Radosavac and Department of Family and Community Services
[2000] AATA 1137
•21 December 2000
DECISION AND REASONS FOR DECISION [2000] AATA 1137
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2000/1368
GENERAL ADMINISTRATIVE DIVISION )
Re MIRKO RADOSAVAC
Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr J D Campbell
Date21 December 2000
PlaceSydney
Decision The Tribunal affirms the decision under review.
[Sgd] Dr J D Campbell
Member
CATCHWORDS
Social Security - lump sum compensation payment - preclusion period - special circumstances - discretion to disregard all or part of the lump sum payment as having been paid
Social Security Act 1991, sections 17, 1165, 1184
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Beadle v Director-General of Social Security (1985) 60 ALR 225
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Re Secretary, Department of Social Security and Smallcombe (1991) 23 ALD 41
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Secretary, Department of Social Security and Winterbotham (AAT 6499, 11 December 1990)
Re Kulakov and Secretary, Department of Social Security (1991) 63 SSR 879
Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985)
REASONS FOR DECISION
Dr J D Campbell, Member
Mr M Radosavac ("the Applicant") in this matter seeks a review of a decision of the Social Security Appeals Tribunal ("the SSAT") dated 7 August 2000. This SSAT decision affirmed that made by a Centrelink delegate of the Secretary, Department of Family and Community Services ("the Respondent") on 31 August 1999, to impose a preclusion period, as a result of the Applicant's receipt of a lump sum compensation payment, from 28 July 1999 to 12 March 2002. This latter decision had been reviewed and affirmed by an authorised review officer in a decision dated 14 July 2000.
A hearing was held before the Tribunal on 7 December 2000 at which the self-represented Applicant presented oral evidence to the Tribunal. The Tribunal was assisted by an interpreter fluent in the Croatian language. The Respondent was represented by Mr Lozynsky, an advocate from the advocacy and administrative law section at Centrelink.
The following material was placed in evidence before the Tribunal:
Documents prepared pursuant to the Administrative Appeals Tribunal Act 1975. T1-T44 pp1-73
Records of the Applicant's Commonwealth Bank account. Exhibit A1
Statutory declaration of My Dijana Savic dated 3 October 2000. Exhibit A2
Statutory declaration of My Lazo Stambolija dated 4 October 2000. Exhibit A3
Statement of financial expenditure of Applicant per fortnight. Exhibit A4
X-ray report of lumbo sacral spine dated 17 August 2000. Exhibit A5
Respondent's statement of facts and contentions dated 27 November 2000. Exhibit R1
The relevant issues in this matter are:
(a) whether the Applicant, by reason of the receipt of a lump sum compensation payment, should be subject to a preclusion period, during which he is unable to receive income support payments, commencing 28 July 1999 and ending on 12 March 2002; and
(b) if so, whether there are any special circumstances found to exist as a result of which a discretion may be exercised where part or all of the lump sum compensation payment can be deemed not to have been paid, thereby limiting the length of the preclusion period.
Legislation
The relevant legislation in this matter is the Social Security Act 1991 9 ("the Act") and in particular sections 17, 1165 and 1184.
BackgroundThe Applicant was born in Yugoslavia on 7 August 1944. He attended school until he was 17 years of age and then worked for two years before he undertook two years of military service. After this period he worked for seven years at a dockyard. The Applicant married in 1967 and migrated to Australia in 1970.
On 13 June 1996 the Applicant was injured while working. He received weekly incapacity payments of $272.60 from 14 June 1996 until 27 August 1999. A lump sum compensation settlement occurred on 28 July 1999 with the insurance company informing Centrelink of this on 30 August 1999 (T5, p13). Centrelink wrote to both the insurer (MMI Insurance Ltd) and the Applicant on 30 August 1999 regarding the repayment of Social Security income support benefits since the date of the injury and his entitlements to such benefits in the future. Centrelink advised the Applicant to seek advice prior to agreement to a settlement.
On 31 August 1999 the Respondent advised the Applicant that a compensation preclusion period would commence on 28 July 1999 and cease on 12 March 2002, that his newstart allowance would be cancelled from 28 July 1999 and that he would have to repay $674.64 to Centrelink (T10, T12).
On 22 May 2000 the Applicant requested a review of the decision to impose a compensation preclusion period (T14, p33), at which time the Applicant lodged a financial information form. The internal review was completed and the Applicant advised on 2 June 2000 that his preclusion period remained unaltered (T16). The Applicant lodged further documentation with the Respondent regarding his financial circumstances and again the Respondent confirmed in June 2000 that the earlier decision would not be changed (T36). Following a further request, the authorised review officer reviewed and affirmed the earlier decision and notified the Applicant of this decision on 14 July 2000 (T39). The Applicant sought further review, and the SSAT affirmed the decision on 7 August 2000 (T2).
The Applicant's EvidenceThe Applicant told the Tribunal that he arrived with his wife and two children in Australia in November 1970. He further stated that he separated from his wife 14 years ago but that they have not been divorced. He lived in a defacto relationship for eight years until it ceased in the last 18 to 24 months. The Applicant stated that he now lives alone in a housing commission home with his dog at Corrimal.
The Applicant informed the Tribunal that he had worked in many jobs since arriving in Australia, namely:
· process worker for two years;
· crane driver for three years;
· security guard in Melbourne for five years;
· forklift driver for three years;
· security guard in a Ringwood hotel for four years;
· security car park operator for two years;
· fish market worker in Pyrmont for one year; and
· lawn mowing for five years.
The Applicant stated that it was while working at the fish market that he suffered his work related injury to his back in June 1996. The Applicant indicated that he had undergone surgery on his lower back some three years previous and that since then he has been unable to mow lawns.
The Applicant informed the Tribunal that he received a lump sum payment of $115,000 in July/August 1999 and that from this amount the following expenditures were made:
· $18,000 to repay a debt relating to a car accident in Melbourne some eight years ago;
· $6,500 to his ex common law partner;
· $23,000 to repay a loan to do with an investment in Queensland; and
· $32,000 to purchase a car and accessories.
As a result of these expenditures and the normal cost of living expenses the Applicant stated that by 14 July 2000 the balance of Commonwealth Bank account stood at $3884.41, and that by the date of this hearing it was of the order of $300. The Applicant indicated to the Tribunal that he was neither a gambler nor a drinker, that he had a St George bank account with a negligible amount of money therein and that he does not have any source of income.
Since his operation in 1998, the Applicant stated that in the good weather he goes to the beach, takes the dog for a walk in the morning and in the evening. He further stated that during the day he does all his housework including washing, hanging clothes on the line, cooking and pottering in the garden growing tomatoes. The Applicant stated that he can and does use public transport, that he drives his own car, which needs to be in good condition, to both physiotherapy and hydrotherapy appointments. The Applicant indicated that he may sleep during the day, sleeps well at night and that he takes digesic and orudis for his pain.
The Applicant told the Tribunal that he had both good and bad days, with the low back pain radiating on bad days to his left leg which is accompanied by a feeling of numbness. The Applicant indicated that he was not looking for work as he feels that he is unable to work.
In response to questions in cross-examination the Applicant further indicated that he was receiving both unemployment benefits and weekly incapacity payments at one stage after his injury, but that his common law partner looked after the St George account into which the unemployment benefits were paid. The Applicant stated that he was not told by his solicitor of a preclusion period, but that he was told that he would receive not unemployment benefits from the date of settlement. Further the Applicant indicated that he had not received, nor could he explain why he had not received, letters from the Respondent in which advice as to the effects of his compensation lump sum would have on his ability to receive social security income support payments (T6, T10).
Documentary EvidenceDocuments tabled by the Applicant demonstrate:
(a) the loan of $18,000 by Mr Dijana Savic to the Applicant on 10 June 1994, the repayment of such a loan since that time and that the loan was made for personal reasons; and
(b) the loan of $23,000 by Mr Lazo Stambolija to the Applicant on 24 March 1998, the repayment of such a loan since that time and that the loan was made to assist the Applicant in a purchase of a business; and
(c) a fortnightly analysis of the Applicant's expenditure:· rent $66
· food and groceries $190
· car operating costs $135
· telephone/electricity $70
medicine/physio/hydrotherapy $232 (Exhibit A4)
An analysis of the Applicant's Commonwealth Bank account records (commencing 31 December 1997) reveals:
(a)a fortnightly payment of a minimum of $224.55 from MMI Insurance with the first payment noted on 31 December 1997 and ending with a payment of $232.65 on 25 August 1999;
(b)other deposits approximately in the amount of $9,963 were made to this account between the period 31 March 1998 and 30 August 1999; and
(c)a lump sum payment of $114,325.26 that was paid into the account on 8 September 1999.
The Applicant informed the Tribunal of the following expenditures:
8 September 1999 $2000 to his former partner;
14 September 1999 $26,300 to purchase a car;
30 September 1999 $13,977 to repay a loan relating to an
earlier car accident in Victoria;
October/November 1999 daily cash withdrawals to repay the $23,000
loan which he had borrowed in 1998;
late November 1999 another $4500 was withdrawn and paid in
cash to his former common law partner;
18 September 2000 by this date the balance in the account was
$2209.60, the only withdrawal in the previous two months being $75.83 to pay his NRMA insurance;
16 October 2000 the balance in his account was $1065.57.
Submissions: The Applicant
The Applicant submitted that he had little money ($300) and was without a source of income to purchase food. He further stated that he considered his car a necessity to travel to his various therapies relating to his work related back injury for which he had had surgery some years ago. The Applicant stated that his only companion was his dog and that, while receiving his lump sum compensation payment of $114,325 in early September 1999, he had particular expenditures which he had properly made, including loan repayments and expenditures associated with a car purchase and his former common law partner. In essence the Applicant submitted that he was in financial hardship and that his ability to work was negligible in view of his work related back injury.
Submissions: The RespondentThe Respondent stated that the Applicant's credit was an issue and that essentially the Applicant's explanations for much of his expenditure were without merit and records to support many of the payments. Further the Respondent notes that for the first time at this hearing, the Applicant stated that he had paid monies to his former common law partner. Further it was the Respondent's concern that the Applicant had been receiving income support payments as well as weekly incapacity payments during the period prior to the lump sum compensation payment.
Irrespective of this nominated concern, the Respondent contended that the Applicant had been served with notice of his preclusion period, which the Applicant denies. It is further contended by the Respondent that while the Applicant did admit to and understanding that he had been told that he wouldn't be entitled to unemployment benefits, he did not admit that his solicitor informed him of this preclusion period. The Respondent submitted that the Applicant's current situation was, in the Respondent's view, a direct result of the Applicant adopting a spending pattern which resulted in $110,000 of the settlement money being expended within ten months of receipt. This expenditure, it was contended, was on discretionary items as well as variously documented and non-documented loans.
In view of the Applicant's lack of credit and his continued ownership of a car, the Respondent submits that the Applicant's financial circumstances do not constitute special circumstances. Similarly his medical condition does not warrant such a consideration and as a consequence it is submitted that a discretion should not be exercised to shorten the preclusion period by way of part or all of the lump sum compensation payment being deemed not to have been paid to the Applicant.
Consideration and FindingsIn preliminary comment, the Tribunal does express particular concern about the reliability of some of the evidence of the Applicant, where it relates to repayments being made in cash, as a result of accumulation of cash by daily or twice daily withdrawals of cash, with these cash payments changing hands without any form of documentation. Further the Tribunal expresses some concern over the Applicant raising at the hearing, for the first time, his payments to his common law partner.
In further comment the Tribunal considered many of the Applicant's answers to questions on his various expenditures to be vague and not to the point, particularly when addressing sizeable multiple withdrawals on both the one day and successive days.
As a consequence of the Tribunal's preliminary considerations it finds that the Applicant is less than a creditable witness, with many answers reflecting both a lack of frankness and a desire to secure an outcome beneficial to him.
The Tribunal, having considered all the evidence, makes the following findings of fact:
(a)the Applicant did receive a lump sum compensation payment of $115,000 on 27 July 1999, and following the payment of a charge of $674.64 to Centrelink for payment of newstart allowance between 27 July 1999 and 25 August 1999, the Applicant had a deposit in his account on 8 September 1999 of $114,325.26;
(b)the Applicant had a balance of $1065.57 in his Commonwealth Bank account on 16 October 2000;
(c)the Applicant had expended the money on a variety of discretionary payments including the purchase of a motor vehicle, for which he claimed he paid $32,000 and which now has a value in his opinion of somewhere between $10,000 and $15,000; and
(d)the Applicant was informed of his preclusion period in correspondence from the Respondent dated 30 August 1999 31 August 1999, and the Applicant was aware that he would not be entitled to payment of newstart allowance after the settlement.
In considering the finding that the Applicant received a lump sum compensation payment of $115,000, the Tribunal finds that pursuant to sections 17 and 1165 of the Act, the Applicant's preclusion period has been correctly calculated. The Tribunal affirms the imposition of a preclusion period commencing on 28 July 1999 and ceasing on 12 March 2002.
On the evidence before the Tribunal, the Applicant has available financial resources of $250-$300 and a car valued at some $10,000 - $15,000. While the Applicant claims his car as a necessity, the Tribunal observes that he is able to walk his dog frequently, use public transport and undertake all the activities of daily living. The Tribunal further notes that by the Applicant's own analysis, his car is costing some $135 a fortnight to operate, and that this, coupled with the other expenditure, but excluding medical and therapy expenses of $232 per fortnight, results in a fortnightly expenditure of $460. It is evident to the Tribunal that the Applicant's current living expenses are in excess of prudent expenditure determined by both current and likely sources of income.
The Tribunal notes section 1184 of the Act, which provides:
1184.(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.
In turning to the issue of special circumstances and indeed what has been found in other matters to constitute special circumstances, the Tribunal notes the following cases:
(a) In Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, the Tribunal stated at N97:
"The reference to special circumstances "by reason of which" a person liable "should be released" requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes… Thus whilst keeping the dominant principle of [recovery of debt] in mind, [the decision maker] must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise."
(b) In Beadle v Director-General of Social Security (1985) 60 ALR 225, the full Federal Court considered and followed the statement of Toohey J in Beadle and Director General of Social Security (1984) 6 ALD 1 where he stated:
"An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on 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."
(c) In Re Secretary, Department of Social Security and Smallcombe (1991) 23 ALD 41 the Tribunal further defined the issue:
"'Special circumstances' is unlikely to exist, in isolation of any other factor at least, simply by reason of the application of a legislative provision. Even where the effect of a legislative provision may be harsh or unjust, the Tribunal is bound by the clear intention of Parliament."
(d) In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Reiffel J considered that there had to be something to distinguish a particular case from the usual or ordinary case when he observed:
"…for present purposes it is sufficient to observe that it would require something to distinguish (this case) from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this 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."
(e) In Re Winterbotham and Secretary, Department of Social Security (AAT 6499, 11 December 1990) and Re Kulakov and Secretary, Department of Social Security (1991) 63 SSR 879, in relation to financial circumstances, it was found that the financial situation must be beyond straitened and must be exceptional.
(f) In relation to financial hardship it is appropriate to consider how it arose, as demonstrated in Re Ivovic and Director General of Social Security (supra) and Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985).
In further considering the circumstances, there can be no doubt that the Applicant has himself created his own financial difficulties. He also believes that others should now assist him in solving them and that he should not have to sell his car to help his financial circumstances. The Tribunal, in considering all the issues in this matter does find that despite having an impending cash difficulty, the Applicant does have a car which can be sold and that such resulting finance should be put towards living expenses. Further the Tribunal finds that the Applicant's circumstances have been created directly by his own actions, and for which, before the Tribunal, the Applicant seemed disinclined to acknowledge any responsibility.
In summary, the Tribunal finds that the Applicant's financial situation does not constitute special circumstances in that they have been self created, with little or no attempt on the part of the Applicant to resolve them. The Applicant has a valuable asset which he can sell, and therefore his situation is neither unusual, uncommon or exceptional.
The Tribunal, in considering the issue of the Applicant's medical condition notes the Applicant's evidence and particularly the activities which he undertakes on a regular basis. The Tribunal also notes the radiological report of Dr Nikolich of 21 December 1998 (T4), and in the absence of any other medical evidence, concludes that the Applicant may well enjoy a capacity to work, albeit with some restrictions on lifting and carrying and with a requirement to be able to alter posture as needed. The Tribunal further concludes that the Applicant has not raised facts or circumstances about his medical impairment which could be considered unusual, uncommon or exceptional. As a consequence special circumstances are found not to exist, the Tribunal having considered his medical impairment and his financial situation separately and together.
In summary the Tribunal, having found that the Applicant's nominated situations do not constitute special circumstances, concludes that the Tribunal cannot exercise a discretion as nominated in section 1184 of the Act.
DeterminationThe Tribunal affirms the decision under review.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for the decision herein of Dr JD Campbell
Signed: .....................................................................................
AssociateDate/s of Hearing 7 December 2000
Date of Decision 21 December 2000
Advocates for the Applicant Self-represented Applicant
Solicitor for the Respondents Mr G Lozynsky
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