O'NEILL Applicant And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
[2010] AATA 242
•31 March 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 242
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/0834
GENERAL ADMINISTRATIVE DIVISION ) Re CRAIG ANDREW O'NEILL Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal The Hon R J Groom (Deputy President) Date 31 March 2010
PlaceHobart
Decision 1. The Tribunal affirms the decision to cancel Mr O'Neill's disability support pension.
2. The Tribunal sets aside the decision to raise and recover the debt of $123,816.10 and pursuant to section 1237AAD of the Social Security Act 1991 waives the right to recover any part of that debt.
..............................................
Deputy President
CATCHWORDS
Social Security – Disability Support Pension – whether regular payments from Medical Trust Fund income for purposes of Social Security Act 1991 – meaning of income – payments are income – decision to cancel pension affirmed – overpayment – whether debt should be waived – special circumstances – debt waived
Public Trust Office Act (Tas) 1932
Social Security Act 1991, ss 8(1), (2), 8(8)(v), (zi), 35A, 1209L to 1209X, 1237AAD
Read v Commonwealth (1988) 167 CLR 57
Secretary of the Department of Social Security and Davies [1997] FCA 1024
Kelleners v Secretary, Department of Social Security [1988] FCA 397
Secretary, Department of Social Security and Hales (1998) 82 FCR 154
Re Taylor and Director-General of Social Security (1984) 6 ALD 500
REASONS FOR DECISION
31 March 2010 The Hon R J Groom (Deputy President) Background
1. Mr O'Neill was injured in a work-related motor vehicle accident in 1985. He suffered a serious brain injury and as a result has permanent mental incapacity.
2. A workers' compensation claim was subsequently lodged on his behalf. It was settled in 1994. There were two components to that settlement:
·$130,000.00 plus costs was paid by the insurers to settle Mr O'Neill's claim for incapacity and lost earnings. These funds are administered by the Tasmanian Public Trustee ("the Personal Trust Fund").
·$1.2 million was also paid by the insurers in settlement of Mr O'Neill's past and future "... accommodation, services, nursing care and therapy" costs. After satisfying outstanding accounts for hospital, medical and ambulance services the balance of $870,000.00 was paid to the Public Trustee subject to the terms of a deed of settlement dated 20 July 1994 and also the provisions of the Public Trust Office Act (Tas) 1932 ("the Medical Trust Fund").
3. Immediately following the accident Mr O'Neill was treated at the Royal Hobart Hospital. He was later transferred to the New Norfolk District Hospital and in recent years has been cared for at the Corumbene Nursing Home at New Norfolk ("Corumbene").
4. Mr O'Neill was granted a Commonwealth disability support pension in February 1987. After the settlement of his workers' compensation claim Mr O'Neill continued to receive that pension. In late 1994 the Public Trustee commenced to make regular payments from the Medical Trust Fund for Mr O'Neill's hospital and nursing care. In November 2007 a monthly amount of $5,059.00 was then being paid to Corumbene. Regular monthly payments continue to be paid to Corumbene.
5. On 17 October 2007 Centrelink forwarded an "Income and Assets Update" form to the Public Trustee seeking information about Mr O'Neill's income and assets.
6. On 28 November 2007 the completed form was received by Centrelink. It stated that an amount of $465,000.00 was then being held in the Medical Trust Fund.
7. A Centrelink officer decided on 19 May 2008 that payments made out of the Medical Trust Fund for O'Neill's hospital and nursing care were payments of income for the purposes of assessing Mr O'Neill's entitlement to a disability support pension under the Social Security Act 1991 (“the Act”).
8. On 20 May 2008 Centrelink cancelled Mr O'Neill's pension and decided to seek repayment of $123,816.00 which it claimed was overpaid for the period 1 December 1994 until 13 May 2008.
9. The Public Trustee on Mr O'Neill's behalf sought a review of that decision. On 28 July 2008 the decision was affirmed by an Authorised Review Officer.
10. An appeal was then lodged with the Social Security Appeals Tribunal ("SSAT"). The SSAT affirmed both the cancellation decision and the decision to raise and recover the debt.
11. On 26 February 2009 the Public Trustee, on behalf of Mr O'Neill appealed to this Tribunal for a review of the decision of the SSAT.
The Issues
12. The principal issues to be determined by the Tribunal are:
(a) Are the regular payments from the Medical Trust Fund for Mr O'Neill's hospital and nursing care "income" for the purposes of the Act?
(b) If those payments are income should any overpayment of the pension be recovered?
13. It should be mentioned that Ms Taglieri for the applicant informed the Tribunal that the quantum of the alleged overpayment was not in issue (Transcript page 110). The main contention advanced on behalf of Mr O'Neill was that the payments are not income and also that if the Tribunal decided that the payments were income it should exercise the discretion in section 1237AAD of the Act and waive all of the debt. Mr Sparkes for the respondent submits that the payments are income and also that the particular circumstances do not warrant the exercise of the discretion to waive any part of the debt.
The Legislation
14. The principal provisions of the Act requiring consideration by the Tribunal are as follows:
8(1) In this Act, unless the contrary intention appears:
...
income, in relation to a person, means:
(a) an income amount earned, derived or received by the person for the person’s own use or benefit; or
(b) a periodical payment by way of gift or allowance; or
(c) a periodical benefit by way of gift or allowance;
...
income amount means:
(a) valuable consideration; or
(b) personal earnings; or
(c) moneys; or
(d) profits;
(whether of a capital nature or not).
...
The expression "earned, derived or received" is defined in section 8(2) as follows:
(2) A reference in this Act to an income amount earned, derived or received is a reference to:
(a) an income amount earned, derived or received by any means; and
(b) an income amount earned, derived or received from any source (whether within or outside Australia).
Section 8(8) contains a list of various types of payments and benefits which are excluded from the concept of income for the purposes of the Act.
Section 8(8)(v) may have relevance in this application. It provides:
"A payment (other than a periodical payment or a payment representing an accumulation of instalments) made for or in respect of expenses incurred by a person for hospital, medical, dental or similar treatment;"
Section 8(8)(zi) may also have relevance. It provides that:
"A payment towards the cost of personal care support services for the person, being a payment made under a scheme approved under section 35A;"
Section 35A provides:
"35A Personal Care Support
The Minister may, in writing, determine that a scheme for the provision of personal care support is an approved scheme for the purposes of this Act"
Section 1237AAD of the Act provides as follows:
"The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt".
the two trust funds
15. Mr O'Neill's workers compensation claim was settled. The terms of settlement were set out in a Consent Judgment in the Supreme Court of Tasmania dated 12 July 1994 (T Documents T3).
16. The terms of the settlement provided that Mr O'Neill was to receive $130,000.00 including $18,226.80 in redemption of weekly compensation. In addition provision was made for settlement of past and future "... accommodaiton, services, nursing care and therapy ..." costs as set out in a draft Deed attached to the Consent Judgment.
17. The Deed was executed on 20 July 1994. In clause 10 it explains that the employer's insurers, whilst denying liability, would pay a total of $1.2 million for the past and future costs as mentioned above.
18. In the Deed the following details are provided as to how the $1.2 million was to be expended.
"A. The plaintiff agrees to the immediate payment of $330,000.00 from the sum of $1.2 million aforesaid towards the outstanding accounts for the Royal Hobart Hospital (by payment of the sum of $50,000.00) and New Norfolk District Hospital (by payment of the sum of $279,722.13) and the Tasmanian Ambulance Service (by payment of the sum of $277.85) in full and final settlement of all outstanding claims against the Plaintiff for medical treatment, hospital, nursing and ambulance services provided to him as a result of the injuries sustained by him on the 27th day of November, 1985, as at the 1st day of December, 1993.
B. To create, by order of the Supreme Court, through application of the Plaintiff's Next Friend - the Crown Solicitor for the State of Tasmania a trust fund of the balance of the monies offered by the employer's insurers, $870,000.00, to be held in trust by The Public Trustee subject to provisions of the Public Trust Office Act 1932 for the following limited purposes (hereinafter called "the trust fund"):-
(i) to pay to the State Hospital, Nursing Home or other such State institution at which the Plaintiff is receiving nursing care and therapy $138.00 per day towards the cost of providing full accommodation, services, nursing care and therapy to the Plaintiff from the 1st day of December, 1993 and thereafter as varied, or at such other rate, calculated in accordance with B(ii) hereof;
(ii) to pay the daily cost of full accommodation, services, nursing care and therapy, as provided in B(i) hereof, monthly on account being rendered to the Public Trustee;
(iii) to authorise payment of any variation in the daily rate of $138,.00, as provided for in B(i) hereof, calculated from time to time by reference to any variation in the scheduled fee under the Health (Regional Boards) (Fees) Regulations 1991 or any statutory or other substitute of those regulations for the provision of such services such that the rate of $138.00 will be varied by a percentage equivalent to the percentage variation in the scheduled fee for private "other patients" under Schedule 1 Part 1 paragraph (e) (providing for a daily rate of $145.00 at the date hereof) from the date or dates of such variation or variations to the said fee;
(iv) to pay in the event of there being a residue in the trust fund created hereunder at the time of the Plaintiff's death, such residue forthwith to the Zurich Australia Insurance Company Limited or its successor".
19. The then Minister for Health and Community Services was a party to the Deed. The Minister, on behalf of the State of Tasmania, made a number of covenants including the following:
"(c) In the event that the residue of the trust fund :established hereunder is exhausted before the Plaintiff's death to provide to the Plaintiff ongoing full accommodation, services, nursing care and therapy at no cost to the Plaintiff subject to the Plaintiff, his legal personal representative the Crown Solicitor for the State of Tasmania providing such contribution as is leviable from any Disability Pension or other such Benefit payable to the Plaintiff at the time such trust fund is exhausted and thereafter".
20. It is reasonable to infer that the Medical Trust Fund mechanism was chosen principally because of Mr O'Neill's mental incapacity and his inability to manage his on-going affairs. However it was also of benefit to the insurer in that it passes to the Public Trustee responsibility for the detailed administration involved in the payment of Mr O'Neill's future medical and related needs. Also it safeguards the insurer's interest in the residue of the Medical Trust Fund should Mr O'Neill die before the fund is exhausted. The Public Trustee owes a duty not only to Mr O'Neill but also to the insurer and other parties to the Deed to ensure that their respective interests are properly protected.
21. Mr O'Neill was and is the beneficial owner of the Personal Trust Fund. The Public Trustee can use that fund for any reasonable purpose in Mr O'Neill's interest. However his interest in the Medical Trust Fund is different. Mr O'Neill does not have an unfettered right to the Medical Trust Fund or any part of it. It was established for a defined and limited purpose. The money in the Medical Trust Fund cannot be used for any other purpose. Upon the death of Mr O'Neill any residue in the Trust Fund is to be repaid to the insurance company.
22. It is noted that the Deed provides for a regular payment, on a monthly basis, for Mr O'Neill's "... full accommodation, services, nursing care and therapy ...". The term "full accommodation" suggests that all of his accommodation costs including sustenance are to be provided. The word "services" is very wide and is probably intended to mean all forms of medical and related services that Mr O'Neill may need.
23. Mr O'Neill is totally and permanently incapacitated. The nature of the care provided to him at Corumbene is explained in the affidavit of Cecily Verrier, a registered nurse, dated 11 December 2009 (Exhibit A11). Almost all of Mr O'Neill's costs of living are the costs of his nursing care and medical needs. His personal expenses are quite limited. Those personal expenses including toiletries, clothing and laundry expenses are met out of his Personal Trust Fund. As indicated in a letter from the Public Trustee dated 14 December 2009 (Exhibit A14) the sum of $505.00 had been paid each month to Mr O'Neill's parents from his Personal Trust Fund to pay for his personal needs. On and from November 2009 the Public Trustee has not paid this regular allowance each month but has asked Mr O'Neill's parents to provide receipts for any purchases for Mr O'Neill. His parents are then reimbursed the amounts actually paid.
24. It would appear that Mr O'Neill's accommodation and nursing, medical and related needs are being adequately met from the Medical Trust Fund. There remains sufficient money in his Personal Trust Fund to pay for his personal needs and expenses. As at 26 November 2009, the balance in the Medical Trust Fund was $222,536.93 and the balance in Mr O'Neill's Personal Trust Fund was $197,393.70. If and when the Medical Trust Fund is exhausted the State of Tasmania is then to provide for Mr O'Neill's ongoing accommodation, nursing, medical and related needs.
Are payments from the medical trust fund "income" for the purposes of the act?
25. It was submitted on behalf of Mr O'Neill that the only payment that should properly be considered is the lump sum payment of $870,000.00 paid into the Medical Trust Fund administered by the Public Trustee. It is argued that this was a lump sum payment of Mr O'Neill's hospital and nursing care.and is therefore an "excluded amount" under section 8(8)(v) of the Act.
26. The contention is that the only reason the $870,000.00 was paid into the Medical Trust Fund was because of Mr O'Neill's mental incapacity. It is said that if he had been able to manage his own affairs the lump sum would have been paid directly to him and not to the Public Trustee. Any payments he subsequently made out of the lump sum for his hospital and nursing care etc could in no sense then be considered income.
27. There have been two stages in the process of settling Mr O'Neill's workers' compensation claim and satisfying his on-going medical and other needs.
28. The first stage was the 1994 settlement of his workers’ compensation claim in which two lump sum payments were made by the insurers to satisfy the claim. There was the amount paid for incapacity and lost earnings totalling $130,000.00 which became Mr O'Neill's Personal Trust Fund. There was also the sum of $1.2 million paid for past and future medical related expenses. Of that total of $1.2 million $850,000.00 was paid to the Public Trustee and became the Medical Trust Fund.
29. The second stage in the process was the series of regular payments which commenced in late 1994 and are still on-going, paid out of the Medical Trust Fund to the New Norfolk District Hospital and later Corumbene for Mr O'Neill's hospital and nursing care and related expenses.
30. Attached to an affidavit from Kenneth Eric Read, the legal practitioner then acting for Mr O'Neill, dated 11 November 2009, is a letter from Mr Read of 12 April 1994 to the Public Trustee which states in the last paragraph:
"The Department of Social Security has determined that $2,994.12 is repayable to them from the settlement monies of $130,000.00. You will therefore be receiving $127,005.88. Mr O'Neill's invalid pension will continue unaffected by the settlement".
31. Mr Read has said in his affidavit that he believes that, in accordance with his then usual practice, he had sent a copy of the Consent Judgment dated 12 July 1994 and also a copy of the Deed to the Department. The Tribunal is satisfied the Department had received a copy of the Consent Judgment. In that Consent Judgment there is a reference to the Draft Deed.
32. There is no evidence before the Tribunal as to whether or not the matter set out in the Deed were properly considered by the Department. Perhaps it determined that the payment of the $1.2 million lump sum for past and future hospital medical and related expenses was not income as it was an excluded amount under section 8(8)(v) of the Act. In the absence of evidence on this issue the Tribunal can only speculate about the Department’s then attitude to that payment.
33. There may be merit in the Applicant’s contention that if the lump sum had been paid directly to Mr O'Neill it may not have been income because of the effect of section 8(8)(v). However that does not mean that the lump sum would then not be considered as an asset. It is likely that any income derived from that lump sum when it was invested would be considered income for the purposes of the Act.
34. The task now before the Tribunal however, is to determine whether the regular monthly payments out of the Medical Trust Fund and paid to the New Norfolk District Hospital and Corumbene are "income" within the meaning of that term in the Act.
35. At the hearing there was a wide-ranging discussion of all three limbs of the definition of "income" in section 8(1) of the Act. Each limb is an alternative meaning of the word. If the Tribunal were to conclude that one of those alternatives was satisfied then the payments would be income.
36. The Parliament has cast a very wide net in defining "income". It goes well beyond what one would normally consider to be income. The purpose is obviously to restrict social security payments to people genuinely in need of support.
37. The definition of income in the Social Security Act 1947, a predecessor to the present Act, was described by Brennan J in Read v Commonwealth (1988) 167 CLR 57 at 69 as follows:
"The definition is couched in the widest terms, presumably to ensure that public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide".
Case law is replete with similar expressions by our Courts and Tribunals highlighting the breadth of the definition of income in the Act.
38. The extraordinarily wide range of exclusions set out in section 8(8) of the Act highlights the breadth of the meaning of income. For example, if it was intended not to include payments for medical and like expenses why is section 8(8)(v) necessary? As another example, why did the legislature believe it was necessary to enact sections 1209L to 1209X of the Act relating to “Special Disability Trusts” if income gained by that type of trust fund or distributions from it are not income for the purposes of the Act? The principal purpose and characteristics of the Medical Trust Fund created for Mr O’Neill are quite similar to those of the “Special Disability Trusts” recognised by the Act.
39. It is noted that the SSAT was not satisfied that the payments were income within the first limb of the definition in section 8(1). However it did conclude that the payments in question came within the second limb, namely that they were "periodical payments" by way of an "allowance".
40. Neither party suggested the payments were a "gift" within the meaning of that word in parts (b) and (c) of the section 8(1) definition. The payments were required to be made by the Public Trustee pursuant to a clear legal duty. In no sense could the payments be considered a gift.
41. The payments were made regularly. The Deed stated that they would be paid monthly after an account was provided. This appears to have been the practice. Payments for other accounts, for example, "for repairs to wheel chair" and "review of seating and mobility" (See T9 page 78) were made from time to time but they are not the payments now under consideration. In November 2007 the regular payments were $5,059.00 per month.
42. In Secretary of the Department of Social Security and Davies [1997] FCA 1024 Heerey J held that payments made under the Social Security Contributions Benefits Act UK were "periodical" in the sense that they were regularly recurring and made by reference to periods of time.
The Tribunal is satisfied that the payments here were also "periodical". They were periodical in the sense that they were paid regularly and on a monthly basis.
43. "Allowances" is defined in the Macquarie Dictionary (5th Edition) to mean, inter alia, "a definite sum of money allotted or granted to meet expenses or requirements".
The payments made to the hospital and the nursing home were of a definite sum of money allotted to meet Mr O'Neill's expenses and requirements.
44. It was submitted on behalf of Mr O'Neill that an allowance must have the character of an ex-gratia payment. It was suggested that the decision by Ryan J in Kelleners v Secretary, Department of Social Security [1988] FCA 397 was authority for that proposition.
45. In the Tribunal's view an allowance may include payments of a gratuitous kind but the term is not confined to ex-gratia payments in the strict sense of that term. Ryan J expressed the view that the payments in that particular case could not be considered "monies" but did conclude that the payments, although said to be “ex-gratia”, did come within the proper meaning of "allowance". (See para 22 of the decision).
46. In Kelleners the payments were paid to the applicant under a Netherlands statute for the suffering of victims of persecution. Similarly in the later Davies decision (supra) Heerey J found that housing benefits paid under the Social Security Contributions Benefit Act 1992 (UK) were either "a payment or benefit, or perhaps both, made by way of allowance". His Honour said, perhaps clarifying what may appear to be an ambiguity in Kellener, "the ordinary meaning of the term "allowance" would include a payment which the payee does not earn by personal exertion or income from property" (the Tribunal’s emphasis). The payment of the benefit in Davies was not an ex-gratia payment in the true sense of the term as it was a statutory entitlement. But as in Davies the regular payments to the hospital and the nursing home were not earned by personal exertion and were not income derived from property. Their original source was a statutory workers’ compensation claim. The payments in Kelleners and Davies were both made under statutory schemes. The interpretation of such payments as “ex-gratia” is a rather generous interpretation of the term. Payments made after satisfying the requirements of a statutory scheme are not usually considered ‘ex-gratia”. They arise from a statutory entitlement. The payments made regularly by the Public Trustee satisfy the ordinary meaning of the term “allowance”.
47. The payments from the Medical Trust Fund were intended principally to pay for the costs associated with Mr O'Neill's care. It is apparent that the Parliament envisaged that the wide meaning of income can include medical and like expenses. This is made clear by section 8(8)(v) which provides that a periodical payment of expenses for "hospital, medical, dental or similar treatment" is income whereas a lump sum payment for the same expenses is not. As the payments here were periodical section 8(8)(v) does not exclude the payments from the definition of income in section 8(1).
48. The payments in question are also a "benefit". A periodic benefit is provided to Mr O'Neill through the payment to the hospital and the nursing home by the Public Trustee. That benefit is in the form of the provision of full accommodation, nursing and medical care and other essential services.
49. The Tribunal concludes that the payments out of the Medical Trust Fund to the New Norfolk District Hospital and to Corumbene made since December 1994 and on-going are "periodic payments" and "periodic benefits" by way of "allowance" and therefore "income" to be taken into account when assessing Mr O'Neill's entitlement to the pension.
50. Having arrived at that conclusion it is not necessary for the Tribunal to express any view as to whether the payments were "an income amount earned, derived or received by the person for the person's own use or benefit (section 8(1)(a)). The Respondent submits that in the particular circumstances the definition of income in section 8(1)(a) is satisfied. That may well be correct but as sections 8(1)(b) and 8(1)(c) are satisfied there is no need for the Tribunal to further consider section 8(1)(a).
51. In the course of the hearing there was a brief discussion about the possibility of an application under section 35A of the Act for approval of an on-going scheme of care support for Mr O’Neill. As the payments out of the Medical Trust Fund are for hospital and nursing care and related support for him approval of such an application might well be consistent with the policy behind section 35A and section 8(8)(zi) of the Act.
SHOULD THE OVERPAYMENTS BE RECOVERED?
52. The Tribunal is satisfied that neither Mr O'Neill or any other person knowingly made a false statement or representation or knowingly failed or omitted to comply with the Act.
53. It is also satisfied that it is more appropriate to waive than to write-off the debt or part of the debt. Indeed the preconditions in section 1236(1A) to allow the write-off of a debt are not present in this case. Mr O'Neill has the capacity to pay the debt of $123,816.10 but the amount would have to be paid out of his Personal Trust Fund and could not be paid out of the Medical Trust Fund. The Public Trustee has no authority to repay the overpayment out of the Medical Trust Fund which, as has been explained, was established for strictly limited purposes.
54. French J, as he then was, when discussing the discretion in section 1237AAD said in Secretary, Department of Social Security and Hales (1998) 82 FCR 154 as follows:
"The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose".
55. In Re Taylor and Director-General of Social Security (1984) 6 ALD 500 at 507 the Tribunal, with then President Davies J presiding, said:
"... in determining whether to recover a particular sum at a particular time and in a particular way, the Director-General and, on review, the Tribunal, should take into account all the circumstances of the case including the circumstances in which the overpayment arose, whether as a result of an innocent mistake or fraud, whether administrative delay and error contributed and also all relevant compassionate circumstances. The effect of the recovery action upon the social welfare recipient should be taken into account".
56. It is obvious that Mr O'Neill had no part to play in causing the overpayment. He is severely mentally and physically incapacitated. Dr Maureen Malloy, clinical neuro psychologist, described the extent of his neuro psychological loss as "about as large as possible commensurate with survival". Dr Malloy said his condition "... is very close as to what is described in the literature as the vegetative state ...". Mr O'Neill obviously has no real appreciation of his circumstances and certainly not of his entitlements and obligations.
57. The Tribunal is satisfied that Mr O'Neill's legal representatives and officers in the office of the Public Trustee have acted properly in every respect and had no intention to conceal information. The Tribunal is satisfied that there was contact with the Department of Social Security prior to settlement and that it was aware of the existence of the Consent Judgment and draft Deed.
58. Mr O’Neill is totally dependent on the people who advise and assist him. The facts established that he had no knowledge that as a result of payments out of the Medical Trust Fund there was no ongoing entitlement to a disability support pension. Mr O’Neill is a completely innocent party. Yet a decision requiring repayment of $123,816.10 would substantially reduce his Personal Trust Fund which contains the only money available to meet his ongoing personal expenses. As at 26 November 2009 the balance of that Fund was $197,393.70. Assuming that figure is still the balance after repayment the Fund would be suddenly reduced to $73,577.60. Mr O’Neill is now 48 years of age. The evidence is that his life expectancy is not likely to be significantly affected by his severe mental and physical incapacity. It is quite possible that he may therefore be dependent on his Personal Trust Fund for the payment of personal expenses for many years to come. Recovery action may potentially have a serious impact on Mr O’Neill’s future enjoyment of life and well-being. This would be an unfortunate consequence for someone who played no conscious part in the events which have caused the overpayment. These are indeed unusual and exceptional circumstances.
59. After considering all of the material before it the Tribunal concludes that there are special circumstances in this case which go well beyond financial circumstances alone. The Tribunal will therefore exercise the discretion in section 1237AAD in Mr O'Neill's favour and will waive all of the debt of $123,816.10.
Decision
60. 1. The Tribunal affirms the decision to cancel Mr O'Neill's disability support pension.
2. The Tribunal sets aside the decision to raise and recover the debt of $123,816.10 and pursuant to section 1237AAD of the Social Security Act 1991 waives the right to recover any part of that debt.
I certify that the 60 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon R J Groom (Deputy President)
Signed: H Healy (Administrative Assistant)
Date/s of Hearing 1, 14 December 2009 and 26 February 2010
Date of Decision 31 March 2010
Counsel for the Applicant Ms S Taglieri
Solicitor for the Applicant Ms R Ladd, The Public Trustee
Solicitor for the Respondent Mr B Sparkes, Centrelink Legal Services
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