Pirwani and Secretary, Department of Social Services (Social services second review)

Pirwani and Secretary, Department of Social Services (Social services second review) [2024] AATA 999 (7 May 2024)
Division:GENERAL DIVISION
File Number(s): 2023/5289
Re:Inayat Pirwani
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member A Poljak
Date:7 May 2024
Place:Sydney

The decision under review is affirmed.
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Senior Member A Poljak
Catchwords
SOCIAL SECURITY – lump sum preclusion period – disability support payment – Whether a compensation preclusion period has been correctly applied – whether special circumstances exist – compensation lump sum – no evidence that special circumstances exist – decision under review affirmed.
Legislation
Social Security Act 1991
Social Security (Administration) Act 1999.
Cases
Beadle and the Director-General of Social Security
(1984) 6 ALD 1

Colaiacolo and Secretary Department of Social Security (1985)
AATA 2109
Secondary Materials
Guides to Social Policy Law Social Security Guide
REASONS FOR DECISION
Senior Member A Poljak
7 May 2024

On 23 May 2017, Mr Pirwani, the applicant, was involved in an incident and from 2 June 2017 until 24 October 2022, he was in receipt of weekly worker’s compensation payments (compensable incident).
On 17 July 2017, 16 June 2020 and 8 April 2021, Services Australia (the Agency) sent the applicant a notice which stated that if he was in receipt of any weekly or lump sum compensation, that this could stop him from receiving Centrelink payments.
The applicant notified the Agency on 18 June 2020, that he was in receipt of weekly compensation payments of $740 per week.
On 11 October 2021, the applicant lodged a claim for Disability Support Pension (DSP), which was granted on 30 November 2021.
The insurer, GIO, informed the Agency on 13 October 2022, that in respect of the applicant’s compensable injury of 23 May 2017, the applicant received a section 66 lump sum payment of $313,050 on 9 February 2021 and a further gross lump sum settlement amount of $750,000 on 29 August 2022. GIO confirmed that the applicant’s weekly compensation payments would cease after 24 October 2022.
On 24 October 2022, the Agency applied a compensation preclusion period from 25 October 2022 to 15 March 2032 (preclusion period) and cancelled the applicant’s DSP. The applicant sought review of this decision and on 29 November 2022, an Authorised Review Officer (ARO) affirmed the decision to cancel the Applicant’s DSP and the preclusion period.
On 19 June 2023, the Social Services & Child Support Division of the Administrative Appeals Tribunal (SSCSD) affirmed the decision made by the Agency on 24 October 2022. This is the decision under review in these proceedings.
ISSUES
The issues for determination are:
(a)Whether a compensation preclusion period has been correctly applied; and
(b)Whether there are special circumstances that make it appropriate in the special circumstances of the case to treat the whole or a part of the Applicant’s compensation payment as not having been made pursuant to section 1184K of the Social Security Act 1991.
RELEVANT LEGISLATIVE PROVISIONS
Section 1169(1) of the Social Security Act 1991 (the Act) provides that “compensation affected payments” are not payable during a lump sum preclusion period:
(1) If:
(a) a person receives or claims a compensation affected payments; and
(b) the person receives a lump sum compensation payment.
the compensation affected payment is not payable to the person in relation to any day to days in the lump sum preclusion period.
Under section 17(1) of the Act, DSP is a compensation affected payment. As such, DSP is not payable during any lump sum preclusion period.
Subsection 17(2) defines “compensation” as:
(a) a payment of damages; or
(b) a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c) a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from a personal injury.
Section 1170 outlines the formula for calculating the lump sum preclusion period length and the commencement date.
Relevantly, subsection (1) and (4) provide:
(1) Subject to subsection (2), if a person receives both period compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:
(a) Begins on the day following the last day of the period payments period or, where there is more than one period payments period, the day following the last day of the last period payments period; and
(b) Ends at the end of the number of weeks worked out under subsections (4) and (5)
…
(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
퐶표푚푝푒푛푠푎푡푖표푛 푝푎푟푡 표푓 푙푢푚푝 푠푢푚/ 퐼푛푐표푚푒 푐푢푡표푢푡 푎푚표푢푛푡
(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number.
Section 1171 of the Act provides that where a person receives multiple payments they may be treated as a single lump sum:
(1) If:
a)a person receives 2 or more lump sum payments in relation to the same event that gave rise to an entitlement of the person to compensation (the multiple payments); and
b)at least one of the multiple payments is made wholly or partly in respect of lost earnings or lost capacity to earn;
the following paragraphs have effect for the purposes of this Act and the Admin Act:
c)the person is taken to have received one lump sum compensation payment (the single payment) of an amount equal to the sum of the multiple payments;
d)the single payment is taken to have been received by the person:
I.on the day on which he or she received the last of the multiple payments; or
II.if the multiple payments were all received on the same day, on that day.
(2) A payment is not a lump sum payment for the purposes of paragraph (1)(a) if it relates exclusively to arrears of periodic compensation.
Section 1184K of the Act also provides a mechanism to effectively shorten a preclusion period in special circumstances. Section 1184k(1) states as follows:
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 is appropriate to do so in the special circumstances of the case.
CONSIDERATION
As already noted, the applicant received compensation for the compensable incident in the amounts of $313,050 on 9 February 2021 and $750,000 on 29 August 2022. As these amounts related to a single event, with at least one being made partly in respect of lost capacity to earn, they are to be aggregated pursuant to section 1171 of the Act. The applicant is therefore taken to have received a single payment in the amount of $1,063,050. Pursuant to section 1171, as per subparagraph 1171(1)(d)(i), the payment was taken to be received on the day the last payment was received, being 29 August 2022.
Subsection 17(3) provides that the “compensation part” of the lump sum, where that sum is made in settlement of an injury related claim, is 50% of the settlement amount. Accordingly, the applicant’s compensation part of the lump sum payment’ is $531,525.
The “income cut-out amount”, also known as the ‘divisor’, is the amount at a particular time above which no pension is payable to a single person under the ordinary income test. Pursuant to subsection 17(8) of the Act, the relevant weekly “income cut-out amount” is the amount at the time the last payment was received, which was $1082.60.
The preclusion period is determined by applying the formula in subsection 1170(4) of the Act, by dividing the compensation part of the lump sum payment, being $531,525, by the relevant divisor, $1,082.60, which provides a preclusion period of 490.97 weeks in accordance with subsection 1170(5) of the Act. This results, rounded down, in a preclusion period of 490 weeks.
The applicant was in receipt of periodic compensation in respect of this claim up until 24 October 2022. Therefore subsection 1170(1) of the Act applies and accordingly the lump sum preclusion period commences on 25 October 2022 and runs for 490 weeks until 15 March 2032. As such, the applicant’s DSP was therefore not payable from 25 October 2022 until 15 March 2032, and his DSP was appropriately cancelled under section 80 of the Social Security (Administration) Act 1999.
Turning to the consideration of special circumstances, which are not defined in the Act, however the Tribunal is provided some guidance by several Federal Court and Administrative Appeals Tribunal cases. Financial hardship alone, would not usually be sufficient to establish special circumstances which make it desirable to effectively shorten the preclusion period; see Colaiacolo and Secretary Department of Social Security (1985) AATA 2109. In the decision of Beadle and the Director-General of Social Security (1984) 6 ALD 1 at [3]:
An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances of that are unusual, uncommon, or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This 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 (emphasis added).
The applicant contends that he should not spend the settlement funds and the amount of money he has is insufficient to allow for him to provide for his family for the duration of the preclusion period, as he will need to use his compensation payout to pay for medical expenses and the family’s housing, food, utilities, schooling, and clothing. The applicant also submits that as his family is currently residing in a private rental property, his housing may be at risk should circumstances change. At hearing the applicant reiterated his concerns about using the compensation funds for his living expenses as he was concerned for his family’s financial future.
In his statement, the applicant also contends that the cost of living, and inflation would mean that his payout would run out sooner. He said that he has ongoing chronic pain and injury and requires the funds for additional surgery, physiotherapy, hand therapy and other necessary therapies. The applicant also said that he was diagnosed with renal cancer in 2019 and is still being treated for the illness. He said there are additional expenses and disability associated with the condition. Further, the applicant contends that there are further costs associated with his family’s medical needs as a result of his wife’s mental health issues, and his son’s diagnosis of type 1 diabetes in 2019. The applicant said he will never be able to work again, nor will his wife due to her mental health conditions and her carer responsibilities.
The applicant also contends that he was given incorrect legal advice about his compensation payments and was told that the payments were like a “lottery win”. The applicant said he should have received a lot more.
The failure of a solicitor to advise as to the effect of an award of damages is not considered special circumstances. There is no evidence that the applicant was given incorrect legal advice, and even if he was, it would be more appropriate for the applicant seek redress directly from his legal representative rather than for the Tribunal to reduce his preclusion period under section 1184K of the Act.
In a letter from YWCA Australia dated 14 September 2023, specialist homelessness caseworker, Deuza Lemos, stated that the applicant’s family was currently residing in private rental property, their tenancy is vulnerable, and circumstances could change at short notice.
While I note that the applicant does not own his residence and is renting, there is no evidence the applicant is at risk of homelessness. The applicant has significant savings and receives rent assistance. There is no evidence that the applicant has been notified of eviction or asked to leave his current residence.
Having considered the available evidence, the applicant cannot be said to be in financial hardship for the following reasons.
The applicant is currently in receipt of Family Tax Benefit and Rent Assistance of approximately $499.24 per fortnight and the applicant’s wife is currently in receipt of Carer’s Payment and Carer’s Disability Allowance of approximately $1,130 per fortnight.
Bank statements from ANZ show the applicant has the following:
(a)Term Deposit Account ending in xx166 with a balance of $300,000 as at 2 August 2023.
(b)Term Deposit Account ending in xx978 with a balance of $500,000 as at 7 November 2023.
(c)Savings Account ending in xx189 with a balance of $118,377.43 as at 4 October 2023.
The applicant currently receives 4% interest on his term deposits and is projected to earn approximately $32,000 in the next 12 months. This is more than what a single DSP recipient would receive in a year.
The applicant has provided letters from Anglicare Financial Counsellor, Thomas Carrol, dated 18 September 2023 and 26 October 2023. Mr Carrol advised that they had reviewed the applicant’s household and medical expenses and found that the applicant was running a regular deficit which would, over time, draw down on his savings. He also reiterated that the applicant was of the belief that the amount of money he had was insufficient to allow for him to provide for his family for the duration of the preclusion period. Mr Carrol also noted that the applicant has a fear of running out of funds and that this is causing him considerable mental harm.
The evidence and opinions of Thomas Carrol are based on information provided by the applicant about his household expenses. Anglicare’s document tilted ‘Financial Organiser’ dated 10 October 2023, details these expenses. Firstly, I note that the organiser does not include the applicant’s savings, nor any interest paid on the applicant’s term deposits. Secondly, it appears that the medical and pharmacy expenses are grossly overcalculated. For example, an amount of $5,000 annually has been predicted for chemist expenses, as well as $5,000 annually for specialist fees and $4,000 annually for other medical fees. These amounts are not made out on the evidence. There is no evidence of outstanding medical expenses and the applicant’s available bank records from August 2022 to December 2023 only accounts for approximately $1,652.80 of chemist payments.
At hearing the applicant explained that he intended to purchase a car for himself using the funds in his savings account and was also hoping to pay for his son’s university fees in excess of $75,000. The applicant said that his son had only very recently started attending university, but he was unclear if or how the fees were to be paid. He said his son had applied for a government loan for his tertiary study but was unclear of the outcome. The applicant said, “I got money in the bank, happy to pay fees for uni”; “my son can use the money for whatever he wants, I have money”. I also note that his son now receives Youth Allowance of approximately $459 a fortnight.
Whilst I can appreciate the applicant’s intention to save his settlement lump sum for his family’s future, I note that the principle of the compensation provisions in 4.13.2.60 of the Guides to Social Policy Law Social Security Guide (the Guide), provide that if a person has been compensated for loss of income, they should use that money to live off rather than receive a taxpayer-funded payment.
Looking at the applicant’s claims that his health and medical conditions should warrant some reduction of the preclusion period, instruction 4.13.4.20 of the Guide relevantly provides that:
the state of ill health should be more severe than the majority of Disability Support Pension recipients.
injury that a person received compensation for cannot generally be regarded as a special circumstance.
As per the deed to the compensation settlement agreement for the compensable injury, the applicant sustained injuries to his left hand, wrist, left knee and leg, right knee, right foot, right calf and right leg, left leg and psychological injury.
Dr Faisal Qidwai, general practitioner, opined in a letter dated 12 October 2023, that the applicant’s declining health was as a result of his workplace incident in 2017. Some of the conditions that have arisen since the accident include mental health issues, renal cancer, lower limb pain, Type 2 Diabetes and iron deficiency and leaking left popliteal cyst. Dr Qidwai said that the applicant may need to draw on his impairment payment to cover the costs of urgent and lifesaving medical treatments at any time and opined that the applicant was also in need of a specially adapted, automated car due to his limitations. He also opined that the payout he received is unlikely to sustain [the applicant] and his family for a decade given the cost of living in Sydney combined with his special needs.
In a letter dated 19 July 2023, Robbey Taouk, clinical psychologist, stated that since the workplace injury, there has been an exacerbation of symptoms in the context of escalating physical health issues. Mrs Taouk opined that the applicant continues to exhibit symptoms of post-traumatic stress disorder, anxiety, and severe depressive illness. He has been attending the clinic for treatment since 2018 for treatment and follow-up.
While I accept that the applicant continues to suffer from many significant medical issues and disabilities, most of the applicant’s significant conditions are a result of the applicant’s workplace incident, for which he received compensation. Therefore, these conditions are not to be taken into consideration when assessing special circumstances.
The applicant has the financial means to cover his current medical needs and there is no evidence that he is at risk of severe financial hardship due to any upcoming treatment.
The report from Sarah Kebbi, occupational therapist, dated 6 October 2023, provides that the applicant is receiving NDIS funding for support averaging 2-3 hours per day, 1 day per week to assist with his health condition.
The applicant advised that he does currently have a NDIS plan for 25 May 2023-2024. the funding received under his NDIS plan is around $70,000. He said that this provides for allied supports including physiotherapy, occupational therapy, and support workers. He said his plan used to provide for psychological therapies, but these are now covered through Medicare. The applicant said that his NDIS plan also provides for hand therapy and respite, cleaning services and transport funding.
At hearing, the applicant stated that he recently passed his drivers test and currently drives. Although not essential, the applicant said that he planned to buy himself a new car and to give his current vehicle to his son. The applicant said he didn’t use the transport funding provided for in his NDIS plan because he found it “embarrassing”.
The applicant underwent treatment for renal cancer in July 2020. The applicant received the treatment through the public health system and has an upcoming appointment at the Crown Princess Mary Cancer Clinic on 16 May 2024.

In a letter dated 20 February 2024, Dr David Bradshaw, orthopaedic surgeon, hand, wrist and microsurgeon, opined:
I do not think there is much more to do from a surgical perspective. MCP joint arthroplasty is contraindicated in the absence of sensation. Arthrodesis would remove the range that he currently has which is contributing to his residual hand function and would likely lessen his function. I do not think there are any soft tissue procedures to improve range, pain, or sensation. Obviously if his situation deteriorates, we will reassess options, but for the time being I recommend against any surgery.
Additionally, Dr Paul Della Torre, orthopaedic surgeon, advised in a letter dated 29 February 2024, that the applicant underwent left total knee arthroscopy at Concord Hospital on 7 September 2022. He stated that upon review, the applicant’s left knee function was satisfactory. He stated that the applicant was listed for right total knee arthroplasty for progressive degenerative changes in 6 months time. The applicant advised that he will be receiving the surgery through the public health system.
There is no evidence that the applicant was required to pay out of pocket expenses nor that any such expenses are currently causing a significant impact on the applicant’s finances or health, such that it be treated as special circumstances.
Considering the applicant’s circumstances as a whole, I am not convinced that they are special or unique to warrant any waiver of his compensation preclusion period.
DECISION
The decision under review is affirmed.

51. I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak

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Associate
Dated: 7 May 2024

Date of hearing: 5 March 2024

For the Applicant: Ms P Thody, Advocate

Solicitor for the Respondent:

Ms J Vetter, Services Australia

[2024] AATA 999

7 May 2024

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Statutory Construction

Remedies

Procedural Fairness

Date of hearing:	5 March 2024
For the Applicant:	Ms P Thody, Advocate
Solicitor for the Respondent:	Ms J Vetter, Services Australia