Menere and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 930
•20 October 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 930
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/1885
GENERAL ADMINISTRATIVE DIVISION ) Re DEBBIELEE MENERE Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date20 October 2008
PlaceTamworth
Decision The decision under review is set aside. The preclusion period is to end on 9 November 2008. ....................[sgd]..........................
Ms N Isenberg
Senior Member
CATCHWORDS
SOCIAL SECURITY – lump sum compensation payment – preclusion period – whether special circumstances exist to justify the exercise of the discretion to disregard all or part of the compensation payment being made – unfairness of the strict application of the ‘50% rule’ – decision under review is set aside
Social Security Act 1991 – sections 17, 1170 and 1184K
Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281
Beadle v Director-General of Social Security (1985) 7 ALD 670
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
Haidar v Secretary, Department of Social Security (1998) 52 ALD 255
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Ellis (1997) 46 ALD 1
Re Secretary, Department of Social Security and Norman (AAT 13005, 22 June 1998)
Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985)
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Re Cvetanoska and Secretary, Department of Family and Community Services [2000] AATA 459
Re Cavuoto and Secretary, Department of Social Security (AAT 9249, 13 January 1994)
Re Minda and Secretary, Department of Social Security (1989) 49 SSR 641
Re Martin and Secretary, Department of Social Security (AAT 6482, 14 November 1990)
Re Testa and Secretary, Department of Social Security (AAT 4956, 14 March 1989)
Re Latour and Secretary, Department of Social Security (1988) 16 ALD 279
Re Secretary, Department of Social Security and Barry (AAT 10320, 28 July 1995)
Re Black and Secretary, Department of Social Security (1995) 83 SSR 1219
Re Dunn and Secretary, Families and Community Services [2005] AATA 404
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Secretary, Department of Social Security and Bunge [1990] AATA 486
Secretary, Department of Social Security v Hulls & Others (1991) 22 ALD 570
Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348
Re Secretary, Department of Social Security and Winterbotham (AAT 6499, 11 December 1990)
Dranichnikov v Centrelink (2003) 75 ALD 134
REASONS FOR DECISION
20 October 2008 Ms N Isenberg, Senior Member DECISION UNDER REVIEW
1. Ms Menere has applied to the Administrative Appeals Tribunal for review of the decision of the Social Security Appeals Tribunal dated 15 April 2008 to affirm the decision of the Centrelink Authorised Review Officer to impose a compensation preclusion period from 3 April 2002 to 3 November 2009.
BACKGROUND
2. On 3 April 2002 Ms Menere sustained injuries as a result of medical negligence. She brought personal injury proceedings. Centrelink informed her solicitor that, based on an estimated settlement amount of $800,000, the likely repayment amount would be $46,792.18 and that a preclusion period from 3 April 2002 to 2 July 2013 would apply. On 4 July 2006 Centrelink was notified by Ms Menere’s solicitors that her claim had been settled on 27 March 2006 in the sum of $550,000 inclusive of costs. The schedule of damages referred to a claim for future economic loss.
3. On 12 July 2006 Centrelink wrote to Ms Menere and her solicitor advising of a compensation preclusion period from 3 April 2002 to 29 December 2009 (later changed to 9 November 2009). The correspondence noted that Centrelink had asked GIO Insurance Ltd to pay an amount of $51,864.82, representing past Centrelink payments paid to Ms Menere since the date of injury.
4. On 24 July 2006 Ms Menere is recorded as having made an enquiry of Centrelink about her preclusion period and charge and was informed by a Centrelink officer that her settlement monies were intended to support her for the period of the preclusion period and not be used for the purchase of a house or motor vehicle.
5. In November 2007 Ms Menere claimed Newstart Allowance but Centrelink rejected the claim because of the preclusion period. On internal review an error was found in the calculation of the preclusion period with the result that the preclusion period was varied to end on 3 November 2009. That decision was affirmed by the Social Security Appeals Tribunal.
LEGISLATION
6. Briefly, the scheme of the legislation is aimed at preventing those receiving lump sum compensation payments for loss of income from receiving benefits from the public purse. Where the lump sum settlement includes a component of economic loss, section 17(3) of the Social Security Act 1991 (“the Act”) has the effect that 50 per cent of the lump sum is taken to be for lost earnings or lost capacity to earn. This amount is the “compensation part of the lump sum” and is then used, by application of a statutory formula contained in section 1170 of Part 3.14 of the Act, to calculate a period of time when a person will not be eligible to receive Centrelink payments. This is called “the preclusion period”. If, during the preclusion period, the person has received Centrelink payments then the Act creates a statutory charge over the settlement funds to the extent of the payments made. The licensed insurer is obliged to pay the amount of the charge to Centrelink in priority to payments to the person entitled to the benefit of the settlement. Solicitors routinely make enquiries of Centrelink prior to any settlement to ascertain the preclusion period and the amount of any statutory charge.
7. The Act provides potential relief from the strict application of the compensation preclusion period, by giving the Secretary a discretion to disregard the whole or part of the compensation payment in “special circumstances”, as follows:
1184K Secretary may disregard some payments
(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case.
ISSUE BEFORE THE TRIBUNAL
8. There was no dispute that if the statutory formula were applied to Ms Menere’s circumstances a preclusion period would result from 3 April 2002 to 3 November 2009.
9. It was agreed between the parties that the central issue in this matter was the application of section 1184K of the Act, that is, whether there are any “special circumstances” in Ms Menere’s case to reduce the length of the preclusion period.
Evidence: Ms Menere
10. Ms Menere told me that she and her seven children had lived in Housing Commission premises at Villawood before the (medical negligence) incident in 2002. When she was released from hospital after five months (with two day’s notice) she was in a wheelchair – in which she would remain for five years – and was unable to care for herself. Her wheelchair could not fit through the doorways at Villawood. Because she could not afford to move all their belongings, she relied on her mother and another relative to help her move to her mother’s house in Werris Creek. They loaded what they could onto a trailer. She was unable to assist in the move herself as she was wheelchair-bound. There was limited space on the trailer but, in any event, a lot of the furniture was old and was not worth taking. The cost of storage was more expensive than the goods were worth. She also thought the place had been ransacked while she was in hospital and things were missing. What they could not load into the trailer they had to leave behind.
11. Her oldest son became her carer and she and five of the children moved into her mother’s three bedroom home, to which some modifications were made to accommodate the wheelchair. While she had been in hospital the children had been split up and cared for by her mother and a cousin. At some stage their father took three of the children because he “liked the FTB”. She thought he was a “poor role model” because, for example, he gambled and did not insist the children attend school.
12. When she and the children moved to Werris Creek her brother was also living there and he and her son made a room for themselves in the garage. It was very cramped, which led to a lot of stress. She and her mother argued and she resolved to move into her own accommodation. Unsurprisingly, this proved difficult. Her ex-partner had defaulted on rental payments for which they had been jointly responsible, although she had already left him. Consequently, she acquired a poor rental history. Also, she was in a wheelchair and this limited the properties that might accommodate her and the seven children. She had no income source and it did not occur to her to produce evidence of her term investments. It took two and a half years before some Housing Commission accommodation was found on the Central Coast.
13. When her litigation was settled she received a cheque for $410,000 in about July or August 2006. She went to a financial adviser at her bank who suggested she place $300,000 into a term deposit account. She bought herself a new car for $26,000 because she needed to be able to transport herself and needed a car that was reliable as she was still wheelchair-bound and unable to make basic repairs as she had done in the past. She also wanted to be somewhat independent of her carer – her son, and later her daughter. Her son had left his job to care for her and her daughter left school to take over the carer role. She also bought them a car each, to show her appreciation for them caring for her. She repaid her mother for the modifications she had made to her home to accommodate her wheelchair. She repaid some other debts she had incurred in the previous five years she had been incapacitated and gave a small amount to her mother’s (then new) partner, Mr Porter, who had kindly taken her to her specialist medical appointments, travelling from Tamworth to collect her on the Central Coast and transporting her to doctors in Sydney. She financed a $6,000 trip for herself and her sister and their children to the Gold Coast because the children had to put up with so much while she had been ill and unable to care for them. They, in fact, were caring for her. She also needed some furniture and appliances for the home on the Central Coast to replace those she had had to leave behind in Villawood. She bought a fridge in a closing down sale, but it broke and she had to buy another one. She bought the seven children some clothes and a computer to help her daughter look for a job. She financed the Christmas lunch for the family, because she wanted to do something for her children, as she had been away from them and unable to care for them; and she was ill and in need of care herself.
14. They were happy on the Central Coast but, in April 2006, while she was still wheelchair-bound, she awoke one night to find an intruder under her bed. She screamed and her son came to her aid. The man ran off, but was apprehended by police. She understood he had preyed on a number of elderly or disabled persons in the area. Because he had served time on remand he actually only served about two months in jail after he was sentenced.
15. She was then amazed to see the man living in her street and mocking her. She became very anxious, especially as she knew she was unable to defend herself or her children. Before that time, even after she was ill she was very self-confident and, notwithstanding her condition, was as independent as possible. Her son also became somewhat obsessive about checking locks. Until very recently she knew nothing of the Victims Compensation Scheme, and understands she may be out of time in that regard, but has a solicitor looking into that for her.
16. In January 2007 she attempted suicide. She went to a motel and took sleeping tablets and an overdose of methadone. She was discovered by the cleaner and was hospitalised for six weeks. Then she had a stroke.
17. She was terrified at the prospect of returning to the home on the Central Coast when the man who had invaded her home was still in close proximity. She would not leave the home except to go to the doctors. She investigated renting in the Tamworth area but there was nothing available. In about June 2007 she approached her mother about selling her house to her. They had it formally valued and she paid market price of $135,000. Bearing in mind how cramped it had been when she and five of the children had lived there previously she had some improvements undertaken to the kitchen and added a family room. Unfortunately, this had cost more than she had anticipated: about $60,000.
18. She said that “no-one had told [her] not to buy a house”, and this seemed to be the basis on which she could not get any Centrelink benefits. Her solicitor’s parting words to her were “the next time I see you, you’ll have a house and a car”. She put the house on the market in February 2008. It is listed with three real estate agents and is on some internet sites. She has not had a single expression of interest. She wanted $200,000, but has it on the market for $180,000. The agents suggest she might get $170,000, but she doubts this having regard to the lack of interest at $180,000. For 12 months she has advertised a room to let, again without success.
19. She has endeavoured to get a job. Employment opportunities are somewhat limited. Werris Creek has a population of only 1,600, although it is only a 15 minute drive from Tamworth. An employee of CRS Australia who assessed Ms Menere suggested waitressing but acknowledged that, as her condition leaves her prone to unexplained falls, this is not realistic. She posted babysitting signs but was told this was inappropriate as she was “not licensed”. She sells Avon, but after expenses, this raises only about $40 to $50 per month. The local community cannot afford luxuries like Avon. She sought work experience in an endeavour to update her secretarial skills but was rejected.
20. Her back problem has reduced her ability to sit for long. Her legs swell and she has a limp. She falls over and she has co-ordination problems. She cannot bend so would be unable to tend a vegetable patch.
21. Since the stroke she is forgetful and her memory is poor. She is told she talks inappropriately loudly. She angers easily. She has a frequent choking sensation which is due to two hernias in her throat.
22. She now cries frequently whereas, throughout her life, that was something she would never do. She was humiliated by the years of being in a wheelchair, and needing her children to be her carers.
23. She takes Tramadol daily for pain and Valium as required. She now takes only 20 mls of methadone daily (reduced from 160 mls) and expects to be off that within two months. Because of her suicide attempt she must attend three times per week to collect her dosage. The methadone costs her $45 per month.
24. She has a pre-paid mobile phone (which Mr Porter pays) and the plan permits free calls to her children and her sister. She maintains a landline to make cheaper calls to others. She has no cable TV, but has an internet service which costs $60 per month. She does not drink, but she smokes and this might cost $30 per week. She does not go out. On the rare occasions she and her mother might go to the club, her mother might give her $20 for the poker machine. She has stopped paying her life insurance which was costing $48 per month. She was unable to buy her son a birthday present.
25. Her children do not live with her, the last having left, supposedly temporarily, in March. This is largely because Werris Creek cannot offer them jobs or activities of interest to teenagers.
26. She survives on the generosity of her mother and Mr Porter, who give her $250 per fortnight. They phone her daily to see that she is alright. She expressed concern that this may put pressure on their relationship.
27. She acknowledged in cross-examination that she knew the money “had to last”, but thought it was only to April 2008. She thought she had been told that by Centrelink on the phone. She agreed she may have received the letter from Centrelink dated 12 July 2006 informing her about the imposition of preclusion periods by Centrelink. She acknowledged that she did not go to a Centrelink financial adviser, because she had been to her own at the bank.
Evidence: Mrs Carter
28. Mrs Carter is Ms Menere’s mother. Mrs Carter gave evidence of her daughter’s determination to get out of the wheelchair even when the medical advice was that she would not walk again.
29. She felt she had little option but to take her daughter and daughter’s children in when her daughter was released from hospital. Ms Menere was unable to care for the children and needed care herself. Mrs Carter gave evidence of how distressing it was to have to leave so many goods behind at Villawood, and to see the neighbours helping themselves. She had to be strong for her daughter and the children. She would not ask the children to attend to their mother’s frequent vomiting or her incontinence.
30. At her home at Werris Creek they argued, mostly about the children. Because there were so many of them she had to do a “roster” and the children didn’t like it.
31. When her daughter got the Housing Commission place on the Central Coast she gave her some things which were transported in a truck and a friend’s car. The house was nice but it was in a bad area.
32. She was worried when her daughter got the compensation settlement because she knew she was unable to protect herself and the children if someone were to take advantage of her. Her fears were realised when the intruder was found in her daughter’s house.
33. Mrs Carter was happy to sell her house to her daughter so she could get away from the Central Coast. Mrs Carter moved in with Mr Porter.
34. When her daughter attempted suicide the doctors “couldn’t believe” she survived. She was in intensive care for two weeks and then she had four weeks in rehabilitation.
35. Her daughter is now angry and aggressive. The most recent psychological assessment is that she is incapable of work.
36. She said she and her daughter tried raising money through a garage sale to pay for the rates. A friend has given her $200 for her daughter, and someone she does not even know (a friend of a friend) gave her $50. This went to pay the power bill. She and Mr Porter do not begrudge helping her daughter. She knows that but for them, her daughter would be “on the street”.
37. She is worried that her daughter might attempt suicide again. Only six weeks ago the contact person at CRS Australia became worried that Ms Menere was desperate and sent the police to check she was alright.
DISCUSSION AND FINDINGS
38. I had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 (“the T-documents”), which I took into evidence (Exhibits R1 and R2).
39. In addition, the following documents were tendered:
·CT scan final report dated 31 January 2007 (Exhibit A1)
·Discharge summary – Northern Sydney Central Coast Health dated 12 February 2007 (Exhibit A2)
·Job Capacity Assessment Report – assessment date 4 June 2008 (Exhibit R3).
40. Following settlement of her personal injury claim Ms Menere received a lump sum payment which was compensation as defined in section 17(2) of the Act. The total sum awarded before any deductions was $550,000.
41. Pursuant to section 17(3) of the Act, the “compensation part of a lump sum compensation payment” is 50 per cent of the lump sum, which amounts to $275,000. There was no dispute that, if the statutory formula contained in section 1170 of the Act was applied to the Applicant’s circumstances, a preclusion period would result from 3 April 2002 to 3 November 2009.
42. A charge of $51,864.82 was recovered representing compensation affected payments that Ms Menere had received since the commencement of the preclusion period. There was no dispute concerning the calculation and recovery of the charge. The only matter in issue was whether the preclusion period should be reduced so that Ms Menere could receive income support payments prior to 3 November 2009.
43. It was the Respondent’s position that there are no special circumstances in the Applicant’s case such that the discretion to disregard parts of the compensation payments pursuant to section 1184K(1) of the Act should be exercised.
44. The Tribunal reviewed the decision in Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281 where Mansfield J, said that “s 1184 [as it then was] is designed specifically to enable the respondent, and on review the Tribunal, Department to ameliorate such unfairness or injustice when it appears by virtue of the strict application of the Act”.
45. The discretion, in special circumstances, to disregard the whole or part of a compensation payment can be exercised where application of the usual rules would lead to a result that is unfair or inappropriate (see Beadle v Director-General of Social Security (1985) 7 ALD 670 and Secretary, Department of Social Security v Hulls (1991) 22 ALD 570). The Federal Court in Secretary, Department of Social Security v Smith (1991) 30 FCR 56 held that it is appropriate for the discretion under section 156 (as it then was) to be used where the arbitrary nature of the “50 per cent rule” results in unfairness in a particular case.
46. Section 1184K(1) is a way of alleviating the harshness of a statutory provision in appropriate cases where there are special circumstances. Special circumstances do not have to be statistically extreme or unique, it is sufficient if there is something that takes the matter out of the usual ordinary case, (see Haidar v Secretary, Department of Social Security (1998) 52 ALD 255 at 264, in which Hill J cited the earlier Federal Court cases of Groth v Secretary, Department of Social Security (1995) 40 ALD 541 and Secretary, Department of Social Security v Ellis (1997) 46 ALD 1).
47. I considered each likely “special circumstance” in turn.
Advice
48. Ms Menere and her solicitors were advised of a preclusion period both before and after she settled her claim. Although there was some dispute about what her understanding was as to the end date, there was no dispute that she knew the money was to last beyond November 2007 when it in fact ran out.
49. She understood her solicitor’s advice to be to buy a house. She thought buying a house was a good idea and that it would provide something for her children.
50. Knowledge of the preclusion period and its relevance to taking into account the applicant’s spending of the compensation payments was considered in Re Secretary, Department of Social Security and Norman (AAT 13005, 22 June 1998). In that case, the Tribunal did not find special circumstances as the respondent had been made aware that the preclusion period would apply to him and the length of the period. The Tribunal decided that the respondent did not wisely control his spending, that the respondent was able to do so and did not. It was submitted that in this case the Applicant was able to control her spending and voluntarily chose not to.
Financial Hardship
51. Financial hardship alone is not sufficient to amount to special circumstances unless it is “exceptional” and not merely “straitened”: Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985) and Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716.
52. The Respondent contended that, in this case, Ms Menere’s circumstances are not “straitened”.
53. The Respondent submitted that Ms Menere’s financial circumstances were not exceptional, largely on the basis that Ms Menere is living in her own unencumbered home, a valuable asset that can be realised. The evidence, however, was that the home is not able to be realised, because there is no market for it. Ms Menere has been attempting to sell it since February this year without success. Understandably, she is not keen to sell her home for less than it has cost her. Further, she has attempted to take in lodgers, also without success.
54. There is no point in her seeking to mortgage the home – she could not fund repayments.
55. It was said that there is no evidence that she has significant debts or an incapacity for work. On the contrary, she is unable to pay her bills and relies on the charity of her mother and others to live. Further, the most recent medical evidence is that she is incapable of work. Despite this she endeavours to do so and attempts to improve her work skills.
Expenditure
56. When considering the existence of financial hardship, it is relevant to consider the way in which an applicant’s claimed hardship arose. There is also a need to consider how the lump sum was expended. Any expenditure undertaken “must be taken in the context of what can be afforded”: Re Cvetanoska and Secretary, Department of Family and Community Services [2000] AATA 459. The Respondent submitted that Ms Menere’s expenditure of the lump sum within a short period of time was the result of her choices in circumstances where she knew that her compensation money was to last.
57. Ms Menere received a net figure of $410,000 out of a total settlement of $550,000 in July or August 2006. By November 2007, she had no money left. The bulk of the money – a total of nearly $200,000 was spent on purchasing and improving a home.
58. I accept as entirely reasonable Ms Menere’s evidence that she needed to get away from the Central Coast because of her terrible experience with an intruder. Her ability to rent accommodation was limited by the size of the property she needed and her poor rental history. I accept too that she wanted a home so her children could reside with her and the bitter disappointment when all ultimately decided not to do so.
59. The Respondent contended that this purchase may not have been necessary given that her mother had allowed her to live with her for two years. I reject this submission as unreasonable, especially given the evidence in relation to the cramped conditions and the ensuing arguments when they had lived there previously. Furthermore that she lived there with her children was entirely because of the goodwill of Mrs Carter.
Renovations
60. Ms Menere carried out renovations and extensions costing about $60,000 which included a new kitchen and a new rumpus room. The Respondent submitted that the decision to renovate was not justified at the time when the settlement monies was intended to provide financial support until the end of the preclusion period. I agree that there was a degree of naiveté in arranging expensive renovations in Ms Menere’s circumstances. There was no evidence that they were essential.
Furniture
61. When Ms Menere vacated her home in Villawood, she had to leave behind household goods because she was unable to transport everything. As a consequence, she was ultimately required to purchase new furniture and household goods amounting to possibly as much as $80,000. I accept her evidence that she had no choice about moving because of her condition; as to the urgency of the move; and the likely disproportionate expense of storing old household goods.
62. I reject the Respondent’s submission that she should now sell some of her household items in order to alleviate her position. Furthermore, I note she has already conducted a garage sale of household goods in order to pay bills.
Loans & Debts
63. The Respondent contended that Ms Menere was very generous in the way she handled her compensation settlement. She repaid debts; she lent money to various family members; she paid her son’s fines because he was her carer and also because he needed his car to get to work.
64. I note the Respondent’s submission that her repayment of debts to family members and friends was only a moral obligation and as such should not be classed as giving rise to a financial hardship: Re Cavuoto and Secretary, Department of Social Security (AAT 9249, 13 January 1994) and Re Minda and Secretary, Department of Social Security (1989) 49 SSR 641. While there may have been no legal obligation to repay the debts her preparedness to do so is consistent with my observation of her as a genuine and sincere person who does not readily accept charity.
Gifts
65. Ms Menere bought two of her children cheap second hand cars because they were her carers and also to assist in their transportation to jobs. I note the decision in Re Minda (supra) and Re Martin and Secretary, Department of Social Security (AAT 6482, 14 November 1990), but do not regard this expenditure as unreasonable.
66. She spent $6,000 on a holiday to the Gold Coast. I accept her evidence that she took the children on the holiday because they had been somewhat deprived in the years of her illness. In this regard I note that at the time she was still in a wheelchair herself and hence, unlikely to be in the nature of self-indulgence.
67. That she spent $10,000 on clothes for the children is unremarkable considering there are seven of them.
Other Assets
68. Ms Menere purchased a motor vehicle for herself at a cost of $26,000. She has some household items. There was no evidence of other assets. It was submitted that she is in a better financial situation than many Centrelink recipients since she has realisable assets that can be disposed of and the proceeds used to support herself until the end of the preclusion period. Having regard to her ill health I do not consider it appropriate that she dispose of the car, or that she acquire a less expensive car. Such a car would be likely to require additional maintenance that she cannot afford, and be less reliable.
69. I do not accept the Respondent’s submission that the bulk of her expenditure was on non-essential items, and as such, that spending does not to constitute special circumstances: Re Testa and Secretary, Department of Social Security (AAT 4956, 14 March 1989) and Re Latour and Secretary, Department of Social Security (1988) 16 ALD 279.
70. I was referred to Re Secretary, Department of Social Security and Barry (AAT 10320, 28 July 1995), in which the Tribunal found that the exercise of the discretion to shorten the preclusion period was unjustified, because “it would condone a spending pattern which took little or no account of planning for financial maintenance during the preclusion period”. I was also referred to Re Black and Secretary, Department of Social Security (1995) 83 SSR 1219 which was said to bear some similarities to the present matter. There was evidence in that matter of significant expenditure on family members, holiday travel, new furniture and household items. In Re Dunn and Secretary, Families and Community Services [2005] AATA 404, an applicant who had five children had been subjected to a series of unfortunate events that had beset her and her family including one of her children being very unwell and the applicant, herself, having two accidents at work. She suffered from depression, panic attacks and chronic gambling. She had dissipated her compensation settlement very rapidly in a short period of time despite having a family to support and a mortgage to meet.
71. Unlike those matters, I do not consider Ms Menere to have entered into a pattern of reckless spending as soon as she received her compensation money. Her spending was measured, over time and she thought buying the house was a sensible thing to do.
72. With the possible exception of the improvements to the property, her spending has not been unreasonable.
Ill Health
73. The Respondent contended, correctly, that ill health does not of itself constitute special circumstances: Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464 and Re Secretary, Department of Social Security and Bunge [1990] AATA 486.
74. While this may be true in respect of the medical condition which gave rise to the personal injury litigation, she now has other, unrelated medical problems: gastric hernias, methadone treatment, and the deep depression which gave rise to her suicide attempt. All those conditions may have a favourable prognosis. She does, however, appear to have permanent cognitive impairment arising from her stroke.
75. As well, the Respondent contended that any reference to medical expenses cannot constitute special circumstances, especially as Ms Menere is covered by Medicare and has a Health Care Card. I note, though, that her medical expenses for methadone are paid by her, and this expense is not associated with her personal injury. Other treatments which may assist her physical limitations (for example, the physiotherapy, acupuncture etc) are likely to be out of her financial reach.
CONCLUSION
76. The Respondent submitted, and I agree, that the purpose of the legislation is to ensure that an injured person who receives compensation does not “double-dip” and receive benefits from the public purse in respect of the same period of time: Secretary, Department of Social Security v Hulls & Others (1991) 22 ALD 570, and Secretary, Department of Family & Community Services v Chamberlain (2002) 116 FCR 348. I was referred particularly to Re Secretary, Department of Social Security and Winterbotham (AAT 6499, 11 December 1990) in support of the Respondent’s contention that “primary responsibility for the payment of … 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.
77. In this matter though, much has changed in Ms Menere’s life since the settlement. Most notably she was traumatised by an intruder in her home in circumstances where she was acutely aware, being wheelchair-bound, of being unable to defend herself and her children. She was horrified to see the intruder, on release from prison after a remarkably short period, living in her street. She needed to get away. She thought she was prudent in buying a house for herself and her children. She has tried for months to sell it; tried to find a lodger; tried to find a job; tried to get work experience; and raised money through a garage sale. She has attempted suicide. She has had a stroke. Her children have deserted her. She is alone and is reliant on her mother and her mother’s partner. She lives entirely on charity. I find her circumstances to clearly be distinguishable from the usual case: Dranichnikov v Centrelink (2003) 75 ALD 134.
78. I find that Ms Menere’s circumstances are sufficiently unusual, uncommon or exceptional so as to render the strict application of the Act unjust, unreasonable or inappropriate.
79. I therefore reduce the preclusion period so as to end on 9 November 2008.
DECISION
80. The decision under review is set aside. The preclusion period is to end on 9 November 2008.
I certify that the 80 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member
Signed: ..............[sgd]..................................................................
AssociateDate of Hearing 19 August 2008
Date of Decision 20 October 2008
Solicitor for the Applicant Self-represented
Solicitor for the Respondent Ms J Maclean, Legal Services and Procurement Branch, Centrelink
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