Ryan and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 1126
•17 December 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 1126
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/5206
GENERAL ADMINISTRATIVE DIVISION )
Re DEBORAH RYAN Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr R G Kenny, Member Date17 December 2008
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
..................[Sgd].........................
MEMBER
CATCHWORDS
SOCIAL SECURITY – Pensions, Benefits and Allowances – settlement of compensation claim – lump-sum compensation payment includes component referable to lost earnings and capacity to earn – imposition of preclusion period – special circumstances not established – no part of settlement treated as not having been received – preclusion period not shortened – decision under review affirmed.
Social Security Act 1991 (Cth) ss 17, 1169, 1170, 1184K
Secretary, Department of Social Security v Smith (1991) 23 ALD 277
Secretary, Department of Family and Community Services v Allan (2001) 66 ALD 147; [2001] FCA 1160
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Re Secretary, Department of Social Security and VYS (1995) 40 ALD 745
Re Hajar and Department of Social Security (1988) 16 ALD 716
Re PGVK and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2008) AATA 381
Director-General of Social Services v Hales (1983) 47 ALR 281
Re Secretary, Department of Family and Community Services and Spencer [2004] AATA 248
Re Nguyen and Secretary, Department of Family and Community Services [2004] AATA 249
Re Secretary, Department of Family and Community Services and Pearce [2003] AATA 972
Re Males and Secretary, Department of Family and Community Services [1999] AATA 863
Re Secretary, Department of Family and Community Services and Rankin [1999] AATA 496
Re Secretary, Department of Family and Community Services and Peak [2003] AATA 1212
Re Secretary, Department of Family and Community Services and Jones [2003] AATA 505
Re Stavrakis and Secretary, Department of Family and Community Services [2003] AATA 212
Re Davis and Secretary, Department of Family and Community Services [1999] AATA 84
REASONS FOR DECISION
17 December 2008 RG Kenny, Member
BACKGROUND
1. On 21 March 2007, Deborah Ryan entered into a Deed of Release (“the Deed”) in which she agreed to accept a sum of money in full and final settlement of a common law claim against her former employer in respect of a work-related injury incurred on 23 June 2003. On 3 April 2007, a Centrelink delegate determined that, as a result of Miss Ryan’s receipt of those monies, she was subject to a preclusion period from 23 March 2007 until 12 May 2011. The effect of that decision was that Miss Ryan was precluded from receiving all forms of income support payments under the Social Security Act 1991 (“the Act”). This included disability support pension for which she completed a claim form on 2 November 2007.
2. The decision to impose the preclusion period was affirmed by an authorised review officer on 14 March 2008. On 23 May 2008, the Social Security Appeals Tribunal (“the SSAT”) also affirmed the decision. Miss Ryan now seeks review of that decision by the Administrative Appeals Tribunal (“the Tribunal”).
ISSUES AND LEGISLATION
3. Where a person receives certain compensation monies which include a component referable to lost earnings or lost capacity to earn, provision is made for the imposition of a period during which further such payments are precluded. Miss Ryan does not dispute the application of the relevant provisions of the Act concerning the imposition of and the duration of the preclusion period imposed upon her. These provisions are set out in ss 17, 1169 and 1170 of the Act. The issue raised by Miss Ryan relates to the operation of s 1184K(1) of the Act which makes provision for disregarding part or all of the lump-sum payment. This will result in the shortening of the applicable preclusion period. It reads:
“s1184K Secretary may disregard some payments
(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.”
EVIDENCE
4. Miss Ryan gave the following evidence. The compensation payment under the Deed was for $275,000 of which, after legal costs were deducted, she retained approximately $200,000. Previously, she had received the sum of $40,000 for the same injury. She agreed that her expenses since the receipt of her compensation monies were listed in her statement, dated 20 February 2008. These are: $17,000 for a car; $5,000 for car modifications; $2,000 for car insurance; $10,000 for holidays; sums of $10,000, $5,000 and $2,000 for repayment of loans to three friends; $3,000 to Centrelink; and the rest in gambling at various clubs and casinos. She said that she has virtually no money and that she had been in that position since November 2007 when she applied for the disability support pension.
5. Miss Ryan said that she had always had a desire to play poker machines and did so, from time to time, before she received her compensation payment but had always remained within her budget limits. However, when she received the compensation payment, this changed. She socialised much more, enjoyed holidays, purchased items that she had wanted and frequented clubs and casinos with friends. She regularly lost money, was conscious that her account was being depleted but always thought that she would win the money back. She agreed that she had spent a total of $200,000 in approximately 28 weeks. She received no formal counselling in relation to the preservation of her monies although she did speak about this with certain elders in her church. She had also consulted a psychologist at about the time of receiving her compensation payment.
6. Miss Ryan lived with her son in Sydney during 2007 and until about June 2008 when their arrangement broke down. When her money had been spent, she had relied upon him to cover her costs of living. After June 2008, she moved to Childers in Queensland where she is now living with distant cousins. They were aware of her situation but have allowed her to stay with them. Miss Ryan said that she has attempted to find work but has been unsuccessful as she is hampered by the constant pain from her spinal and leg injuries, for which the compensation payment was made. She said that she also feels depressed. She does not see a doctor currently because of her financial situation and takes no medication for depression.
7. In September 2006, prior to receiving her compensation payment, Miss Ryan purchased a 1992 model Nissan Skyline GTS. As noted above, in her statement of expenses, she said that she paid $17,000 for it. In her evidence, she agreed that her son’s car was used as a trade in and that she borrowed $16,000 from a friend, promising to repay him when she received her compensation payment. When asked why she purchased such a vehicle, she said that it was “the only one she could get”. It was a turbo-charged vehicle and she purchased parts for the turbo ($349) and for the exhaust system ($520) in February 2007 from a performance parts supplier. Other expenses on the car took the total spent on improvements to approximately $5,000 and insurance added a further $2,000.
8. Miss Ryan no longer owns the car as she gifted it to her son early in 2008. This was to reimburse him for assisting her with accommodation and living costs when she had no money left. When she came to Queensland, she also left with her son all of the furniture items she had purchased with the compensation payment. These comprised a television set, refrigerator, computer, washing machine, clothes dryer, DVD player, microwave oven and a playstation 3. When asked why she did not sell the car and other items, she said that this had not occurred to her.
9. Miss Ryan said that her solicitor had not given her any advice about the prospect of a preclusion period being imposed. However, she agreed that she was aware of the procedure because she had contacted Centrelink within a few days of receiving the compensation payment and was advised how a preclusion period would be calculated. She did this because her psychologist had advised her that the imposition of a preclusion period was likely. She also agreed that two Centrelink letters, dated 3 April 2007, advised her of the preclusion period and made it clear that she would not be in receipt of Centrelink benefits until 2011. She was referred to another Centrelink letter, dated 22 July 2003, which was shortly after her injury occurred. It also carried advice of the effect of a preclusion period.
10. Miss Ryan’s monies were held in an ANZ bank account. Her practice was to make cash withdrawals from an automatic teller machine (ATM) which also provided her with a receipt and an account balance after the transaction. She was not able to produce any such documentation or any other statement from the bank to confirm the state of her account. She said that her enquiries revealed that she would be required to pay $14 per page for a statement print-out and was unable to afford this. She agreed that the ANZ bank routinely sent statements to customers but she could not recall receiving these. She said that she had provided an ATM account balance receipt to the SSAT during her hearing there in order to demonstrate that there was almost no money left.
SUBMISSIONS
11. Miss Ryan, who was not represented, submitted that at least some of the compensation monies she received should be disregarded. She submitted that the special circumstances in her case were her state of health, her inability to obtain employment and her financial situation. For the respondent, Mr McQuinlan submitted that there were no special circumstances to justify the exercise of the discretion under s 1184K(1) of the Act.
CONSIDERATION
12. As noted above, Miss Ryan conceded that the provisions of the Act by which a formula is applied to compensation payments in order to calculate the length of a preclusion period have been properly applied. I am satisfied that her concession was properly made and that the preclusion period is from 23 March 2007 until 12 May 2011. The purpose of those provisions has been the subject of judicial comment. They have been described as operating as a:
“…..fair balance of the interests of the recipient of the payment with the competing interests of others in the community whose needs must be met as far as possible from a finite budget allocation for social security measures[1]”
[1] Secretary, Department of Social Security v Smith (1991) 23 ALD 277 at 281-282 per von Doussa J.
13. Similarly, they have been described as a safeguard against “double dipping” in that:
“People should not receive social security payments for loss of earnings where they have received compensation for that same loss of earnings from another source[2]”.
[2] Secretary, Department of Family and Community Services v Allan (2001) 66 ALD 147 at 148 per Heerey J.
14. Those considerations must be kept in mind when determining, for the purposes of applying s 1184K(1) of the Act, whether or not special circumstances arise in a given case. The issue of special circumstances arises in various parts of the Act. In the context of other aspects of the Act, it was observed that what is required is:
“……something to distinguish... [the]… case from others, to take it out of the usual or ordinary case. ……. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary[3]”.
[3] Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 per Kiefel J.
15. That observation is equally applicable to s 1184K(1) of the Act. Accordingly, there must be something about the applicant’s situation which makes it “unusual” or “uncommon” such that it distinguishes it from the ordinary or usual case.[4]
[4] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 at [33].
16. I note Miss Ryan’s evidence that she was not given advice by her solicitor about the preclusion period. There have been cases where a legal adviser’s failure to properly advise a person in Miss Ryan’s position has given rise to an exercise of discretion under s 1184K(1) of the Act[5]. Generally, however, this will not be the case on the basis that it is a matter between client and solicitor[6]. In Miss Ryan’s case, I am satisfied that absence of advice from the solicitor is not a special circumstance because she was well aware that a preclusion period would be applied to her as a result of her Centrelink contact on 27 March 2007, some 6 days after the settlement. A copy of the file note recording that advice was in evidence. I am also satisfied that she was aware of the details concerning the effect of and duration of the preclusion period as a result of letters sent to her on 3 April 2007. This was less than two weeks after the settlement. Again, copies of those letters were in evidence and they also include information about obtaining free, expert information from Centrelink’s Information Service Officers to assist her in making informed decisions about her compensation payment. Miss Ryan did not utilise that free service as she believed that she would be able to manage her own affairs.
[5] Re Secretary, Department of Social Security and VYS (1995) 40 ALD 745.
[6] See Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716.
17. I have concerns about aspects of Miss Ryan’s evidence. She demonstrated significant reluctance in providing details about several matters to an extent that casts doubt on her reliability as a witness. These included the circumstances surrounding the car she purchased in September 2006, her current living arrangements, the disposal of her furniture items and her current financial status.
18. The documents relating to Miss Ryan’s purchase of the car in September 2006 were in evidence. The vendor was “Prestige High Performance T/as JapStyle” and the stated price is given as $11,000 with a trade-in value of $1,000 for the vehicle of Miss Ryan’s son. That level of expenditure is not the amount given by Miss Ryan in relation to the car in her statement of expenses or in her evidence. There, she listed the cost as $16,000. That was also her evidence. Further, if she did borrow $16,000, as she said in her evidence, she did not refer to that loan repayment in the schedule of expenses even though it was significantly higher than the three loan repayment amounts that she did refer to. Miss Ryan said she did not wish to identify the person from whom she borrowed the purchase money for the car. However, the amount could have been identified by her without attributing it to any particular individual.
19. Miss Ryan showed inexplicable hesitation and reluctance when giving evidence about her current living arrangements. At one stage, she said that she does not have anything to do with her family but, subsequently, she described the people who took her in after she left her son’s house as her cousins. She then qualified this by describing them as “distant cousins”.
20. The breadth of the discretion in s 1184K(1) of the Act is such as to accommodate health problems and an inability to return to work. Miss Ryan described herself as being depressed but there is no medical evidence before me to enable any evaluation of her mental health to be made. I note that she is not taking medication for that condition. Miss Ryan referred to constant pain which distresses her and which precludes her from obtaining employment. Those consequences are directly related to the injuries for which she was compensated. It is not an unusual or uncommon consequence that the compensated conditions would lead to the outcomes described by Miss Ryan[7] in order to enliven the discretion under s 1184K(1) of the Act.
[7] See Re PGVK and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 381.
21. It was submitted that financial hardship is a relevant consideration in this matter. This will not generally constitute a special circumstance unless the financial hardship goes beyond straitened circumstances and is truly exceptional[8]. In regard to Miss Ryan’s present financial status, I am in the same position as was the SSAT which declared that it had no documentation to confirm that there was no money available to her. Miss Ryan’s assertion that she provided an ATM receipt and account balance to the SSAT is not consistent with the SSAT’s reference, in its published reasons, to a complete absence of documentation before it about her finances. Mr McQuinlan advised that a search of Miss Ryan’s Centrelink file revealed no such documentation.
[8] Director-General of Social Services v Hales (1983) 47 ALR 281 at 321.
22. Given Miss Ryan’s evidence that she had no money when she left Sydney to come to Queensland, I do not accept that the prospect of selling her car and/or furniture did not occur to her. Miss Ryan may well have gifted her car and furniture items to her son. However, I do not accept that she did so in consideration of his covering her living expenses for approximately seven or eight months only. In any event, the gifting of furniture by Miss Ryan must have occurred after the SSAT hearing because, at that time, she was still living with her son. This means that, at a time when she was arguing that she should be paid public monies, Miss Ryan had an available resource which she chose not to realise.
23. There have been cases where financial hardship brought about through gambling losses has been found to satisfy the terms of s 1184K(1) of the Act. With many of these, there existed a psychiatric condition which compelled the gambling[9] or state of intoxication during which the gambling occurred[10]. There is no evidence of any underlying pathological basis for Miss Ryan’s continuation of gambling and I am satisfied that her gambling losses do not amount to a special circumstance under s 1184K(1) of the Act[11].
[9]Re Secretary, Department of Family and Community Services and Spencer [2004] AATA 248; Re Nguyen and Secretary, Department of Family and Community Services [2004] AATA 249; Re Secretary, Department of Family and Community Services and Pearce [2003] AATA 972.
[10] Re Males and Secretary, Department of Family and Community Services [1999] AATA 863.
[11] See Re Secretary, Department of Family and Community Services and Rankin [1999] AATA 496; Re Secretary, Department of Family and Community Services and Peak [2003] AATA 1212; Re Secretary, Department of Family and Community Services and Jones [2003] AATA 505; Re Stavrakis and Secretary, Department of Family and Community Services [2003] AATA 212 at [19]; and Re Davis and Secretary, Department of Family and Community Services [1999] AATA 84.
24. When considering the discretion in s 1184K(1) of the Act, all relevant circumstances are to be taken into account[12]. Of particular significance in this matter is the unsatisfactory state of aspects of Miss Ryan’s evidence as noted above. I am satisfied that there are no circumstances, either individually or in conjunction with each other, that are special such as to meet the requirements of s 1184K(1) of the Act.
[12] Re Davis and Secretary, Department of Family and Community Services [1999] AATA 84.
DECISION
25. The Tribunal affirms the decision under review.
I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member
Signed: ..................[Sgd]......................................................
Elizabeth Young, Research AssociateDate/s of Hearing 1 December 2008
Date of Decision 17 December 2008
Applicant was self-represented
For the Respondent Mr Rick McQuinlan, Departmental Advocate
2
13
0