Mehrdad Tavili and Secretary, Department of Social Services
[2015] AATA 19
•15 January 2015
[2015] AATA 19
Division GENERAL ADMINISTRATIVE DIVISION File Number
2014/4006
Re
Mehrdad Tavili
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member A C Cotter
Date 15 January 2015 Place Brisbane The decision of the Social Security Appeals Tribunal is set aside and in its place the following decision is substituted:
(a) that the preclusion period be altered, to begin on 24 September 2010 and ending on 23 September 2011;
(b) that the correct amount of the compensation charge recoverable by Centrelink on behalf of the Secretary is $18,802.36;
(c) that, pursuant to s 1184K of the Social Security Act 1991 (Cth), the payment of the amount of $4,182.24, being the periodic compensation amount paid, is to be disregarded and treated as not having been made; and
(d) as a consequence, the amount which Centrelink is entitled to recover as a compensation charge is $17,495.57.
...................................[Sgd].....................................
Senior Member A C Cotter
CATCHWORDS
SOCIAL SECURITY – newstart allowance – disability support pension – DSP – compensation payment – preclusion period – compensation charge recoverable by Centrelink – decision set aside and substituted – preclusion period altered – periodic compensation amount paid to be disregarded and treated as not having been made – recalculation of compensation charge recoverable by Centrelink.
LEGISLATION
Social Security Act 1991 (Cth), ss 17, 1184K
CASES
Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Whitlock [2010] AATA 816
Secretary, Department of Social Security v Hales (1998) 51 ALD 695
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Ivovic and Director-General of Social Services (1981) 3 ALN No 61
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Re Secretary Department of Social Security and Winterbotham (AAT 6499A, 11 December 1990)
REASONS FOR DECISION
Senior Member A C Cotter
15 January 2015
INTRODUCTION
In November 2013, Mr Mehrdad Tavili, the Applicant, settled a workers’ compensation claim against his former employer. He obtained a lump sum compensation payment.
At the time of settlement, Mr Tavili had for some time been receiving social security payments from Centrelink, first in the form of the Newstart Allowance and later as a Disability Support Pension (“DSP”). He continues to receive the DSP.
As a consequence of the settlement, Centrelink advised Mr Tavili that he was subject to a preclusion period during which social security payments were not payable to him. Centrelink therefore required repayment of the amount calculated by reference to that period, and recovered that amount directly from WorkCover Queensland (“WCQ”) out of the settlement proceeds.
Mr Tavili sought a review of that decision by an Authorised Review Officer (“ARO”) of the Department, contending that “special circumstances” (a combination of various medical and social issues and financial hardship) existed in his case which justified the effective refund of the whole or part of the monies recovered by Centrelink. The ARO did not accept that such circumstances existed in a decision dated 19 May 2014. That decision was in turn varied slightly by the Social Security Appeals Tribunal (“SSAT”) in a decision dated 15 July 2014. As he is still dissatisfied with the outcome, Mr Tavili has applied to this Tribunal, seeking a review of the SSAT’s decision, in an application dated 23 July 2014.
BACKGROUND
The factual background is uncontroversial.
Mr Tavili was granted the Newstart Allowance from 29 January 2008.[1]
[1] See Exhibit 3, Secretary’s Statement of Facts, Issues and Contentions, paragraph [3].
For several years, he was employed by the Bunnings hardware chain, until he resigned, for psychological health reasons, in 2010. He subsequently made a
workers’ compensation claim for workplace injury sustained on 30 April 2010 during the course of that employment, and received weekly compensation amounts from WCQ from 1 May 2010[2] until 23 September 2010.[3] Centrelink notified him on 10 June 2010 that if he received any compensation, some or all of his Centrelink payments paid since the injury may have to be paid back.[4]
[2] See Exhibit 1, T5, f38.
[3] See Exhibit 1, T2, f4.
[4] See Exhibit 3: Secretary’s Statement of Facts and Contentions, Attachment B.
On 11 February 2011, Mr Tavili was granted the DSP.[5]
[5] See Exhibit 1: T2, f4.
On 15 January 2013, Centrelink again notified him that any compensation he received may impact on his Centrelink payments, which might need to be repaid, wholly or in part.[6]
[6] See Exhibit 1: T9, f67.
By a Release and Discharge signed by Mr Tavili on 11 November 2013, he, WCQ and Bunnings Group Limited agreed to settle his compensation claim for the sum of $85,000.00. As part of the settlement, the parties acknowledged that WCQ was not entitled to a refund of statutory benefits paid by it in respect of the claim, totalling $9,551.35.[7] (For completeness, I note that there is a slight discrepancy between this figure and that which was relied upon by the ARO and the SSAT, in calculating the preclusion period; that difference is not significant and has no material impact on the period calculated).[8] Clause 4.1 of the Release and Discharge provided that payment of the settlement sum was conditional upon WCQ receiving a clearance letter or otherwise from Centrelink. By cl 4.2(b), Mr Tavili authorised payment of the settlement proceeds to Centrelink “for such sum as it identifies as its charge on the Claimant’s damages”.[9]
[7] See Exhibit 1: T7, ff50-51.
[8] The figure employed in the earlier calculations was $9,687.25; see Exhibit 1: T2, f4.
[9] See Exhibit 1: T7, f51.
By letter of 18 November 2013 to Mr Tavili’s lawyers, Centrelink advised that it had calculated that Mr Tavili had a preclusion period starting on 24 September 2010 and ending on 1 September 2011. It said that during that time, he was not able to receive income support from Centrelink and that therefore, he had to repay the sum of $17,495.57.[10] That figure was made up of $5,548.38 for the Newstart Allowance paid during the period 24 September 2010 and 10 February 2011, and $11,947.19 for the DSP paid during the period 11 February 2011 to 1 September 2011. The total amount was paid to Centrelink from the settlement proceeds on 17 December 2013.[11]
[10] See Exhibit 1: T9, f65.
[11] See Exhibit 1: T16, ff92, 93.
As mentioned earlier, a review by an ARO confirmed the original decision. In particular, the officer concluded that there was nothing sufficiently unusual or uncommon to accept as special circumstances warranting the disregarding of some or all of the payments pursuant to s 1184K of the Social Security Act 1991 (Cth) (“Act”). The SSAT varied that decision by reducing the amount recoverable from Mr Tavili by $500.00 to $16,995.57, to take account of his requiring new glasses for which no subsidies were apparently available to him. Centrelink paid the $500.00 to Mr Tavili on 30 July 2014.
ISSUES FOR DETERMINATION
The primary issue for the Tribunal is whether “special circumstances” exist in this case which would warrant treating the whole or part of Mr Tavili’s compensation payment as not having been made for the purposes of the compensation recovery provisions of
the Act. In other words, do “special circumstances” exist which justify refunding to
Mr Tavili some or all of the monies recovered by Centrelink from the settlement proceeds?
Before addressing that issue, there is a threshold question to be considered, concerning the proper calculation of the preclusion period (and therefore, the amount of compensation Centrelink was entitled to recover).
CONSIDERATION
Calculation of the preclusion period and amount entitled to be recovered
The Act sets out a formula for the calculation of the preclusion period. At the hearing, the representative of the Respondent, the Secretary of the Department of Social Services (“Secretary”), contended that both the ARO and the SSAT were incorrect in their calculations of that period because in determining a component of that formula, they mistakenly deducted the amount of the periodic compensation payment received by
Mr Tavili ($4,182.24) from the total settlement amount. The Secretary contends that
s 17(4) of the Act only permits the deduction of such payments where they are actually repaid, which did not occur in the present case. That, says the Secretary, has a consequential impact on the calculation of the preclusion period, increasing it from
49 weeks to 52 weeks. The practical effect is that the amount of compensation entitled to be recovered by the Secretary is increased by $1,306.79, resulting in an amended total of $18,802.36.
Mr Tavili made no submissions on that issue.
It is common ground among the ARO, the SSAT and the Secretary, that it is appropriate to include the amount of any foregone statutory benefits as part of the lump sum payment.[12] Therefore, the ‘grossed up’ lump sum compensation payment was the total of $85,000.00 and the foregone refunds of medical and travel expenses and periodic compensation.
[12] See Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Whitlock [2010] AATA 816, at [28].
Where the disagreement arises is in the application of s 17(4) of the Act, and in particular, paragraph (c) of that subsection. It anticipates that, for the purposes of the calculation under s 17(3) of the Act, an amount equal to the periodic compensation amounts received is to be deducted from the lump sum amount where, because of receiving the lump sum payment, the person “becomes liable to repay” that amount of periodic compensation.
Both the ARO and the SSAT deducted the amount of $4,182.24 from the ‘grossed up’ lump sum compensation amount, giving them a figure of $90,505.01 for the purpose of
s 17(3) of the Act.
The Secretary contends that the deduction of $4,182.84 ought not to have been made in this instance for the reason that, under the terms of the Release and Discharge, the parties acknowledged that WCQ was not entitled to the refund of the statutory benefits, and therefore, Mr Tavili did not “become liable to repay” the amount of the periodic compensation payment. I accept the Secretary’s submission on that point; to do otherwise would be to ignore the express wording of the settlement documentation.
On that basis, the Secretary says that the amount to be used in the calculation should be $94,551.35. The variation of that amount has consequences for the calculation of the preclusion period. Accepting (as the Secretary also did) the accuracy of the remainder of the calculation, that has the effect of increasing the preclusion period by three weeks, from 49 weeks to 52 weeks. Therefore, the preclusion period is taken to have commenced on 24 September 2010 and expired on 23 September 2011. As a consequence, the amount of the compensation charge referable to that period is $18,802.36, or an increase of $1,306.79 on the figure arrived at by the ARO and the SSAT.[13]
“Special circumstances” to disregard payments?
[13] See Exhibit 3: Secretary’s Statement of Facts and Contentions, paragraphs [28] to [40].
Mr Tavili’s contentions
Prior to the hearing, Mr Tavili wrote to the Tribunal, expanding on what he told the SSAT.[14] In addition, he gave sworn evidence at the hearing and tendered three bundles of documents in support of his arguments. Because his contentions are to be found in several places, it is convenient that I summarise them in some detail here.
[14] See Exhibit 2: Mr Tavili’s letter dated 12 November 2014, with attachments.
Essentially, the “special circumstances” that Mr Tavili relies upon are a combination of medical conditions, social issues and financial hardship.
It is undisputed that Mr Tavili suffers from multiple medical conditions. He has been the recipient of the DSP since February 2011. In a letter dated 20 June 2014, his general practitioner, Dr Anthony Tatkovic, listed a large number of medical conditions from which Mr Tavili had suffered.[15] Without intending to be exhaustive, they included: spinal problems; osteoarthritis of the hip; knee and ankle complaints; chronic nasal drip and sinusitis; depression, anxiety and post-traumatic stress disorder due both to marital problems and mental abuse at work; gastritis; and dental issues. Dr Tatkovic reports that Mr Tavili’s marriage broke up in 2005 and that his “ex-wife attempted unsuccessfully to have him deported”.[16] His two daughters live in Nambour and he has access to them each Saturday (when he travels from Redcliffe, where he resides).
[15] See Exhibit 5: Letter from Dr A Tatkovic dated 20 June 2014.
[16] See Exhibit 5: Letter from Dr A Tatkovic dated 20 June 2014.
In his letter to the Tribunal, Mr Tavili noted that his stress level is very high, with his doctor increasing his dosage of anti-depressants. He previously suffered a nervous breakdown.[17]
[17] See Exhibit 2: Letter from Mr Tavili dated 12 November 2014.
Mr Tavili had been on a category 1 waiting list for neck surgery for more than a year and a half, and finally had an appointment with a specialist on 3 November 2014. He says that gave him more grief, in that he discovered that the surgery is “extremely risky” and that if not successful, he might be confined to a wheelchair for the rest of his life. Because the surgery involves taking bones from his hip and reusing them in his neck, and because he already suffers hip problems, further discussions between his specialists have to take place, although he expects the surgery to take place at any time.[18] A letter from
Dr Janusz Bonkowski, a consultant neurosurgeon at the Royal Brisbane and
Women’s Hospital (“RBWH”), dated 5 November 2014 (but dictated on the day of the appointment) confirms that Mr Tavili is being placed on the unit’s waiting list to undergo a “C4/5 anterior cervical discectomy and fusion”.[19] However, the doctor notes that the track record of such surgery “for what are largely mechanical and discogenic symptoms is fairly nebulous” and that most cervical disc prolapses in fact get better on their own.[20]
[18] See Exhibit 2: Letter from Mr Tavili dated 12 November 2014.
[19] See Exhibit 6: Letter from Dr Janusz Bonkowski to Dr M [sic] Tatkovic dated 5 November 2014.
[20] See Exhibit 6: Letter from Dr Janusz Bonkowski to Dr M [sic] Tatkovic dated 5 November 2014.
At the hearing, Mr Tavili repeated what he told the SSAT concerning the dental problems he has experienced since August 2013. Due to the pain he suffers as a result, he has been forced mainly to eat soup. He needs eight to 10 teeth fixed, with each implant costing $5000.00 if done privately or $1500.00 each if performed at the Dental Hospital. The alternative is for him to go through the public health system, with the attendant wait. Among the bundle of documents tendered by Mr Tavili is a letter from the
Maxillo-Facial Unit of the RBWH dated 17 November 2014, confirming Mr Tavili’s appointment at that clinic for 15 December 2014.[21]
[21] See Exhibit 5: Letter from Maxillo-Facial Unit, RBWH to Mr Tavili dated 17 November 2014.
Before the SSAT, Mr Tavili indicated that he needed new glasses but that he was unable to access any subsidies as they had been withdrawn. Based on his estimate of the likely cost, the SSAT decided that the amount recoverable from Mr Tavili should be reduced by $500.00 so that he could obtain new glasses. That amount was paid to him by Centrelink on 30 July 2014. It was put to Mr Tavili by the Secretary’s representative during
cross-examination, relying on a Queensland Health Fact Sheet regarding eligibility for the Spectacles Supply Scheme,[22] that a subsidy would in fact have been available to him as a recipient of the DSP. Mr Tavili maintained that he was not able to obtain the subsidy, but did not produce any evidence substantiating that claim. Also under
cross-examination, Mr Tavili said that he did not obtain the glasses after all, as they were going to cost more than anticipated and he could not afford them despite receiving the additional $500.00. Instead, he applied the money towards paying off his car loan.
[22] See Exhibit 3: Secretary’s Statement of Facts and Contentions, Attachment D.
As mentioned already, Mr Tavili’s marriage broke down in 2005 and he is separated from his two daughters who live some distance away. Since he has no accommodation where they can visit and stay with him, he makes the trip to see them most Saturdays. His father died a few years ago and he was unable to attend the funeral overseas; he has not seen his mother (who lives overseas) in many years. He also complains about the racial taunts that he suffered when working at Bunnings that gave rise to his compensation claim.
The main focus of Mr Tavili’s contentions is based on financial hardship. His letter to the Tribunal[23] attached copies of correspondence from his lawyers at the time of the settlement. After deducting the lawyers’ fees (which they discounted to assist him), the Centrelink refund and a payment to the Child Support Agency, Mr Tavili received a net amount of $28,591.11 on 21 December 2013. He says that he paid off two debts to
Fixed Charter Lending Proprietary Limited totalling approximately $800.00 on
23 December 2013, and tendered documents verifying those payments.[24]
[23] See Exhibit 2: Letter from Mr Tavili dated 12 November 2014.
[24] See Exhibit 5: Letter and statements from Fixed Charter Lending Pty Ltd (five pages).
When asked during cross-examination how the balance of the funds was applied,
Mr Tavili stated that he repaid loans to family and friends. Apart from mentioning unspecified financial assistance he received from Dr Tatkovic (which the doctor confirmed in correspondence tendered to the Tribunal),[25] Mr Tavili was unable to name his various lenders. He said that they were reluctant to provide any further assistance to him by way of providing statements to the Tribunal. When questioned further, Mr Tavili said that the total amount of the loans was about $10,000.00 to $15,000.00.
[25] See Exhibit 5: Letter from Dr Tatkovic dated 20 June 2014.
Under cross-examination, Mr Tavili was also referred to a discussion which he had with an officer of Centrelink on 14 February 2014, when he requested a review of the decision by an ARO. At that time, he told the officer that there was nothing left from his settlement monies. Assuming the accuracy of his earlier statement, that he had paid back about $10,000.00 to $15,000.00 of debt and loans to family and friends, Mr Tavili was questioned as to what happened to the balance of the proceeds (estimated to be between $13,000.00 and $18,000.00) in the period between receiving the money in late
December 2013 and 14 February 2014, some six to seven weeks later. Apart from saying that he spent money on his daughters for Christmas, Mr Tavili was unable to say how that money was spent. He also explained that he originally asked his lawyer to seek a review of the decision concerning recovery at the time when he received the settlement proceeds. The lawyer said that he would help Mr Tavili, but that he needed to apply for the review himself. As it transpired, the lawyer went on holidays, and Mr Tavili did not seek an internal review until February.
At the hearing, Mr Tavili tendered his Statement of Financial Circumstances dated
9 July 2014 which had been prepared for the SSAT.[26] Under cross-examination, he acknowledged that, with some variations, it largely reflects his current circumstances. It confirmed that he received $830.00 per fortnight from his DSP. That is currently
$810.43 net per fortnight (or approximately $1,620.00 per month), presumably due to some adjustments. He confirmed that his rental is $560.00 per month and that he has credit card payments of $400.00 per month. His monthly spend on other expenses is as follows: telephone $50.00 to $60.00; petrol $260.00; car insurance $55.00 to $60.00; food $200.00; spending on his daughters $200.00; other expenses $50.00. He is also paying off a $1,600.00 loan he obtained for dental work, at the rate of
$280.00 per month.
[26] See Exhibit 4: Applicant Statement of Financial Circumstances dated 9 July 2014.
When compared with his position in July, he has paid off the $4,000.00 loan on his car (which he was repaying at $300.00 per month) and replaced it with a smaller loan of $2,300.00 (including the $1,600.00 loan referred to in the previous paragraph), which will be paid out in a much quicker time.
What are “special circumstances”?
As mentioned earlier, s 1184K of the Act provides that the Secretary may treat the whole or part of a compensation payment as not having been made if the Secretary “thinks it is appropriate to do so in the special circumstances of the case”. The expression
“special circumstances” is not defined in the Act. It has, however, been the topic of much consideration by the Tribunal and the courts, whether in the context of s 1184K or the provisions of other legislation where the same term has been employed. While it is acknowledged that the concept of “special circumstances” is a broad one[27] and difficult to define exhaustively or with precision, it is often taken as referring to circumstances which are “unusual, uncommon or exceptional” which make the case “markedly different from the usual run of cases”; they must have a particular quality of unusualness that permits them to be described as special.[28]
[27] See Secretary, Department of Social Security v Hales (1998) 51 ALD 695, 702.
[28] See Re Beadle and Director-General of Social Security (1984) 6 ALD 1.
In Ivovic and Director-General of Social Services (1981) 3 ALN No 61, the Tribunal made it clear that in exercising a discretion such as that conferred by s 1184K, the decision-maker:
[M]ust have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the Social Services Act 1947.[29]
[29] This passage was cited with approval at 45 in the unreported decision of Ivovic at [45], and considered to apply with equal force and effect to the Act, by O’Loughlin J. in Secretary, Department of Social Security v Hulls and ors. (1991) 22 ALD 570, 580-581.
In that context, the Secretary’s representative referred me to the Tribunal’s decision in
Re Secretary Department of Social Security and Winterbotham(AAT 6499A, 11 December 1990), as highlighting the principle underlying compensation provision contained in the Act, that persons who receive lump sum compensation payments are expected to support themselves from their own resources for a period before seeking support from the taxpayer:
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 ([sic]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 tax-payer.[30]
[30] (AAT 6499A, 11 December 1990) at [19].
Are Mr Tavili’s circumstances “special”?
It was conceded on behalf of the Secretary that, because of the incorrect calculation of the preclusion period and therefore, the amount which Centrelink was entitled to recover, Mr Tavili was advised of the incorrect amount recoverable, not just once, but on several occasions. As Mr Tavili had expended his funds following that incorrect advice, the Secretary concedes that it would be appropriate to exercise the discretion in s 1184K, but only to the extent that an amount equivalent to the periodic compensation payments be disregarded. That would result in the compensation lump sum amount for the purpose of the preclusion period calculation being reduced to $90,505.01 and the recoverable charge being $17,495.57.[31] That is an entirely reasonable and appropriate concession. I agree that the incorrect advice by Centrelink is a “special circumstance” which justifies the exercise of the discretion to the extent conceded by the Secretary.
[31] See Exhibit 3: Secretary’s Statement of Facts and Contentions, paragraphs [58] and [59].
The question is whether the discretion should be exercised further. I do not consider it should. My reasons follow.
Mr Tavili produced little evidence of any weight to support his contentions. In a number of key areas, he was simply unable to offer any explanation for his actions, or produce anything to corroborate his version of events. For example, he was unable to offer any plausible explanation as to what happened to the net funds he received in late
December 2013, which were completely dissipated within some six to seven weeks. Nor, when the Queensland Health Fact Sheet on the subsidy scheme for spectacles was put to him, was he able to give any detail as to his denial of access to that scheme. On other occasions, his evidence was unreliable. Since his initial request for review by an ARO in February and throughout the ARO and SSAT review processes, Mr Tavili has maintained that his lawyers deducted $55,000.00 from his settlement proceeds in payment of their fees. It was only with the production of documents to the Tribunal that the true figure was in fact found to be almost $9,000.00 less. While I accept that was an innocent mistake, it was nevertheless significant, having regard to the amount of the overall settlement sum and the fact that the lawyers deliberately reduced their own professional costs to ensure that Mr Tavili recovered a reasonable result. Similarly, his letter to the Tribunal of 12 November 2014 stated that his specialist told him at an appointment on
3 November 2014 that his planned surgery was “extremely risky” and that if it were unsuccessful he could be confined to a wheelchair for life. He agreed with the Tribunal that that assessment was not conveyed in Dr Bonkowski’s report of 5 November 2014. While I appreciate that there are inherent risks in any surgery, I would have expected a risk of the magnitude suggested by Mr Tavili to have been expressly recorded in that report.
While I have no doubt that Mr Tavili has multiple medical conditions that require treatment, I have reservations as to whether they are as “pressing” or as urgent as he would have one believe. The dental care and new glasses are cases in point. After specifically and successfully raising before the SSAT his need for new glasses, and after having received an additional $500.00 from Centrelink for that purpose, Mr Tavili elected not to obtain them after all; instead, he decided to do without them and put the money towards paying off his car loan. Similarly, after obtaining quotes for dental implants, Mr Tavili secured a loan of $1,600.00 to enable him to get treatment. However, it appears from his evidence at the hearing that he may have abandoned the idea of having the implants done privately or at the Dental Hospital, and that he will go on to the public health system waiting list. The monies he obtained for that purpose have likewise been directed towards paying off his car. While I appreciate that Mr Tavili has competing demands for funds, these examples lead me to be somewhat sceptical about the particular needs for which he contends and their relative priorities.
That leads me to the next point. There is nothing to suggest, even with his multiple complaints, that Mr Tavili’s state of health is so much more severe than other DSP recipients, as to constitute “special circumstances”. It is not uncommon for DSP recipients to suffer from a variety of health complaints. Further, Mr Tavili has suffered from a number of those conditions for some time – well before his settlement. Two of the most recent complaints that he has noted before the SSAT and the Tribunal, namely his neck pain and his dental issues, were likewise known to him some time before the settlement[32] and were matters that he presumably took into account when accepting the amount of compensation which he did. In any event, the concerns about those complaints seem to have diminished considerably since that time. Therefore, having regard to the various health issues raised by Mr Tavili, I do not believe that they present circumstances which could be considered uncommon or “markedly different” to usual circumstances encountered by DSP recipients.
[32] Mr Tavili had been on the waiting list for neck surgery for 18 months before seeing the specialist in early November 2014, meaning that he would have been conscious of the neck complaint since at least May 2013 (Exhibit 2). He was at least aware of his dental problems by August 2013 (Exhibit 1: T2, f8).
It is also significant that Mr Tavili had ample notice of the potential for, and amount of, the compensation charge. Quite a significant amount of time before the settlement was negotiated, he had been advised of the prospect of recovery by Centrelink. At the time of settlement, his lawyers expressly brought the matter to his attention. Specific provisions relating to refunds were contained in the Release and Discharge, which Mr Tavili signed. At the time of receiving the settlement monies just before Christmas in 2013, he says that he sought his lawyer’s assistance to obtain a refund of the recovered monies; the lawyer said he would assist him, but it was unlikely to be successful. There can be no suggestion that Mr Tavili was unaware of the compensation recovery procedures at the time that he settled. It would appear that Mr Tavili did not factor such a prospect into his settlement considerations.
The issues concerning Mr Tavili’s marriage breakdown and separation from his daughters, while regrettable, are not unusual or exceptional, either by themselves or in combination with the other factors raised by Mr Tavili. The same applies to the isolation from his family overseas. Although they would have been no doubt distressing at the time, the racial taunts directed at Mr Tavili while at work are now some time ago, with his position having been vindicated, to some degree at least, by the settlement.
As mentioned earlier, Mr Tavili was unable to produce any reliable, corroborative evidence as to how the bulk of the net settlement proceeds were expended so quickly after he received them. In the absence of any plausible explanation in that respect, I do not think there is adequate basis for him to contend that the financial hardship he now allegedly suffers from is sufficiently out of the ordinary to justify the exercise of the discretion found in s 1184K of the Act. To exercise the discretion in favour of Mr Tavili while significant questions remain unanswered as to the expenditure of the settlement proceeds would not be consistent with the legislative intent of the compensation recovery provisions of the Act. In any event, as the situation with each of the dental work and glasses illustrates, Mr Tavili’s priorities seem to fluctuate depending on the circumstances at the particular time.
Finally, it is also significant that, unlike many other cases, the preclusion period in this case is in the past and that Mr Tavili’s entitlement to DSP is ongoing. As was pointed out during cross-examination, it appears that, if anything, Mr Tavili’s financial position has improved following the paying off of his car loan and replacing it with a smaller loan that will be repaid more quickly. While there is no doubt that Mr Tavili is under tight financial constraints, I do not consider that those circumstances are so severe or exceptional, either by themselves or in combination with the other factors which he raised, to justify the exercise of the discretion.
It follows that, apart from exercising the discretion in the manner and for the reason mentioned in paragraph 38 above, there is no other “special” reason to do so. That means that the amount which Centrelink was entitled to recover was that which was initially advised and recovered by it, $17,495.57. Practically speaking, that means that Mr Tavili has to refund to Centrelink $500.00. Given the subsidy scheme which apparently exists for glasses and what appears to be Mr Tavili’s diminished priority in obtaining glasses, I do not consider sufficient justification exists to retain the SSAT’s variation of the original decision on that ground.
DECISION
The decision of the SSAT is set aside and in its place the following decision is substituted:
(a)that the preclusion period be altered, to begin on 24 September 2010 and ending on 23 September 2011;
(b)that the correct amount of the compensation charge recoverable by Centrelink on behalf of the Secretary is $18,802.36;
(c)that, pursuant to s 1184K of the Act, the payment of the amount of $4182.24, being the periodic compensation amount paid, is to be disregarded and treated as not having been made; and
(d)as a consequence, the amount which Centrelink is entitled to recover as a compensation charge is $17,495.57.
I certify that the preceding 48 (forty -eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member A C Cotter ...............................[Sgd].........................................
Associate
Dated 15 January 2015
Date of hearing 9 December 2014 Applicant In person Solicitors for the Respondent Rick McQuinlan, Department of Human Services
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