Morris; Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and
[2008] AATA 649
•28 July 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 649
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/3936
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS Applicant
And
RAYMOND MORRIS
Respondent
DECISION
Tribunal Mr S E Frost, Member Date28 July 2008
PlaceSydney
Decision The decision under review is set aside and in substitution therefor the Tribunal decides that the preclusion period applicable to Mr Morris end on 26 December 2008. ...................[sgd]...........................
Mr S E Frost
Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – lump sum preclusion period – discretion to treat compensation payment as not having been made – no special circumstances – the decision under review is set aside
Social Security Act 1991 – Section 1184K
Re Beadle and Director-General of Social Security [1984] AATA 176; 6 ALD 1
Re Ivovic and Director-General of Social Services [1981] AATA 57; 3 ALN N95
Re Green and Secretary, Department of Social Security [1990] AATA 550; 21 ALD 772
Groth v Secretary, Department of Social Security [1995] FCA 1708; 40 ALD 541
Re Secretary, Department of Social Security and Winterbotham [1990] AATA 808
Re Secretary, Department of Social Security and VYS [1995] AATA 371
Re Farthing and Director-General of Social Security [1984] AATA 363
Re Colaiacolo and Secretary to the Department of Social Security [1985] AATA 91
Re Secretary, Department of Education, Employment and Workplace Relations and Muslemani [2008] AATA 116
Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67
REASONS FOR DECISION
28 July 2008 Mr S E Frost, Member Introduction
1. Mr Morris was injured in a motor vehicle accident in March 2004. He was paid workers compensation for a period after the accident and in April 2005 he claimed and was granted disability support pension (DSP) as he was unable to return to work.
2. In March 2007 he received a lump sum compensation payment. As a result of that compensation payment he was required to repay to Centrelink the DSP that had been paid to that date. Centrelink also determined that he would be subject to a "lump sum preclusion period", during which he would not be able to receive the DSP. That preclusion period would expire in June 2009.
3. There was a subsequent correction made to that calculation, as a result of which it was determined that the preclusion period would end on 26 December 2008.
4. Mr Morris requested a review of the decision relating to the preclusion period, but the Authorised Review Officer (ARO) affirmed the decision.
5. On appeal to the Social Security Appeals Tribunal (SSAT) Mr Morris was partially successful. The SSAT decided that some part of his compensation payment should be treated as not having been made. As a result, his preclusion period was recalculated to end on 2 May 2008.
6. The Secretary has appealed against the SSAT decision.
The issue
7. The issue before me is whether I should exercise the discretion under s 1184K of the Social Security Act 1991 (the Act) to treat the whole or part of Mr Morris' compensation payment as not having been made. I can only exercise the discretion if I think it is "appropriate to do so in the special circumstances of the case". The consequence of a favourable exercise of the discretion would be a shortened preclusion period.
8. If I decline to exercise the discretion, the parties agree that the preclusion period will expire on 26 December 2008.
Should the discretion be exercised?
9. I am satisfied that it is not appropriate to exercise the discretion in the circumstances of Mr Morris’ case. Therefore, the preclusion period will end on 26 December 2008.
“Special circumstances” and the policy behind the preclusion period
10. Some of the many authorities dealing with “special circumstances” say that:
· a person’s circumstances need not be unique, but must be “unusual, uncommon or exceptional”: Re Beadle and Director-General of Social Security [1984] AATA 176; 6 ALD 1;
· there must be factors that justify making the particular case an exception from the general run of cases: Re Ivovic and Director-General of Social Services [1981] AATA 57; 3 ALN N95;
· decision-makers should exercise the discretion in cases where strict enforcement of the usual rules would be unjust, unreasonable or otherwise inappropriate: Re Green and Secretary, Department of Social Security [1990] AATA 550; 21 ALD 772;
· in cases of claimed financial hardship, it will not be sufficient to demonstrate “straitened” circumstances; the hardship must be truly exceptional: Groth vSecretary, Department of Social Security [1995] FCA 1708; 40 ALD 541.
11. In the particular context of the lump sum compensation preclusion period, the following was noted in Re Secretary, Department of Social Security and Winterbotham [1990] AATA 808:
This particular piece of legislation [introduced by a 1988 amendment to the previous Act, but for practical purposes identical to s 1170 of the 1991 Act] 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 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.
12. Even so, the Tribunal has also commented, in Re Secretary, Department of Social Security and VYS [1995] AATA 371:
I agree that it is inappropriate for a system of Social Security to require people to take "a one way ticket to poverty" to qualify for Social Security payments.
13. The Secretary’s Statement of Facts and Contentions dealt with Mr Morris’ circumstances in three broad categories – Financial Circumstances; Health, Emotional State and Lack of Accommodation; and Insufficient or Incorrect Legal Advice. Mr Morris’ Statement of Facts and Contentions took the same course and it is convenient for me to deal with the matter in the same way.
Financial circumstances
14. In net terms, Mr Morris received in April or May 2007 a total of about $188,000 as a result of his accident. He invested the bulk of that amount in an MLC Nominees MasterKey account. As at 16 January 2008 the balance of that account was just over $178,000.
15. It seems that weekly amounts of $409 are transferred from that account to a savings bank account for living expenses. It is clear that Mr Morris is gradually depleting the MasterKey account and by the end of the preclusion period his normal living expenses will have consumed a further $20,000 of that $178,000.
16. In an undated document which appears to have been prepared for the SSAT hearing in July 2007, there were listed as “debts to be addressed this month” the following (T49/203):
SOLICITOR 22K
CAR 27K
FURNITURE 15K
RENT 12K a year
DENTAL 16K
PREPAID FUNERAL 8K
FUTURE OPERATION ON SHOULDER 30K
Debt to family 2,500
TOTAL 132.5K
17. That document also has handwritten references to pharmacy expenses of $150 per month, “Future operations? (Neck, spine, hip)”, “Wheelchair?” and “Cortisone injection spine?”.
18. Since that time the solicitor’s fee was reduced to around $15,000, which Mr Morris paid in November 2007. Mr Morris has also provided to the Tribunal a “treatment plan” from a dental surgeon which lists 37 dental treatments totalling $18,547. However, I am not told how many of these treatments are essential, nor whether they are required urgently. In relation to the remaining items in the document there is at best scant information. There is no evidence that he either needs, or even intends, to buy himself a car, or furniture, nor how much he intends to pay for them, and the handwritten notes accompanied by question marks remain as mysterious and uncertain as when they were first written.
19. There is also a quote from an orthopaedic surgeon indicating that a “left total knee replacement” will cost $4,166.67 (or $3,750 if paid within 30 days of invoice) plus 20% of that fee for the assistant doctor.
Health, Emotional State and Lack of Accommodation
20. Mr Morris has had generalised osteoarthritis in multiple joints and in particular both knees. He underwent a right total knee replacement in July 2007 and “at some stage”, according to one of his doctors, he will need a left knee replacement (Exh R1, Tab 2).
21. He suffers significantly restricted movement in his right shoulder, as a result of the motor vehicle accident in 2004. Corticosteroid injections to the shoulder have provided only short term relief.
22. He suffers neck and lower back pain, apparently aggravated by the motor vehicle accident.
23. He is on an extensive range of medications including regular analgesics and anti-inflammatory drugs to help control his pain (Exh R1, Tab 3).
24. He has a history of alcoholism and gambling, both of which now seem to be under control (T2/p6, para 13).
25. In March 2008 he was suffering acute anxiety (Exh R1, Tab 5). He will require ongoing psychological and psychiatric care (Exh R1, Tab 6).
26. His current living arrangements are unclear. At the time of the SSAT hearing in July 2007, he was living in a “half-way house” and had no stable accommodation. Towards the end of 2007 he applied to the NSW Department of Housing for priority housing and apparently that application was granted in March 2008 (Exh R1, Tab 11). A “Case Management Plan” prepared, apparently, by the “Wayback Committee” in May 2008, indicates a desire for assistance from Meals on Wheels, and some level of home care assistance.
Insufficient or incorrect legal advice
27. This factor was included by the Secretary as a separate category because of Mr Morris’ early assertions that he had received poor legal advice in relation to the accident claim. The SSAT, correctly, disregarded his assertions as irrelevant to the question whether Mr Morris could establish “special circumstances”. I propose to do the same: Re Farthing and Director-General of Social Security [1984] AATA 363; Re Colaiacolo and Secretary to the Department of Social Security [1985] AATA 91; Re Secretary, Department of Education, Employment and Workplace Relations and Muslemani [2008] AATA 116.
Consideration
28. The fundamental elements of Mr Morris’ case in favour of exercising the discretion in s 1184K of the Act are that:
· he suffers a range of significant pre-existing conditions – conditions that existed prior to the motor vehicle accident in 2004, and which were not taken into account in the quantification of the lump sum payment; and
· because the money he has invested does not provide him with a “living income”, he is required to live off the capital of his compensation payment.
29. I have not found those arguments convincing – partly, I suspect, because Mr Morris’ case was conducted almost as if it were an application for judicial review of the SSAT decision (urging me not to disturb that decision) rather than a full merits review of his circumstances.
30. I do not wish to underestimate the difficulties facing Mr Morris. His health is poor. Some of his conditions pre-date the accident and it will be expensive for him to have those conditions treated. However, on the face of it, he has ample funds available to afford those treatments. It seems to me to be consistent with the legislation, and with the authorities noted in paragraphs 10 to 12 of these reasons, that Mr Morris, and not the taxpayer, should be expected to fund those treatments as far as possible.
31. That is not to suggest that the legislation should be read as requiring claimants to exhaust all their resources before they can receive taxpayer-funded benefits. That said, it is clear that the legislation is designed so as to ensure, as far as possible, that benefits are directed to those most in need: see Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67, at [18].
32. I am not persuaded that, in terms of s 1184K of the Act, it is appropriate in the circumstances of Mr Morris’ case to treat the whole or part of his compensation payment as not having been made.
Conclusion
33. I therefore set aside the decision of the Social Security Appeals Tribunal and in its place, reinstate the corrected decision of the Secretary referred to in paragraph 3 of these reasons, and affirmed by the ARO. Mr Morris’ preclusion period will end on 26 December 2008.
I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S E Frost, Member
Signed: .................[sgd]...............................................................
AssociateDate of Hearing 28 May 2008
Date of Decision 28 July 2008
Solicitor for the Applicant Ms J Maclean, Centrelink Legal Services
Counsel for the Respondent Mr N Angelov
Solicitor for the Respondent Ms P Savage, Frontier Law Group
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