Re Secretary, Department of Family and Community Services and Jones
[2003] AATA 505
•30 May 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 505
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2002/1620
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES Applicant
And
JOHN PHILIP JONES
Respondent
DECISION
Tribunal Mr S. Webb Date30 May 2003
PlaceCoffs Harbour
Decision The Tribunal decides to set aside the decision under review and, in substitution therefor, decides a lump sum preclusion period applies from 11 December 1999 to 10 October 2003 and it is not appropriate, in the circumstances, to disregard any part of the lump sum compensation payment to Mr Jones.
[sgd] Mr S. Webb, Member
CATCHWORDS
SOCIAL SECURITY - Disability support pension - compensation preclusion period - whether preclusion period calculated correctly - whether special circumstances exist – gambling - change in circumstances after decision under review – decision set aside and preclusion period reimposed
LEGISLATION
Social Security Act 1991 section 17, 1169, 1170, 1184K
AUTHORITIES
Re Ivovic and Director-General of Social Security (1981) 3 ALN N95
Re Beadle and Secretary, Department of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 60 ALR 225
Secretary, Department of Family & Community Services v Allan [2001] FCA 1160
Re Males and Secretary, Department of Family and Community Services [1999] AATA 863
Re Anderson and Secretary, Department of Family and Community Services [2000] AATA 431
Re Secretary, Department of Family and Community Services and Rankin [1999] AATA 496
Re Secretary, Department of Social Security and VYS [1995] V95/762
Haidar v Secretary, Department of Social Security (1998) 157 ALR 359
Secretary, Department of Family and Community Services v Verney (2000) 60 ALD 737
Director-General of Social Security v Hales (1983) 47 ALR 281
REASONS FOR DECISION
30 May 2003 Mr S. Webb 1. This application by the Secretary, Department of Family and Community Services (“the Applicant”) is for review of a decision of the Social Security Appeals Tribunal (“the SSAT”) dated 19 September 2002, to reduce the duration of a compensation preclusion period, arising from payment of compensation to Mr John Philip Jones (“the Respondent”) in consequence of a work-related injury. The SSAT decided to set aside the decision of an authorised review officer (“ARO”) dated 5 June 2002, and substitute a new decision that “so much of the lump sum compensation payment be disregarded as will end the preclusion period on 19 September 2002” (Exhibit T3 folio 4). The ARO previously affirmed a Centrelink decision that a compensation preclusion period would apply from 11 December 1999 until 10 October 2003.
2. A hearing before the Tribunal was held in Coffs Harbour on 20 March 2003, at which Ms Marian Buckley, an advocate from Centrelink’s Advocacy and Administrative Law Team, represented the Applicant and the self represented Respondent and his wife gave evidence.
BACKGROUND
3. The following information is provided by way of background and is not in contention.
4. The Tribunal finds:
(a)The Respondent was injured at work on 29 September 1995.
(b)The Respondent sought compensation and was awarded $170,000 on 9 December 1999, in consequence Centrelink advised the Respondent’s solicitor that a compensation preclusion period would apply from 10 December 1999 to 9 October 2003 (Exhibit T4 folio 15).
(c)On 26 July 2001 Centrelink wrote to the Respondent advising him that the compensation preclusion period commenced on 11 December 1999 and would cease on 10 October 2003 (Exhibit T8 folio 21).
(d)On 21 November 2001 the Respondent wrote to Centrelink requesting a cessation of the compensation preclusion period (Exhibit T10 folio 25) and has pursued his appeal rights thereafter.
(e)The Respondent is married with three dependent children aged 17, 15 and 10 who are all living at home and attending school.
(f)Neither the Respondent nor his wife is in employment and the family is solely dependent upon Centrelink payments, which comprise of Family Payment, Carer Allowance for their second child, Parenting Payment and Newstart Allowance.
ISSUES BEFORE THE TRIBUNAL
5. The issues before the Tribunal are:
(a)whether special circumstances exist; and if so
(b)whether the correct and preferable decision would be to treat the lump sum compensation payment, in whole or in part, as not having been made.
LEGISLATION
6. The relevant legislation in this matter is the Social Security Act 1991 (“the Act”), in particular sections 17, 1169, 1170 and 1184K.
EVIDENCE BEFORE THE TRIBUNAL
7. The Tribunal has before it the following documents.
EXHIBITDESCRIPTION
T1-T21Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.
A1Applicant’s Statement of Facts and Contentions dated 25 February 2003.
A2National FlexiAccount Bank statements from 31 December 1999 to 16 April 2002.
A3Applicant’s bundle of documents, folios 1 to 7.
R1Statements of account and receipts in respect of Mrs Coral Jones from 1 January 2000 to 31 December 2001.
R2Statements and receipts in respect of the sale of 10 Brown Street, Chester and the purchase of 33 Bangalee Crescent, Toormina from 29 January 2003 to 14 February 2003.
R3AutoBank transaction record dated 10 March 2003.
R4Letter from Mortgage House Australia dated 30 October 2002 and attached receipt and account statement dated 11 November 2002.
R5Receipts from Dr Karlo Taliana, Dental Surgeon from 19 April 2001 to 6 August 2001.
R6Hanly Moir Pathology reports dated 18 December 2002 and Diagnostic report by Dr Nguyen dated 19 January 2003.
R7National FlexiAccount Bank statements from 14 July 2000 to 9 January 2001 and 4 September 2001 to 2 January 2002.
evidence of mr jones
8. Mr Jones told the Tribunal he is dyslexic and functionally illiterate. He said he had “not had money before the compensation”. He informed the Tribunal that he had been employed in manual occupations all his working life until injuring his sternum and right shoulder at work in 1995. He said his injuries healed after surgery, but he has been prevented from engaging in any heavy lifting ever since. He told the Tribunal he undertook a security guard course at his own expense, but failed to qualify after two attempts on account of his literacy problems. He said he has been seeking employment within his capacity since 2000 without success. He gave evidence that he is currently undertaking a bar course at his own expense.
9. Mr Jones gave evidence that he commenced drinking on a daily basis over 10 years ago when he was working for the Sydney City Council, which had “a drinking culture”. He said his drinking became a “real problem” in 1992 with the birth of their third child. His evidence was that he would drink with his mates “for hours” and would walk home afterwards. He said he was in treatment for his alcohol problem prior to his injury. His evidence was that his earnings dropped from $880 per week before the injury to $268 per week on compensation and, in consequence, he could not afford to drink as often or as much as before and his lifestyle changed.
10. Mr Jones told the Tribunal he became depressed after the injury and was treated by Dr Blows. He said he underwent treatment in a pain management clinic and took a variety of medications including Zoloft, Deptran and Panadene Forte. He stated that he withdrew from treatment on settlement of his compensation claim in December 1999 and he has received no further treatment or medication. He claimed he “was on a big high” after the settlement”.. Mr Jones then proceeded to tell the Tribunal that he thinks he is still suffering with depression and pain from his injury, but has not sought treatment. He said he has been taught to hide his emotions and not show any weakness, in consequence of which, he is “not a big doctor goer”.
11. Mr Jones gave evidence that he was “pretty freaked out” about the death of his mother, his father and brother having died previously. He said his mother was very close to his children and lived with the family in her house at 10 Brown Street, Chester. He told the Tribunal they had taken out a mortgage to build a granny flat for her to live in and, cared for her at home as long as they could. Mr Jones informed the Tribunal that his mother’s health deteriorated in 1999 and she moved into the Abel Tasman Respite Care facility for a period of 16 weeks. He told the Tribunal his mother then returned home for a five-month period until they were no longer able to care for her, at that stage she moved into a residential care facility managed by Anglicare in March 2000. He gave evidence that this was very distressing, especially as he was dubious about the quality of care being provided. He said his mother had seven falls in 10 days and they paid extra for the installation of a Vitalcare connection. Mr Jones told the Tribunal his mother died in October 2001 and he experienced deep grief.
12. Mr Jones gave evidence that he started to gamble in 2000, having only gambled on the Melbourne Cup previously. He told the Tribunal he gambled on poker and card machines while drinking alcohol. He said he continued to drink and gamble heavily until his wife gave him an ultimatum to stop by 1 January 2002 or lose his family. He said this made him feel suicidal. It was his evidence that he consulted a priest about his problems and ceased drinking and gambling within the specified deadline. He told the Tribunal he did not seek or receive treatment for these problems or professional assistance to stop drinking and gambling even though he claimed he was “addicted to gambling”.
evidence of mrs jones
13. Mrs Jones told the Tribunal her husband, the Respondent, controlled the compensation monies he was awarded, her only involvement being to write cheques; he is unable do so due to his dyslexia and illiteracy. She said she wanted to invest $100,000 of the compensation money, but her husband refused. She gave evidence that she first became aware that her husband was gambling in August 2000, but remained unaware of the extent of his problem until realising in November 2001 that the family was in dire financial straits and the compensation monies were substantially gone. Mrs Jones said she gave her husband an ultimatum to stop gambling and drinking by 1 January 2002, which he did.
14. Mrs Jones told the Tribunal that the compensation monies were entirely expended by 2002. She itemised the following expenditures from the compensation payment:
Home nursing costs: Mrs Coral Jones $1,600
Residential care costs: Mrs Coral Jones $27,000
Funeral costs: Mrs Coral Jones $4,000
Bathroom modifications for Mrs Coral Jones $2,000
Car purchase $25,000
Mini bike purchase $2,346
Yamaha 250cc motor bike purchase $5,729
Family holiday on the Gold Coast $7,000
Electrical goods, including a television $8,361
Lawn mowing equipment $1,500
15. Mrs Jones told the Tribunal her husband was clinically depressed and had “money fever” on receipt of the compensation settlement. She estimated her husband spent in excess of $80,000 gambling and identified cash withdrawals totalling $21,160 which she claimed were for that purpose between 14 July 2000 and 9 January 2001 (Exhibit R7). She informed the Tribunal that the compensation monies had been reduced from $153,000 on 6 January 2000 to $40,343.57 by 9 January 2001. Mrs Jones identified cash withdrawals by the Applicant totalling $2,260 in the period 4 September 2001 to 6 December 2001 which she claimed were for the purpose of gambling (Exhibit R7), noting that the compensation monies had been reduced to $89.04 by 6 December 2001.
16. Mrs Jones told the Tribunal her husband sold the motor bikes he had previously purchased in order to pay bills after the compensation monies were exhausted. She gave evidence they retained the electrical goods and lawn mowing equipment they had purchased in 2000.
17. Mrs Jones gave evidence that her husband inherited the 10 Brown Street, Chester property from his mother. She told the Tribunal that the family went through a “healing process“ after her death in which they faced their financial difficulties and “put everything in order” in 2002. She gave evidence that she worked in a childcare centre earning $670 per fortnight between 1 July 2002 and 18 December 2002, whereupon, she was required to leave having contracted whooping cough. She gave evidence that she and her husband had attempted to refinance their house in October 2002 without success, as they did not satisfy the bank’s qualification requirements. She said they sold the house at 10 Brown Street, Chester for $345,000 on 24 January 2003 and purchased a house at 33 Bangalee Crescent, Toormina for $215,000 on 14 February 2003, using the balance of the sale proceeds to pay off outstanding debts. She told the Tribunal the family had only $8,370.54 remaining in their bank account on 19 March 2003 (Exhibit R3) having spent approximately $3,000 on removalists.
18. Mrs Jones told the Tribunal the family situation had improved since their move to Coffs Harbour. She said arrangements are in place for the education of her two younger children and her eldest son has returned to school. She said she and her husband were looking for work. She gave evidence that she had contacted 18 child-care centres and an employment agency and her husband had sought work as a storeman without success, his literacy being the problem.
19. Mrs Jones told the Tribunal the family exists on a very tight budget and has no spare or disposable income, being totally reliant on Centrelink payments. She estimated the family’s income and living costs as follows:
Income
Carer Allowance $87.70 per fortnight
Family Payment $314.44 per fortnight
Newstart Allowance and Parenting Payment $340.11 per fortnight
Expenses
Food $200 per week
Telephone $30 per week
Electricity $320 per quarter
School costs $40 per week
Fuel $40 per week
Rates $1,400 per year
Clothing and incidentals $40 per week
Car maintenance and insurance $25 per week
submissions, consideration of the issues and findings
20. The Tribunal carefully considered all the evidence before it and took into account the submissions of both parties, relevant legislation and, caselaw in reaching the correct and preferable decision in this matter.
21. The Tribunal finds the Respondent and his wife to be truthful witnesses who gave their evidence openly and without guile.
22. It is not in dispute and the Tribunal finds, that the Respondent received $170,000 in a lump sum compensation payment in consequence of which a lump sum preclusion period applies.. The Tribunal finds, and both parties agree, that the lump sum preclusion period commenced on 11 December 1999 and ceases on 10 October 2003, having been correctly calculated pursuant to sections 17(3) and 1170 of the Act.
23. The sole issue to be determined by the Tribunal, therefore, is whether special circumstances exist to justify a determination in the Respondent’s favour that the lump sum compensation payment should be taken, in whole or in part, as never having been made.
24. Section 1184K of the Act provides:
“Secretary may disregard some payments
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.”
25. The Tribunal is mindful of the authorities in relation to ‘special circumstances’. The Tribunal said in Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 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.”
Toohey J in Re Beadle and Secretary, Department of Social Security (1984) 6 ALD 1 observed at page 3:
“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 upon the context in which they occur. For it is 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.”
This passage was approved of by the Federal Court in Beadle v Director-General of Social Security (1985) 60 ALR 225. Heerey J said in Secretary, Department of Family & Community Services v Allan [2001] FCA 1160 at paragraph 17:
“It is not sensible to lay down precise limits or precise rules as to what may constitute special circumstances: Beadle v Director General of Social Security (1985) 60 ALR 225 at 228. Ill health, financial circumstances and the unfairness of a strict application of the Act are some matters which may in an individual case, constitute special circumstances: Kirkbright v Secretary, Department of Family and Community Services (2000) 32 AAR 120 at 123, 127; see also Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64 at 71.”
26. Ms Buckley, for the Applicant, submitted that no such special circumstances exist and the preclusion period should apply for the full period as calculated. Ms Buckley contended that the Respondent’s circumstances were difficult in consequence of his own actions, expending his compensation settlement monies in a frivolous manner without due regard to the future requirements of his family during the preclusion period. In her submission Ms Buckley pointed to extensive outlays for family purposes, such as, expenditure on a car, motor bikes, electrical appliances and a family holiday. She contended that the Respondent did not seek treatment for his drinking and gambling problems and did not require professional assistance to cease those activities. This, Ms Buckley submitted, indicates that the Respondent was not “addicted” to gambling, or unable to control his drinking and gambling as he claimed and, should not in turn receive special treatment at cost to the taxpayer.
27. The Respondent submitted that the circumstances in which he and his family find themselves are special circumstances, sufficient to justify exercise of the discretion. The Respondent contended the following circumstances constitute special circumstances that are either exceptional or uncommon:
(a)The stress of caring for his mother, who suffered from aggressive Parkinson’s disease, and the cost of providing residential and respite care over an extended period prior to her death;
(b)The psychological effect on the Respondent of his mother’s deterioration, removal from the family into residential care and death in October 2001;
(c)Concerns about the well-being and health of his children, the eldest of whom had difficulties and left school, the second who suffers from Attention Deficit Disorder which requires special care, and the third who suffers from severe dyslexia and requires special remedial education assistance;
(d)The Respondent’s depression and his gambling and drinking problems, which relate in part to his inability to work and, in other part to the aforementioned family stresses;
(e)The Respondent’s illiteracy and consequent difficulty finding suitable vocational training or employment within the physical restrictions that are the consequence of his work-related injury; and
(f)The difficult financial circumstances in which the family finds itself, which would become severe if the preclusion period were to be reinstated.
gambling
28. The Tribunal accepts the Applicant’s submission that the Respondent drank and gambled away over $80,000 of his compensation settlement monies. The Respondent accepted that his expenditure on drinking and gambling was reckless and excessive and the Tribunal so finds. He claimed to have been out of control with his gambling addiction. He was humble and embarrassed when discussing his drinking and gambling activities and expressed remorse. The Tribunal accepts that the Respondent has not gambled or drunk since 1 January 2002. The Respondent submitted that he was significantly depressed after his work injury and found solace and relief in the purchase of essential items and gifts for his family, as well as drinking and gambling. He described his actions following receipt of his compensation settlement as “money fever” which he now regrets. The Tribunal had the advantage of observing the Respondent and finds his remorse and regret to be sincere.
29. There is no medical evidence before the Tribunal concerning the Respondent’s mental state during the period in question. However, the Tribunal accepts that he was clinically depressed and in treatment before receiving the lump sum compensation settlement payment in December 1999. The Respondent’s evidence that he withdrew from treatment in December 1999 was not challenged and there is no reason to doubt it. In the absence of medical evidence, however, the Tribunal is not able to determine whether or not the Respondent‘s gambling was pathological or whether, in clinical terms, he was “addicted” to gambling. What is clear from the documentary evidence before the Tribunal, is that the he withdrew amounts of money from his bank account on a frequent and regular basis in the hotels and clubs where he claimed he gambled after receiving the compensation settlement in December 1999 and, continued to do so, until the money was gone in December 2001 (Exhibit R7 and A2). The Respondent’s evidence that he gambled excessively while alone and drinking alcohol was not challenged. That he gambled in this manner between January 2000 and December 2001 until all his compensation money was gone indicates the Respondent suffered from a significant gambling problem and the Tribunal so finds.
30. The Tribunal accepts that the Respondent had no previous history of problem gambling and that this behaviour was out of character. The Tribunal finds that he ceased gambling in December 2001 having exhausted the compensation settlement monies and in response to an ultimatum from Mrs Jones to either stop gambling or lose his family. That the Respondent was able to exercise his will, and stop gambling without any assistance other than his wife’s threat to leave him, does not lead the Tribunal to conclude that he was not addicted to gambling. That medical question cannot be determined conclusively on the evidence before the Tribunal. The Tribunal is satisfied, however, that the Respondent had a significant gambling problem that was associated with the consumption of alcohol and, in all likelihood, was also associated with his state of emotional disturbance and depression. The Tribunal notes and accepts that the Respondent was brought to his senses by two significant factors, those being the loss of all his money and the threat of loss of his family. These two factors were sufficient to cause him to cease his gambling activities and change his behaviour.
31. The Tribunal is mindful of the cases of Re Males and Secretary, Department of Family and Community Services [1999] AATA 863, Re Anderson and Secretary, Department of Family and Community Services [2000] AATA 431 and Re Secretary, Department of Family and Community Services and Rankin [1999] AATA 496. In the cases of Mr Males and Mr Anderson both appellants expended large sums of money from lump sum compensation payments by gambling in an ‘out of control’ manner on poker machines over an extended period. In the case of Mr Anderson, he was found to suffer psychological problems that related to his work injury and in the case of Mr Males, he was found to be addicted to gambling. In both cases ‘special circumstances’ were found. However, both cases may be distinguished from the present case as neither Mr Males nor Mr Anderson had any assets of significance.
32. In the case of Re Secretary, Department of Family and Community Services and Rankin (supra), Mr Rankin was depressed and expended an amount of $25,000 over a three-day period following an argument with his wife. He owned significant assets, including a house, and ‘special circumstances’ were not found to exist. The present case is distinguished from Mr Rankin’s case on its facts. At the time of his gambling spree Mr Rankin lived with his wife, who was an extravagant spendthrift, and had no debts or dependent children. The cause of his uncharacteristic gambling behaviour was said to be his depression and an argument with his wife over money. Like Mr Rankin, the Respondent in the present case was depressed, had no prior history of problem gambling and owned his own home. The Tribunal finds in the Respondent’s case, however, he inherited the house and associated debts from his mother upon her death, having paid the costs of his mother’s care over an extended period of time prior to her death. Unlike Mr Rankin, the Respondent’s gambling problems commenced immediately after his receipt of his compensation settlement and continued in an out of control manner over a two year period, until all his money was gone and he was faced with the loss of his family. Furthermore, the Respondent and his wife are responsible for the care of three children, two of whom require special care. These factors clearly distinguish the Respondent’s case from that of Re Rankin (supra).
33. The Tribunal finds that the Respondent’s psychological condition and the associated reckless behaviour of gambling and drinking, that he engaged in following receipt of his lump sum compensation settlement, sets his case apart from the ordinary run of cases. These are factors that were germane to a finding of special circumstances in the Anderson case and the same applies in the present case, albeit in different financial circumstances. It is necessary, however, to consider the totality of the Respondent’s circumstances.
health
34. Ms Buckley submitted that the effects of the Respondent’s injury have been compensated and it cannot be said, in respect of a person in the Respondent’s situation, that ill health is unusual or uncommon or exceptional. There is no doubt that it is commonplace for a person who has suffered an injury that is the cause of impairment to suffer the effects of the injury and the impairment thereafter.
35. In the Respondent’s submission it is not the effects of his injury that contribute to a finding of special circumstances, it is his dyslexia and depression. The Respondent contends that the latter condition arose after his injury and has been exacerbated by the ill health and death of his mother and his inability to find suitable employment. The Tribunal accepts that the Respondent’s functional illiteracy is a significant impediment to him gaining employment within his physical capacity. It cannot be said, however, that it is uncommon or unusual for a person in the Respondent’s situation, having sought and failed to obtain employment, to feel depressed. The Tribunal finds the Respondent is not in treatment for depression and is pursuing vocational training to improve his prospects of employment. These factors do not describe circumstances that are exceptional or uncommon.
36. The Tribunal accepts, however, that the emotional circumstances surrounding the ill health and death of the Respondent’s mother were stressful and difficult for the Respondent and his family. While death and grieving cannot be said to be unusual, uncommon or exceptional, the circumstances in which the death and grieving occurs must be taken into account for present purposes.
37. The Respondent submitted that caring for his ill mother within the family home for an extended period, her eventual removal into respite care and subsequent death are factors that had an adverse impact upon his psychological health and the emotional stability of his children. The Tribunal accepts this submission and notes that the late Mrs Jones suffered from aggressive Parkinson’s disease before her death. The Tribunal finds the Respondent and his wife cared for Mrs Jones senior in their home while also dealing with the health and related problems of other family members. The Tribunal finds that the Respondent’s youngest son suffers from dyslexia and his second son suffers from Attention Deficit Disorder and requires special care. The Tribunal accepts that Mrs Jones suffered from Whooping Cough for a period of months commencing in December 2002.
38. The Tribunal is satisfied that the concert of ill health in this case and its effects on the Respondent are outside the realm of the ordinary. The Tribunal notes, however, that the Respondent was previously in treatment for depression and could resume that treatment if his symptoms warranted it. The Tribunal is sympathetic to the Respondent’s claims concerning the effect of his mother’s illness and death on his state of mind but notes, however, that the passage of time may ameliorate the impact of the Respondent’s loss.
FINANCIAL CIRCUMSTANCES
39. The Respondent owns significant unencumbered assets including a house and a car. The question whether special circumstances could be found in the case of a person who has significant assets, such as a house, that could be traded to alleviate their financial difficulties during a properly imposed preclusion period was agitated before the SSAT.
40. The SSAT said, relevantly, as follows:
“The Tribunal had regard to all the circumstances in Mr Jones’ case. Mr and Mrs Jones do have their own home and some income from Mrs Jones’ part-time work, and family tax benefit. Should Mr Jones sell the family home to obtain income to support the family for the remaining duration of the preclusion period? The tribunal notes the home is modest and is not in fact unencumbered. Mr and Mrs Jones continue to make mortgage payments from their low income, as well as support their family. The tribunal had regard to decisions made in the Administrative Appeals Tribunal where it was found that special circumstances exist notwithstanding the existence of a family home as an asset (see Re SDSS and Turner (1993), Re SDSS and VYS (1995), and Re Akesson and SDSS (1998)). In Mr Jones’ case, the tribunal considers that the family home is important for both the financial and economic security of the family.”
41. The Tribunal notes the social security system permits a person receiving social security payments to own certain limited assets. As noted by the Tribunal in the case of Re Secretary, Department of Social Security and VYS [1995] V95/762 at par 48:
“I agree that it is inappropriate for a system of Social Security to require people to take “a one way ticket to poverty” to qualify for Social Security payments. That is why the legislation allows for Social Security payments to people who own their own home and have some limited assets or other income. If they can supplement their income with other income, they will obviously have a better standard of living. Why should the system be less generous to those who suffer from a disability for which compensation was payable?”
The question whether it is reasonable or not to expect a person to sell their home to provide for their financial needs during a preclusion period must be determined on the particular facts of the case.
42. In the present case the SSAT found that it was not reasonable to expect the Respondent to sell the family home, considering it was important to the financial and economic security of the family at that time. Subsequently, however, the Respondent did sell the family home and purchased a cheaper home in a different location, using the remaining proceeds to repay his accumulated debts and other costs for which he was responsible. He did not, however, retain sufficient money from this sale to provide for his family during the remaining preclusion period even though he knew that the SSAT decision to reduce the preclusion period was under appeal and could be set aside.
43. The Applicant claims the Respondent, having sold his house, now has the means to alleviate his financial difficulties and provide for himself and his family during the remaining 51 weeks of the preclusion period as calculated. That is a question that will be resolved on the facts. However, the question thus arising is whether the Tribunal can consider new evidence arising after the date of the SSAT decision in this matter and, if so, whether the totality of the Respondent’s current circumstances constitute special circumstances for the purposes of section 1184K of the Act.
44. The Tribunal is mindful of the authorities on this point. The Federal Court said in the case of Haidar v Secretary, Department of Social Security (1998) 157 ALR 359 at ALR 367:
“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 that those facts are relevant to the decision. It is not limited to taking into account events which occurred at the time the original decision was made, nor for that matter facts as they were known at that time, notwithstanding that later knowledge would lead to a revision of the earlier factual assessment. However, the fact that the Tribunal can consider facts after the date the initial decision was made does not mean that every fact after that date is necessarily relevant.”
Cooper J discussed this point in the case of Secretary, Department of Family and Community Services v Verney (2000) 60 ALD 737 at paragraphs 53:
“52. The AAT was required to determine whether the decision under review was the correct or preferable one on the material before the AAT: Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589. That material included evidence of events which had occurred since the date of the original decision: Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24 at 45; Flick Administrative Law paragraph [1364/2].
53. …Later evidence may be relied upon by the AAT to demonstrate the falsity of any assessment or prediction and the AAT would not be entitled to ignore material of which it had notice which demonstrated that earlier material was incorrect, incomplete or misleading: Minister for Aboriginal Affairs v Peko Wallsend Ltd at 44-45.”
45. The Tribunal, therefore, must consider evidence of events that have occurred since the date of the SSAT decision, in so far as it is relevant and contraindicative of the matters decided by the SSAT on the evidence before it at the time.
46. The evidence reveals that the Respondent’s house at 10 Brown Street, Chester was sold for $345,000 in January 2003. The Tribunal finds that $112,562.94 of the proceeds from this sale was reasonably disbursed in payment of outstanding debts and fees (exhibit R7). This being the case, the Tribunal finds the Respondent received an amount of $232,890.08 from his solicitors in respect of the sale.
47. The Respondent and Mrs Jones maintained throughout these proceedings that the Chester property was sold on the basis that a suitable alternative property would be purchased for the family to live in, thereby protecting their long term financial security. The evidence is that the Respondent and Mrs Jones purchased a property at 33 Bangalee Crescent, Toormina at a total cost of $222,460.55 (Exhibit R7) and the Tribunal so finds.
48. This being the case, the Tribunal finds the Respondent retained an amount of approximately $10,430 on conclusion of the real estate transactions. Mrs Jones submitted, without challenge by the Applicant, that an amount of approximately $3,000 had been expended on removal costs, leaving an amount of approximately $7,000. In fact, the Tribunal finds the Respondent and Mrs Jones retained an amount of $8,370.54 in their bank account on 19 March 2003 (Exhibit R3).
49. In the circumstances, the Tribunal accepts the Applicant’s submission that the Respondent “traded down” his home to alleviate his financial difficulties. It does not follow, however, that the Respondent is in a comfortable financial position.
50. The evidence is that Mrs Jones and the Respondent’s eldest son, who has returned to school, are no longer in employment as they were at the date of the SSAT decision. In consequence, the family is reliant upon Centrelink payments for their entire income. The Tribunal finds that the Respondent and his wife currently receive a total amount of $371.12 per week in Centrelink payments, comprising Carer Allowance, Family Payment, Parenting Payment and Newstart Allowance. Ms Buckley informed the Tribunal that this amount includes an amount of $170.05 per week in compensation affected payments in the form of Parenting Payment and Newstart Allowance, which the Respondent and his wife would not be entitled to receive were the preclusion period to be reinstated. It follows, therefore, were the preclusion period to be reinstated the sole income of the Respondent and his wife, in the absence of employment, would be approximately $200 per week in Centrelink payments.
51. In this context it is necessary to consider Mrs Jones unchallenged evidence concerning the family’s weekly living expenses and costs. The Tribunal accepts her estimates and finds the family is reasonably expending approximately $425 per week. This being the case, the family would face a weekly shortfall of approximately $225 per week in the event of the reimposition of the lump sum preclusion period, plus any consequential debt to the Commonwealth that may arise.
52. It is clear the Respondent faces difficult financial circumstances that will become worse if the preclusion period is reinstated. It is a fact, however, that the Respondent has unencumbered assets in the form of a house, a car and approximately $8,300 in the bank that could be traded in order to provide for his family during the preclusion period.
53. The Federal Court said in Director-General of Social Security v Hales (1983) 47 ALR 281 at p321:
“The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common; they will be impecunious and in straitened circumstances.”
The Tribunal is satisfied that the Respondent’s current financial circumstances are not other than somewhat straitened and do not constitute special circumstances. The Respondent’s financial circumstances at the time of the SSAT decision were straitened and the family was experiencing financial hardship. It is clear that the Respondent’s financial circumstances have improved since September 2002, but remain difficult because their unemployed income does not cover their weekly living expenses. It is true that the Respondent could sell the family home to provide for their needs during the preclusion period, but the Tribunal finds it unreasonable to expect him to do so in the circumstances. He and his wife could be expected take out a loan against their unencumbered assets, but the chances are they would not qualify for a loan or, if they did, their current combined family income would not be sufficient to service such a loan. Such an expectation would not be reasonable in the circumstances and the Tribunal so finds.
54. It is reasonable, however, to expect the Respondent to sell his car to provide for his family’s financial needs.. The Tribunal accepts that the family reasonably requires a car in the course of their educational, health and employment activities and that, if the Respondent did sell his car, he would then have to purchase another cheaper car. No evidence was adduced concerning the current value of the Respondent’s car, which was purchased in 2000 for an amount of $25,000. Nonetheless, the Tribunal is satisfied that it is realistic and reasonable to expect the Respondent to pursue this option in the circumstances.
55. Ms Buckley submitted that the Respondent and his wife have reasonable employment prospects in their new environment. However, no evidence was adduced in support of this submission. The Respondent stated that he and his wife are seeking employment in order to improve their financial circumstances, but have not yet been successful. The Tribunal accepts the Respondent’s contention that his lack of skills, illiteracy and physical restrictions are an impediment to obtaining employment, and that it is necessary for him to undertake vocational training. The Tribunal finds the Respondent undertook a security course at his own expense, but failed that course on two occasions in consequence of his illiteracy. He gave evidence that he is currently enrolled in a bar attendant’s course at his own expense, having determined that such work is available in his local labour market and is within his physical capacity. The Respondent contended that he would not be able to afford to undertake such training in the event that the preclusion period were reimposed. The Tribunal accepts that the Respondent is paying the costs of his vocational training from funds retained in his bank account, but does not accept that he would not be able to pay for such training were the preclusion period to be reimposed, especially if he traded his car for a cheaper one.
56. The Tribunal finds that the Respondent’s financial circumstances are not exceptional or special, but are difficult. The Tribunal is satisfied that the Respondent’s financial difficulties may be alleviated by the generation of earned income through employment or exacerbated by the reduction in income that would ensue from reimposition of the preclusion period. However, the Tribunal accepts Ms Buckley’s submission that the Respondent has sufficient money in the bank and a car that can be traded in order to provide for his family during the remaining preclusion period.
conclusion
57. Considering all the evidence, the Tribunal is satisfied that there are no factors in the Respondent’s case that set it apart from the ordinary or usual case and finds that there are no special circumstances for the purpose of section 1184K of the Act.
58. The Tribunal has found, however, that the Respondent has the capacity to repay his debt to the Commonwealth. He has approximately $8,300 in the bank and a car that can be traded for a cheaper vehicle for this purpose. There is nothing unreasonable or unjust in the application of the Act in this case. The Respondent’s circumstances are difficult and he must be very careful financially. There is no doubt, however, that the Respondent’s circumstances cannot be considered exceptional when considered in relation to others in similar situations depending on social security payments for their income. The Respondent is to some extent, at least, the architect of his own misfortune. Unlike many others in similar situations he has unencumbered assets of significance and has some capacity to repay his debt to the Commonwealth. Requiring him to do so, in accordance with the objects of the compensation recovery provisions and the principle of liability the Act establishes; is neither unjust nor unfair in the circumstances.
59. The Tribunal is not persuaded by the Respondent’s submissions that the decision of the SSAT should not be set aside. The Tribunal is satisfied that it is not appropriate to enliven the discretion in the special circumstances of this case to relieve the Respondent of his liabilities under the Act and reduce the preclusion period.
60. The Act requires that in cases where lump sum compensation is received, the payment of compensation affected payments will be precluded for a period and, allows for the reduction of the length of the period that would result from a strict application of section 1170 of the Act in special circumstances. In this case the circumstances do not warrant exercise of the discretion to provide relief from the effect of section 1170 of the Act.
DECISION
61. The Tribunal decides to set aside the decision under review and, in substitution therefor, decides a lump sum preclusion period applies from 11 December 1999 to 10 October 2003 and it is not appropriate, in the circumstances, to disregard any part of the lump sum compensation payment to the Respondent.
I certify that the 114 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb
Signed: Georgie Zuzak
AssociateDate/s of Hearing 20 March 2003
Date of Decision January 2003
Advocate for the Applicant Ms M Buckley
Counsel for the Respondent Self-represented
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