Nikolic and Department of Family and Community Services

[2001] AATA 736

DECISION AND REASONS FOR DECISION [2001] AATA 736

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V2001/413

GENERAL ADMINISTRATIVE DIVISION          )          
           Re      MILOVAN NIKOLIC          
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES  
  Respondent

DECISION

Tribunal       Mr J. Handley, Senior Member  Mr G. Friedman, Member    

Date16 August 2001

PlaceMelbourne

Decision      The decision under review is affirmed.   
  ......... Sgd. Mr J. Handley .............
  Senior Member
CATCHWORDS
Social Security - Compensation lump sum - Preclusion period - whether circumstances special.
Re Beadle & Director General Social Security 1984 6 ALD 1

REASONS FOR DECISION

16 August 2001      Mr J. Handley, Senior Member Mr G. Friedman, Member                  

1. The applicant applies to review a decision of the Social Security Appeals Tribunal ("SSAT") made on 2 March 2001.  The SSAT then decided to affirm a decision made by the respondent on 28 December 2000 to impose a period of preclusion from receipt of Disability Support Pension ("DSP") having regard to the prior receipt of a compensation lump sum. 

2. The applicant appeared at the hearing without representation, but with the assistance of a Serbian Interpreter.  Mr Baker appeared on behalf of the respondent. 

3. At the commencement of the hearing the applicant said that he had not ever received documents lodged by the respondent pursuant to s.37 of the Administrative Appeals Tribunal Act. When we indicated that we would be prepared to adjourn the hearing to permit him the opportunity to inspect the documents the applicant declined our invitation. He insisted that his application proceed on the day listed for the hearing. Whilst we were satisfied that the majority of the documents would have previously been forwarded to the applicant, namely the original letter rejecting the application and imposing the preclusion period and the decision of the SSAT, we decided to stand the matter down and arranged to have a copy of the T-documents immediately made available to him. Mr Baker also explained the contents of the documents to the applicant, particularly Centrelink memorandums and internal working notes.

4. The background to the application may be briefly summarised as follows-

5. Mr Nikolic suffered injuries arising out of his former employment with the Inner and Eastern HealthCare Network, which subsequently gave rise to compensation proceedings.  That claim was eventually settled and a release was executed on 10 December 1999 in the sum of $165,000.  On 21 August 2000 the applicant made an application for DSP and the respondent subsequently decided to impose a period of preclusion between 10 December 1999 (being the date of the execution of the release) and 4 September 2003. 

6. Having regard to the provisions of s.17(2) and (3) and s.1165 of the Social Security Act, the period of preclusion was calculated by reference to the sum of $82,500 being 50% of the "compensation part of a lump sum".  Having then applied the compensation divisor then applicable namely $422.90, the period of preclusion amounted to 195 weeks.  That period expires (as was calculated) on 4 September 2003.  We were accordingly satisfied that the method of calculating the preclusion period was correct.

7. The issue in dispute in the present application was whether the applicant's circumstances were "special" within the meaning of s.1184 of the Act.  If his circumstances are special, some or all of his compensation payment may be regarded as not having been made. 

8. Mr Nikolic told us that he and his wife had previously purchased a home in Dandenong in the sum of $143,000.  Upon receipt of his compensation monies the sum of $118,000 was paid to the Bank of Melbourne to discharge a mortgage.  From the settlement monies he also paid approximately $7,000-$8,000 in legal costs, constructed another room to the house in the sum of approximately $20,000, purchased a computer and some furniture for his daughter in the sum of approximately $3,600 and contributed approximately $4,000 towards airfares to permit his sisters in Serbia travelling to Australia.  Mr Nikolic also told us that he has from time to time transferred monies to relatives in Serbia, whom he described as being "hungry and thirsty" having been subjected to the consequences of conflict. 

9. At the time the SSAT made its decision on 2 March 2001, Mr Nikolic said that he then had approximately $9,000 remaining from the settlement funds.  At the day of the hearing before us, Mr Nikolic said that he had approximately $6,000 remaining. 

10. At the present time Mr Nikolic estimated the value of his home in Dandenong at $150,000.  He has a 1997 Mitsubishi Magna motor vehicle, which he estimated to have a value of $12,000.  He estimated home contents to be $10,000.  He said his wife owns a 1995 Mitsubishi Lancer motor vehicle for which he was unable to estimate the value.  She presently is in receipt of Workers Compensation by reason of injury suffered in her employment, and presently is paid $286 net per week. 

11. Mr Nikolic said that he was advised by his solicitors prior to the settlement of his compensation claim that he would be exposed to a preclusion period.  He told us that he did not then understand the advice that he was given.  When he later approached his bank he was advised (by the bank) that the "best thing to do" was to pay off his house and he accepted that advice. 

12. Mr Nikolic also told us that shortly after receipt of the settlement funds he and his wife agreed that in consideration of him using his settlement monies to discharge the mortgage, the day to day living costs of the household would be met from the salary earnt by his wife.  Mr Nikolic said that his wife was then working and was bringing home up to $700 per week.  He said that their relationship deteriorated considerably, subsequent to him expending most of the settlement funds.  Shortly afterwards his wife was injured at work. 

13. He said whilst he and his wife and 14 year old daughter continue to live in the Dandenong home, that he and his wife live separate lives.  He said that she "goes out in the morning and comes back at night".  He also said that he and his wife had agreed that she would accept responsibility for meeting payments of another loan with the Bank of Melbourne for which $20,000 is presently outstanding.  The repayments of that loan are in the sum of $47 per week, and he understands that his wife is meeting those payments.  He said that he has insufficient money to feed himself.

14. The expression "special circumstances" was discussed by the Tribunal in the case of Re Beadle & Director General Social Security 1984 6 ALD 1 page 3, which in part recorded as follows-

    "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 in the context which allows one to say, that the circumstances in one case are markedly different from the usual run of cases.  That 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".

Conclusion & Reasons For Decision

1. We cannot find that the applicant's circumstances are "special". 

2. Mr Nikolic was aware prior to the settlement of his compensation claim that a preclusion period would be imposed.  Whilst he said he did not properly understand the advice, it is apparent that he chose to ignore it by accepting the advice of his bank which recommended that he discharge his mortgage.  That was a decision that he made, yet there is nothing "special" about it.  It appears to us that it is a decision that was made by him by agreement and in conjunction with his wife arising out of a separate agreement between them, with respect to responsibility for day to day domestic costs.  That is to say, we are satisfied and find as a fact, that Mr and Mrs Nikolic did agree that his settlement funds would be used largely to discharge the mortgage and meet other costs and in turn her salary would be used for day to day living expenses. 

3. It is apparent that the relationship between Mr and Mrs Nikolic has deteriorated subsequent to that agreement having been made, and whilst that is unfortunate it is not "special".

4. Mr Nikolic told us that he did not know where his wife spent the monies she apparently receives in Workers Compensation payments, yet it is clear to us that she is meeting the outstanding loan payment to the Bank of Melbourne together with some other costs associated with the household.

5. Mr Nikolic says that he meets most of the costs associated with the education of his daughter, and always responds to other demands made on him by her.  He said that he is approached by his daughter (as opposed to his daughter approaching his wife) for monies because he is "soft".  We would take the view that Mr Nikolic is capable of indicating to his daughter that his funds are limited. 

6. At the hearing the applicant rejected a number of options that would enable him to realise some of his assets to meet day to day expenses.  One of these was a property settlement with his wife.  He said that his experience (under Australian law) is that wives always receive three quarters of property settlements (he told us this having regard to what he said was experienced by him in a matrimonial property settlement from a former marriage).  He said that from monies that he would recover in a property settlement he would then have to pay rent and would not be in any better financial position.  Similarly the applicant rejected a suggestion of selling his motor vehicle and purchasing a cheaper car.  He told us that this would expose him to repair costs and other expenses. 

7. Having read the documents filed and having listened extensively to Mr Nikolic we are not satisfied that his circumstances are 'special'.  We note that he has considerable assets and the WorkCover Authority in Victoria continues to remain liable for ongoing medical costs arising out of treatment of the workplace injuries.  He has $6,000 in the bank, and his wife presently receives $286 net per week in compensation and $37 per fortnight in family payment.  Whilst it would appear that the relationship with Mrs Nikolic has deteriorated considerably, she is meeting some of the jointly held debts and meeting day to day living expenses. 

8. In all of the circumstances we are satisfied that the decision under review should be affirmed.

   I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member & Mr G. Friedman, Member.

   Signed:         ...C. Irons......................................................
     Secretary

   Date/s of Hearing  3 August 2001
   Date of Decision  16 August 2001
   Counsel for the Applicant        unrepresented
   Solicitor for the Applicant          
   Counsel for the Respondent    Mr T. Baker, Departmental Representative
   Solicitor for the Respondent