Moran and Secretary, Department of Employment and Workplace Relations

[2006] AATA 102

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR ORAL DECISION [2006] AATA 102

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S2005/286

GENERAL ADMINISTRATIVE DIVISION		)
Re		VINCENTE MORAN

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Deputy President D G Jarvis

Date10 January 2006

PlaceAdelaide

Decision The Tribunal affirms the decision under review. 

…………………………………..
  D.G. Jarvis
  Deputy President

CATCHWORDS

SOCIAL SECURITY – disability support pension – lump sum payment of compensation – preclusion period – discretion to treat whole or part of compensation payment as not having been made – whether special circumstances exist  – decision under review affirmed.

Social Security Act 1991, s 1184K(1)

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Re Dunn and Secretary, Department of Family and Community Services (2003) 74 ALD 746

Re Ivovic and Director-General of Social Services (1981) 3 ALN N95

Re Secretary, Department of Family and Community Services and Peak (2003) 79 ALD 734

Riddell v Secretary, Department of Social Security (1993) 30 ALD 31

REASONS FOR ORAL DECISION

10 January 2006   Deputy President D G Jarvis

1.      In May 1990 the applicant, Vincente Moran, sustained work injuries for which he claimed compensation.  In January 2003, he settled his claim for a lump sum of $161,974.27.  This included an amount of some $109,000 for loss of earning capacity.

2.      In letters dated 14 January and 15 July 2003, Centrelink referred to the settlement of Mr Moran’s compensation claim, and advised him that if he needed to apply for Centrelink payments in the future, he was precluded from receiving any such payments for the period 13 July 2003 to 4 February 2006 (the “compensation preclusion period”).

3.      On 3 May 2005 Mr Moran lodged a claim for a disability support pension pursuant to the Social Security Act 1991 (‘the Act”).  His claim was rejected on the basis that as a result of the lump sum settlement of his workers’ compensation claim, he was precluded from payment of compensation affected payments for the compensation preclusion period.

4. On 23 September 2005 the Social Security Appeals Tribunal (“SSAT”) affirmed a subsequent rejection of his claim by an authorised review officer. The SSAT further decided that there were no special circumstances that would allow the whole or part of the compensation payment to be treated as if it had not been made pursuant to s 1184K of the Act.

5.      Mr Moran has applied to this tribunal for review of the decision of the SSAT.  At the conclusion of the hearing, I announced that on the evidence before me, I did not consider that special circumstances existed in this matter, and I accordingly affirmed the decision under review.  Subsequently the respondent requested reasons for my decision.  I now provide these reasons in response to that request.

Issue before the Tribunal

6. The issue before me was whether special circumstances existed that would make it appropriate to treat the compensation payment either in whole or part as not having been made. Mr Moran did not dispute that he had received the above letters of 14 January and 15 July 2003, and did not challenge the correctness of the calculation of the compensation preclusion period under the Act. He also acknowledged that at the time of settlement of his compensation claim his legal representative made him aware of the application of a preclusion period to his eligibility to make any claim for social security benefits in the future.

Background

7.      Mr Moran is forty seven years of age, having been born on 28 March 1958.  He came to Australia in 1971 when he was twelve years old.  Initially his family settled in Griffith in New South Wales.

8.      In May 1990 Mr Moran sustained a number of work injuries for which he received periodic compensation payments, and also the lump sum compensation payment referred to above.

Mr Moran’s evidence

9.      I found Mr Moran to be an honest and forthright witness, and I accept his evidence, which I summarise as follows.

10.     Mr Moran married in about 1977 and bought a property in Griffith.  However, he was divorced about ten years later, and his wife took all of his assets.  He has two children with his former wife, aged 20 and 18.

11.     He began a relationship with a Ms Fabris in 1990, and this relationship ended in December 2004.  He has two children with Ms Fabris, aged 7 and 4.  Mr Moran was also expecting his fifth child with his current partner, Ms Jodie Salter, and it was expected that this child would be born shortly after the hearing.

12.     Mr Moran spent a period of time at a mental health facility, Crammond Clinic, in November 2004, and he had difficulty in coping with problems in his life.  The respondent conceded that Mr Moran has been recognised by Centrelink as suffering from a major depressive illness with anxiety.

13.     During their relationship Ms Fabris and Mr Moran lived together at a property in Allenby Gardens owned by Ms Fabris.  Mr Moran contributed significantly to the general maintenance, upkeep and improvements upon this property in terms of manual labour and also in a financial capacity.  He painted the house, built a pergola and installed a burglar alarm system, an air conditioning system and a new hot water system, and made various other improvements to the property during the fourteen-year relationship.

14.     Mr Moran also took financial responsibility for the general maintenance of the two cars he and Ms Fabris owned during their relationship, by paying for the registration and insurance of these vehicles. Ms Fabris did not work, and her social security payments were sufficient for her to pay for the council rates and to provide food for the family, but Mr Moran was responsible for their other expenses.  He estimated that over the period of the relationship he spent between $10,000 to $20,000 on improvements to the property, but added that this did not include some of the improvements such as the pergola, which he installed and which cost approximately $7,000.

15.     Mr Moran acknowledged that he would have a financial interest in the Allenby Gardens property that he had shared with Ms Fabris, but said that because of his children he felt he could not take steps to obtain a property settlement.  He said that he had spent months repainting and decorating his son’s room, and his children were devastated when he left their mother, and he could not take their home away from them.

16.     It appears that Mr Moran has suffered various injuries to his back and shoulders over the years.  The injury which led to his receiving a lump sum compensation payment resulted from a fall on a construction site.  He said that he was a very strong man at the time of this accident, but that he injured his back, shoulders, and his right knee in the accident.  He is now unable to work, and his back and knee problems have developed to a point where sometimes he is unable to get out of bed in the morning.  He said his muscles in his back “jam”, and this causes him considerable pain and discomfort.  At times his pain is treated by an injection in his back to relieve the stress.  He also referred to his right knee causing him pain.  He said that sometimes his pain causes him to think that he does not want to live.

17.     Mr Moran said his current financial situation was extremely strained.  He said that he had “been broke since about 6, 7 May (2005)”, and that he owed his sister approximately $300.  He said that he is not currently living with his current partner, Jodie Salter, and has been staying with a friend in Gilles Street.

18.     Mr Moran said that he and Ms Salter have managed financially since May 2005 by selling items such as televisions, computer chairs and other equipment.  He also sold his jet ski for somewhere between $1,500 or $1,800.  He has been assisted by some of the charitable organisations working in Adelaide who provided food and small amounts of money to those in need.

19.     In cross-examination Mr Moran agreed that he had made a number of significant purchases, including a caravan for which he paid $37,000, his current vehicle for $24,200, a boat and a jet ski.  He also admitted that he had gambled approximately $7,000 at the casino.  He agreed that he “blown” other compensation money of about $10,000 which he had received in March 2005 for a car accident.  He also said that he went on holiday with Ms Salter, and also gave her between $2,000 to $3,000 despite his increasingly strained financial circumstances.  According to the facts found by the SSAT, which Mr Moran said were correct, he had about $40,000 when he left his former partner in December 2004, but this “disappeared”.

20.     Mr Moran said that following the failure of his relationship with Ms Fabris he “really got out of place. I lost a bit of control there.”  He said that during this time he gambled more, and that as his situation worsened he felt as if nothing had a meaning or purpose.

21.     In early 2005 Mr Moran began his relationship with his current partner, Ms Jodie Salter.  He contributed a lot to the daily finances of the household.  Ms Salter has four children of her own, and is expecting her fifth with Mr Moran shortly.  Mr Moran said that he and Ms Salter had smoked a lot of marijuana in the past, and that he had paid for the marijuana and most other costs the family incurred.

22.     It appears that Mr Moran still has some assets of value, namely his car and his boat.  He clearly does not want to sell these items, which he said he had acquired as a result of his hard work over the last twenty years.  If he did sell them, it appears that they would bring substantially less than the amount they had cost.

Other Facts Raised by Respondent

23.     Prior to the conclusion of the hearing of this matter the respondent’s advocate, Mr Goldsworthy, indicated that as Mr Moran has no debts with Centrelink he would be entitled to receive a $500 advance payment immediately following the expiration of the preclusion period.  He also said that it would be possible to arrange for Mr Moran to have an interview with a Centrelink officer a few days prior to the expiration of the preclusion period in order to reduce the delay between his eligibility and receipt of social security payments, assuming that the assessment of his claim was favourable.

24.     Mr Goldsworthy further pointed out that at the time of the hearing Mr Moran had no dependants, he was not liable for rent, and his preclusion period would end only twenty three days after the hearing.  Mr Goldsworthy further pointed out that when Ms Fabris’ child was born, she would be entitled to a $3,000 maternity payment from the Commonwealth, as well as the Family Tax Benefit and Parenting Payment, and that those payments would be more than adequate to provide for the infant for the duration of the preclusion period.  It was therefore not likely that Mr Moran would be called upon to provide any financial support for his infant child before the expiry of the preclusion period.

Mr Moran’s Submissions

25.     In addition to the evidence he gave to the tribunal in support of his claim that his situation constituted “special circumstances” Mr Moran highlighted a number of difficulties he had faced.  In particular, he referred to the breakdown of his relationship with Ms Fabris, and his having suffered a mental illness, as well as his physical disabilities.  He also emphasised the high cost of living and his financial responsibilities to his family, both when he was living with Ms Fabris, and later towards Ms Salter and her four children.

Consideration

26. Section 1184K(1) of the Act enables this tribunal, on the hearing of applications to it to review decisions of the SSAT in the circumstances of the present matter, to decided whether there are special circumstances that make it appropriate to treat the whole or part of a lump sum compensation payment as not having been made. This would have the effect of reducing the compensation preclusion period. Section 1184K(1) provides as follows:

“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.”

27.     The meaning and application of the expression “special circumstances” has been considered on many occasions.  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the tribunal, constituted by Toohey J and Members Wilkins and Billings, 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 the circumstances answer any of these descriptions must depend upon 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 must have a particular quality of unusualness that permits them to be described as special.”

28.     In a later case, namely Riddell v Secretary, Department of Social Security (1993) 30 ALD 31, the Full Court of the Federal Court said, at page 38:

“Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.”

29.     The respondent’s advocate, Mr Goldsworthy, submitted that Mr Moran had expended the bulk of his compensation pay-out on what he described as “frivolous activities and luxuries”, and further that Mr Moran had been reckless in spending his pay-out.  In making these submissions he referred to Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, where the tribunal rejected a submission that it should ignore the circumstances out of which the alleged hardship is said to have arisen.

30.     Mr Goldsworthy also referred to two other decisions of the Administrative Appeals Tribunal, namely Re Secretary, Department of Family and Community Services and Peak (2003) 79 ALD 734 and Re Dunn and Secretary, Department of Family and Community Services (2003) 74 ALD 746. He submitted that those two decisions were similar to the within proceedings, in that in both matters the applicant’s conduct involved gambling and reckless expenditure, a level of psychiatric imbalance, and family responsibilities. However, the circumstances in both cases were not found to capable of the categorisation as “special”.

31.     I have carefully considered the facts of this matter by reference to the principles laid down in the cases referred to above.  All of these cases ultimately depend on their own facts.  In considering Mr Moran’s financial position, family responsibilities and ill health, being the matters upon which he relies to show special circumstances, I must also have regard to the position of other persons receiving Centrelink benefits, and consider how Mr Moran's situation compares with that of other people, in order to decide whether his circumstances may be described as “unusual, uncommon or exceptional”.

32.     Whilst I felt sympathy for Mr Moran and the difficult circumstances in which that he finds himself, I reached the conclusion that Mr Moran’s position is such that special circumstances do not exist in his case.

33.     Mr Moran is in very difficult financial straits.  However, he is not responsible for rent at his current address, and remains in possession of some assets that could be sold, which would provide some financial relief during the remainder of his preclusion period.  At the time of the hearing, he had no dependants, as his younger children reside with their mothers, and as mentioned above, when Ms Fabris’ child was born, she would have been entitled to social security payments that could provide financially for the infant in the immediate future.

34.     I accept that Mr Moran has serious health difficulties which also prevent or make it difficult for him to undertake regular employment.  However, unfortunately many other persons seeking social security benefits are also often affected by serious ill health.

35.     I have also taken into account that with Mr Goldsworthy’s assistance, Mr Moran’s claim for a disability support pension should be assessed quickly, and that if it is approved, it is likely that a loan will be available to him forthwith after the expiration of the preclusion period.  As at the date of the hearing, it therefore appeared that it was likely that some relief from his extreme financial difficulties would be available in the near future.

36. For the sake of completeness, I add that it is most unlikely that any claim against his former de facto partner for a property settlement would provide some relief from his financial difficulties in the period before the expiration of the preclusion period. Any such claim would almost certainly take a reasonable time before it could be resolved. However, I agree that Mr Moran’s failure in the past to make such a claim is a relevant matter, in that it is one of the factors which have led to his current financial difficulties, and further illustrates that these difficulties are to a significant extent of his own making. These considerations are in my view relevant to the further question that would arise under s 1154 of the Act if I had found that special circumstances did exist, namely the question of whether I should exercise my discretion in favour of the applicant. His conduct, including his failure to pursue a property settlement, would indicate that it would not be appropriate to exercise my discretion in his favour even if I had found that special circumstances existed.

37.     For the above reasons, I find that Mr Moran’s present circumstances are not so unusual, uncommon or exceptional compared with other persons receiving social security benefits as to amount to special circumstances.  I further consider that it would not be appropriate in this matter to reduce the preclusion period.

Decision

38.     I affirm the decision under review.

I certify that the 38 preceding paragraphs are a
true copy of the reasons for the decision
herein of Deputy President D G Jarvis

Signed:         .....................................................................................
           J. MacIntyre  Associate

Date/s of Hearing  10 January 2006
Date of Decision  10 January 2006
Solicitors for the Applicant          In person
Advocate for the Respondent    Mr C Goldsworthy
Solicitors for the Respondent     Legal Services Branch