McAliney and Secretary, Department of Family and Community Services
[2005] AATA 96
•1 February 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 96
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2004/410
GENERAL ADMINISTRATIVE DIVISION ) Re COLIN MCALINEY Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mrs Josephine Kelly, Senior Member Date1 February 2005
PlaceSydney
Decision The decision of the Social Security Appeals Tribunal dated 9 March 2004 is affirmed.
[sgd] Senior Member
CATCHWORDS
SOCIAL SECURITY – Parenting Payment (Single) – Applicant ineligible due to periodic workers compensation payments – whether special circumstances apply to allow discretionary relief – special circumstances do not apply – decision affirmed
LEGISLATION
Social Security Act 1991 sections 1173, 1184K
CASELAW
Social Security v Ellis (1997) 46 ALD 1
Secretary, Department of Social Security v Lee (1993) 30 ALD 250
Boscolo v Secretary DSS (1999) 53 ALD 277
Beadle v Director-General Social Security (1985) 60 ALR 225
Kirkbright v Secretary, Department of Family and Community Services (2000) 65 ALD 211
Groth & Department of Social Security (1995) 37 ALD 797
Groth v Department of Social Security (1995) 40 ALD 541
REASONS FOR DECISION
1 February 2005 Mrs Josephine Kelly, Senior Member BACKGROUND
1. Mr McAliney suffered a back injury in 1996 while working at Liddell Power Station. He has not worked since then and receives workers compensation payments. In approximately 1999, he developed a pituitary tumour. A doctor from Health Services Australia has assessed his permanent impairment as 20 points for his back and 10 points for the tumour, that is, a total of 30 points. That doctor stated that Mr McAliney is permanently unfit for all work. Since his back injury, Mr McAliney’s marriage has broken up. He owns a modest two bedroom villa in Port Macquarie and now has sole custody of his daughter, Cyndi, who turned 16 on 20 March 2004.
2. He applied for Parenting Payment Single (“the parenting benefit”) in July 2003 which was refused by the Respondent (“the Department”). He has applied to this Tribunal for a review of the decision of the Social Security Appeals Tribunal made on 9 March 2004 which affirmed the Department’s original decision.
3. Mr McAliney applied for the disability support pension in August 2004 after Cyndi turned 16. His application was rejected but there has been no decision by an authorised review officer or by the SSAT. I decided that I had no jurisdiction in relation to that matter, however, the Department has undertaken to apply to that application the findings I make in this case, subject to any appeal that it may lodge.
4. Mr McAliney did not qualify for a parenting payment because he receives workers compensation payments for his back injury. When s 1173 of the Social Security Act 1991 (“the Act”) is applied, that is, his compensation payments are deducted dollar for dollar from the maximum benefit available, he is not entitled to any benefit.
5. Cyndi has not applied for Youth Allowance and her own health care card in order that her father can claim the Family Tax Benefit (“FTB”) which gives him a health care card (“HCC”) which covers them both. That decision has resulted in some tensions between Cyndi and Mr McAliney. Mr McAliney claims this decision results in their being $64 worse off per fortnight. The Respondent disputes that that is the case.
THE ISSUE
6. Mr Gerogiannis, appearing for Mr McAliney, conceded that Centrelink has applied s 1173 correctly. He relies on s 1184K(1) which provides:
“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.”
7. He asks me to exercise the discretion conferred by that provision in a novel fashion. He asks that Mr McAliney’s compensation payments be discounted or disregarded to the extent that Mr McAliney would be entitled to a pension of $1 per fortnight. If that were done, Mr McAliney would be entitled to a pensioner concession card (“PCC”). Having such a card confers direct and indirect financial benefits. The direct benefits include cheaper medications. Indirect benefits include reduced local council rates, energy bills, water rates, motor vehicle registration and drivers license fees, telephone concessions, transport concessions, health concessions, home insurance and dog registration fees. Such benefits could amount to $1,000 per year. Those indirect benefits are not conferred by a health care card.
8. Mr Gerogiannis points to Mr McAliney’s special circumstances which include his financial situation as set out in Exhibit A1, his work injury and other health conditions, marriage breakdown and having sole custody of his daughter. His health conditions include back, leg and neck pain due to the work related injury, a pituitary tumour and associated problems with vision and motion sickness, asthma, anxiety, and bladder and bowel problems. Mr McAliney takes various medications, requires injections and suppositories and may require MRIs in the future in relation to the pituitary tumour. He will never work again. He is socially isolated. His daughter also requires various medications. Some of his medications are payable by his workers compensation insurer, however, Mr McAliney does not claim all medications from his compensation insurer to which he is entitled, but relies on the health care card. He says his former wife will not help their daughter financially and therefore he will always have that responsibility. He sees himself getting older and feels his life is going nowhere.
9. There was some discussion of an FTB reconciliation which the Department said was paid to Mr McAliney on 4 November 2004 in the sum of $1,087.99. Material provided to the Tribunal and to Mr Gerogiannis following the hearing of this matter established that this was so.
10. Ms Mantaring for the Department argued there are not special circumstances in this case. She said the FTB and HCC may be a better financial option for Mr McAliney and cannot be considered as a special circumstance. She raised the concern that this case would open the flood-gates to similar claims. She argued that Mr McAliney was “double dipping” by asking for $123,200 of his income to be disregarded over 16 years until he becomes entitled to the aged pension. Mr Gerogiannis said the correct approach was to look at the amount Mr McAliney would receive from two sources, that is $26 per year.
11. Ms Mantaring said that an ordinary worker on $20,000 (approximately the amount of Mr McAliney’s income) and not entitled to unemployment benefit would not get the benefit of rebates or other benefits of a PCC. She pointed to Mr McAliney’s unencumbered property and said that his position should be compared to that of someone paying weekly rent.
12. Further, Mr McAliney’s compensation payment of $767.50 per fortnight gross ($663.50 net) is substantially higher than the parenting payment (single) rate of $470.70 per fortnight. Ms Mantaring said it would be easier to demonstrate special circumstances if his income was materially less than maximum pension.
13. Finally, Ms Mantaring also argued that it would be administratively very difficult to work out the discount of the compensation payment which would give Mr McAliney a $1 pension. It would be necessary to specify the special circumstances and a reporting mechanism if they changed. Whereas finances may be monitored, it is more difficult to monitor other matters. Mr Gerogiannis says outcomes in Social Security v Ellis (1997) 46 ALD 1 and Secretary, Department of Social Security v Lee (1993) 30 ALD 250 were not significantly different from an administrative point of view from this case.
14. He also pointed to the obligations set out in the letter dated 17 December 1998 addressed to Mr McAliney, forwarded to the Tribunal by the Department, as an example of how ample protection may be given in relation to requiring notification of changes of circumstances. Regular reviews would also ensure adequate notification and disclosure. If special circumstances were established, this may be a matter to take into account in the exercise of the discretion, however, it would be a matter of the weight to be given to it.
15. I note the remarks made by French J in Boscolo v Secretary DSS (1999) 53 ALD 277 about the word “special” in the Act. His Honour observed:
“The word “special” conditioning “reasons” or “circumstances” guards the entrance to the exercise of many different statutory discretions. It is generally futile to search for its meaning in terms of other words. It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened. .. If helpful to speak in terms of its meaning almost all of it comes from context… Circumstances or reasons will not necessarily fall outside the designation of “special” because they fall within a class which is widely defined or because they are circumstances or reasons which can be foreseen before they arise: Re Hutchins; Jarlas Pty Ltd v FCT (1987) 14 FCR 510. The core of the requirement for “special circumstances” or special reasons” is that there be something unusual or different to take the matter the subject of the discretion of the ordinary course: Minister for Community Services and Health v Chee Keong Thoo (1988) 78 ALR 307 at 324: Burchett J. But that does not require that the case be extremely unusual, uncommon or exceptional: Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32.”
16. In Beadle v Director-General Social Security (1985) 60 ALR 225, Bowen CJ, Fisher and Lockhart JJ considered the term “special circumstances” in the context of extending a time limit for lodging a particular application. Their Honours said: “Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate.” Their Honours gave examples of circumstances which would clearly constitute special circumstances and others which were “more difficult” to determine. They continued: “We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase “special circumstances”, although lacking precision, is sufficiently understood in our view not to require judicial gloss.”
17. Mr Gerogiannis referred to Kirkbright v Secretary, Department of Family and Community Services (2000) 65 ALD 211. In that case Mansfield J held unfairness arising from the strict application of the legislation may constitute special circumstances.
18. In Groth & Department of Social Security (1995) 37 ALD 797, Deputy President Forgie reviewed the compensation provisions. Relevantly at pages 798-799 she said that it must be borne in mind when considering whether there are “special circumstances” that the purpose of the provisions is to ensure a person is not paid from two sources in respect of the same period of time. She continued: “Therefore, there will be special circumstances if the circumstances are such that it is unreasonable, unjust or inappropriate not to treat whole or part of a compensation payment as not having been made…”. She went on to say that the practical effect of the provisions relating to periodic payments is “to ‘top up’ the compensation payment to a pre-determined standard”, that is, of the particular benefit being considered.
19. This decision was the subject of an appeal heard by Kiefel J ((1995) 40 ALD 541. Her Honour observed “…it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case … it would of course follow that if one were to conclude that something unfair, unintended, or unjust had occurred that there must be some feature out of the ordinary”.
20. Mr Gerogiannis argued that the “pre-determined standard” should include the benefits of a PCC because otherwise Mr McAliney is disadvantaged. If he were successful, he would receive those benefits plus $1 per fortnight paid from two sources. Ms Mantaring argued that the rebates that come with a PCC are a recognition by the community that a person is a low income earner and therefore extending those benefits to someone who does not meet that test would undermine the integrity of the assets test.
21. While I accept Mr McAliney is disadvantaged as Mr Gerogiannis points out, he is in the same position as other recipients of compensation payments to whom the more stringent income test provided by s 1173 applies. If they do not satisfy that test, they do not receive a PCC. That matter does not constitute a special circumstance.
22. Mr Gerogiannis argued that if Mr McAliney received the same amount of compensation payments in the form of an ordinary income he would get a part pension. The Department did not dispute that. Accordingly, Mr Gerogiannis argued, Mr McAliney is worse off than a pensioner with a different income source because of the dollar for dollar reduction which applies where the income source is a compensation payment. I accept that is so, however, once again, that is the clear consequence of the legislation and applies to any person in receipt of compensation payments which exceed the income test for such payments but which are less than the level of income test for income from other sources. I do not consider that circumstance to amount to a special circumstance.
23. Ms Mantaring pointed to the Department’s position that "When an employee suffers from a work related injury that results in his inability to work, the law requires his employer to compensate him for his lost earnings. The compensation cost is meant to be borne by the employer and not by the taxpayers nor by the greater Australian community." I accept that is the case. However, two points need to be made. First, s 1184K(1) is a discretion in the legislation to be exercised in appropriate circumstances. Secondly, what Mr McAliney is seeking is “double dipping” to the extent of $1 per fortnight for the purpose of getting a PCC. If he diligently exercised his workers compensation rights in relation to medical expenses, the benefits he would receive under the PCC would not be double dipping at all. His compensation payments do not provide such benefits.
24. The question for me to decide is do special circumstances exist in this case? While Mr McAliney’s situation is not easy, I am not persuaded that his circumstances do constitute special circumstances. His situation is one determined by different income tests which apply generally under the legislation. While he may be living from compensation payment to compensation payment, that is no different from others relying on compensation payments or the parenting payment. His income is significantly higher than the parenting benefit; he owns his own home and a motor vehicle; and he has a health care card which pays for his medical expenses.
25. In conclusion, I note that in the course of the hearing, Ms Mantaring commented that Mr McAliney chose not to distinguish his health problems related to his work accident from his other medical conditions when he claimed his disability support pension. She said that “if he did that, we could look at his situation again”. The assessment made and referred to above, allocated 20 points for low back pain the result of his work accident and which qualifies Mr McAliney for a DSP, and 10 points for other medical conditions unrelated to his work. I strongly urge both parties in these proceedings to consider the implications of the comment made by Ms Mantaring.
DECISION
26. The decision under review is affirmed.
I certify that the preceding 26 paragraphs are a true copy of the reasons for the decision herein of Mrs Josephine Kelly, Senior Member
Signed: .....................................................................................
AssociateDate/s of Hearing 23 November 2004
Date of Decision 1 February 2005
Solicitor for the Applicant Bill Gerogiannis
Advocate for the Respondent Susan Mantaring
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