Murgevski and Secretary, Department of Family and Community Services

[2004] AATA 1045

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1045

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2004/94

GENERAL ADMINISTRATIVE  DIVISION		)
Re		DRAGI MURGEVSKI

Applicant

And SECRETARY,DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal M.A.Griffin

Date6 October 2004

PlaceSydney

Decision The decision under review is affirmed.

[SGN] M.A.Griffin, Member

CATCHWORDS

SOCIAL SECURITY – civil action lump sum compensation payment – recovery of social security payments by Centrelink – consideration of special circumstances - decision affirmed

Social Security Act 1991 - s1184K

Dranichnikov v Centrelink (2003) 75 ALD 134

Groth v Department of Social Security (1996) 40 ALD 541

REASONS FOR DECISION

6 October 2004 M.A.Griffin              

1.      This is an application by Mr Dragi Murgevski (“the Applicant”) for review of a decision of the Social Security Appeals Tribunal (“SSAT”) dated 16 December 2003. The SSAT affirmed the decision of an authorised review officer (“ARO”) of Centrelink dated 30 September 2003, to recover a charge of $117,116.58 from Mr Murgevski’s compensation settlement for social security payments paid to himself and his wife between 4 June 1993 and 23 November 2001.

2.      At the hearing of this matter, Mr Murgevski was represented by Mr J.R. Young of counsel, instructed by Mr K Papanicolaou of P & A Lawyers. Ms C. Collis, a Centrelink advocate from the Centrelink Service Recovery Team, represented the Secretary, Department of Family and Community Services (“the Respondent”).

3. The Tribunal received into evidence the documents lodged under section 37 of the Administrative Appeals Tribunal Act1975 (“the T Documents”) (T1-24) as well as exhibits marked A1-A3 for Mr Murgevski and R1-R3 for the Respondent.

BACKGROUND

4.        Mr Murgevski used to work for Telecom. His arm was injured at work in July 1990.  He received periodic compensation payments from the GIO until February 1993. His employment ceased in April 1993. He commenced receiving job search allowance in June 1993, transferring to newstart allowance in May 1994 and then to carer payment in August 2003. Mrs Murgevski was granted partner allowance in September 1994, then parenting allowance in July 1995, returning to partner allowance from February 1996.

5.        Mr Murgevksi claimed compensation for his work injury. On 20 May 2002, his claim was settled with a closed period award whereby he received $179,058.84 representing compensation for the period 29 April 1993 to 23 November 2001. Centrelink decided to recover a charge of $117,116.58 from this payment against the allowances paid to Mr and Mrs Murgevski during the award period.

6.        The total charge initially included $65,911.57 for the job search and newstart allowances paid to Mr Murgevski. That figure was subsequently reduced on internal review to $63,808.72. The remainder of the total charge was $53,307.86 for partner and parenting allowance paid to Mrs Murgevski for the period. The final total of the charge is $117,116.58. Mr Murgevski sought review of the charge by the SSAT on two grounds. First, that the payments to Mrs Murgevski should not have been taken into account. Secondly, that the calculations in respect of his payments were incorrect. The SSAT affirmed the ARO’s decision.

ISSUES

7.        The relevant issues are:

a) Whether the charge has been correctly calculated and applied, and, if so;

b) Whether there are special circumstances under section 1184K of the Social Security Act 1991 (“the Act”) which make it appropriate to regard the whole or part of the compensation payment as not having been made.

LEGISLATION

8. The relevant legislation is the Social Security Act 1991 (“the Act”).

EVIDENCE

9.        Mr Murgevski is 54 years old. He was born in Macedonia and came to Australia in July 1970. He left school at fifth grade primary. He has limited English language skills. He and his wife have one 29 year old son who is in full time employment and lives at home.    They live in their own home which is unencumbered by debt and they have an investment property nearby. The investment property is untenanted and in poor repair. It has a mortgage of around $50,000.00. It has a land value of between $250000 to $300000.  Mr Murgevski receives a carer’s pension and Mrs Murgevski receives partner allowance. They have around $20000 left over from the approximately $48000 compensation payment actually received. They have a motor vehicle, as does their son. Their son helps them “to pay for food and bills”.

10.      Both Mr and Mrs Murgevski have some health problems. Mr Murgevski, in addition to the arm injury, has pain in his hips, left leg and back. His application for a disability pension was refused as the medical assessment was less than the 20 impairment points required. Mrs Murgevski suffers from depression, osteoarthritis and melanoma.  The Tribunal asked about the prognosis of the melanoma condition. Mr Murgevski said the condition was initially treated with injection and then tablets and is monitored by monthly blood checks.

11.      Mr Murgevski said he ceased work on 29 April 1993 and then applied for social security payments. He said he first received a payment in June 1994. He said the statement of allowance for the period 8 July 1994 to 23 June 1995 (T24: page 101) was the first one he received. He said he always kept them and had not received any earlier payments. He said he finished work with Telecom on 29 April 1993, had an interview for social security and was told he would have a one month wait for the first payment. He said he got the first payment in June 1994.

12.      Mr Murgevski said he spoke to Centrelink officers about possible deductions from any compensation payment before accepting the settlement. He said he was not told that payments made to his wife would be recovered. He said he was told that “the computer was not showing how much should be deducted”.  He said this conversation was conducted in English. He said “I was not sure I understood it correctly” and one or two weeks later he asked again with the assistance of the interpreter service.  He said “on the computer it said nothing showing for the amount of deduction”.

13.      Mr Murgevski said his solicitor advised him that about $65000 would be deducted from the settlement. Mr Murgevski said he thought he had a good case and would not have accepted the settlement had he been aware of the full recovery amount.

14.      In cross-examination, Mr Murgevski agreed that the Centrelink payment records showing his first social security payment in June 1993 and continuing thereafter are correct (T8: page 24 and exhibit R1 attachment A). Mr Murgevski said he was not happy with the solicitor who handled his compensation claim and settlement. He said he was quite confused by what the solicitor told him.  He said the hand-written letter of instruction to his solicitor to settle the claim, was in fact, written by the solicitor himself. He said an interpreter read the letter to him and he was aware of its content. He said he asked the solicitor about the basis of his stated $65000 recovery charge and the solicitor explained it was his own calculation. He was asked if he checked this calculation with Centrelink. He said “no”. He said “nobody explained to me that my wife’s payments would be deducted”. He said he did not know if he had received or read a Department of Social Security letter dated 10 May 1993 (T5) relating to recovery of various types of social security payments from compensation/damages awards. The letter expressly refers to social security payments made to partners.

15.      Mr Murgevski said he spoke to the Centrelink officer about his wife’s payments. He said “I understood he should explain to me that if I receive this amount then I have to pay back that amount. The officer told me it is not saying on the computer that I have to pay back money paid to my wife. The officer should tell people if the money should be deducted. My solicitor told me that too”. Mr Murgevski said he was under pressure from his solicitor to settle the claim. He said he wanted to take the matter to court. He agreed that he was operating on an assumption about the amount to be deducted coming from one telephone conversation with a Centrelink officer. He agreed that he did not give the Centrelink officer any details of the settlement proposal.

SUBMISSIONS

16.      First, Mr Murgevski contends that he received social security payments of $58,000.00 and not the $63,808.72 calculated in the charge amount.  Secondly, Mr Murgevski contends that he “was mislead and given misinformation by Centrelink in writing and by its officers and as a result has compromised his compensation claim to his detriment” (exhibit A2 paragraph 9). Finally Mr Murgevski contends that there are special circumstances in this case which justify treating the whole or part of the compensation payment as not having been made.

17.      Mr Young submits the SSAT double-counted in some of it’s calculations of payments received from Centrelink, specifically at paragraph 27 of the decision. He said that a number of recoverable payment types are mentioned in the 10 May 1993 Centrelink letter but there is no specific mention of parenting or partner allowance. He submits that “Having regard to the minimum linguistic and educational level of the Applicant if Centrelink changed the name of any of the allowances they should have informed the Applicant in writing of the new allowances affected” (A2).  Mr Young submits that the 12 September 2001 letter to Mr Murgevski from Centrelink (A1) which refers to compensation, does not mention payments to partners. Mr Young submits that Centrelink failed to give correct advice about the recovery of Mrs Murgevski’s payments. He submits that Mr Murgevski’s legal advisers at the time “should have checked the payback to Centrelink” (A2). Mr Young submits that these legal and administrative errors by his solicitor and Centrelink can and do amount to special circumstances to waive the debt.

18.      Ms Collis submits that the payment records at T8 and R1 attachment A confirm the SSAT and ARO calculations of the amount owed. She points out that the 12 September 2001 Centrelink letter warns the recipient to check repayment figures before settling a claim for compensation. Ms Collis submits there is no clear evidence about the information that Mr Murgevski gave to the Centrelink officer. Ms Collis submits the only negligence was that of Mr Murgevski’s solicitor. She submits that Mr and Mrs Murgevski are not in financial hardship and their situation does not amount to special circumstances for the purpose of waiving the recovery charge.

CONSIDERATION OF ISSUES

19.      In reaching its decision, the Tribunal takes into account the written material, the oral evidence and the submissions made at the hearing.

20.      I have examined the payment records and the calculations of Centrelink. I accept that the formulation applied by the SSAT at paragraph 27 of it’s decision correctly takes account of the income test. I find that the amount of the recovery charge is correct.

21. In respect of the recovery charge, the relevant section of the Act is section 1184K which provides:

“For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:

(a) not having been made; or

(b) not liable to be made;

if the Secretary thinks it appropriate to do so in the special circumstances of the case.”

22.      The issue is whether or not there are special circumstances in this case, which make it appropriate to regard the whole or part of the compensation payment as not having been made. In Dranichnikov v Centrelink (2003) 75 ALD 134 at paragraphs 65 and 66, Hill J in considering the term “special circumstances” said:

“65. … The origin of the test apparently adopted by the secretary appears to be the decision of the first instance judge in Beadle v Directory-General of Social Security (1985) 60 ALR 225.  That was a decision under previous legislation, the history of which is referred to by French J in Secretar,y of Department of Social Security v Hales (1998) 82 FCR 154.  The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth).  Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given.  The reference to the first instance decision from which the words “unusual, uncommon or exceptional” come was not actually affirmed by the Full Court.

66. To some extent the question whether there were special circumstances must depend on how it came about that the error occurred.  Again that is not a matter to which the decision maker apparently averted.  Other cases which have considered analogous words such as “special reasons” has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case.  There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss”.

23.      In Groth v Department of Social Security (1996) 40 ALD 541 at paragraph 545, Keifel J in consideration of the phrase ‘special circumstances’ said, “it would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary”.

24.      In this matter, the evidence is that Mr Murgevski spoke with a Centrelink officer on two occasions about his settlement. He did not give the officer any details about the settlement. He relied on the officer’s statement to him that “it is not saying on the computer that I have to pay back money paid to my wife”. He relied on the advice of his solicitor who was pressuring him to settle. He did not check his solicitor’s calculations with Centrelink.  Centrelink had written to Mr Murgevski in 1993 expressly stating that social security payments including those made to partners may be recovered from compensation settlements. Another letter in September 2001 contained similar advice but did not refer to partner payments. It is submitted that Centrelink should make express reference to such matters in these documents.

25.      On the evidence I am not satisfied that Centrelink has mislead or misinformed Mr Murgevski. Mr Murgevski has obvious English language limitations. I do not accept that a telephone call to an officer which contained no details of the proposed settlement is a sufficient basis on which to conclude error on the part of Centrelink about possible recovery amounts. I do not accept that the Centrelink documentation is deficient in the information provided to Mr Murgevski about recovery charges.  I accept that solicitor’s error can amount to special circumstances but I am not satisfied in this instance that it does so.

26.      On the evidence presented I find that Mr and Mrs Murgevski are not destitute or in precarious financial circumstances. They have significant cash assets and substantial equity in an investment property.  Both have health problems but there is no medical evidence to suggest that they are invalids. Their adult son lives with them and contributes to the household.

27. Having regard to the case law and legislation, the health, domestic and financial issues, the Tribunal finds that there are no personal, financial, health or other matters raised by Mr Murgevski that constitute special circumstances for the purposes of section 1184K of the Act.

DECISION

28.      The decision under review is affirmed.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M.A. Griffin, Member  

Signed: M. DiCondio
           Associate

Date/s of Hearing         : 15 June 2004
Date of Decision         : 6 October 2004
Solicitor for the Applicant                : Mr K Papanicolaou, P & A Lawyers
Counsel for the Applicant                : Mr JR Young
Representative for the Respondent : Ms C Collis