Nguyen and Department of Family and Community Services - [2000] AATA 900

DECISION AND REASONS FOR DECISION [2000] AATA 900

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/1457

GENERAL ADMINISTRATIVE DIVISION       )
           Re      VAN HIET NGUYEN
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Dr J D Campbell

Date16 October 2000
PlaceSydney

Decision The Tribunal varies the decision under review in that it finds that the Applicant qualified for special benefit payment from 14 April 1999, with the other aspects of the decision being reviewed remaining unchanged.

…………………………………….
  Dr JD Campbell
  Member
Catchwords:
SOCIAL SECURITY – special benefit – receipt of compensation – lump sum payment – notification obligations – failure – placing oneself in financial hardship – cancellation of special benefit – overpayment – debt – administrative error – waiver – special circumstances.

Social Security Act 1991, sections 729, 729A, 740, 741, 742, 759, 765, 768, 1224, 1236, 1237A and 1237AAD.

Reasons for decision

Dr J D Campbell, Member

Mr Van Hiet Nguyen ("the Applicant") in this matter seeks a review of the decision of the Social Security Appeals Tribunal ("the SSAT") dated 13 August 1999. This decision which affirmed an earlier decision to cancel the Applicant's special benefit, set aside that part of the decision to reject the Applicant's claim for special benefit of 14 April 1999 and substituted thereof that the Applicant was qualified for special benefit from 4 August 1999. The SSAT also affirmed an earlier decision that the Applicant has a debt arising from overpayment of $2031.50 of special benefit during the period 2 December 1998 to 9 February 1999. The earlier decision to cancel the Applicant's special benefit and raise a debt for overpayment of special benefit was made by a delegate of the Secretary, Department of Family and Community Services ("the Respondent") on 12 March 1999. The earlier decision to reject his claim of 14 April 1999 for special benefit was made by the same delegate on 4 May 1999. Both of these earlier decisions were affirmed by an authorised review officer on 14 May 1999.

A hearing was held before the Tribunal in 15 June 2000 at which the Tribunal was assisted by an interpreter fluent in the Vietnamese language. The Applicant was represented by Ms Koller, a solicitor from the Welfare Rights Centre. The Respondent was represented by Ms D'Cunha, an advocate from the Advocacy and Administrative Law Section of Centrelink. The Applicant and his son, Mr Trong Nguyen Prun, presented oral evidence to the Tribunal.

The following written material was placed in evidence before the Tribunal:

Exhibit No    Description Date
T1-T51 pp1-127 Documents prepared pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975
A1      Applicant's statement of facts and contentions 20 December 1999
A2      Letter from Centrelink to Applicant's solicitors    25 November 1998
A3      Financial information re Applicant.          19 November 1999
A4      Medical report re Applicant of Dr Tam     31 January 2000
A5      Medical report of Dr Lam for the attention of Dr Vo      7 October 1999
R1      Respondent's statement of facts and contentions plus attachments 21 December 1999
R2      Medical report of Dr Keen 17 February 2000

Issues:

The relevant issues in this matter are:
whether Mr Nguyen ceased to qualify for special benefit from 2 December 1998, on the grounds that he was no longer suffering financial hardship after having received a lump sum compensation payment;
whether Mr Nguyen's subsequent claim for special benefit made on 14 April 1999 was correctly rejected; and
whether Mr Nguyen has incurred a debt of special benefit in the amount of $2031.50 and if so, whether there is any basis for non-recovery of all or part of it.

Legislation:

The relevant legislation in this matter is the Social Security Act 1991 ("the Act") and in particular sections 729, 729A, 740, 741, 742, 759, 765, 768, 1224, 1236, 1237A and 1237AAD.
Background evidence:
Mr Nguyen was born in Vietnam on 2 December 1929 and worked as a foreman mechanic in a French-owned tyre company for forty years until 1973 before arriving in Australia in 1992. The Applicant stated that he was able to read and write in Vietnamese but not in English. In 1995 he was involved in a car accident in which he received a closed head injury and other skeletal fractures.
As a consequence of his circumstances on arrival, the Applicant had been on special benefit payment for many years and this was continuing at the time of his accident and thereafter. On 3 November 1998 the Applicant agreed to settle his compensation claim for a gross amount of $36,591.85 (T5-T7). Centrelink wrote to the Applicant on 25 November 1998 advising him that there was no compensation charge, nor was there any nomination of a preclusion period, although details of how a preclusion period would be calculated were included. The Applicant was also instructed that he must notify the Respondent within 14 days of receiving his compensation payment.
The Applicant received a net compensation payment of $26,511.97 on 2 December 1998 and on 29 December 1998 he lodged a completed special benefit review form with Centrelink, in which he disclosed his receipt of the compensation payment and a bank balance of $11.00 (T3). The Applicant provided a completed Compensation and Damages form on 31 December 1998 (T4), together with details of settlement (T5).
On 31 December 1998 Centrelink sent the Applicant a letter requesting proof of his bank balance (bank statement) and letters from the borrowees confirming that amounts borrowed had been repaid in full (attachment 1 to Exhibit R1), and that all material to be lodged by 10 January 1999. On 7 January 1999 the Applicant provided a statutory declaration stating how he had dealt with the proceeds of his compensation settlement (T9). A copy of his Commonwealth bank statement for the relevant period was lodged with Centrelink on 25 January 1999 (T10, T11). On 2 February 1999 Centrelink sent internal advice to their compensation section as to what effect the lump sum compensation would have on the Applicant's special benefit (T13). The response on 3 February 1999 referred to the impact of the compensation settlement in regard to assets and income tests (T14).
On 11 February 1999 the Applicant was requested to bring documents to prove he had borrowed money; from whom he had borrowed it; the dates and the amounts of the loans; and documents to demonstrate payment and receipt of monies by debtors (T15). The Applicant attended the Centrelink office on 18 February 1999 and explained how he had used the borrowed money over the years, but provided no documentation in support of this. The Applicant's special benefit was cancelled with effect from 9 February 1999 on 18 February 1999 (T16). Documentation as requested was lodged with Centrelink on 25 February 1999 (T17).
On 12 March 1999 a debt of $2031.50 resulting from overpayment of special benefit was raised for the period 2 December 1998 to 9 February 1999 (T27).
The Applicant lodged a special benefit claim on 14 April 1999 (T35A), which was rejected by the Respondent on 4 May 1999 (T40).
Applicant's evidence:
The Applicant stated that he was rendered unconscious in the accident of November/December 1995. Since then he has been troubled by cold weather, inability to sleep, and he often loses his way home. After the accident and his hospitalisation he stayed with a niece in Cabramatta, where he paid rent and money for food. Two hospital employees visited him there at his niece's home for a short time, and after an unknown period (the Applicant cannot remember) he moved to a second place, which was built and owned by his son. He paid rent of $65 a week, cared for himself and purchased food for himself and others. He is unable to remember how long he was there, before he moved to a third place in Canley Vale. He lived there by himself for two weeks, before another man moved into the three-bedroom house. The man was supposed to help him, but stole his money and ate his food. He moved again to another place, where he looked after himself with his son and other members of the family helping him to buy food. It was while accommodated at this place that he received his compensation payment.
In relation to the debts that he accumulated following the accident, the Applicant stated that he borrowed money in anticipation of his compensation payment on the understanding that they would keep a written record of his debts, and that either he or his children would repay the loans once the compensation payment was received. The money borrowed was spent on himself or put in a drawer.
The Applicant indicated that a female solicitor had dealt with his compensation matter over three years, and that she gave him a letter which said he was eligible for payment from Social Security. When he received the money he did not think it would affect his social security payments.
In stating that he spent the compensation payment in two days by way of a cash withdrawal of $13,500 and a cheque for $13,000 to his son to repay money lent to him by a family friend (unsure of quantum), with the son writing a cheque to make the repayment, the Applicant indicated that there was not enough money to meet all his debts.
The Applicant stated that he first learnt that his special benefit payment was not going to be paid in March 1999, and between March 1999 and August 1999 he suffered a lot, with family and friends providing food and accommodation.
In relation to his health, the Applicant stated that he often gets lost and has difficulty finding his way home. He has had to sleep on and under street benches and at the corner of people's houses. He further stated that people known to him, as well as on occasion the police, have helped him to find his way home. The Applicant states that he sees his doctor about being upset, his loss of memory, his spinal problems in cold weather and his fractured ribs. He has complained to his general practitioner, Dr Vo, about his difficulty with sleeping and memory loss and has been referred to a consultant physician and geriatrician, Dr Tam. The Applicant stated that he had to pay for medicines ($170 for 28 days), Chinese medicines, as well as for rent and food.
In discussing his current circumstances, the Applicant is currently sharing a room at his son's home at Canley Vale, and has been there for a year. He currently pays $50 a week for food which he eats by himself, and in addition to this he spends more on weekends and contributes to electricity and telephone expenses. The Applicant stated he was married in Vietnam, but his wife left him in 1980. He has five sons and two daughters. He has experienced difficulty with his two daughters for having criticised their husbands' drinking habits, and has difficulties with a daughter-in-law because of his poverty. The Applicant also indicated that he married again in March 1999 and resided for a very brief period with his new wife in her daughter's home.
In response to questions asked in cross examination the Applicant stated that the only period in which he was not accommodated with family was between January 1997 and November 1997. The Applicant said he did not borrow money until after the accident and he spent the money on special food and other things ("a heater"). The Applicant stated that he was never told that his compensation money would have an affect on his special benefit. He was unable to remember what he did with his letter from Centrelink, stating that he had to tell them when he received his compensation payment. In relation to the various forms he received, and particularly the special benefit review forms he received every three months, he was fully aware of the importance of filling them in. He would have questions read to him and the form completed by friends, which he would sign and then have lodged with Centrelink. He stated that Centrelink did not tell him when he was granted special benefit or that he would have to inform them if he received any money. Similarly he did not tell Centrelink that he was borrowing money from friends and family. The Applicant stated that he has a health care card and that he did indicate his wife was a dependent when he completed the special benefit claim on 14 April 1999.
Mr Trong Nguyen Prun:
The witness confirmed that the Applicant did borrow money from his son and friends; that they never asked why he needed the money; and that they were not expecting the money to be repaid. However the Applicant always said he would repay the loans when he received the money from his compensation payment. In relation to the Applicant's health, the witness stated that at times he does not look well and that his memory is variable. Further he stated that he only found out that the Applicant was married after the event and commented that the Applicant is a hard man and difficult to live with.
Medical evidence:
Dr Tam, a consultant physician and geriatrician in a medical report dated 7 October 1999 gave the following opinion:
"…
Herewith, Mr Nguyen, a Vietnamese speaking gentleman with a history of post traumatic stress disorder and becoming mentally slow progressively.
Clinically he does not present with significant cognitive impairment. At this stage he has no dementia but insidious onset of dementing illness eg. Alzheimer's Disease would be a possibility.
I propose to review him in about 4 month's time.
His hypercholesterolaemia may be treated with diet or liquid lowering medication which would help reduce the vascular risk.
…" (Exhibit A4)

Dr Law, a consultant psychiatrist, has been treating the Applicant since May 1996. In February 1999 he described the Applicant as having memory problems and, having treated him for post traumatic stress disorder following his car accident, and that in February 1999 he advised him to consult a geriatrician for future care. (T2, p6)

Dr Keen, a senior medical adviser at Health Services Australia, in his report dated 17 February 2000, stated that in the absence of formal psychometric testing, an insidious dementing illness cannot be excluded. (Exhibit R2)
Applicant's submissions:
The Applicant contends that the Respondent had significant prior knowledge that the Applicant was about to receive a compensation payment and had significant opportunity to inform the Applicant's solicitors that the special benefits payment would or could be affected by the compensation payment. This the Respondent did not do, and more importantly this may have created a mindset within the officers dealing with the matter that the Applicant was not necessarily a creditworthy individual. The Applicant further contended that it would appear that the decisions in relation to the Applicant reflect an understanding that the Respondent was not notified of the compensation until February 1999.
Ms Koller submitted that the Applicant was given no advice by the Department as to the affect that the compensation payment would have on his special benefit payment. The Applicant was first advised of such an effect in February 1999, by which time all monies received by the Applicant had well and truly been dissipated. It was further submitted that sufficient weight was not placed on the evidence of the Applicant in relation to his memory difficulties.
Ms Koller contended that in the light of all the evidence, the Applicant should be paid his special benefit from the date of application on 14 April 1999, with the debt for the period 2 December 1998 to 9 February 1999 being waived for sole administrative error pursuant to section 1237A of the Act. It was further contended that this sole administrative error arose because the Respondent failed to advise the Applicant of the implications of his lump sum payment, when they were aware of this payment prior to the Applicant receiving it.
Respondent's submissions:
The Respondent submitted that with a person's qualification for special benefit falling within section 729 of the Act, receipt of a lump sum compensation by the Applicant means that the Applicant is no longer in need of income support. Accordingly the Applicant no longer qualifies for special benefit as the discretion to award special benefit only exists where there is a real need for income support.
In further addressing this issue the Respondent notes that the Guide to the Administration of the Social Security Act provides guidance for the exercise of the discretion under section 729A to grant or continue to pay special benefit. The Respondent contends that pursuant to the guide, the Applicant is subject at all times to the long term available funds test, the Applicant being a person who is in long term need of support. Accordingly on 2 December 1998, when the compensation payment was made he had acquired liquid funds of more than $5,000. Hence as such funds were available for his support, continued exercise of the discretion to pay a special benefit was not warranted. In the light of all the circumstances, including the Applicant's long term familiarity with special benefit review forms every three months, the decision to cancel the special benefit on 9 February 1999 was correct, pursuant to sections 765 and 768 of the Act.
The Respondent contends that once the special benefit has been cancelled, benefit payment cannot be recommenced until a new claim is lodged and in this matter the Applicant lodged such a claim on 14 April 1999.
The Respondent further contends that the failure by the Applicant to notify the Respondent within 14 days of receipt of his compensation payment on 2 December 1998 was a failure on his part to undertake his notification obligations pursuant to his section 759 recipient notification notice in the Respondent's letter to him of 25 November 1998. Because of this failure, the overpayment between the period 2 December 1998 and 9 February 1999 becomes a debt pursuant to section 1224(1) of the Act.
The Respondent submits that there are no grounds for waiver either for sole administrative error or special circumstances.
Considerations and findings:
In preliminary comment the Tribunal states that it experienced particular difficulty with the clarity of the Applicant's evidence in relation to the disbursement of the compensation payment. In fairness to the Applicant however, the Tribunal also notes both the earlier history of the Applicant's employment, his arrival in Australia and his car accident in late 1995. The Tribunal further observes that after this accident the Applicant changed address on a number of occasions and that his memory seemed to deteriorate. There were also increasing stresses within the family group, which would appear to relate to certain attitudes held by the Applicant. In noting and accepting the medical evidence as given, the Tribunal finds that, in the absence of definitive psychometric testing, it cannot exclude an organic brain disorder characterised by the symptoms of which the Applicant complains. However the Tribunal also makes the finding that not all of the activities of the Applicant in relation to the disbursement of the compensation can necessarily relate to the Applicant's age and medical condition. In such a situation the Tribunal will endeavour to deal with the various matters arising on their merits, with the understanding that where there is difficulty in interpretation of the facts, fairness will be the final arbiter.
The Tribunal observes that the Applicant had been in receipt of special benefit for some years and was accustomed to completing the special benefit review forms every three months, with the assistance of family and friends, with the inference being that the Applicant was not a novice in such matters. Further the Tribunal does note that the Applicant was sent a recipient notification notice on 25 November 1998, obliging him to notify Centrelink within 14 days of receiving his compensation payment. This he did not do until 29 December 1998 when he lodged his special benefit review form. The Tribunal finds that the Applicant's failure to notify within the 14 day time frame is a failure to comply with a provision of the Act, namely section 759.

The Tribunal also acknowledges the correspondence between the Applicant's solicitors and Centrelink in relation to the issue of whether a compensation affected payment was involved and whether there was to be a preclusion period imposed. That there was not one imposed does not alter the fact that the Respondent had been made aware that a compensation payment was shortly to be paid. However in the Tribunal's view there is a difference between having knowledge of an impending event and knowledge of the actual occurrence, which in this case occurred on 2 December 1998. The Tribunal finds that in this regard and up to the time of the Applicant's receipt of the compensation payment there has been no administrative error by the Department, although with hindsight it may have been more appropriate for the two parties to have been considering the effect of his compensation payment on his special benefit payments. Clearly such a payment would have placed him in a financial situation where a discretion to continue payment of special benefit would not be warranted.
The Tribunal notes the statutory framework which provides for the payment of special benefit, with an individual's qualification for special benefits falling for consideration under section 729 of the Act stating:
"729(1) A person is qualified for a special benefit for a period if the Secretary determines, in accordance with subsection (2), that a special benefit should be granted to the person for the period.

729 (2) The Secretary may, in his or her discretion, determine that a special benefit should be granted to a person for a period if:
(a) no social security pension is payable to the person during the period; and
(b) no other social security benefit is payable to the person for the period; and

…

(e) the Secretary is satisfied that the person is unable to earn a sufficient livelihood for the person and the person's dependants (if any) because of age, physical or mental disability or domestic circumstances or for any other reason; and

(f) the person:
(i) is an Australian resident; or
(ii) has a qualifying residence exemption for special benefit;
or
(iii) is the holder of a subclass 820 visa - Extended eligibility (spouse); or

(iv) is the holder of a subclass 826 visa - Interdependency; or
(v) is the holder of a visa that is in a class of visas determined by the Minister for the purposes of this subparagraph; and

(fa) the person is in Australia throughout the period; and

729 (3) The Secretary is not to determine that a special benefit should be granted to a person for a period if the Secretary is satisfied that the benefit is not payable to the person for that period."

37. The Tribunal acknowledges that the Applicant did not notify Centrelink of his compensation payment until 29 December 1998, with some weeks passing while Centrelink tried to establish and verify the disbursements and the reasons for such disbursements. A decision to cancel the Applicant's benefit was made on 9 March 1999, with the Respondent remaining dissatisfied with the integrity of the reasons by nature of the variability over time that the Applicant used to justify his disbursement. The Tribunal, in noting its own preliminary comments on this matter, finds that the variability and transparency of the Applicant's reasons cause difficulty. Nevertheless the Tribunal does accept that the disbursements did occur, in the Tribunal's view with inordinate haste and without emphasis on necessary documentation as to the purpose of the disbursements.

In considering all the issues and matters outlined the Tribunal finds that the decision to cancel the Applicant's special benefit on 9 March 1999 was correct, for the Applicant had received his compensation payment on 2 December 1998. In review of his receipt of some $26,500 it is evident to the Tribunal that at that point in time he was in possession of significant funds well in excess of the $5,000 nominated in the Social Security Guidelines as regards the long term available funds test. Accordingly the Tribunal finds that the decision to cancel the Applicant's special benefit in March 1999 was correct pursuant to sections 765 and 768 of the Act, with an overpayment occurring from the time the Applicant ceased to qualify for special benefit, namely 2 December 1998 (the date of the disqualifying event), up to the cancellation of his special benefit on 9 March 1999.
The overpayment for this period amounts to $2031.50 and in the light of the Applicant's failure to notify his receipt of compensation payment within 14 days, this amount becomes a debt due pursuant to section 1224(1) of the Act which states:
"1224(1) If:
(a)an amount has been paid to a recipient by way of social security payment; and
(b)the amount was paid because the recipient or another person:
(i)made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of this Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth."
In considering the period between 10 March and April 1999, the Tribunal notes that for special benefit to be granted there must be a current claim form. In this matter, no completed claim form exists for this period in the light of the cancellation of the special benefit on 9 March 1998 and the Tribunal finds that no special benefit can be paid for this period.
In considering the Applicant's claim lodged on 14 April 1999, the issue is again bedevilled with the issue of disbursements. In the light of all the circumstances, the Tribunal recognises the reality of the situation in that the Applicant had no source of income for some many weeks, albeit as a result of his own actions, and that the Applicant must be given the benefit of the doubt in that his actions to undertake the disbursement as he did were not in his interests. This may reflect an absence of mind as suggested, but not proven by the medical evidence. The Tribunal therefore finds that special benefit should be paid from 14 April 1999.
In addressing the issue of waiver of debt the Tribunal has already found that the Respondent did not make an administrative error and hence waiver pursuant to section 1237A of the Act is not available.
Particular circumstances such as the Applicant's health and his financial circumstances were nominated as constituting special circumstances. The Tribunal, in observing that the Applicant currently is able to support himself on his special benefit payments, and that it would appear that all or nearly all of any debts owing have been repaid, finds that the Applicant is in a tightened financial circumstance, but nothing more. In relation to his health issues the Tribunal is of a view that much more clinical elucidation of any purported memory loss would need to be in evidence, before the health status of the Applicant could be considered a special circumstance. The Tribunal finds that neither the financial or health circumstances of the Applicant are uncommon, unusual or exceptional when considered either alone or together and as such do not constitute special circumstances for which waiver of the debt could be considered.
Finally the Tribunal considers whether the debt should be written off pursuant to section 1236. The Tribunal finds, having considered all the matters raised, that grounds do not exist for such an action, as the Applicant by virtue of this decision will be in a better financial situation than he was, and during which some monies were being withheld to pay the existing debt.
Determination:
The Tribunal varies the decision under review in that it finds that the Applicant qualified for special benefit payment from 14 April 1999, with the other aspects of the decision being reviewed remaining unchanged.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell.
Signed:         .....................................................................................
  Associate
Date of Hearing  7 June 2000
Date of Decision  16 October 2000
Solicitor for the Applicant               Ms Sandra Koller
Advocate for the Respondent           Ms Pat D'Cunha