Richards and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2013] AATA 167

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/1802
Re	Terence Richards
APPLICANT
And	Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT

DECISION

Tribunal	G. D. Friedman, Senior Member
Date	8 February 2013
Date of written reasons	25 March 2013
Place	Melbourne

The Tribunal affirms the decision under review.

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G. D. Friedman, Senior Member

SOCIAL SECURITY – Compensation preclusion period – Whether able to waive any part of the compensation preclusion – Whether special circumstance s exist

Social Security Act 1991 ss 17(2), 17(3), 1165, 1166, 1163(1), 1184(K)(1), 1237A

REASONS FOR DECISION

G. D. Friedman, Senior Member

25 March 2013

EXTRACT OF TRANSCRIPT PROCEEDINGS [10.20 AM]

G. D. FRIEDMAN, SENIOR MEMBER: This is somewhat an of unusual case because it is a compensation preclusion period matter where the preclusion period finished back in 1995 and the applicant Mr Richards has been receiving disability support pension payments since 1996. In normal cases when there has been a settlement following an injury and a compensation preclusion period the person in those circumstances has spent the money and then has claimed social security benefits on the basis that they have no income.
So this is slightly different, but there is no real dispute about the facts in this matter, and they are that in 1997 Mr Richards settled a claim for compensation with the Transport Accident Commission (TAC) for $325,000 in relation to injuries he received in an accident in 1985. Following that settlement the respondent in this case, Centrelink, decided that a compensation preclusion period applied to Mr Richards’ social security payments from 25 October 1987 to 22 July 1995. In 1997 Centrelink wrote to the TAC to recover an amount of $41,352.78 which was the amount of social security payments paid to Mr Richards between 1987 and 1995. That amount was to be recovered and the overpayment was repaid to the Commonwealth and an authorised review officer in 2011 confirmed the original decision stating that the compensation preclusion period was calculated correctly and an outstanding amount of $5,824.90 which was an additional debt to the Commonwealth was waived under section 1237A of the Social Security Act 1991 (The Act).
Mr Richards later applied for review of the decision; he applied to the Social Security Appeals Tribunal and he said when applying that the compensation preclusion period should be less because during the period he worked and paid tax on benefits between 20 December 1987 to 6 November 1990. He also did not claim any sickness benefits during that period and did not claim any benefits until his payments ran out in 1991.
The Social Security Appeals Tribunal affirmed the decision under review on 13 April 2012 and Mr Richards appealed to this Tribunal for review. He told me that the period that he worked until 1991 should not have been taken into account because he paid his taxes up till then and the fact that he was insured by the TAC meant that they should have to pay for ongoing medical treatment which they did not pay as it was not part of the original settlement of $325,000.
Now, I need to determine whether the lump sum compensation payment affected Mr Richards’ entitlement to social security payments and the length of the compensation preclusion period. I also have to decide whether Mr Richards was paid in excess of his entitlement; if so, was there any reason, or is there any reason why the excess amount should not be recovered and whether all or part should be waived under section 1237A of the Act.
Mr Richards did not dispute the calculation of the compensation preclusion period which is set out in section 1163(1) of the Act as at 8 May 1997. Section 17(2) defines compensation and section 17(3) refers to compensation part of a lump sum and the preclusion period is set out in section 1165 and 1166. I am satisfied that the calculations of the compensation preclusion period are correct and that the compensation preclusion period is, or was, from 25 October 1987 until 22 July 1995.
The question that arises then is whether any part of the compensation preclusion period should be waived or as of 13 April 2012 whether special circumstances apply under section 1184K(1) of the Act which provides that the Secretary, or in this case the Tribunal, may treat the whole or part of the compensation payment as a) not having been made or b) not liable to be made if the Secretary or the Tribunal thinks it appropriate to do so in the special circumstances of the case. Section 1237A of the Act states that subject to subsection 1A the Secretary or the Tribunal must waive the right to recover the proportion of a debt, that is attributable solely to the administrative error of the Commonwealth, if the debtor received in good faith a payment or payments that gave rise to that proportion of the debt.
I have already said that, in my view, the amount of the debt and the calculations are correct; the question remains should any of the overpayment be waived.
Mr Richards has told me that the matters I should take into account with regard to whether special circumstances exist under section 1184K(1) are that he (in material provided to the Social Security Appeals Tribunal) spent the lump sum from his compensation on buying a house. He has told me today that the property is subject to foreclosure because he cannot maintain the interest payments on the mortgage because his sole source of income is the disability support pension.
He also told the Social Security Appeals Tribunal that he invested some of the money that was subsequently lost by investment managers. He told me today that he has a number of medical conditions including his back pain and Parkinson’s disease. He said he has had a number of surgeries, a spinal cord stimulator implanted and spinal scoliosis. He also said that as a result of the possible foreclosure or sale of his home he will essentially be ‘out on the street’. At some stage he was living with his son and his family, but as I understand it today, that is no longer the case.
Therefore, he says that those factors constitute financial hardship plus the actions by the TAC in not including the ongoing medical expenses in the settlement amount. In dealing with the second issue first, while it’s true that it appears that there was no allowance in the settlement amount of $325,000 for ongoing medical expenses I agree with Mr Blunt that it would appear that that is an issue negotiated between the solicitors for Mr Richards and the solicitors for the TAC at the time of the settlement.
I am aware from Mr Richards that he has approached various lawyers, regulatory authorities, and other people to complain and to try to rectify that problem. He believes he should not have been left with ongoing medical expenses that were taken out of the settlement money and accordingly reduced the settlement money considerably and has been a large contributing factor to the situation he finds himself in today.
Although I have some sympathy for Mr Richards with regard to that issue, I agree with Mr Blunt to the extent that that really was a matter for negotiation between the respective solicitors. It is not really a matter for Centrelink and consequently it cannot be a matter for me because all I have before me is a settlement amount and a compensation preclusion period that is based on the settlement amount according to the Act. Despite sympathy that I do have for Mr Richards in that regard, in my view, the legislation and the provisions of the legislation require me to consider the compensation preclusion period on the basis of the settlement amount that was paid to Mr Richards.
Now, that leads into the second matter of special circumstances and Mr Richards would ask me to consider that matter as part of the special circumstances plus his financial situation and his medical situation. Unfortunately, the cases that have come before this Tribunal and the courts indicate that for special circumstances to apply there needs to be something exceptional, unusual or uncommon that would assist a court or tribunal in determining that there are special circumstances. There is no doubt that Mr Richards suffers from a range of medical issues and that he does have financial difficulties. I do not believe that I am able to take into account the issue of the TAC settlement as a special circumstance other than looking at his overall situation. While his financial and medical situation is certainly grim, he is receiving a disability support pension, which, as I said at the outset, is unusual in compensation preclusion cases, where applicants are generally receiving no benefits.
Whilst I accept Mr Richards’ evidence that he is struggling financially he does, in fact, have some income, albeit only at the disability support pension level and the cases do indicate that whilst medical issues and financial issues are relevant they do not necessarily constitute special circumstances. In this case I find that despite the medical conditions and despite the financial issues they are not enough to persuade me that those factors alone are sufficient to make a finding that special circumstances exist. I also take into account that a decision unfavourable or adverse to Mr Richards today would not require the repayment of any money by him to Centrelink as the amount has already been repaid and has come out of the settlement money.
So for all of those reasons I find that special circumstances do not exist in this case. Therefore, I am not going to shorten the preclusion period under section 1184K (1) or waive any of the outstanding amounts. Consequently, I am going to affirm the decision under review and, Mr Richards, whilst I have sympathy for you, I am unable to assist you today.
END OF TRANSCRIPT

I certify that the preceding 16 (seventeen) paragraphs are a true copy of the reasons for the decision of G. D. Friedman, Senior Member.

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Associate

Dated 25 March 2013

Date of hearing	8 February 2013
Applicant	In person
Advocate for the Respondent	Andrew Blunt
Solicitors for the Respondent	Australian Government Solicitor

[2013] AATA 167

8 February 2013