QX06/3 and Secretary, Department of Employment and Workplace Relations
[2007] AATA 1225
•13 April 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1225
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2005/346
GENERAL ADMINISTRATIVE DIVISION ) Re QX06/3 Applicant
And
SECRETARY, DEPARTMENT
OF EMPLOYMENT AND
WORKPLACE RELATIONSRespondent
DECISION
Tribunal Dr EK Christie, Member Date13 April 2007
PlaceBrisbane
Decision
The Tribunal sets aside the decision under review and in substitution therefore decides that the length of the preclusion period be reduced under s 1184K of the Social Security Act 1991 so much of the settlement amount as is referrable and set aside for the education of the applicant’s son.
..........[Sgd]........
EK Christie
Member
CATCHWORDS
SOCIAL SECURITY – Compensation consent settlement – preclusion period – economic loss as a component of settlement – special circumstances: economic loss and intervening medical condition – whether appropriate to treat part of compensation payment as not having been made – words and phrases: special circumstances and mental health and social conditioning
Social Security Act 1991 (Cth) s 17, 1166, 1169, 1184
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316
Haidar v Secretary, Department of Social Security (1998) 157 ALR 359
Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64
Secretary, Department of Social Security v Banks (1990) 23 FCR 416
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
Secretary, Department of Social Security and Norman (AAT 13005, 22 June 1998)
Re Martin and Secretary to the Department of Social Security (AAT 6482, 14 November 1990)
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580
Reuben and Secretary, Department of Social Security (AAT 11879, 20 May 1997)
Re Dean and Secretary, Department of Education, Employment and Youths Affairs [2005] AATA 586REASONS FOR DECISION
13 April 2007 Dr EK Christie, Member
1. This is an application for review of the decision made by the Social Security Appeals Tribunal (the “SSAT”) dated 29 April 2005 to preclude compensation affected payments for the period 1 March 1999 to 23 January 2005 and to recover the charge amount of $57,860.42.
2. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” documents) [Exhibit 1] and the various exhibits lodged by the parties.
3. The applicant was represented at the hearing by Mr G Radburn of Counsel, instructed by Hertzberg Heydon. The respondent was represented by Ms S Oliver, a Departmental Advocate [at the time of the hearing] and later a solicitor, AGS.
Issues before the Tribunal
4.The issue for the Tribunal to decide was:
· whether there were "special circumstances" which would justify a variation in the length of the preclusion period and hence, the amount of disability support pension (DSP) entitlements [$57,860.42] recovered.
5. During the hearing, the evidence before the Tribunal revealed that the applicant had suffered a brainstem injury following being struck by a motor car at the age of 5. As a consequence of this injury, the applicant has a cognitive disability. At the end of the first day of hearing and with the consent of the parties, the Tribunal issued two Directions that the applicant’s treating psychiatrist, Dr Clive Fraser, provide an expert opinion in terms of the impacts of the medical condition(s) that he was treating the applicant for and the medication regime, on her capacity to manage her day to day affairs as well as her ability to make rational decisions. Dr Fraser’s report was filed with the Tribunal on 3 February 2006. A supplementary report was filed with the Tribunal on 9 October 2006 in which Dr Fraser clarified the nature of the applicant’s depressive disorder condition over time, including the stressors that caused the depressive disorder.
6. Health Services of Australia also provided past medical assessment records of the applicant in relation to the applicant’s application for a disability support pension. These documents were filed with the Tribunal on 16 November 2005 and 8 May 2006.
7. The parties were invited to make supplementary submissions in relation to these materials. Supplementary submissions were filed with the Tribunal on 26 May 2006 (for the applicant) and 10 June 2006 (for the respondent) in relation to Dr Fraser’s first report. Further supplementary submissions were filed by the respondent only (on 20 October 2006) in relation to Dr Fraser’s second report. The applicant elected not to file further supplementary submissions by the due date (1 November 2006). The respondent elected to not call further medical evidence in response to the two medical reports filed by Dr Fraser pursuant to the Tribunal’s Directions.
Facts
8.The applicant is now aged 43.
9. On the basis of the evidence before it, the SSAT made the following findings of fact :
“(i)On 1 March 1999, [the applicant] was injured in a motor vehicle accident.
(ii)On 31 May 2004, [the applicant] settled a claim for personal injury in the sum of $400,000 plus subsequent payment of costs in the sum of $119,000.
(iii)After payment of all costs and refunds, [the applicant] received a net amount of $237,506.19.
(iv)[The applicant] currently owns her own house and a motor vehicle, is debt free and has approximately $20,000 in bank deposits.
(v)[The applicant] is currently in receipt of disability support pension and she receives family tax benefit in respect of her son, aged 12 years.
(vi)[The applicant] has complex medical problems resulting both from her motor vehicle accident and from a previous accident when she was a young child.
(vii)[The applicant] intends to carry out renovations to her home and to purchase a more suitable vehicle.”
10. Mr Radburn acknowledged that, at the time the settlement offer was made, the applicant had been told “that there would be a payback to Social Security that would have to be taken into account, so there is no issue”.
Oral Evidence of The Applicant
11. The applicant gave an account of a difficult life following her brainstem injury as a child.
12. She had lived in many houses over time including, for some periods, living on the streets. At times there has been a need to have her son cared for by her sister and other family members.
13. She acknowledged the report of a psychologist that she had difficulty in coping with her life over time as well as coping with her son. On the psychologist’s advice, she had sought some work to improve her self-esteem.
14. She worked as a cleaner for a local GP for about one year only, for which she was paid $29.30 per week. She had also undertaken general housework for two people – but this averaged around 5 hours per week. These work opportunities ended following her motor vehicle accident in 1999. She had earned a total of around $50 per week for housecleaning work undertaken in 1998. She had worked for a maximum of 40 weeks.
15. She commenced receiving disability support pension entitlements continuously since 1999 because she was assessed as being unable to work.
16. Because of the enormous difficulties she had encountered in the past in having a stable place of residence, as well as for providing for her son’s needs, she decided to use some of her lump sum compensation to purchase a house in Brisbane, previously owned by one of her sisters, for $150,000.
17. Under cross-examination, the applicant said:
(a)She had $26,000 in a bank account. She said this amount included $20,000 that she had retained for her son’s education;
(b)One of her sisters lived in her house rent-free;
(c)She relied on her sisters to assist and to advise her in relation to her financial affairs;
(d)In terms of whether she understood that when she received her lump sum compensation that she would have to live on this for sometime before she could access her disability support pension again, she replied: “That is so… I just knew that was the law”; and
(e)Later, in response to a question from Mr Radburn, she said that “she had been informed by Centrelink in regard to this aspect of receiving lump sum compensation”.
18. In response to a Tribunal question she said that her education had been limited because of her brainstem injury. She had attended an opportunity school.
Oral Evidence of a Sister of the Applicant
19.The sister who now lives in the applicant’s house said:
20. For a considerable period of the applicant’s life she had cared for the applicant, and her son, as well as undertaking the housework.
21. She said that prior to the applicant’s motor vehicle accident in 1999, the applicant’s life could be described as one of “peaks and troughs” and where she had lived in many places in the Byron Bay area. She said that the applicant had no capability and limited skills to get a job and would never be able to work after the 1999 motor vehicle accident.
22. She said the applicant had previously received a compensation payment at the age of 18. Because of her psychological condition, she was taken advantage of by others, in the past, and the compensation money soon disappeared. She said the applicant was unable to manage money matters herself.
23. The applicant’s sister said that when the applicant received the compensation payment in 2004, the family had discussed the issue of buying a house, both to provide stability to the applicant’s life and to avoid the past predicament where other people had taken advantage of the applicant by “ripping off” money from her.
24. Under cross-examination the applicant’s sister said:
(a)That she lived in Hobart at the time of the lump sum settlement and had nothing to do with the compensation case. She believed that another sister would have been responsible for this;
(b)Although she was unsure of the details, another sister had spoken to the applicant about the preclusion period. In general, family members assisted the applicant with things she could not do alone;
(c)She said that it was more than likely that this sister would have spoken to the applicant about the consequences of the lump sum compensation or the preclusion period as set out in the Centrelink notification notice dated 7 July 2004 (T10, Folio 25). All Centrelink documents at this period of time were taken care of by this sister;
(d)That the applicant had spent moneys on home renovations: re-tiling of the entire home, ceiling fans and security screens; and
(e)That she reads letters to the applicant if she asks when she cannot understand them.
25. In response to a Tribunal question, she said that important decisions in the applicant’s life were made by the sisters advising the applicant. However, the applicant then made her own decision.
Expert Medical Opinion – Dr Clive Fraser (Psychiatrist)
(a) Report I, filed 3 February 2006
26. The applicant has been a patient of Dr Fraser between June 1991 and October 1993 (18 consultations) and this professional relationship was resumed in April 2000 and continues to the present time (23 consultations).
27. Dr Fraser provided the following history of facts that are personal to the applicant and that are a relevant consideration in terms of understanding the medical conditions suffered by the applicant and their impacts upon her.
28. The applicant sustained a serious head injury, at the age of 5, when she was struck by a car. Her behaviour altered dramatically following her head injury and as she grew older she became an increasing management problem for her parents. She apparently often ran away and eventually left home at the age of 13 and became “a street kid”. From there a history of substance abuse and aberrant lifestyle followed. The applicant became uncontrollable and had lost all contact with her parents. She had a history of self harm as well as suicidal ideation.
29. Dr Fraser’s initial impression of the applicant at the first consultation in June 1991 was that she had an organic brain syndrome (dementia) following a head injury in 1969 and she had problems with substance abuse and dependence. Her social history suggested that between the ages of 13 and 27 she had become enslaved in a lifestyle of drug abuse and exploitation. Her self esteem was extremely poor. She also explained to Dr Fraser that she had tried to live with her parents between December and January 1991 but had run away from them again. She told Dr Fraser that her parents had tried to apply some reasonable house rules, but she had not been able to cope with this and left.
30. In September 1991, the applicant became pregnant but the child’s father offered her no support at all.
31. In 1992 and 1993 the applicant lived at different addresses on Queensland’s Sunshine Coast away from her mother. Late in 1993 she moved to Brisbane to live with her mother.
32. Following the motor vehicle accident in March 1999, Dr Fraser stated that the applicant developed symptoms of PTSD.
33. Dr Fraser diagnosed the following conditions:
§ Chronic organic brain syndrome (dementia);
§ Major depressive disorder;
§ Post-traumatic stress disorder;
§ Substance abuse (alcohol and narcotics); and
§ Chronic pain.
As to whether there had been any changes in the applicant’s psychiatric status over the period 1991 – July 2004, Dr Fraser stated:
“Essentially this young woman was in a terrible state when I first met her in 1991. She was abusing hard drugs, her social situation was extremely unstable, she could not sustain extended contact with her family and had an unplanned pregnancy. Over a period of time she dramatically changed her lifestyle, giving up hard drugs and she undertook to care for her child. The arrival of [her child] seemed to give her life some purpose and I recall that she particularly gained hope from two friends, one of whom was a nursing sister and the wife of a local general practitioner who had helped her to feel worthy and had encouraged her to protect herself from being financially and sexually exploited.
I believe that the period in her life from October 1993 until March 1999 was relatively stable. She had moved to [New South Wales], established a network of friends, started working part-time and enrolled her child in the Steiner School believing that this would provide him with a superior education. This all fell apart terribly after the motor vehicle accident of 1st March 1999 when she was disabled by pain and her child’s education became disrupted when this had previously been extremely important to her. She redeveloped symptoms of depression and needed to restart antidepressant treatment again and she began abusing alcohol again. She also experienced symptoms of a post-traumatic stress disorder for a few months following the accident.”
34.In terms of changes in medication over this time Dr Fraser noted:
“In December 2000 she told me that her general practitioner had started her on anti-depressant medication (Aropax) and she remained on this. This medication caused weight gain and in October 2002 I ceased it and changed her anti-depressant medication to Efexor XR which she continued to take until approximately December 2005.”
(b)Report II, filed 9 October 2006
35.“Question 1:
Is there any distinction, or are they equivalent/identical psychiatric conditions, between the following conditions that were diagnosed over time.
(a)the condition of “post traumatic brain syndrome with depression” as diagnosed by Dr Salmona and Dr Douglas in 1998; and
(b)your response referring to the diagnosis of “major depressive disorder” from December 2000 to December 2005 as stated in your report (25 January 2006).
Answer:
“… ‘post-traumatic brain syndrome with depression’ is a different condition to the condition ‘major depressive disorder’.
In fact the condition ‘major depressive disorder’ according to the criteria in the DSM should not be due to the direct physiological effects of a general medical condition. In the case of [the applicant] that medical condition would relate to the head injury that she suffered as a five year old in 1969 which caused irreversible brain damage. It is a very semantic point as patients who have had a head injury are much more prone to the subsequent development of depression. That is not meant to say that all patients who have had a head injury will suffer from depression and it also does not mean that all major depression that occurs in patients who have had a head injury should be considered to be entirely aetiologically related to that injury. (Emphasis added)
In [the applicant’s] case there were many other factors which played a part in the onset of her depression prior to 1991 and they would relate to substance abuse and social adversity.
…
The diagnoses which I would have applied to describe her condition prior to her 1999 motor vehicle injury would have been:
·Dementia due to head trauma
·Major depressive disorder due to a general medical condition (i.e. head injury)
·Substance abuse”
Question 2
Can you express an opinion as to any difference in the severity between the “major depressive disorder” diagnosed during December 2000 to December 2005 and to the “depressive condition” that was related to the post-traumatic brain syndrome in 1998.
Answer:
“I do wish to state that the ‘major depressive disorder’ diagnosed during December 2000 to December 2005 was much more severe than the ‘depressive condition’ that was related to the post-traumatic brain syndrome diagnosed prior to the injury sustained in the motor vehicle accident on 1st March 1999 (emphasis added).
She needed to take anti-depressant medication in large doses and she was obviously in a great deal of distress with depressive symptoms which were being exacerbated by the severe pain she was experiencing.
By comparison she had largely not needed and was generally not being treated with anti-depressant medication by me in the period of time before the motor vehicle of 1stMarch 1999”.
Question 3
Can you express an opinion as to the course of the “major depressive disorder” over December 2000 to December 2005 in terms of causation by psycho-social stressors for [the applicant]. If there is more than one stressor, can you identify which stressor might be the prevalent one for the “major depressive disorder” of [the applicant] during the period December 2000 to December 2005.
Answer:
“In the period of time between December 2000 to December 2005 there were many issues which were acting as stressors. They included:
· Severe pain related to her neck injury
· A significant loss of self-esteem related to having become dependent upon her family again
· Losing the care of her son whom she could not longer look after. [The applicant] was staying with her parents for some time and her parents and sister were helping with the care of [her son]. On 30th April 2002 she advised me that she did not feel that she could manage [her son] anymore. She said ‘I can’t handle the pain, I can’t do the physical stuff, I can’t cope’.
· [The applicant] began to binge on alcohol again in spite of having been largely sober and substance-free for many years prior to the motor vehicle accident on 1st March 1999…
· [The applicant] had to endure moving back in with her sister… and had to leave [her son interstate] with her other sister.
[The applicant] has long-standing issues with her family which relate to feeling that she has no control over decisions that are made. Her family have at times told me that they believe that they need to provide some supervision and guidance, though they are also respectful of the need for [the applicant] to have some input into some of these matters.”
Question 4
Can you express an opinion on whether [the applicant] had suffered only a single major depressive episode or recurrent major depressive episodes over the period December 2000 to December 2005.
Answer:
“[The applicant] was suffering from a ‘recurrent major depressive disorder’ over the period between December 2000 and December 2005.”
Question 5
Can you express an opinion of the impacts of the “major depressive disorder” suffered by [the applicant] over the period December 2000 to December 2005, on [the applicant’s] physical, social and role functioning.
Answer:
“In terms of the impact that [the applicant’s] major depressive disorder had on her in the period between December 2000 and December 2005 I wish to state that her depression had a very severe impact on her at that time. She was medicating herself with alcohol because of problems with her mood and her pain. She told me that in February 2002 she tried to choke her son … [s]he subsequently could not remember the incident at all…
Essentially her life completely fell apart for a period of time following the accident and all the good work which she had done between 24th June 1991 and the accident on 1st March 1999 had come unstuck…
The accident on 1st March 1999 turned her world upside down. She has not been in any paid employment at all since the accident and she continues to experience pain.” (Emphasis added).
Health Services Of Australia Medical Assessment Records of the applicant in Relation to Eligibility for a Disability Support Pension
36.The applicant’s entitlement to disability support pension commenced in 1992.
37. Medical conditions which were evaluated in the most recent DSP application [M1, 2000] as a part of her eligibility for disability support pension included Frontal Brain Syndrome. The impacts on her capacity to work were recorded as “Impaired memory and concentration”. The recommended Impairment Rating under Table 8 [Neurological Function: Memory, Problem Solving, Decision Making Abilities and Comprehension] for this condition was 20 points. That is:
“TWENTYCan understand speech face-to-face, but confusion or fatigue occurs rapidly in any group. Is unable to cope with rapid change in topic, or with complex topics and is unable to understand a series of work instructions from a supervisor or
Moderate impairment of memory: has frequent difficulty in recalling details of recent experiences; frequently misplaces objects; fails to follow through with intentions or obligations; tends to get lost more easily in unfamiliar areas. Compensation through use of aids, eg, lists or diaries is normally adequate. If restricted to familiar schedules, activities, procedures and areas, is largely independent or
Moderate impairment of problem-solving ability and ability to concentrate: relies on accumulated knowledge. Suffers significant disadvantage in circumstances requiring complex decision-making or non-routine activities, ie, when past decision-making is not directly relevant. Has reduced initiative/spontaneity, reduced ability to concentrate and/or reduced capacity for abstract thinking or
Significant perceptual problems (visual, space or time) making learning and complying with work tasks very difficult.”
38. Supplementary documents filed by the respondent relating to the initial claim for DSP (1992), the review of DSP (1998) and the claim for DSP (2005) enable the following chronology which provides the basis for assessment of work capacity in relation to diagnosed medical conditions:
(a) Initial claim for DSP (1992)
§ Treating Doctor’s Report (Dr C Fraser, Psychiatrist) 20 January 1992 (M3)
Two conditions diagnosed: “Organic brain syndrome following head injury” [MVA accident in 1968] and “substance abuse (in remission)”.
§ Medical Assessment (Dr K Barker) 31 January 1992 (M4). Two permanent medical conditions assessed: “Organic brain syndrome following MVA” [Table 7, 40%] and “substance abuse” [Table 8, 10%]
(b) Review of DSP (1998)
§ Treating Doctor’s Report (Dr A Salmona, GP) 20 August 1998 (M7). Only one diagnosed condition specified, “Acquired Brain Injury Syndrome”. Dr Salmona noted the following clinical features: “includes low self esteem with periods of depression and mood swings, emotional and relationship problems” (emphasis added).
§ Medical Assessment (Dr G Douglas) 23 December 1998 (M8)
Two Permanent Medical Conditions assessed: “Cognitive defect/Post Traumatic Brain Syndrome [Table 8, 20%] and “Depression/Post Traumatic Brain Syndrome [Table 6, 10%]”.
Dr Douglas’ assessment report contained the following notations in relation to the “depressive condition”: “has mild depression" and later “moderately severe cognate deficit associated with mild to moderate depression and PH [past history] of child abuse” (emphasis added).
(c) Regrant of DSP (2005)
§ Treating Doctor Report (Dr M Fletcher, GP) 27 January 2005 (M10)
Two conditions diagnosed: “Frontal brain syndrome” and “Fractured spine from MVA (1999)”. PTSD was also identified as a “medical condition” which [is] generally well managed and caused minimal or limited impact or ability to function was “poor concentration, depression and anxiety”.
§ Work Capacity Assessment (T Cooke, Rehab Consultant) 12 April 2005 (M11)
The following assessments were made: “Frontal brain syndrome” (Table 8, 20%), “PTSD” (Table 6, nil) [mild symptoms].
Statutory Requirements And Case Law
§ The Tribunal’s Decision Making Powers
39. The decision possible in this application for review is whether the “special circumstances” provisions of the Social Security Act 1991 provide discretion to justify a reduction in length of the applicable preclusion period. Accordingly, the question for the determination of the Tribunal is whether the decision under review is the correct or preferable one: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68.
40. Administrative decision-makers are generally required to address the evidence before them and not confine themselves to evidence before a prior decision-maker whose decision is being reviewed unless the relevant legislation requires a decision to be based upon the circumstances at a particular point of time: see Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316 at 324-326.
41. In this application for review, the Tribunal considers all the evidence and information before the Tribunal as at the date of the hearing, and supplementary submissions following the hearing in relation to the expert medical opinion provided by Dr Clive Fraser in response to the Tribunal’s directions. The Tribunal considers all the evidence and information before the Tribunal to the extent those facts are relevant to the question of law that must be decided, by reference to the subject matter, scope and purpose of the Social Security Act 1991.
[See Haidar v Secretary, Department of Social Security (1998) 157 ALR 359 at 367]
The Statutory Scheme for the Preclusion Period under the Social Security Act
42. The statutory scheme is complex. In the factual circumstances of this application for review, the legislative requirements have been summarized as follows: see Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64 at 65-66:
·”Section 17(2), relevantly, defines "compensation" as a payment of damages made wholly or partly in respect of lost earnings or lost capacity to earn. Section 17(3)(a) of the Act, which in substance relates to claims that are settled rather than contested, defines the "compensation part of lump sum compensation payment" to be 50% of the lump sum compensation payment.”
·“The adjustment of 50% was arbitrarily prescribed by Parliament to prevent parties adjusting their settlement calculations to understate the amount of the settlement sum attributable to loss of earning capacity and thereby minimising the loss of a claimant's social security benefits: see Secretary, Department of Social Security v Banks (1990) 23 FCR 416 at 420-422”.
·“Section 1169(1), relevantly, provides that if a person receives or claims a compensation affected payment and the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) no compensation affected payment is payable to the person for the preclusion period… For present purposes it is sufficient to note that any reduction in the compensation payment, and consequently the compensation part of the lump sum payment, will result in a reduction in the preclusion period.”
·“Section 1166(1) provides that a person is liable to repay an amount where both lump sum compensation payments and compensation affected payments have been received if:
(a) a person receives a lump sum compensation payment; and
(b) the person receives payments of a compensation affected payment for the preclusion period;
and the Secretary by written notice to the person, determines that the person is liable to pay to the Commonwealth the recoverable amount specified in the notice.”
43. Section 1184K of the Act provides the Department with discretion to decrease the length of the preclusion period:
“Section 1184K – Secretary May Disregard Some Payments
1184K(1) [Special circumstances] 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.”
44. The Tribunal has had to consider the common law meaning and application of the expression “special circumstances” on many occasions.
45. Analysis of case law provides the following legal principles that can be applied to (a) the exercise of discretion and (b) the meaning of the term “special circumstances” in the Social Security Act 1991:
(a) The Exercise of Discretion
· A broad discretion to meet the great variety of circumstances which must occur, raising considerations including individual hardship, need, fairness and reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act. [The Full Federal Court, in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 at 450].
· In Haidar v SDSS (1998) 157 ALR 359, Hill J considered the question of “special circumstances” in the context of hardship and difficulties experienced after the preclusion period had come to an end. Referring to the statutory scheme which prescribes that 50 per cent of lump sum compensation will be deemed to be in respect of economic loss for personal injury settlements, Hill J acknowledged that the legislature was conscious of the possible harshness of a rule structured in an arbitrary way. However, section 1184K, provided the means for alleviating the harshness of the statutory provision, in an appropriate case, but only where there were special circumstances. He concluded that:
“It seems to me that events after the expiration of the ordained preclusion period could only have relevance as factors to be considered in the exercise of discretion if those facts in some way related to the events occurring during the preclusion period” (at 368).
(b) The meaning of “Special Circumstances”
§A term incapable of precise definition. Circumstances that are unusual, uncommon or exceptional [Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3.
§“Something unusual or different to take the matter the subject of the discretion out of the ordinary…[But] that does not require that the case be extremely unusual, uncommon or exceptional.” [Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277 at 281-282]
§Something to take it out of the usual or ordinary case. “It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.” [Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545]
46. Analysis of cases decided by the Tribunal, with respect to the Social Security Act 1991, where "special circumstances" have been considered as the basis for varying the length of the preclusion period as they are relevant to the present case:
(a)Past and future economic loss and the application of the statutory 50% rule;
(b)Financial issues; and
(c)Health issues
§ Economic Loss Component and the Preclusion Period
47. In Secretary, Department of Family and Community Services v Chamberlain (2002) 116 FCR 348, Kiefel FCJ considered whether the strict application of the statutory formula [viz. application of section 17(3)(a) of the Social Security Act 1991 which results in 50% of the total gross payment being used to calculate the “income cut-out amount”] resulted in unfairness. Kiefel J held “the result following the strict application of the statutory calculation cannot be equated with the ‘special circumstances’ referred to in s 1184(1)” (at 352).
48. In her reasons for decision, Kiefel J identified a limited number of cases where it was permissible to consider the extent of the difference between the assumed amount of economic loss and the amount actually provided for in the settlement:
§Firstly, the case where the incapacity for work for an injury during the preclusion was unrelated to the injury for which compensation was received was a relevant circumstance i.e. for a supervening incapacity for work that attracted pension payments that was unrelated to the earlier injury that attracted compensation : see Secretary, Department of Social Security v Smith (1991) 30 FCR 56; and
§Secondly, the case where the recipient was not an "earner" for the purposes of the statutory compensation scheme in the period prior to the accident was also a relevant circumstance: see Kertland v Secretary, Department of Social Security (1999) 95 FCR 64.
49. In the applicant’s fact situation, the exceptions identified in Smith’s case may be applicable. The expert medical evidence before the Tribunal, including Dr Fraser’s reports is the relevant evidence for the Tribunal to consider.
§ Financial Issues and the Preclusion Period
50. Analysis of cases decided by the Tribunal, in relation to “special circumstances” and financial issues recognizes that “[t]he provisions in the Act are there to ensure that money received in place of income as part of the Workers' Compensation system is not also paid by way of Social Security benefits…. This prevention of double dipping reflects the idea that the money is there to provide a person with income, not capital for investment”: See Secretary, Department of Social Security and Norman (AAT 13005, 22 June 1998) at [18]. In addition, “[i]n considering the question of financial hardship it is relevant to consider the reasonableness of the applicant's action in disposing of … compensation monies”: See Re Martin and Secretary to the Department of Social Security (AAT 6482, 14 November 1990) at [10].
51. In this regard, the relevant matters for the Tribunal to consider are:
·whether the funds the applicant received may have been applied in a way which was unwise given that the money was there to provide a person with income, not capital for investment; and
·whether it was unreasonable to claim financial hardship when compensation moneys have been diverted to the purchase of, and modifications to, a home.
§ Health Issues and the Preclusion Period
52. In Secretary,Department of Social Security v Thompson (1994) 53 FCR 580 Einfeld J stated at 586:
“The width of the discretion under the [special circumstances] section clearly extends to all the circumstances of the case, including circumstances not specifically related to a particular portion of the compensation payment. It is not therefore outside the section for the Tribunal to consider the general factors such as the mental health and social conditioning of the individual in concluding that the preclusion period should be shortened” (Emphasis added).
53. In Haidar v SDSS (1998) 157 ALR 359 at 367, Hill J considered the question of “special circumstances” in the context of hardship and difficulties experienced after the preclusion period had come to an end. That is, whether special circumstances existing after the preclusion period, but at the time of an Administrative Appeals Tribunal appeal, are relevant matters properly to be taken into account under s 1184K(1). Referring to the statutory scheme, Hill J acknowledged that the legislature was conscious of the possible harshness of a rule that prescribed 50 per cent of lump sum compensation to be deemed as economic loss. However, section 1184K provided the means whereby the harshness of the statutory provision could be alleviated in an appropriate case, where there were special circumstances:
“…it cannot be said that events at the time of hearing would necessarily be irrelevant. It is clear enough that the Tribunal sitting on appeal from a decision maker, be it the Minister or another Tribunal, must take into account the facts as they exist at the time the matter is heard by the Administrative Appeals Tribunal, to the extent those facts are relevant to the decision. …” (at 367).
And
“It seems to me that events after the expiration of the ordained preclusion period could only have relevance as factors to be considered in the exercise of discretion if those facts in some way related to the events occurring during the preclusion period” (at 368).
54. In Reuben and Secretary, Department of Social Security (AAT 11879, 20 May 1997) the Tribunal concluded that the burden of family health needs that contributed to ongoing financial problems and “perhaps even more importantly, to a diminution in the emotional and psychological well-being of the family” should be considered as “special circumstances” (at [53]).
55. The Tribunal in Re Dean and Secretary, Department of Education, Employment and Youths Affairs [2005] AATA 586, reviewed cases decided by the Tribunal as to the circumstances which came within the meaning of “special circumstances” – in the context of overpayments of social security benefits, because of the impacts of the medical condition on the social security recipient. The Tribunal in Dean’s case concluded that the application of “special circumstances” involved a consideration of the impacts of the medical condition on the social security recipient’s capacity to make rational decisions in managing their day to day affairs.
Consideration of the Issues
56. The first issue to decide is whether the facts before the Tribunal come within the “supervening incapacity for work” exception of Chamberlain’s case. The applicant has been unable to work since the motor vehicle accident in 1999. Whilst Dr Fraser’s opinion distinguishes between the depressive conditions diagnosed before and after the motor vehicle accident in 1999, as being different, the major depressive disorder suffered after this motor vehicle accident was, in part, related to the accident. The stressors that gave rise to the major depressive disorder after the motor vehicle accident were multiple. Whilst most of the stressors are independent of the injury sustained in the 1999 motor vehicle accident, the “pain stressor” identified by Dr Fraser is related to the accident. Consequently, the injury sustained in the motor vehicle accident in 1999 is a contributory stressor to the applicant’s major depressive disorder, during the preclusion period. Therefore, the “supervening incapacity for work” exemption in Chamberlain’s case does not apply to the applicant’s factual situation as a “special circumstance” i.e. in relation to the economic loss component of the compensation payment received.
57. Given this finding, the approach taken by the Tribunal is that raised by Kiefel J in Chamberlain’s case in terms of special circumstances i.e. to consider the facts put forward as personal to the applicant. Furthermore, the approach extends to a consideration of the factors involved in the exercise of discretion in the cases of Thompson, Haidar and Reuben, that is, the discretion for special circumstances includes circumstances that extend to general factors such as the mental health and social conditioning of the individual.
58. The Tribunal accepts Dr Fraser’s medical opinion that the major depressive disorder suffered from December 2000 to December 2005 can be distinguished from the condition of depression associated with post-traumatic brain syndrome suffered prior to the motor-vehicle accident in 1999.
59. The Tribunal accepts the medical opinion of Dr Fraser that the factors (or stressors) that played a part in the onset of the applicant’s depression prior to 1991 related to (a) substance abuse and (b) social adversity. In addition, the Tribunal accepts the medical opinion of Dr Fraser that the factors (or stressors) that played a part in the onset of the applicant’s major depressive disorder after the motor vehicle accident in 1999 were (a) severe pain related to the neck injury incurred in the accident, (b) a significant loss of self esteem related to becoming dependent on her family again, (c) losing the care of her son (including interstate separation from her son), (d) long standing issues associated with the degree of control by her family over decisions that were made and (e) substance abuse.
60. Factors (b), (c), and (d) could be characterised as “personal stressors” for the major depressive disorder condition, relative to factor (a) – the “pain stressor”; the major depressive disorder condition was suffered as recurrent episodes during the preclusion period December 2000 to December 2005. Factors (b), (c), (d) are not specifically related to the motor vehicle accident in 1999. Only factor (a) is a stressor specifically related to the motor vehicle accident in 1999. The stressor [factor (e)] “substance abuse”, was the only stressor that existed prior to and after, the 1999 motor vehicle accident and was associated with the applicant’s post-traumatic brain syndrome condition.
61. The Tribunal accepts Dr Fraser’s medical opinion that the major depressive disorder diagnosed during December 2000 to December 2005 was a “much more severe” condition than the depressive condition related to the post traumatic brain syndrome diagnosed prior to the motor vehicle accident in 1999.
62. The Tribunal concludes that the applicant’s depressive disorder condition has deteriorated over time. Moreover, this conclusion needs to be considered in the context that the applicant has a history of suicidal ideation including a history of self harm to herself and to her child (Dr Fraser’s medical opinion).
63. In terms of the applicant’s “dementia [condition] due to head trauma” (see Dr Fraser’s report) – or as it has been referred to, ”post traumatic brain syndrome” (Dr Salmona and Dr Douglas), it is concluded that her cognitive functions would be impaired (see claims and reviews for DSP in 1992, 1998 and 2005).
64. The Tribunal considers it is significant that Dr Fraser’s supplementary report refers to a situation in February 2002 in which the applicant tried to choke her son – but fortunately a friend (a nurse) intervened; the situation was associated with substance abuse. The applicant then contacted Dr Fraser directly “in an extremely distressed state about what she had done”. Later, on 30 April 2002, the applicant advised Dr Fraser that “she did not feel that she could manage her son any more”. In addition, the applicant had to then endure moving in with her sister (in Brisbane) and having to leave her son (interstate) with another sister.
65. Accordingly, the Tribunal finds that the event in February 2002 in which she tried to choke her son is indicative of a situation in which the applicant was “not capable of great feats of rational thoughts” at this time, as a consequence of the stressors that triggered off her major depressive disorder. Furthermore, the Tribunal concludes, on the balance of probabilities that beyond this time, there are multiple stressors associated with (i) the loss of the care of her child (ii) the interstate separation between the applicant and her son together with (iii) the loss of self-esteem as she once more became dependent on her family and (iv) associated ongoing concerns of having no control over decisions made by her family, that have all persisted and so triggered off her recurrent major depressive disorder.
66.Furthermore, the Tribunal finds as follows:
·That the condition “post traumatic brain syndrome with depression” is a different condition to the condition “major depressive disorder”. The depression condition prior to, and after, the 1999 motor vehicle accident was triggered by substance abuse. However, there was only one other stressor for depression prior to the 1999 motor vehicle accident (“social adversity”). In contrast, the depressive condition after the 1999 motor vehicle accident arose from four additional stressors that did not exist prior to the 1999 accident. Therefore, causation of the depressive condition could be distinguished, prior to and after the 1999 accident.
·That the applicant’s depressive disorder condition deteriorated over time and became “much more severe” after the motor vehicle accident in 1999;
·That the applicant has a history of suicidal ideation and harm to herself and to her child;
·That her recurrent major depressive disorder over the period December 2000 to December 2005 was triggered off by multiple stressors;
·A situation related to substance abuse and physical harm to her son in February 2002, led to a near catastrophic family outcome resulting in the applicant’s son being placed, interstate, in the care of another family member; and
·That four of these stressors were unrelated to the motor vehicle accident in 1999. Loss of self esteem, loss of the care of her son and issues related to the degree of family control over decisions affecting her, arose as stressors following the accident in 1999. Substance abuse persisted as a stressor over time and was associated with her post-traumatic brain syndrome condition with depression. Pain related to the neck injury was the only stressor specifically related to the motor vehicle accident in 1999;
67. The Tribunal also finds that there are instances over time e.g. the “harm situation” to her son in February 2002, from which it may be concluded that the applicant had significant limitations in her cognitive function as well as being incapable of great feats of rational thought i.e. because of her recurrent major depressive disorder and her ongoing dementia due to head trauma conditions. The stressors associated with loss of self esteem, loss of the care of her son and issues associated with decisions made by her family have all persisted over time – during and beyond the preclusion period. These stressors, together with her ongoing dementia due to head trauma, have affected the applicant’s mental health and social conditioning and so, are relevant considerations for shortening the length of the preclusion period.
68. The substance abuse stressor (associated with the post-traumatic brain syndrome condition) and the neck pain stressor (related to the motor vehicle accident in 1999) would have also persisted. However, the relative contribution of each of the five stressors to the major depressive disorder has not been partitioned. Consequently, it can only be concluded that all five stressors have contributed to the applicant’s ongoing major depressive disorder.
69. Consideration of all of the above findings, in their totality, represent a factual situation in which “special circumstances” are justified to warrant a reduction in the length of the preclusion period. That is, the facts represent circumstances that are unusual, some even uncommon, to take the matter out of the ordinary.
70. In concluding that all of the above findings are relevant in reducing the length of the preclusion period for special circumstances, the Tribunal has applied the following legal principles:
(a)The mental health and social conditioning of the applicant is directly related to her recurrent major depressive disorder and dementia due to the head trauma, medical conditions that have continued throughout and beyond the defined preclusion period. In addition, the dementia due to head trauma condition has led to a situation in which the applicant has impaired cognitive functions: Haidar’s case.
(b)That the multiple stressors that trigger off the applicant’s recurrent major depressive disorder were ongoing throughout the preclusion period and have continued and so must be considered in “the context of hardship and difficulties experienced after the [defined] preclusion period”. That is, they are relevant matters properly taken into account as special circumstances by the Tribunal: Reuben’s case.
(c)That the burden of the applicant’s health and family needs – (her son’s needs) should be considered as a special circumstance which contributes to financial problems – particularly, where this is associated with a decline of the applicant’s emotional and psychological well being.
71. In making this finding, special circumstances can only apply to a reduction in part of the preclusion period. That is by the amount of $20,000 that had been set aside from the lump sum compensation for the education of the applicant’s son. The four stressors, arising independently of the 1999 motor vehicle accident are directly related to triggering off her recurrent depressive disorder condition during and beyond the preclusion period and would be further exacerbated should there be financial problems in meeting the needs for her child’s future education.
Conclusion
72. The Tribunal sets aside the decision under review and in substitution therefore decides that the length of the preclusion period be reduced under s 1184K of the Social Security Act 1991 so much of the settlement amount as is referrable and set aside for the education of the applicant’s son from the lump sum compensation received.
I certify that the 72 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: Adam Ryan
Legal Research Officer
Date/s of Hearing 16 November 2005, 2 May 2006
Date of Decision 13 April 2007
For the Applicant Mr G Radburn of Counsel
Hertzberg Heydon, Solicitors
For the Respondent Ms S Oliver, Departmental Advocate, now Solicitor, AGS
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