Ruperez and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 231
•25 March 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 231
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2006/601
GENERAL ADMINISTRATIVE DIVISION ) Re CARLOS RUPEREZ Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms Robin Hunt, Senior Member Date25 March 2008
PlaceSydney
Decision The decision under review that no part of the compensation payment made to Mr Ruperez should be disregarded is affirmed.
.................. [Sgd]........................
Ms Robin Hunt
Senior Member
CATCHWORDS
SOCIAL SECURITY – lump sum compensation payment - preclusion period - no "special circumstances" – no exercise of discretion to treat part of the compensation payment as not having been made - decision affirmed.
Social Security Act 1991 s 17, 1169, 1170 and 1184K(1)
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Secretary, Department of Employment and Workplace Relations v Homewood [2006] FCA 779
Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690REASONS FOR DECISION
25 March 2008 Ms Robin Hunt, Senior Member SUMMARY
1. Mr Ruperez sustained extensive injuries in a motor cycle accident on 17 February 1999, for which he received lump sum compensation in 2002. A Centrelink delegate calculated that Mr Ruperez was subject to a compensation lump sum preclusion period of 390 weeks, commencing on 14 February 2002 and extending until 5 August 2009. This meant that Mr Ruperez would not be entitled to receive social security payments until 5 August 2009. Centrelink later varied the end date from 5 August 2009 to 16 April 2008 and the Social Security Appeals Tribunal affirmed the decision to impose the preclusion period. Mr Ruperez asked that all or part of his lump sum be disregarded, in his special circumstances, so that he would be eligible to receive social security assistance sooner. After considering Mr Ruperez’s circumstances, I have agreed with the decision not to disregard the lump sum payment. This means Mr Ruperez has not been successful in the review. My reasons are set out below.
DECISION REVIEWED
2. The decision which Mr Ruperez has asked this tribunal to review is that of the Social Security Appeals Tribunal (SSAT) dated 21 April 2006, which affirmed a decision made by a Centrelink Authorised Review Officer on 19 December 2005 to impose a compensation lump sum preclusion period from 14 February 2002 until 16 April 2008.
ISSUE
3. I must decide whether special circumstances exist in Mr Ruperez’s case, which warrant waiving part or all of the compensation preclusion period.
BACKGROUND
4. The background to this case is set out in the respondent’s Statement of Facts and Contentions. Before he received an amount of compensation as a result of the motor cycle accident, Mr Ruperez received disability support pension from 29 September 2000 until 2 November 2001. On 26 September 2001, Centrelink sent Mr Ruperez’s solicitors a letter in response to their query about the effect on Mr Ruperez if he accepted a settlement offer of $600,000. Centrelink replied advising that, based on payment of $600,000, Centrelink estimated that Mr Ruperez would be subject to a compensation preclusion period between 29 September 2000 and 1 September 2009.
5. On 21 January 2002, Mr Ruperez accepted the offer of a lump sum payment of $450,000. Mr Ruperez signed the offer document, a copy of which is included in the Centrelink records. It contains a clause acknowledging that he was subject to a preclusion period during which he might not receive any benefits from Centrelink in the future. Another clause of the settlement document was to the effect that Mr Ruperez understood that he would receive $230,000 after the payment of various expenses already incurred such as legal costs, health and medical expenses and a debt to Centrelink.
6. After Mr Ruperez agreed to accept this settlement sum, a Centrelink delegate imposed a compensation preclusion period from 14 February 2002 to 5 August 2009 and advised Mr Ruperez of this by letter, dated 21 February 2002. The Centrelink records show that, on 21 February 2002, Centrelink also wrote to Mr Ruperez’s solicitors.
7. As is usual in compensation cases, Mr Ruperez did not receive the whole of the settlement sum but some of it was used to repay expenses already incurred in connection with his claim. On 4 March 2002, the solicitors for Mr Ruperez received a cheque for $306,459.05 from an insurance company. This was the total settlement figure of $450,000 less a 10% advance to the Health Insurance Commission, workers compensation payback and $20,000 which had already been advanced to Mr Ruperez. On 7 March 2002, the solicitors wrote to Mr Ruperez advising him that they had received the cheque. This letter also referred to $4,956.36 already advanced to Mr Ruperez for travelling expenses, accommodation and plane fares.
8. A copy of the solicitor’s trust account statement addressed to Mr Ruperez indicates that they disbursed on his behalf an amount of $306,459.05 on 7 March 2002 as follows:
$ 1,232.00 Paid to Mr Ruperez’s previous solicitor
$150,000.00 Paid to Mr Ruperez’s mother, Amparo Moreno-Chacon
$ 31,000.00 Paid to Mr Ruperez’s mother, Amparo Moreno-Chacon
$124,227.05 Paid to his solicitors for costs and disbursements
$306,459.05
9. On 8 July 2002, Mr Ruperez telephoned Centrelink and requested review on the basis of financial hardship. Centrelink sent Mr Ruperez a ‘Statement of Financial Circumstances’ form to complete in order to explain how his settlement money had been spent. Mr Ruperez told Centrelink that he wanted a pension so he could go to Spain for rehabilitation and further medical treatment. He said he gave his mother $150,000.00 to go to Spain to prepare his medical treatment. Mr Ruperez said he spent a further $15,149.67, paying for his carer to travel from Queensland to South Australia in order to relocate, plus he had paid airfares and bought luggage for his trip to Spain. He also had repaid a loan to his sister and spent more funds on everyday necessities. Copies of documents on the Centrelink file show that, on 11 May 2002, Mr Ruperez purchased a Singapore Airlines return airfare for travel from Adelaide to Madrid on 1 September 2002, at a cost of $6,249.67.
10. Mr Ruperez left Australia to reside in Spain in October 2002, according to a dual English/Spanish Centrelink pension claim form, bearing a receipt date stamp of 26 October 2004. Mr Ruperez lodged the claim for an Australian pension in Spain which was received by Centrelink’s International Services Branch on 7 March 2005, according to another date stamp.
11. On 11 March 2005, Centrelink sent Mr Ruperez additional forms to complete with respect to his further claim for a disability support pension. However, he was not eligible because of the preclusion period and Centrelink informed him of this. Mr Ruperez sought internal review of Centrelink’s decision by letter Centrelink received on 5 August 2005. On review, a Centrelink delegate varied the length of the compensation preclusion period, reducing the end date from 5 August 2009 to 16 April 2008, on the basis that the workers compensation charge of $78,540.95 should have been deducted from the total amount of compensation awarded before applying the provisions that govern calculation of the preclusion period.
12. On 21 April 2006, the SSAT affirmed the decision to impose a compensation lump sum preclusion period from 14 February 2002 until 16 April 2008. Mr Ruperez then lodged an application with the Administrative Appeals Tribunal seeking further review. On 20 October 2006, Mr Ruperez wrote to the tribunal asking for a decision on his application without proceeding to a hearing. On 13 August 2007, the tribunal received a further letter from Mr Ruperez outlining the history of his application and providing information about his current circumstances. Mr Ruperez was self-represented.
MR RUPEREZ’S EVIDENCE
13. In his letter to this tribunal, received on 13 August 2007, Mr Ruperez wrote: “I gave the money to my parents to go to Spain to organise my rehabilitation”. He also explained that his parents organised modifications to a house to suit him in view of his disabilities. Mr Ruperez said he had decided on this course before he accepted the settlement offer. He claimed his solicitor advised he was within his rights to purchase a house because of his medical condition.
14. Mr Ruperez wrote that he could not remember the motorcycle accident but the police told him it was not his fault. He was told later he was comatose when put into the ambulance and taken to casualty. When he awoke, a student doctor said he had to leave hospital. He said the hospital staff rang a taxi and a friend of his and sent him away without even an aspirin for the pain. He said he could hardly walk, kept falling down, could hardly see and that light was very painful. All he could see was a rose colour and everything looked like broken glass, like a kaleidoscope.
15. Mr Ruperez then described the early days of his recovering. He lived in a flat. He said he had no painkillers so he drank alcoholic drinks. He was in pain and confused when he put his case in the hands of solicitors. He received rehabilitation and other treatments but said this didn’t achieve much. He still had many problems trying to cope.
16. Mr Ruperez wrote about court cases and arbitration that took place. He claimed his solicitors said he could have received a very positive result if he hadn’t collapsed at one of these sessions. Later, he was offered an amount which he turned down. He said the last court hearing was held in his bedroom. He was in pain and told the solicitors to close the case. When he received some monies he did not understand some aspects to do with “the insurance barrister or solicitor”. He said:
Everything got out of hand because of my solicitors. The insurance company offered $450,000 with certain conditions that I had to sign if I agreed. I didn’t want to sign but my solicitor said that if I didn’t accept this deal, the judge was a negative judge towards me and that I would end up with nothing and I would (not) be able to go to Spain and rehabilitate myself.
17. Mr Ruperez finally accepted the offer after reading papers sent to his house. He said he rang the solicitor and asked what a preclusion period was. He acknowledged the solicitor said it was a certain amount of time that he would not be able to claim a pension but informed him it was only six months or when his money ran out.
18. After six months, when he applied for the pension, he said he was shocked to hear that he couldn’t claim it. He said that he had fought this with the help of the solicitors and had been fighting his case since. When he arrived in Spain, he found that there was no money left at all because his parents had bought a house and all the money was spent on this and his needs. He decided to stay in Spain because he could cope better there in the house which was fitted out to make his life a bit easier.
19. In Spain, he also wrote that he had a small “non-contributive pension” although this was very little for a person with disabilities. His parents left him and returned to Australia. They had put him in debt by buying the house in his name and taking out a loan he had to repay. So it had been very hard for him. He claimed he had not heard from any family member since.
20. He said he would love to work but was unable to do so. At the moment, he was losing a bit more weight so he could have a hip replacement and, in six months or so later, surgery on his other hip. He was using several medications which he named and which he said were mostly for pain. He said he got around on crutches and had difficulty with many things but had not given up. Mr Ruperez said he never fought against the preclusion period but asked for help because of his circumstances.
CONSIDERATION AND FINDINGS
21. Section 1169 of the Social Security Act 1991 provides that a ‘compensation affected payment’ is not payable to a person during a lump sum preclusion period. A disability support pension is a ‘compensation affected payment’ pursuant to section 17(1). The term ‘compensation’ is also defined under section 17(2). There is no material before me which suggests the lump sum compensation payment agreed to by Mr Ruperez is outside these provisions. This means he cannot be paid disability support pension for a period calculated in accordance with further provisions under the Act.
22. In this connection, section 1170 sets out rules for calculating the number of weeks that a compensation lump sum preclusion period applies. In other words, the length of time over which a person who receives a lump sum compensation payment is restricted from receiving a compensation affected payment is calculated in accordance with this section. Mr Ruperez has not disputed the correctness of the calculation of the preclusion period. Rather, Mr Ruperez has drawn attention to his unfortunate circumstances since he moved to Spain and continues to suffer the consequences of his motor cycle accident. He asked that part of his lump sum be disregarded so as to reduce the preclusion period because he believes that special circumstances exist in his case.
DISCRETION TO DISREGARD PART OF THE LUMP SUM
23. There are provisions under the Act which permit relief from the strict application of the compensation preclusion period where there are special circumstances. Section 1184K(1) of the Act reads:
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.
24. The phrase ‘special circumstances’ is not defined in the Act, however, it has been considered on a number of occasions in the context of the compensation preclusion period as well as in other situations. In order to be special, the circumstances must be out of the ordinary and different from the circumstances of other persons who apply for social security assistance. The Macquarie dictionary gives several meanings of “special”, beginning with “of a distinct or particular character” and including “different from what is usual or ordinary”. It also gives as meanings, “extraordinary” and ”exceptional”.
25. Along these lines, the tribunal case of Re Beadle and Director-General of Social Security (1984) 6 ALD 1, Toohey J presiding, is often mentioned with approval and the passage below followed:
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 have a particular quality of unusualness that permits them to be described as special.
26. In Secretary, Department of Employment & Workplace Relations v Homewood[2006] FCA 779 at [34], French J explained how best to exercise the special circumstances discretion contained in section 1184K of the Act. He recommended three steps. Firstly, identify circumstances of the case which are ‘special’ and the reasons for arriving at that finding. Secondly, explain why it is appropriate to treat the whole or part of the compensation payment as not having been made. Then, explain the selection of the particular amount disregarded under the section. In accordance with these judgments, I have first considered whether Mr Ruperez’s circumstances are special before moving onto any further steps in the process of considering the discretion available to me.
27. In identifying any circumstances that are special, I note that Mr Ruperez claims he has no funds left from his compensation award and has expenses he cannot meet. He owns a house in Spain in which he lives but he has to repay a loan taken out to acquire the house. He continues to have severe medical problems which require treatment. He is receiving little help from other sources apart from a small Spanish pension and assistance from a charity. Mr Ruperez is unhappy with the legal advice he received and says he would not have agreed to the settlement if he had fully understood the consequences. Below, I have analysed his main contentions taking into account any poor legal advice, adverse financial circumstances, ill health and continuing medical treatment.
Poor legal advice
28. I have considered Mr Ruperez’s claim that he was given inadequate legal advice. Mr Ruperez states that his solicitor did not tell him how long his compensation preclusion period would be, leaving him thinking it would be shorter. He also claimed his solicitors did not adequately prepare his case and were not able to respond to questions from the judge about an earlier compensation claim he had made in 1983. It is not clear how this would have affected his later claim.
29. He also says, when the insurance company offered him $450,000, his solicitors placed great pressure on him to accept this offer, telling him that it was possible that he would end up with nothing. It is true that all litigation involves an element of uncertainty. Nevertheless, I accept that it is possible that Mr Ruperez did not get adequate advice and representation or that he was so unwell as not to understand fully what he was agreeing to.
30. I consider it unlikely that Mr Ruperez was given incorrect advice about the preclusion period. As to other advice Mr Ruperez had available, I note the settlement document Mr Ruperez signed on 21 January 2002 contained a clause to the effect that Mr Ruperez understood he would be subject to a compensation preclusion period during which he might not be able to receive any benefits from Centrelink. As well, his solicitors had written to Centrelink ahead of the settlement asking about the effect of the preclusion period rules and had a reply. Centrelink wrote and provided an estimate of the preclusion period should Mr Ruperez be awarded $600,000. This suggests Mr Ruperez’s solicitors sought information from Centrelink in order to better advise him about the implications of accepting an offer. Centrelink also wrote directly to Mr Ruperez on 21 February 2002 advising him. These surrounding circumstances do not convince me that he was as badly informed as he suggests.
31. If some blame should be attached to his solicitors, Mr Ruperez might take action against them rather than ask the taxpayer to make up any loss. A solicitor who has given poor advice may be liable for damages for negligent advice. I appreciate that such action would be difficult for Mr Ruperez to pursue as he is in Spain However, as I am not convinced that his solicitors did give him poor advice or fail to inform properly of the effect of the preclusion period provisions, I have not placed a great deal of weight on this contention in deciding how exceptional Mr Ruperez’s circumstances are.
Financial Hardship
32. I accept that Mr Ruperez is suffering financial hardship although he has not provided substantiation of most of his claims. After expenses borne out of the settlement were deducted from the award, Mr Ruperez was still left with a substantial amount for the future. As the Secretary has pointed out in the written contentions, in order to qualify as special circumstances, financial hardship must be beyond ‘straitened’ circumstances and be truly exceptional. Although financial hardship may be grounds for finding special circumstances, the tribunal has generally taken this into account as part of overall circumstances. For an example, see Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690.
33. Mr Ruperez’s exact financial circumstances are not clear. Taking into account the information he has furnished, I note he owns his own home, which has been modified to accommodate his disabilities. He is currently receiving a Spanish non-contributory pension and receives some charitable assistance. He told the Social Security Appeals Tribunal that he relies upon charities to meet his expenses and, in earlier correspondence, said he receives 267 Euros per month from a charitable organisation. He says his income is not adequate to meet his needs as a disabled person. Mr Ruperez states that his parents left him with a 3000 Euro debt that will take him until 2009 to repay. I note that the preclusion period ceases on 16 April 2008 and he may be eligible for assistance thereafter.
34. Mr Ruperez has not provided details of his outgoings on a weekly or monthly basis. The Social Security Appeals Tribunal suggested that Mr Ruperez could take in a lodger to help meet his expenses and Mr Ruperez stated, in his application for review, that he has a boarder who helps with his housework in exchange for free accommodation. This may mean he cannot also accommodate a boarder but he has not explained if this is so.
35. In summary, Mr Ruperez’s financial circumstances are very difficult but he receives a basic Spanish pension and owns his own home, which, as the respondent points out, places him in a better position than many disability support pension recipients. In my view, this means his financial circumstances are not so unusual as to warrant the exercise in his favour of the discretion pursuant to section 1184K of the Act. Again, I do not accept that the financial position is a special circumstance unless there are more substantial difficulties facing Mr Ruperez overall.
Ill Health
36. Mr Ruperez also is in very poor health but this is to be expected after his motor cycle accident and is why he received an amount of compensation. In addition, ill heath alone is not enough to constitute a special circumstance.
37. Mr Ruperez states that he continues to experience pain, especially upon movement. He states he has limited mobility and walks with crutches. He cannot bend forward or to the side so is unable to tie his shoelaces, even though he has recently lost some weight. Medical records refer to him being overweight previously. Mr Ruperez states that when he loses weight he will be able to have hip replacement surgery. Mr Ruperez states that his medical condition will continue to deteriorate with age, which I accept is likely in most situations but Mr Ruperez has not provided medical evidence to substantiate this claim or to show how he has or has not progressed. As well, he states that his current pain medication is working well.
38. Mr Ruperez has provided evidence of his medical state up to June 2006. Translations of medical certificates provided on 8 August 2006 span the period from July 2003 to June 2006. These confirm that Mr Ruperez is obese, suffers from sleep apnoea, generalised pain, posterior fibromyalgic symptoms, polyarthritis (especially in his hips) and that he is awaiting hip replacement surgery. Mr Ruperez’s most recent letter sets out that he is still trying to lose weight so he can have hip replacement surgery.
39. Dr Isabel Hernandez Bosque completed a treating doctor’s report on 9 September 2005. In this report, Dr Bosque stated that Mr Ruperez was capable of working up to seven hours per week. Mr Ruperez has not commented on this opinion unless it is this doctor to whom he refers when he says in his letter, received by the tribunal on 13 August 2007, that the consultation took 10 minutes. He also said in the letter that he would love to work and had tried to put his name down for work for people with disabilities but was not able to get “the ok from the doctors”. He also says “if the doctors don’t give you the all clear you can’t get a job”. He does not explain why he cannot get this certification and it is difficult to reconcile this assertion with Dr Bosque’s opinion. As he is waiting for hip replacement surgery when he loses weight, this may be part of the reason for his problems.
40. In my view, the difficulties he is experiencing are not out of the ordinary for a person who received the injuries for which he was compensated. In addition, he has some prospects of improvement if he loses weight and can already work part time in the opinion of one of his doctors. This leads me to find that Mr Ruperez’s poor health is not a special circumstance.
Other factors
41. As the respondent has suggested, the records of the Department show that when Mr Ruperez moved to Spain it was with the expectation that his parents would live with him in the house he had purchased in Spain and that his mother would care for and support him (T26/126-127). Mr Ruperez says his parents have now returned to Australia and he cannot afford to pay for a carer. Mr Ruperez has not explained why his parents decided not to live with him and help him. However, I note that he is receiving some help with housework from a boarder in exchange for free accommodation.
42. In my view, on balance, and taking all these circumstances into account, Mr Ruperez is in a difficult but not unusual situation apart from his living in Spain. This geographic factor, on its own, is not a circumstance which I consider gives rise to consideration of shortening of the preclusion period. His location still gives Mr Ruperez the benefit of medical attention and a house to suit his needs.
43. Unfortunately many people who have agreed to a lump sum settlement of compensation find themselves in a situation where the money has run out before the preclusion period expires. I see nothing exceptional or significantly different in Mr Ruperez’s case. No new circumstances have arisen that were not foreseeable when Mr Ruperez accepted the lump sum settlement. It is my view that Mr Ruperez’s circumstances are not overall “unusual, uncommon or exceptional” and do not warrant the exercise of the discretion in Mr Ruperez’s favour.
DECISION
44. The decision under review that no part of the compensation payment made to Mr Ruperez should be disregarded is affirmed.
I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Ms Robin Hunt, Senior Member
Signed: .............[Sgd]..............................................................
AssociateDate of Decision 25 March 2008
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