Salloum and Secretary, Department of Family and Community Services
[2004] AATA 742
•14 July 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 742
ADMINISTRATIVE APPEALS TRIBUNAL Nº V2004/487
GENERAL ADMINISTRATIVE DIVISION
Re: ADIB SALLOUM
Applicant
And: SECRETARY,
DEPARTMENT OF FAMILY ANDCOMMUNITY SERVICES
Respondent
DECISION
Tribunal: Mr B.H. Pascoe, Senior Member
Date: 14 July 2004
Place: Melbourne
Decision:The Tribunal varies the decision under review to the extent that the applicant is precluded from payment of compensation‑affected social security payments until 21 October 2005. In all other respects, the decision is affirmed.
(sgd) B.H. Pascoe
Senior Member
SOCIAL SECURITY — compensation lump sum – preclusion period – whether special circumstances – whether any part of compensation payment to be treated as not having been made
Social Security Act 1991
Secretary, Department of Social Security v Hulls and Others (1991) 22 ALD 570
REASONS FOR DECISION
14 July 2004 Mr B.H. Pascoe, Senior Member
This is an application to review a decision of the respondent on the basis that the receipt of a compensation lump sum payment precluded the applicant from payment of any compensation‑affected social security payments until 22 October 2005. This decision was affirmed by the Social Security Appeals Tribunal (SSAT).
At the hearing the applicant, Mr A. Salloum, was unrepresented and the respondent was represented by Mr D. Perdon, a Centrelink advocate. Evidence and submissions were given by Mr Salloum through an interpreter.
The facts of this matter are clearly set out in the SSAT decision and need not be repeated here in full. Briefly, the background is that Mr Salloum was injured in a work accident on 2 June 1997 and received weekly compensation payments until 29 October 1999. He then received disability support pension until he received a lump sum of $340,000 in settlement of his compensation claim on 17 August 2000. He was advised by Centrelink, by letter of 22 August 2000, that repayment of disability support pension of $6287.79 had been recovered from the insurer and that he would not be eligible to receive any further social security pension payment before 22 October 2005. The letter set out the basis for this preclusion period.
On 25 August 2003, Mr Salloum again made a claim for disability support pension on the basis that he had no money, was too ill to work and could not live on the carer payment and carer allowance received by his wife. Mr Salloum could account for $271.366 in expenditure of lump sum receipt and believed that the balance had gone on living expenses. The expenditure accounted for was:
Legal cost 24,400
Disability support pension repayment 6,287
Two overseas trips 32,000
Gift to brother 7,000
Overseas medical treatment for wife 4,000
New motor vehicle 42,700
Payout of home mortgage 25,219
Changeover cost of new home 109,160
New furniture 10,000
Painting, repairs, landscaping 10,600_______
$271,366
_______
His present home is free of encumbrance and valued at $360,000.
Mr Salloum acknowledged that he received the letter of 22 April 2000 and was aware of the preclusion period to 22 October 2003. However, he believed that he deserved consideration because he was now in a position of having no money, a substantial credit card debt and, particularly with higher costs of living, could not survive on the small pension income of his wife.
There was no dispute that the preclusion period was correctly calculated pursuant to s 1165 of the Social Security Act 1991 (the Act). The only difference is that it is one day out in that the starting day was said to have been 31 October 1999 whereas it should have been 30 October 1999, resulting in the last day being 21 October instead of 22 October 2005. Consequently, the only question for the Tribunal is whether any part of the compensation payment should be disregarded under s 1184K of the Act because of special circumstances. There have been many decisions of this Tribunal which demonstrate that to be special circumstances they must be circumstances that are unusual, uncommon or exceptional. Financial hardship in itself is not a special circumstance unless that hardship was brought about by exceptional circumstances, generally beyond the control of the individual concerned. Here, the great bulk of the money received in the compensation settlement was expended in a manner which was clearly discretionary.
There are two items of expenditure only which might be regarded as non‑discretionary. These are the legal expenses, said to have been $24,400, and overseas medical treatment, said to have been $4000. It is clear from the Federal Court decision in Secretary, Department of Social Security v Hulls and Others (1991) 22 ALD 570 that the legal expenses cannot be deducted from the lump sum received prior to the calculation of 50 per cent for the purposes of s 1165 of the Act and the payment of legal expenses is not unusual or out of the ordinary in claims for compensation so as to be regarded as special circumstances. Here, I am unable to see anything unusual, uncommon or exceptional in the amount of the lump sum expended in legal costs.
Mr Salloum said that the medical expenses were incurred in Lebanon while he and his wife were visiting Mrs Salloum's father. She experienced pain in her side and attended a hospital for an MRI scan. She was told that there was a possible cancer and Mr Salloum said that they attended the hospital every day over 15 days. Expenses were paid by cash and no receipts or records were kept. Mr Salloum estimated that the medical costs exceeded $4000. On return to Australia, it was ascertained that Mrs Salloum did not have cancer. While the expenditure on medical treatment may have been unexpected, it arose as a result of the decision to expend a substantial part of the compensation lump sum on overseas travel and, presumably, without medical insurance, so that I am unable to accept that it was sufficiently uncommon or exceptional to constitute special circumstances.
Mr Salloum has chosen to expend the funds provided by the compensation lump sum without consideration of his living costs to October 2005 while being well aware of his inability to access social security payments before that date. Having disposed of those funds, he now seeks support from the community. He has substantial assets in the upgraded and unencumbered residence and a motor vehicle which was expensive relative to the bulk of the community receiving social security support. With such assets, he cannot be regarded as being in a position of exceptional financial hardship.
This is not an unusual case of a person, unused to having substantial sums of money, being provided with a significant lump sum and, without adequate thought of providing for the future, disposes of that lump sum in excessive discretionary expenditure. He then seeks to complain that he is suffering financial hardship and believes that he should be entitled to community funded support while retaining the assets acquired. It is another case which points to the desirability of providing compensation by instalments replacing lost income, rather than relying on the recipient to deal with a lump sum wisely.
In this case, subject to the error of one day, the preclusion period has been correctly calculated in accordance with the legislation and there are no special circumstances justifying any part of the compensation lump sum being treated as not having been made under s 1184K of the Act.
It follows that the decision under review should be varied to the extent only that the preclusion period is to 21 October 2005, not 22 October 2005.
I certify that the twelve [12] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr B.H. Pascoe, Senior Member
(sgd) Catherine Thomas
Clerk
Date of Hearing: 12 July 2004
Date of Decision: 14 July 2004
Solicitor for the applicant: Nil — IN PERSONAdvocate for the respondent: Mr M. Todd, Centrelink
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