QHBN and Secretary, Department of Social Services (Social services second review)
[2015] AATA 614
•19 August 2015
QHBN and Secretary, Department of Social Services (Social services second review) [2015] AATA 614 (19 August 2015)
Division GENERAL DIVISION File number
2014/4739
QHBN
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Dr James Popple, Senior Member Date 19 August 2015 Place Canberra The decision of the Social Security Appeals Tribunal on 3 September 2014 is affirmed.
............................[sgd]............................................
James Popple, Senior Member
CATCHWORDS
SOCIAL SECURITY — compensation preclusion period — newstart allowance — whether special circumstances exist to shorten preclusion period — whether gambling a special circumstance — whether Applicant’s gambling is an addiction — financial hardship — Applicant has realisable assets — decision affirmed.
LEGISLATION
Social Security Act 1991, ss 17(1), 23(1), 1169, 1170, 1184K(1)
CASES
Anderson and Secretary, Department of Family and Community Services [2000] AATA 431
Andrews and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 139
Davis and Secretary, Department of Family and Community Services [1999] AATA 84
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Males and Secretary, Department of Family and Community Services (1999) 57 ALD 793
Secretary, Department of Families, Community Services and Indigenous Affairs and Smith [2012] AATA 262
Secretary, Department of Family and Community Services and Jones (2003) 74 ALD 480
Secretary, Department of Family and Community Services and Pearce (2003) 78 ALD 771
Secretary, Department of Family and Community Services and Rankin [1999] AATA 496
Secretary, Department of Social Security and Rodgers (1992) 26 ALD 235
Stavrakis and Secretary, Department of Family and Community Services (2003) 73 ALD 432
Tisdell and Secretary, Department of Social Services [2015] AATA 582
SECONDARY MATERIALS
Department of Social Services, Guide to Social Security Law (version 1.213, 1 July 2015)
REASONS FOR DECISION
James Popple, Senior Member
19 August 2015
Summary
I affirm the decision of the Social Security Appeals Tribunal (the SSAT) to reject the applicant’s claim for the newstart allowance (newstart) on the basis that the lump sum preclusion period (the preclusion period) had not ended. I do not think it is appropriate, in the circumstances of the applicant’s case, to treat part of his compensation payment as not having been made. The applicant’s preclusion period ends on 4 May 2017. He cannot claim newstart during the preclusion period.
Background
On 5 May 2010, “QHBN” (the applicant) injured his back at work. He lodged a claim for worker’s compensation. On 20 September 2012, his employer paid him $33,100. His employer also paid him periodic compensation payments until 10 October 2013. On 8 October 2013, his compensation claim was settled in the District Court of New South Wales, with his employer paying him a further $297,500. So, the applicant received lump sum compensation payments totalling $330,600 (the lump sum).
On 10 October 2013, Centrelink wrote to the applicant, advising him that, because of the compensation payment that he had received, a preclusion period would apply before he would be able to claim Centrelink payments. Centrelink advised that it had calculated that the preclusion period was from 11 October 2013 to 4 May 2017.
On 29 May 2014, the applicant lodged a claim for the newstart allowance (newstart). On 30 May 2014, Centrelink rejected his claim, on the basis that the preclusion period had not ended, which meant that the start date for any newstart payment would be more than 15 weeks in the future. The applicant sought review of that decision. On 27 June 2014, an authorised review officer affirmed the decision to reject his claim. The applicant applied to the SSAT for review of that decision. On 3 September 2014, the SSAT affirmed Centrelink’s decision.
On 12 September 2014, the applicant applied to the Tribunal, under s 179 of the Social Security (Administration) Act 1999, for review of that decision.
Decision under review
The decision under review is the SSAT’s decision on 3 September 2014 affirming Centrelink’s decision to reject the applicant’s claim for newstart on the basis that the preclusion period had not ended.
Issue
The issue in this review is what preclusion period should apply to the applicant. That depends on whether there are special circumstances that make it appropriate to calculate the preclusion period on the basis that the lump sum (or part of it) was not paid to him.
Legislative framework
Section 1169 of the Social Security Act 1991 (the SS Act) provides that, if a person receives a lump sum compensation payment, a “compensation affected payment” is not payable to that person during the preclusion period. Section 17(1) defines “compensation affected payment” to include “a social security benefit”, which s 23(1) defines to include newstart. Section 1170 provides for the calculation of the preclusion period, having regard to (amongst other things) the compensation part of the lump sum. Section 1184K(1) provides:
1184K Secretary may disregard some payments
(1)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.
(Sections 1169, 1170 and 1184K are all in Part 3.14 of the SS Act, which is about compensation recovery.)
The applicant has received a compensation payment (the lump sum), so he cannot claim newstart during the preclusion period. However, the preclusion period can be calculated on the basis that the lump sum (or part of it) was not paid, if it is appropriate to do so in the special circumstances of his case.
The applicant’s circumstances after he received the lump sum
The applicant’s actions after he received the lump sum, and his circumstances since that time, are important to this review. I make the findings set out in [11]–[20] below, on the balance of probabilities. These findings are based on the documents before me, on information provided by counsel for the applicant and by the applicant’s general practitioner (GP), and on evidence given by the applicant at the hearing. This evidence is uncontested, though some of it is uncorroborated. I accept this evidence.
The applicant was living alone in rental accommodation at the time that he was injured. After he was injured, he lived with his mother. He was not aware of the preclusion period, or that he would not be able to claim Centrelink payments during that period. If he received the letter that Centrelink sent him on 10 October 2013 (advising him that the preclusion period would end on 4 May 2017), he threw it out without reading it.
He did not seek financial advice about what to do with his compensation money. He does not remember precisely what he did with the money, but he gambled a lot of it away through poker machines. On his brother’s advice, and in order to stop himself from losing more of his compensation money through poker machines, the applicant decided to buy some property. On 6 February 2014, he bought a one-bedroom cabin for $29,500. On 24 February 2014, he bought a block of land for $42,184.88. The land was only partly cleared, so the applicant moved the cabin onto a site at a caravan park. The cost of moving and installing the cabin was $6800. He moved into the cabin later in 2014. Sometime in 2014, he put himself on the self-exclusion register at his local club, so that he would not be able to continue to gamble using the club’s poker machines.
On 29 May 2014, as noted above, the applicant lodged a claim for newstart, which Centrelink rejected the next day.
On 30 May 2014, the applicant made a statement of income and assets. He had no income. He did not list, as assets, the land or the cabin. He did list as assets household contents and personal effects with an estimated value of $25,000; three cars (all of which, he says, are in need of major repairs) with a total estimated value of $16,000; a box trailer with an estimated value of $1500; and $6549.88 in bank accounts. The $25,000 estimate of the value of his household contents and personal effects was a significant overestimate.
The applicant has since spent the money that he had in those bank accounts. Sometime in 2014, he ran out of funds. Since then, he has survived on the assistance of relatives, friends and charities.
On 24 June 2014, the applicant’s GP reported that the applicant suffers from “L4–5 disc prolapse” and “osteoarthritis spine”. The GP said that the applicant endures “chronic severe pain” and that his conditions significantly affect the applicant’s “mobility, endurance, activities of daily living”. Because of his pain medication, the GP said, the applicant has impaired cognition and difficulty concentrating.
On 11 March 2015, the applicant listed his land for sale at $45,000. He later reduced the price to $35,000. As at 28 May 2015, he had received no offer to buy the land.
On 20 May 2015, the applicant attempted suicide. On 27 May he was admitted to a hospital mental health unit, from where he gave evidence by video-link at the hearing.
Management of the caravan park asked him to leave the park after an incident involving police at the time of his attempted suicide. The applicant has listed his cabin for sale there for $34,000.
On 9 April and 28 May 2015, the applicant’s GP reported that the applicant continues to suffer from chronic severe pain, which has a “considerable impact on his activities of daily living”. He also reported that the applicant had seen a neurosurgeon on multiple occasions, and had undergone an “L4/5 hemilaminectomy, microdiscectom[y], and rhizolysis”. The GP explained that, “[w]hile this is a ‘surgical treatment’ for [the applicant’s] back injury, the procedures themselves can result in severe, chronic pain”. He added that, “[a]s a result of the chronic pain, inability to work, and difficulty with activities of daily living [the applicant] has developed major depression and difficulty with Schedule 8 opiate medications”.
Special circumstances
Because of s 1184K(1) of the SS Act, I can disregard some or all of the applicant’s lump sum in calculating the preclusion period if I think “it is appropriate to do so in the special circumstances of the case”. The SS Act does not define “special circumstances”. The Secretary refers me to the Guide to Social Security Law (the Guide), which is available on the website of the Department of Social Services.[1] The Guide is a statement of government policy, and I should have regard to it when exercising the discretion in s 1184K(1).[2] In Tisdell and Secretary, Department of Social Services, I considered decisions of the Federal Court and the Tribunal, and the relevant parts of the Guide, about the meaning of “special circumstances”.[3] In summary, the discretion in s 1184K(1) is a broad one, but to be “special” the circumstances of a case must be unusual, uncommon, unforeseen and exceptional, and markedly different from those in the usual run of cases.[4]
[1] Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 69 per Bowen CJ and Deane J.
[3] [2015] AATA 582 at [35]–[36].
[4] Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 per Toohey J, Wilkins M and Billings M; Guide, section 4.13.4.10, >
The applicant says that, applying s 1184K(1), I should decide that, in the special circumstances of his case, it is appropriate to disregard some or all of his lump sum in calculating the preclusion period. Effectively, he says that those special circumstances are that his gambling was a result of a psychological condition, and that he suffers extreme financial hardship. These issues are interwoven: the applicant’s gambling has caused—or, at least, substantially contributed to—his financial position.
Was the applicant’s gambling an addiction?
On many previous occasions, this Tribunal has had to consider whether the fact that a person has gambled away some of their compensation money can amount to special circumstances. In those cases, the Tribunal has drawn a distinction between gambling due to a psychological condition (a “gambling addiction”) and gambling as a “lifestyle choice”.
For example, in the following cases the Tribunal decided that an applicant’s[5] gambling—together with other circumstances—amounted to special circumstances:
[5] I use “applicant” in this summary of cases to refer to the person who applied for a benefit. That person was not the applicant in the Tribunal in each case; in some cases, the Secretary was the applicant in the Tribunal.
·In Males and Secretary, Department of Family and Community Services, the applicant’s gambling was “out of control”.[6]
[6] (1999) 57 ALD 793 at 795 [26] per Handley SM.
·In Anderson and Secretary, Department of Family and Community Services, the applicant had “a gambling problem that is apparently related to his post-traumatic stress disorder, which in turn appears to be a consequence of the incapacitating accident” for which he was compensated.[7]
[7] [2000] AATA 431 at [20] per Blow DP.
·In Secretary, Department of Family and Community Services and Pearce, the applicant’s gambling “was not a lifestyle choice, not a personal choice, but something in the form of an addiction and having pathological consequences”.[8]
[8] (2003) 78 ALD 771 at 773 [50] per Bullock SM.
And, in the following cases, the Tribunal decided that an applicant’s gambling did not amount to special circumstances:
·In Secretary, Department of Social Security and Rodgers, the applicant said that he had a “gambling problem”, but the Tribunal thought it important that “he had no such ‘problems’ before the receipt of the settlement moneys and has no difficulty now in staying away from Jupiter’s Casino and the racetrack”.[9]
[9] (1992) 26 ALD 235 at 237 [26] per Breen DP, Gibson M and Brennan M.
·In Davis and Secretary, Department of Family and Community Services, there was no evidence that the applicant had a gambling addiction.[10]
[10] [1999] AATA 84 at [43], [45] per Lewis SM and Lynch M.
·In Secretary, Department of Family and Community Services and Rankin, the Tribunal said that the applicant’s “gambling spree may well be described colloquially as ‘an act of madness’, but it falls short of insanity”.[11]
·In Stavrakis and Secretary, Department of Family and Community Services, the Tribunal said:
Whereas a person who has been diagnosed as being an alcoholic and/or a compulsive gambler may be able to demonstrate special circumstance, … the addiction must be such that it can truly be said that the person is subject to a state where his mind is overborne by the addiction.
… there is no evidence that the applicant’s gambling was in any way compulsive in the sense that his will was overborne but rather it was a case of disinhibited behaviour while under the influence of alcohol.[12]
The Tribunal was not satisfied that there was sufficient evidence to say that the applicant’s gambling was “beyond his control”.[13]
·In Secretary, Department of Family and Community Services and Jones, the Tribunal was satisfied that the applicant had “a significant gambling problem that was associated with the consumption of alcohol and, in all likelihood, was also associated with his state of emotional disturbance and depression”.[14] However, “[i]n the absence of medical evidence”, the Tribunal was “not able to determine whether or not [his] gambling was pathological or whether, in clinical terms, he was ‘addicted’ to gambling”.[15]
·In Andrews and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs, there was no evidence of any “underlying pathological basis” for the applicant’s gambling”.[16]
·In Secretary, Department of Families, Community Services and Indigenous Affairs and Smith, there was no evidence that the applicant “suffered from any medical or medically diagnosed drug or gambling addiction”.[17]
[11] [1999] AATA 496 at [47] per Gerber DP.
[12] (2003) 73 ALD 432 at 436 [19], [26] per Allen SM and Webb M.
[13] (2003) 73 ALD 432 at 436–437 [28] per Allen SM and Webb M.
[14] (2003) 74 ALD 480 at 488 [30] per Webb M.
[15] (2003) 74 ALD 480 at 487 [29] per Webb M.
[16] [2009] AATA 139 at [46] per Kenny M.
[17] [2012] AATA 262 at [21] per Cunningham SM.
I am not bound by previous decisions of this Tribunal, but I see no reason not to follow these decisions in coming to my decision in this review. Following these decisions, a gambling addiction can amount to special circumstances; gambling by choice cannot. I note that this approach is consistent with that suggested by the Guide.[18]
[18] The Guide suggests asking “does the person control their gambling spending or do they gamble compulsively”: section 4.13.4.20, >
The applicant in this review says that he suffers from a long-term gambling problem, which diminished his capacity to manage his finances. He says that he did not gamble significantly before his injury. He says that he started to gamble because he was depressed, and that his depression was a result of his injury. He says that his gambling became uncontrollable, and that the only thing that made him happy was playing poker machines.
There is no corroborative evidence before me that the applicant’s gambling was uncontrollable—that he had a gambling addiction. As noted above,[19] the applicant’s GP reported, on 24 June 2014, that the applicant had impaired cognition and difficulty concentrating. It was not until 9 April 2015 (then, again, on 28 May) that the GP reported[20] that the applicant had developed major depression. The GP did not report that the applicant had a gambling addiction. I have no doubt that the applicant still suffers from major depression. And, I can accept that he was, as he claims, depressed when he gambled his compensation money away. But it does not follow that he suffered from a gambling addiction at that time.[21]
[19] See [16] above.
[20] See [20] above.
[21] See, for example, Secretary, Department of Family and Community Services and Jones (2003) 74 ALD 480 at 488 [29] per Webb M.
On the evidence before me, I cannot find that the applicant was addicted to gambling when he gambled his compensation money away—that his gambling was beyond his control. It follows that I cannot decide that his gambling amounts to special circumstances.
Financial hardship
The applicant says that the operation of the preclusion period has caused him, and continues to cause him, extreme financial hardship, and that that financial hardship amounts to special circumstances.
The Secretary says that the applicant’s financial hardship was primarily caused by his decision to buy the land and the cabin. The Secretary points to the Guide, which says that, “where a person uses compensation proceeds to purchase a house or pay off the balance of a home loan, special circumstances would generally not be found”.[22] I do not agree that the applicant’s decision to buy the land and the cabin caused his financial hardship. He bought them, on his brother’s advice, to quarantine some of his compensation money from being lost through poker machines. If he had not bought them, he may have continued to lose his compensation money in this way. And, even if the land and the cabin had not been bought for that reason, I do not think that the applicant behaved unreasonably, or imprudently, in buying them.
[22] Guide, section 4.13.4.20, type="1">
Nonetheless, the land and the cabin are assets that the applicant can realise. He has already put them on the market for sale. As the Secretary says, the applicant could support himself, for a time at least, by selling the land and the cabin, and one or more of his cars. I do not know whether he could realise enough money to support himself until the end of the preclusion period (4 May 2017). But the applicant’s capacity to realise those assets means that his financial circumstances are not now special circumstances.
Even if the applicant did not have assets to realise, his financial circumstances would not amount to special circumstances. His gambling caused—or, at least, substantially contributed to—his financial circumstances. I have already decided that the applicant’s gambling does not amount to special circumstances. In calculating the preclusion period, I could not disregard that part of his lump sum that he gambled away.
Conclusion
It is not appropriate, in the circumstances of the applicant’s case, to calculate the preclusion period on the basis that part of the compensation payment was not made. Neither the applicant’s gambling nor his financial circumstances are special circumstances for the purposes of s 1184K(1) of the SS Act.
The preclusion period is calculated in accordance with s 1170 of the SS Act. The Secretary says that the applicant’s preclusion period ends on 4 May 2017. The applicant does not dispute the Secretary’s calculations. Those calculations were detailed in Centrelink’s letter to the applicant on 27 June 2014. I have checked those calculations. They are correct.
It follows that I must affirm the SSAT’s decision to reject the applicant’s claim for newstart. He cannot claim newstart during the preclusion period.
I certify that the preceding 35 (thirty-five) paragraphs are a true copy of the reasons for the decision herein of Senior Member Popple ............................[sgd]............................................
Associate
Dated 19 August 2015
Date of hearing 23 June 2015 Date final submissions received 29 June 2015 Counsel for the Applicant Mr Ian Turton Solicitors for the Applicant Illawarra Legal Centre Counsel for the Respondent Ms Amy Bartush Solicitors for the Respondent Legal Services Group,
Department of Human Services
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