payments made to Mr Mathews during the preclusion period.
4. In essence Mr Mathews is appealing the amount of the charge made by Centrelink and also the length of the preclusion period, because he says that it was incorrect to make the calculation based on the total of the lump sum compensation payment of $55,000. Mr Mathews says that from this amount should have been deducted his legal fees and expenses and then the calculation made.
5. In any event Mr Mathews claims that because of special circumstances the preclusion period should be reduced.
Evidence
6. Mr Mathews gave evidence at the hearing.
7. In addition to the evidence of Mr Mathews, which will be shortly summarised, there were a number of exhibits tendered in evidence at the hearing. In addition to the T documents which were marked as Exhibit 1, the following exhibits were tendered:
Exhibit 2 Email and applicant’s budget
Exhibit 3 Letter dated 20 August 2002 and legal costs
Exhibit 4 Report of Dr John M Sutherland dated 21 August 1969
Exhibit 5 Report of Dr Richards dated 21 November 1968
Exhibit 6 Report of Dr John Sutherland dated 5 April 1968
Exhibit 7 Royal Brisbane Hospital discharge summary
Exhibit 8 Report of Dr P Patrikios dated 8 February 1996
Exhibit 9 Report of Dr P Patrikios dated 18 February 1996
Exhibit 10 Report of Dr J Bennett dated 31 March 1998
Exhibit 11 Report of Dr Laura Duggan dated 31 July 1997
Exhibit 12 Report of Dr T Hooper dated 15 May 1997
Exhibit 13 Report of Dr B Hazell dated 8 September 1998
Exhibit 14 Letter dated 18 August 1992 from Denis Brosnan
Exhibit 15 UQ Note from Denis Brosnan dated 12 January 1993
Exhibit 16 UQ letter to Professor Walker dated 29 October 1993
Exhibit 17 Applicant’s Academic Record
Exhibit 18 Report of Dr B Hazell dated 21 February 2000
Exhibit 19 Report of Dr B Hazell dated 30 July 1999
Exhibit 20 Affidavit John Joseph Armstrong
8. Mr Mathews told the Tribunal that the fact that he still had $40,000 of the money from his lump sum settlement did not mean that he was not financially destitute. He noted for the Tribunal’s benefit that he had already been bankrupt and was discharged. He stated that he wanted to spend the money on purchasing his own house. He said that he was paying rent at the moment which had recently gone up. He is currently in receipt of a Disability Support Pension.
9. Mr Mathews gave a history of having fallen off a horse some 35 years ago when he was 17 which caused brain stem damage. Mr Mathews referred to a number of the exhibits to support his medical condition and also to show that he has undertaken and passed a number of University courses and failed some others.
10. Mr Mathews said the accident occurred some five days after finishing his senior year where he obtained a very high pass mark. He said that he was brilliant having an IQ of 145. He said that his injury had affected his whole life and that he should have been on the Disability Support Pension all of his life.
11. Mr Mathews stated that in 1985 he started a business in Townsville as a Tax Agent. He said that Telstra had made a mistake with the telephone lines which they had admitted to. This was associated with a “rotary drive” which was disconnected. He said that over a five month period he had lost $90,000. He said that he was paid some compensation but by then he had “gone broke”.
12. He then moved to Brisbane. He said that since then he has been the subject of bogus allegations of “sexual harassment”.. He also referred to other discrimination and a Federal Court matter which he had commenced relating to the study of law at Queensland University. He said that false allegations had been made against him with regard to alleged threatening behaviour. He stated that he had been denied natural justice and that the Federal Court proceedings had 1,000 pages of attachments which established this. He said that in 1992 he had been imprisoned for intimidating a witness.
13. He said that his underlying medical condition and the discrimination he had suffered affected his ability to progress in life. He stated that the fact that he was able to achieve 6s and 7s in his University courses did not mean that he was cured. He said that it did not mean that he can work and earn an income.
14. Mr Mathews acknowledged that he had received correspondence from Centrelink advising that a preclusion period would apply and that there would be a charge (T4 p33).
15. Mr Mathews also acknowledged that he had been advised by his solicitors that they were seeking details of the preclusion period and charge as per their letter (at T6 p37) and that he had received notification that the charge would be in the vicinity of $1,942.96 based on a lump sum settlement of $50,000. Mr Mathews also acknowledged a telephone conversation when he queried the estimate as set out in T19 p 59. He acknowledged that he was aware that the charge would be at least $1,900. He further acknowledged that this was based on a lump sum compensation payment figure of $45,000 not $55,000 (refer decision of SSAT T2 p13).
16. Mr Mathews stated that he still had the $40,000 invested with ING and that was earning interest. He produced a budget of his weekly living expenses which showed income being a fortnightly Disability Support Pension of $521.41 and expenses of some $500. However the expenses did not include any cost of food other than essentials such as milk, coffee, sugar. Mr Mathews noted that he was paying $310 to rent his house but was also paying a further $110 to rent a yard in which he kept ducks. He also noted that duck feed was costing him $13.33 per week. In the accompanying note Mr Mathews stated:
“I have ducks. They give me an excuse to request from food delis and restaurants discarded food for the ducks. That supplements their feed, but I still have to buy some laying pellets. With the current drought this has risen greatly.”
Issues for the Tribunal
17. The issue for the Tribunal in this case is to determine whether Centrelink has properly calculated the preclusion period and charge and whether on the evidence there are any special circumstances why the preclusion period should be reduced.
18. With regards to the first issue, Mr Mathews does not seriously contest that the preclusion period has not been properly calculated other than to say that his legal costs should have been deducted first. The law, with respect to this issue, is well settled. The Social Security Appeals Tribunal has dealt with this issue at length at paragraphs 26, 27 and 28 of the decision (see T2 p13, p14). The law is clear from the cases stated therein including Secretary, Department of Social Security v a’Beckett (1990) 26 FCR 349, Secretary, Department of Social Security v Banks (1990) 23 FCR 416 and, Secretary, Department of Social Security v Hulls (1991) 22 ALD 570. In particular the reference made to the decision of O’Loughlan J who agreed with reasons of von Doussa J in Secretary, Department of Social Security v a’Beckett (1990) 26 FCR 349 where Von Doussa J said:
“If any parts of the sum of $60,000 received by the respondent were a payment of the kind described in paragraph 152(2)(a) [of the Social Security Act 1947 (Commonwealth)], being a payment in whole or in part in respect of an incapacity for work, the component in that sum representing legal costs should properly be treated as ‘lump sum payment by way of compensation’.”
19. It follows that Centrelink was correct in calculating the preclusion period based on the $55,000 lump sum received by Mr Mathews inclusive of costs. Accordingly, the Tribunal is satisfied that the amount of the preclusion period and therefore the charge has been correctly calculated by Centrelink
20. The other issue which Mr Mathews raises is the issue of special circumstances. Section 1184(K) of the Act states:
“The Secretary may disregard some payment s1184(K) for the purposes of this Act, the Secretary may treat the whole or part of the 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.”
21. In Secretary, Department of Social Security v Smith (1991) 30 FCR 56, the Federal Court said that the compensation recovery mechanism scheme, under Part 3.14 of the Act, uses the concept of “special circumstances to remedy those particular cases where the application of the arbitrary rule would create injustice”. Special circumstances is an expression which has been considered by the Courts and Tribunals on a number of occasions. In particular, in considering the meaning of the term “special circumstances”, reference should be had to the decision of Re Beadle and Director General of Social Security (1984) 6 ALD 1 where Toohey J 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. This is not to say that the circumstances must be unique but they have a particular quality of unusualness that permits them to be described special.”
22. With respect to the discretion under section 1184, Hill J in the recent decision of Haidar v Secretary, Department of Social Security (1998) 28 AAR 288 (at 296):
“Section 1184…provided the means whereby the Secretary, or in the event ultimately of an appeal to the Administrative Appeals Tribunal, the Tribunal could alleviate the harshness of the statutory provision in an appropriate case but only where there were special circumstances. The question of what constitutes special circumstances has been the subject of a number of decisions of this Court. It suffices here to say no more than that something is required that would take the matter out of the usual ordinary cases; Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 per Kiefel J, Secretary, Department of Social Security v Ellis (1997) 46 ALD 1 at 5 per Carr J.”
23. This comment was made in the context that the purpose of the compensation recovery scheme in the Act is to avoid a claimant “double dipping”, that is, its purpose is to avoid the situation where an applicant receives both compensation benefits, which are in the nature of income through a lump sum payment, and social security benefits.
24. In this case the Tribunal is satisfied that there are no special circumstances which would cause the Tribunal to consider that any part of the compensation payment should be treated as not having been made or not liable to be made. It is not unusual for a social security recipient to have financial difficulties. The Tribunal is satisfied that Mr Mathews’ situation is not in any way “unusual, uncommon or exceptional” compared to other social security recipients.
25. In all the circumstances the Tribunal is satisfied that the respondent’s decision with respect to the amount of the charge and duration of the preclusion period, based on the total lump sum payment received by Mr Mathews, was correct.
26. Therefore, the Tribunal affirms the decision under review.
I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Mr O Rinaudo, Member
Signed: .......................................................................................
AssociateDate of Hearing 30 October 2002
Date of Decision 9 April 2003The Applicant Appeared in Person
For the Respondent Mr R McQuinlan, Advocate
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