Radosavljevic and Secretary, Department of Family and Community Services
[2005] AATA 984
•6 October 2005
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DECISION AND REASONS FOR DECISION [2005] AATA 984
ADMINISTRATIVE APPEALS TRIBUNAL ) No N2004/1692
| GENERAL ADMINISTRATIVE DIVISION | ) | ||
| Re | Milan Radosavljevic | ||
Applicant
| And | Secretary, Department of Family and Community Services Respondent |
DECISION
| Tribunal | Ms N Isenberg, Member |
Date6 October 2005
PlaceSydney
| Decision | The decision under review is set aside and an amount of $19,750 is to be treated as not having been made. The matter is remitted to the Respondent for calculation of the remaining debt. |
[Sgd] Ms N Isenberg, Member
CATCHWORDS
SOCIAL SECURITY – recovery of compensation charges – work related injury – periodic compensation payments from Comcare – Centrelink benefits received – consideration of whether the Applicant owes a debt to the Commonwealth – consideration of any special circumstances that make it appropriate to disregard some or all of the compensation payment made to the Applicant – consideration of whether an overpayment exists – decided that the amount of $19,750 cannot be recovered by Centrelink – the decision under review is set aside and the matter remitted to the Respondent to calculate the remaining debt.
LEGISLATION
Social Security Act 1991 – sections 17, 1173, 1180, 1181, 1184F, 1184K.
CASE LAW
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Re Secretary, Department of Social Security and Hill (1995) 2(1) SSR 9
Haidar v Secretary, Department of Social Security (1998) 52 ALD 255
Re Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Ellis (1997) 46 ALD 1
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985).
Dranichnikov v Centrelink [2003[ FCAFC 133
Boscolo v Secretary, Department of Social Security [1999] FCA 106
Blanco and Secretary, Department of Family and Community Services [2003] AATA 26
REASONS FOR DECISION
6 October 2005 Ms N Isenberg, Member
DECISION UNDER REVIEW
The decision under review before the Administrative Appeals Tribunal (“the Tribunal”) was the decision of the Social Security Appeals Tribunal (“the SSAT”) dated 3 November 2004 (T2), which affirmed the decision of the Secretary, Department of Family and Community Services (“the Respondent”) dated 3 June 2003 to raise and recover compensation charges of $20,000 for the period of 8 March 2000 to 11 July 2002 and $1,697.37 for the period 27 March 2003 to 22 May 2003.
BACKGROUND
Mr Radosavljevic suffered a work-related injury on 31 January, 1973, as a result of which he received periodic compensation payments from Comcare.
Then, in 1988, he started work at the Powerhouse Museum, where he continued to work until 1999, when he was retrenched. He received various Centrelink benefits from 22 December 1999.
On 3 March 2003, a Comcare officer sent a fax to Centrelink, advising that Mr Radosavljevic would be paid arrears of compensation for the period 8 March 2000 to 11 July 2002 and inviting Centrelink to advise if it proposed to recover monies from Mr Radosavljevic. The fax also noted that payments may continue to be made, depending on Mr Radosavljevic continuing to lodge medical certificates (T5/p14).
When no response was received from Centrelink, Comcare paid Mr Radosavljevic arrears in the amounts of (gross) $43,726.07 and (gross) $3,016.37, for the periods 8 March 2000 to 11 July 2002 and 27 March 2003 to 22 May 2003, respectively. A net payment of $32,900 was paid to Mr Radosavljevic on 24 April 2003.
On 27 March 2003 Centrelink decided to cancel Mr Radosavljevic’s benefit but continued to pay him until 22 May 2003. Mr Radosavljevic was not advised of the cancellation until a letter was sent on 3 June 2003 (T7/p16). On the same date Centrelink also sent Mr Radosavljevic a letter notifying him that if he received any payment of compensation, he may have to repay some or all of Centrelink payments made to him since the date of the compensable injury. Centrelink also sent him two recovery notices, under the authority of section 1180 of the Social Security Act 1991 (“the Act”). These notices required total repayment of $21,697.50 (T8/pp17-18 and T9/pp19-20).
THE HEARING
A hearing was held before me on 22 August 2005 at which the Applicant was self-represented, but assisted by Mr D Cvetkovic, an accredited interpreter in the Serbian language. Mr J Larcombe of the Centrelink advocacy team appeared on behalf of the Respondent.
Mr Radosavljevic gave evidence and was cross-examined on behalf of Centrelink. I also asked him questions.
I had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which I took into evidence. In addition, Mr Radosavlejevic’s bank statements were tendered.
Centrelink provided a Statement of Facts and Contentions. Mr Radosavljevic provided 2 statements prepared on his behalf by Legal Aid.
STATUTORY SCHEME
The legislation relevant to this appeal is contained in the Social Security Act 1991 (“the Act”).
Section 17 of the Act states, relevantly:
“17.(2) Subject to subsection (2B), for the purposes of this Act, compensation means:
(a) a payment of damages; or
(b)a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c)a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.”
Section 1173 requires the reduction of social security benefit where periodic compensation payments are received, as follows:
“1173.(1) If:
(a) a person receives periodic compensation payments; and
(b)the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c)the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the rate of the person’s compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2).
1173.(2) The person’s daily rate of compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.
1173.(3) The reference in subsection (2) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.”
Section 1180 states, relevantly:
“1180.(1) If:
(a) a person receives periodic compensation payments; and
(b)the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c)the person receives payments of a compensation affected payment in relation to a day or days in the periodic payments period; and
(d)the payments referred to in paragraph (c) have not been reduced to nil as a result of the operation of section 1173;
the Secretary may, by written notice to the person, determine that the person is liable to pay to the Commonwealth the amount specified in the notice.
1180.(2) The amount to be specified in a notice for the purpose of subsection (1) is the recoverable amount under section 1181.”
Section 1181 of the Act then states that the “recoverable amounts” mentioned in the letters sent on 03 June 2003 are to be calculated as follows:
“1181.(1) Subject to subsection (2), the recoverable amount under this section is equal to the smaller of the following amounts:
(a) the sum of the periodic compensation payments;
(b) the difference between:
(i)the sum of the compensation affected payments made to the person in relation to a day or days in the periodic payments period; and
(ii)the sum of the compensation affected payments that would have been made to the person in relation to any such day or days had those payments been made at the rate to which the payments were reduced as a result of the operation of section 1173.”
Section 1184F states:
“1184F. If the Secretary gives a person a notice under section 1178 or 1180 determining that the person is liable to pay to the Commonwealth the amount specified in the notice, the amount so specified is a debt due by the person to the Commonwealth.”
Section 1184K of the Act states:
“1184K.(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.”
ISSUES BEFORE THE TRIBUNAL
The issues before the Tribunal were:
Does Mr Radosavljevic owe a debt to the Commonwealth in the sum of $21,697.50?
If so, are there special circumstances that it make appropriate to disregard some or all of the compensation payment made to Mr Radosavlejevic pursuant to section 1184K of the Act?
CONSIDERATION OF EVIDENCE AND FINDINGS
Is there a debt due to the Commonwealth?
There is no dispute that Mr Radosavljevic received periodic payments in respect of lost earnings due to injury, and that his payments are therefore captured by the definition of “compensation” in section 17(2) of the Act.
When Mr Radosavljevic was injured in 1973, he was not receiving any Centrelink benefit. Therefore, the calculation of his benefit must be in relation to section 1173(2) of the Act. That means that his rate of payment is retrospectively reduced on a “dollar-for-dollar” basis. As his daily rate of compensation exceeded his daily rate of social security payment, no social security benefit was payable to him.
The practical effect of section 1173 is that the amount paid to Mr Radosavljevic by Centrelink during the period for which he also received compensation, becomes an overpayment.
In accordance with section 1180(2), notices were sent to Mr Radosavljevic on 3 June 2003 (T8/pp17-18 and T9/pp19-20).
Are there special circumstances that it make appropriate to disregard some or all of the compensation payment made to Mr Radosavljevic pursuant to section 1184K of the Act?
The statement prepared by Legal Aid for Mr Radosavljevic referred me to the authorities in relation to the meaning of “special circumstances” in particular to the cases of Dranichnikov v Centrelink [2003] FCAFC 133 and Boscolo v Secretary, Department of Social Security [1999] FCA 106.
Special circumstances do not have to be statistically “extreme” or “unique”, it is sufficient if there is something that takes the matter out of the usual ordinary case, (see Haidar v Secretary Department of Social Security (1998) 52 ALD 255 at 264, in which Hill J cited the earlier Federal Court cases of Groth v Secretary, Department of Social Security (1995) 40 ALD 541 and Secretary, Department of Social Security v Ellis (1997) 46 ALD 1).
Mr Radosavljevic submitted that his circumstances are special on a number of bases as detailed in the following paragraphs.
Financial Circumstances
Shortly after the net compensation funds of $32,900 were deposited into his account Mr Radosavljevic withdrew about $20,000. These funds were expended as follows, as detailed in the his statement:
“9. The Applicant states that most of this money was spent re-paying money he had borrowed previously. The 2 largest payments were made to:
Zivko Radosavljevic (brother) - $7,000
Zoran Jovanovic (late wife’s relative) - $11,000
10. Other moneys from the compensation payment were spent as follows:
$7,000 - daughter’s (Biljana) wedding reception
$1,500 - daughter’s wedding dress
$2,500- other expenses associated with
daughter’s wedding (invitations, decorations,
cake and other expenses)
$2.500 - assist daughter to re-pay tax debt
$1,500- assist daughter to pay off credit card debt with
Cth Bank”.
His oral evidence was essentially the same, adding that some money had been spent repairing his car and buying essential clothing. There is nothing left of the compensation payment.
He receives $668 per fortnight from Centrelink. From this, he pays $150- $170 per week to his daughter and son-in-law with whom he lives. He also pays about half of all the utilities bills. Neither his daughter nor son-in-law are presently working and they cannot finance their mortgage. His medication cost about $70-90 per fortnight and as he no longer holds a concession card he must pay for these himself. He currently owes a friend $350 which he is repaying at the rate of $50 per fortnight.
To qualify as "special circumstances", financial hardship must go beyond "straitened" circumstances and be truly exceptional: Re Secretary Department of Social Security and Hill (1995) 2(1) SSR 9.
It is not enough for Mr Radosavljevic to show that he is under financial pressure: (Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 at 699-700; see also Secretary, Department of Social Security v Ellis (1997) 24 AAR 535 at 539-540 per Carr J. The circumstances must make the burden of repayment of the charge unusual or extreme.
Poor Health
Mr Radosavljevic suffers from:
·Heart problems
·Diabetes (controlled by tablets & diet)
·High cholesterol
·Double vision (takes Warfarin)
·Problems with legs – poor circulation, weakness, numbness and cold; and
·Dizziness, especially in the morning.
Mr Larcombe did not dispute Mr Radosavljevic‘s ill health. However, health issues do not necessarily constitute special circumstances: Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464, Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797, Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985).
Mr Larcombe noted, correctly in my view, that, invariably, recipients of compensation will have health problems, as will recipients of many of the Centrelink benefits.
Having reviewed the authorities I find that Mr Radosavljevic’s ill health alone is not sufficient to amount to special circumstances.
Maladministration
Mr Radosavljevic’s main contention however was that had Centrelink responded promptly to the fax from Comcare then the monies now sought to be recovered from him would not have been paid to him at all. Had he not received the money it would not have been spent.
To make matters worse, Mr Radosavljevic contended, he had gone to Centrelink at Fairfield, he thought about a week after he had received the money from Comcare, to tell Centrelink about it. He said the Centrelink clerk made an appointment for him with a lady and an interpreter, Mr Illic the next week. He said he explained to the lady that he was getting Comcare money and they discussed stopping his disability support pension. He said the lady wrote something on the computer. He said he had thought he could get both the payments. He does not recall that he was told anything about Centrelink recovering any benefits already paid.
Centrelink has no record of that attendance, which was said to be about 6 weeks after Centrelink had received notice from Comcare, and about 6 weeks before it took action in notifying Mr Radosavljevic. The Applicant’s Statement makes the following submissions:
“13.Had Centrelink acted on the clear advice of the compensation insurer given on 3 March 2005 (T5), Centrelink should either have made an inquiry of the Applicant to check the fact or it could have issued a notice to the insurer noting its interest in any award to be paid to the Applicant.
14.The fact that it did neither of those things immediately was the main cause of the subsequent events. Reference is made to the Department’s policy guidelines regarding the appropriate action after Centrelink is made aware of a compensation payment that has been made, or will be made, to an Applicant (see guideline 6.4.9 – Recovery Rules attached). Attention is drawn to the following guideline:
If a preliminary notice was NOT served before a claim is settled, the recovery notice should be served on whoever is liable to make the payment, if the funds have NOT already been released to the customer.
15.In this case, a preliminary notice had not been served on the insurer, but the letter of 3 March 2003 (T5) clearly indicated that the insurer had a liability to the Applicant for back pay of weekly workers compensation payments. Also, it was clear from this letter that the funds had not been released to the customer (the applicant) at that time. The notice should, according to guidelines, have been issued to the insurer. This was not done by Centrelink for reasons unknown. It is contended that the failure to do so was due to maladministration.
16.The compensation payment was not made to the Applicant until 24 April 2003, some 6 weeks after the notification by the insurer to Centrelink of the award to be made to the Applicant. Had Centrelink acted according to its own guidelines, it would have recovered the charge before the moneys were paid to the Applicant.”
In relation to Centrelink’s failure to follow its Guidelines I was referred to my decision in Blanco and Secretary, Department of Family and Community Services [2003] AATA 26 for the proposition that the fact Centrelink had not responded in a timely way to the fax from the insurer was no consequence and should be ignored in a consideration of “special circumstances”.
In Blanco, I stated that:
“106. The Respondent had contended that the failure of the Applicant to comply with its own procedures in pursuing the insurer is a special circumstance. The Tribunal reviewed Ebrahami and Secretary, Department of Social Security (AAT 12872, 11 May 1998) to which it had been referred. In that case, the failure to follow internal guidelines was but one of a series of matters which the Tribunal found to warrant Mr Ebrahami’s circumstances as ‘special’. In Andrews and Secretary, Department of Family & Community Services [1999] AATA 516 and Soriano and Secretary, Department of Family & Community Services [2000] AATA 842 to which the Tribunal had also been referred were matters where the Department had a duty to take a certain course and failed to do so, thereby disadvantaging the applicant in each case. The Tribunal finds that in the present matter the guidelines are in the nature of procedural advice to officers of the Department as to the appropriate course to be adopted. They do not impose a duty to operate in that fashion and a member of the public cannot require the Department to follow these guidelines.”
In that decision I was referred to the Centrelink policy guidelines that the compensation insurer should be pursued in recovering charges arising out of the award of a lump sum. The Applicant here has conceded (at paragraph 17 of his submissions) that Centrelink can recover the debt from him rather than the insurer.
The Applicant’s complaint, however, is that Centrelink did not act promptly after receiving clear advice from the insurer about the award of compensation. The policy about which the Applicant complains is policy that is aimed at ensuring information received by the Department is acted upon in a timely and appropriate way. This is a different issue to that considered in Blanco, which was concerned with Centrelink’s ability to recover from the client or the insurer.
In addition, it was argued that the first time the Applicant was aware of the charge was some time after 3 June 2003 when the 2 letters were sent. The day the letters are addressed was a Tuesday. There is no evidence about when those letters would have been dispatched and the Applicant does not recall when he received them. The Applicant cannot read or understand English very well, and Centrelink was aware of this (T6, p15). He did not understand the effect of the letters, he said, because of his lack of English.
As to Mr Radosavljevic’s lack of English and his inability to understand the importance of the letters sent to him by Centrelink on 3 June 2003, Centrelink contended that, as a long-time recipient of Centrelink payments, he should be aware of the importance of reading letters from Centrelink. In this regard I observe that on 18 November 2002, Centrelink sent Mr Radosavlejevic a letter regarding his mature age allowance which required that he notify Centrelink within 14 days if he claimed or received compensation (T4/pp12-13). According to Mr Radosavljevic he complied with request by his attendance at Fairfield Centrelink.
Mr Radosavljevic gave evidence of the availability of Centrelink interpreters. Centrelink contended that Mr Radosavljevic’s lack of English should not be regarded as a special circumstance, as he was able to request assistance to help him to understand letters that were sent to him, but he failed to do so.
At the hearing Mr Radosavlejevic told me that he always had the assistance of an interpreter when dealing when Centrelink. At the hearing he almost completely relied on the interpreter.
I accept Centrelink’s contention that Mr Radosavlejevic should have made himself aware of the contents of Centrelink’s letter of 3 June 2003, which I consider would not have been before Thursday 5 June 2003. As to amounts expended by him from the compensation monies after that date I find no reason to treat those monies, insofar as they relate to the compensation charge as not having been made.
As to the greater amount, that is some $19,750 (according to the bank statements) expended before he was advised that he must repay monies to Centrelink, I find that Centrelink through its delay, has brought about a situation whereby Mr Radosavlejevic, not aware of his obligation to Centrelink, spent his compensation monies, to which he believed he was entitled in addition to his Centrelink benefits. His expenditure was not frivolous: primarily he repaid debts and financed his daughter’s wedding.
Mr Larcombe reminded me that the principle behind the legislative scheme in relation to compensation payments was that a person could not ‘double dip’ and be a recipient of both social security benefit and compensation payments at the same time. I readily accept this. However, in this matter, I find Mr Radosavljevic’s circumstances to be special in that he has found himself having spent money to which he believed he was entitled, without being advised by Centrelink to the contrary, until 5 June 2003. In these circumstances I find that the amount spent by him until that date, namely $19,750, is an amount which should be treated as not having been made and thus is not recoverable by Centrelink.
DECISION
The decision under review is set aside and an amount of $19,750 is to be treated as not having been made. The matter is remitted to the Respondent, for calculation of the remaining debt.
I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of, Ms N ISENBERG, MEMBER.
Signed: N.Glaser
Associate
Date of Hearing 22 August 2005
Date of Decision 6 October 2005
Representative for the Applicant Milan RadosavljevicAdvocate for the Respondent James Larcombe
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