Muslemani; Secretary, Department of Education, Employment and Workplace Relations and
[2008] AATA 116
•14 February 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 116
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4051
GENERAL ADMINISTRATIVE DIVISION )
ReSECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Applicant
AndNEMR MUSLEMANI
Respondent
DECISION
TribunalSenior Member M D Allen
Date14 February 2008
PlaceSydney
DecisionThe decision under review is SET ASIDE and the Tribunal substitutes in lieu thereof its decision, viz. THAT the sum of $15,137.00 being the amount of parenting payment paid to the Respondent’s wife Inya Muslemani for the period 25 October 1998 to 24 October 2000 is due and payable by the Respondent to the Commonwealth.
.................[sgd]........................
M D Allen
Senior Member
CATCHWORDS
SOCIAL SECURITY BENEFITS – review of decision setting aside determination by authorised review officer directing compensation affected payments made to respondent’s wife not refundable to applicant – respondent received sickness allowance – respondent’s wife received parenting payments – respondent also received lump sum settlement payment representing arrears of periodic workers compensation – social security benefits received by a person who is a member of a couple are compensation-affected payments – social security benefits recoverable from an employee and their partner if employee receives compensation payment representing arrears of periodic workers compensation – compensation affected payments not payable in special circumstances – straightened financial circumstances and incorrect legal advice not indicative of special circumstances – decision under review affirmed
LEGISLATION
Social Security Act 1991 sections 17, 1174 and 1184K
Administrative Appeals Tribunal Act 1975 section 37
CASE LAW
Secretary, Department of Social Security v Ellis (1997) 24 AAR 535
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Hutt v Piggott, Wood & Baker (unreported Tasmanian Supreme Court judgement No B20/1993; 28 May 1993)
Re Astill and Secretary, Department of Employment and Workplace Relations [2007] AATA 1888
REASONS FOR DECISION
14 February 2008
Senior Member M D Allen
Summary
1. By application made 24 August 2007 the Secretary to the then Department of Employment and Workplace Relations sought review of a decision by a Social Security Appeals Tribunal made 17 July 2007 that set aside a determination by an authorised review officer and directed that the sum of $15,137.00 be refunded to the Respondent.
2. The Applicant is now the Secretary to the Department of Employment, Education and Workplace Relations and the title of these proceedings has been amended to show the new administrative arrangements.
3. Although the decision of the SSAT refers to a “preclusion period”, that reference is incorrect. The sum of $15,137.00 represents the total of parenting payments made to the Respondent’s wife in the period 25 October 1998 to 24 October 2000. This sum became refundable to the Commonwealth pursuant to s 1174 of the Social Security Act 1991.
4. Section 1174 of the SSA provides inter alia that if a person receives periodic compensation payments and is a member of a couple, then any compensation-affected payment received by that person and their partner is to be reduced by the amount of periodic compensation obtained.
5. In the present Respondent’s case, in the relevant period he received sickness allowance and his wife received parenting payment, both compensation affected payments pursuant to s17 of the SSA. Upon receipt of a payment of arrears of periodic compensation (namely, weekly payments of Workers’ Compensation), the Applicant determined that a recoverable charge of $14,338.50 arose in respect of sickness allowance paid to the Respondent and a recoverable charge of $15,137.00 arose in respect of parenting payments made to the Respondent’s wife.
6. The Respondent does not dispute the raising of a charge amounting to $14,338.50 in respect of social security payments made to him, but argues that special circumstances exist such that the sum of $15,137.00 representing social security payments to his wife should be remitted.
7. Section 1184K of the SSA states that the whole or part of a compensation payment may be treated by the Applicant as not having been made if he thinks it appropriate to do so in the special circumstances of the case.
8. As to what constitutes “special circumstances”, Carr J said in Secretary, Department of Social Security v Ellis (1997) 24 AAR 535 at 539:
…
In Beadle v Director-General of Social Security (1985) 7 ALD 670, a full court of this court had to consider whether the Administrative Appeals Tribunal had erred in its interpretation of s 102(1)(a) of the SSA which provided for an extension of time in which to claim a family allowance … in special circumstances …. At 673 – 674 the full court said:
Presumably in this context special circumstances must include events which would render the 6 months unfair or inappropriate … It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase ``special circumstances'’, although lacking precision, is sufficiently understood in our view not to require judicial gloss.
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J, after referring to Beadle, said:
… for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only inquiry to be undertaken in this case. 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. The inquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied.
Later (on the same page) Kiefel J expressly approved the tribunal's reasoning in holding that Mr Groth's circumstances were not out of the ordinary when Pt 3.14 of the SSA (in which ss 1168 and 1184 are to be found) had the same effect on him as it did on other persons qualified to receive a disability support pension. Her Honour added:
It [the tribunal] went on to find that his circumstances and those of his family although difficult, did not constitute hardship and they could not be said to be different from other pension recipients.
…
9. The Respondent gave evidence in these proceedings and at the outset, I can state that I regard him as a truthful witness. The sole question for me to decide is to whether special circumstances can be said to exist.
10. The Respondent was injured in a work accident on 23 March 1998. After that accident, he received wages for six months but was then forced to apply for Social Security Benefits. He also engaged a solicitor to pursue a claim for Workers’ Compensation.
11. In 1999, the Respondent’s mother who lived in Lebanon became ill. The Respondent regarded it as his duty to fly to Lebanon to care for his mother and also to pay for her medical treatment. As he did not have the money to pay for this himself, he borrowed from relatives, including brothers-in-law resident in Kuwait.
12. Questioned regarding the 1999 borrowings, the Respondent said that at that time, he did not tell the people from whom he borrowed the money how he proposed to repay them. Unfortunately, the Respondent’s mother again became ill in 2003 and he was forced to again borrow money to fly to Lebanon and to pay her hospital bills.
13. With regard to both the 1999 and 2003 borrowings, the Respondent said that he did not enquire from his solicitor how much he would receive in compensation. He also stated that he knew Centrelink would subtract monies from any lump sum payment but that he did not know how much it would be.
14. Cross-examined the Respondent stated his solicitor had told him that when he had his settlement, Centrelink would want their money back. He had previously told the SSAT that he had not realised his wife’s social security payments would also be included in the monies to be refunded.
15. The Respondent’s claim for Workers’ Compensation did not proceed smoothly. At annexure E to the Applicant's Statement of Facts and Contentions is a decision of the Medical Appeal Panel of the New South Wales Workers’ Compensation Commission upholding an appeal by the employer’s insurer against an assessment of degree of impairment suffered by the Respondent.
16. At documents T46 of the documents prepared for the Tribunal pursuant to s37 of the Administrative Appeals Tribunal Act 1975, is a copy of a letter from the employer’s solicitor to the employer’s insurer. Suffice it to say the insurer was content to settle the Respondent’s claim by the payment of $400.00 per week for the period 25 October 1998 to 24 October 2000.
17. I have no hesitation in accepting the Respondent’s evidence that his barrister at the Workers’ Compensation Commission hearing told him that his repayment to Centrelink would be in the vicinity of $15,000.00 to $18,000.00 and that after repayments to the Health Insurance Commission he would be left with $20,000.00.
18. As matters turned out, the Respondent received the sum of $5,919.64. It would appear however, from the solicitor’s letter at T60 the Respondent should also have received a refund of $4,176.00 from the Health Insurance Commission.
19. Both the SSAT and the Respondent’s solicitor (who it must be stressed was not the solicitor who appeared for him in the Workers’ Compensation Commission proceedings) in the course of submissions, placed emphasis on letters to the Respondent from Centrelink and enquiries by his then solicitor as to the amounts of any monies to be refunded to Centrelink.
20. Particular emphasis was placed by the Respondent on a Centrelink file note dated 3 February 2003, which evidences that the Respondent’s solicitor made enquiries as to amounts of any charge. Suffice it to say, the enquiry was made in 2003 and there is no evidence the Respondent was ever told of the result.
21. Document T23 is a letter dated 3 February 2003 to the Respondent’s solicitor. It states inter alia:
…
We have calculated this estimate on the basis that the settlement was made on the date of this letter from information supplied by you. It assumes that your client’s claim will settle by agreement, that it contains some compensation for lost earnings or lost capacity to earn and that the lump sum will not be solely for arrears of periodic compensation. You should note that if there is no provision for lost earnings or lost capacity to earn, then the compensation provisions do not apply to the settlement.
..
22. In its reasons for decision, the SSAT placed emphasis on correspondence between Centrelink and the Respondent. I regard that correspondence as irrelevant. In evidence before me, the Respondent conceded that he borrowed the money without knowing how much he would receive in settlement of his claim for Workers’ Compensation nor did he make enquiries at that time.
23. What is clear is that at the time the Respondent settled his Workers’ Compensation claim, namely on 9 February 2007, his then legal advisers said that he would have to pay to Centrelink $18,000.00 to $20,000.00. There is no evidence before me as to how that figure was obtained.
24. That the Respondent’s then solicitors were ignorant of the provisions of the SSA is made clear by their letter of 26 February 2007 in which they state, “The maximum sum payable by our client is the Centrelink benefit received during this period. Our client is not required to repay the benefits received by his wife during this period”. This statement ignores the effect of s1174 of the SSA.
25. It may well be that the Respondent would not have settled his Workers’ Compensation case on the terms that he did but for his legal representative’s advice as to the repayment sum. The letter by the former solicitors of 26 February 2007 indicates that they did not advert s1174 of the SSA when formulating their advice. However, this Tribunal has consistently ruled that the provision of incorrect legal advice is not persuasive or indicative of “special circumstances” and that if the Respondent considers he has been disadvantaged by his former solicitors’ negligence, his proper course is to take action against them (see Hutt v Piggott, Wood & Baker (unreported Tasmanian Supreme Court judgement No B20/1993; 28 May 1993); Re Astill and Secretary, Department of Employment and Workplace Relations [2007] AATA 1888 at para 28).
26. On behalf of the Respondent, it was submitted the special circumstances arose out of his indebtedness plus the fact he has on two occasions promised his creditors that they would be paid but has had to resile from this promise. The first occasion was when he did not receive the amount of money he thought he would following the settlement of his Workers’ Compensation claim. This was occasioned by the fact that his wife’s Social Security Payments were also recovered by the judgement sum payable to him. The second occasion his creditors were disappointed was when the decision of the SSAT was “appealed” to this Tribunal.
27. Currently the Respondent is indebted in the sum of approximately $16,000.00, being the balance of monies he borrowed to go to Lebanon and to pay his mother’s medical bills. This sum is owed to relatives but is not subject to interest. The fact that this sum is outstanding has caused the Applicant and more particularly his wife to suffer from “anxiety”.
28. I agree that the Respondent is in straightened financial circumstances. Currently, his only source of income is Social Security Benefits paid to him and to his wife. As pointed out in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 that social security recipients are often in straightened financial circumstances is not out of the ordinary and does not of itself amount to special circumstances.
29. In addition, I note that the Respondent has two adult children who are in employment and still live at home. They assist in the payment of rent and contribute to household expenses when asked. It does not appear that they pay regular board.
30. The Applicant has been the author of his own misfortune. He borrowed money on the expectation that he would be able to repay his creditors following successful litigation against his former employer. In this he was disappointed but many people who embark upon litigation are disappointed with the end result. Similarly, he offered repayment to his creditors following the decision of the SSAT. He apparently did not advert to the possibility of that decision being challenged. It seems extremely foolish to have made commitments before the receipt of the monies.
31. In reality, the only special circumstance the Respondent can point to is the fact that he has debts he cannot repay. To my mind this is, in the Respondent’s case, not a special circumstance. The debts were voluntarily incurred at a time when he expected to receive monies from his Workers’ Compensation claim. He did not then know, nor did he investigate, how much he would receive. Having incurred the debts, the Respondent now seeks to obtain relief by imposing upon the public purse claiming that his indebtedness amounts to a special circumstances. It does not.
32. The decision under review is therefore set aside and the Tribunal substitutes its decision that the sum of $15,137.00 being the amount of parenting payment paid to the Respondent’s wife Inya Muslemani for the period 25 October 1998 to 24 October 2000 is due and payable by the Respondent to the Commonwealth of Australia.
I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member MD Allen
Signed: .............[sgd]......................
Mwela Kapapa, AssociateDate/s of Hearing: 29 January 2008
Date of Decision: 14 February 2008
Solicitor for the Applicant: Stephen Hodges Solicitor
Advocate for the Respondent: Centrelink Legal Services
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