Samir Hakim and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2013] AATA 478
•9 July 2013
[2013] AATA 478
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/4177
Re
Samir Hakim
APPLICANT
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT
DECISION
Tribunal Regina Perton, Member
Date 9 July 2013 Place Melbourne The Tribunal affirms the decision under review.
...........................[sgd].............................................
Regina Perton, Member
SOCIAL SECURITY - lump sum compensation - preclusion period - whether special circumstances exist
Social Security Act 1991 ss 17, 1184K
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
REASONS FOR DECISION
Regina Perton, Member
9 July 2013
Samir Hakim was injured in a motor vehicle accident on 26 September 2006. Mr Hakim received a payment of $12,140.00 from the Transport Accident Commission (TAC) on 21 June 2010. The TAC made a further compensation payment of $225,000 in settlement of a common law claim on 19 November 2010. On 1 December 2010 Centrelink wrote to Mr Hakim advising him that he was subject to a compensation preclusion period from 26 September 2006 to 10 August 2012.
Mr Hakim’s solicitors sought legal costs of $25,000 for the common law action. Mr Hakim was also required to repay Centrelink $16,053.35 for social security payments he received during the preclusion period. The legal costs and amount repayable to Centrelink were recovered from the TAC with Mr Hakim receiving the balance.
On 27 March 2012 Mr Hakim applied for disability support pension (DSP). He also applied for special benefit on the same day. On 29 March 2012 Centrelink advised Mr Hakim that his claim for DSP had been rejected on the basis that he was subject to the compensation preclusion period. On 2 April 2012 Mr Hakim was advised he was ineligible for special benefit for the same reason.
On 9 May 2012 Mr Hakim sought internal review of Centrelink's decision to refuse DSP and on 18 May 2012 the agency affirmed its decision. The request was then referred to an authorised review officer (ARO) of Centrelink. On 6 June 2012 the ARO determined that Mr Hakim was not eligible for DSP because of the preclusion period. He also did not consider that Mr Hakim's circumstances were such that the compensation preclusion period should be shortened. Mr Hakim had also lodged an application for review with the ARO concerning the refusal of special benefit which was also affirmed. He then appealed to the Social Security Appeals Tribunal (SSAT). On 23 August 2012 the SSAT considered applications concerning refusal of DSP and special benefit and affirmed both decisions.
Mr Hakim lodged an application for review of the SSAT decision with the Tribunal on 17 September 2012. The preclusion period had expired by the time he lodged the application with the Tribunal.
The issue before the Tribunal is whether there are grounds to waive part or all of the preclusion period that Mr Hakim had been subject to due to special circumstances.
MR HAKIM’S CIRCUMSTANCES
Mr Hakim is married with a young son. He suffers from medical conditions which affect his ability to work. This includes a problem with his feet which arose well after the accident for which he received compensation.
Mr Hakim believes that he was pressured into agreeing to a settlement that was less than what he should have received.
Mr Hakim invested much of his settlement to purchase a taxi licence in March 2011. The total cost for the taxi licence, the taxi and legal expenses was $550,000. Mr Hakim funded the difference between what he had received by way of compensation by taking out a mortgage on the family home. The mortgage on the home was $320,000. Mr Hakim anticipated that he would be able to employ for or five drivers to operate the taxi and this would bring enough income to support him and his family including making mortgage repayments. He did not anticipate that he would have to drive the taxi.
It appears that Mr Hakim bought his taxi licence when licences were at or near their peak value. Not long after he settled his taxi licence purchase, the Victorian government released a significant number of new taxi licences. This had the impact of reducing the value of Mr Hakim’s taxi licence. It also made it harder to get a reliable driver for his taxi. Mr Hakim said that the best offer he had for the licence was around $200,000.
Added to his woes was Mr Hakim’s inability to drive the taxi for long periods. He has a major problem with his feet and ankles swelling resulting in an inability to wear shoes or drive for very long. He still also suffers from the residual effects of the compensable accident on his knees and back. Mr Hakim’s general practitioner, Dr Lilian Rezk, provided a report dated 21 November 2012 in which she provided information about his medical condition.
Further adding to Mr Hakim’s problems was a review of the taxi industry commissioned by the Victorian government that was nearing finalisation when the hearing took place. Professor Allan Fels, who undertook the review, recommended in Customers First – Service, Safety, Choice that there be significant changes to taxi licences which including the release of annual licences which would not require the investment of a large capital amount. The impact of that proposal was predicted to be a further lowering in value of licences. While the Victorian government was considering its response to the Fels recommendations, there was little or no market for taxi licences. The Victorian government has now accepted most of the recommendations contained in the report, having the effect of substantially lowering the value of current licences even further.
In October 2012 Mr Hakim assigned his licence to another person for an agreed amount. However that is not sufficient for Mr Hakim to meet his mortgage payments of and reduce his credit card debt which is significant. His wife works part-time for a supermarket and receives carer payment, carer allowance and family tax benefit. Following the expiry of the preclusion period, Mr Wakim again became eligible for, and received DSP.
SHOULD PART OR ALL OF THE PRECLUSION PERIOD BE WAIVED?
Section 17(1) of the Social Security Act 1991 (the Act) provides that compensation affected payments includes DSP and special benefit. Section 17(2) of the Act provides:
Subject to subsection (2B), for the purposes of this Act, compensation means:
(a) a payment of damages; or
(b)a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c)a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.
Under s 17(3) of the Act, 50 per cent of a lump sum settlement payment is held to be the compensation part of the payment. Section 17(4) sets out the methods of calculation where there is more than one compensation payment that incorporates repayment of periodic compensation payments already received. The Tribunal is satisfied that the calculations are correct and have taken into account the relevant legislative provisions.
Section 1184K(1) of the Act gives the decision maker discretion to treat the whole or part of a compensation payment as not having been made or not liable to be made, if the decision maker thinks it is appropriate to do so in the special circumstances of the case.
For the Tribunal to use the discretion provided in s 1184K it must be satisfied that there is something to make the case stand out from the usual or the ordinary. The term special circumstances is not defined in the legislation. However, many court cases have discussed the term. In those cases, it has generally been defined as requiring a departure from the norm. In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 Branson J stated (at paragraph 26) that the circumstances of a particular case must give rise to hardship or unfairness sufficient to justify departure from the general rule.
The existence of special circumstances needs to be considered on a case-by-case basis. In considering this concept, the Tribunal must maintain a balance between the circumstances and difficulties of the individual involved and the purpose of the legislation, which is to prevent people being paid by two sources for the same period.
The Tribunal accepts that Mr Hakim has multiple medical problems which he will continue to face for the foreseeable future. The circumstances in which the injury occurred have added to Mr Hakim's frustration at his predicament. He also believes that he was not compensated sufficiently for loss of income in the settlement negotiated by his solicitors. Mr Hakim is receiving DSP, as his medical condition is serious enough to meet the onerous criteria for that payment. All recipients of DSP have significant medical issues.
The Tribunal accepts that Mr Hakim’s investment of much of his settlement in a taxi licence has proven to be an unwise one in hindsight. However, Mr Hakim, who studied accountancy before migrating to Australia, still maintains that it was a sound decision to buy the taxi licence at the time he did so. It was just that things went awry after that.
The preclusion period was still in effect when Mr Hakim applied for DSP in March 2012 but had ended by the time he sought review from this Tribunal. Since then, Mr Hakim has received income support through Centrelink. While his financial position is difficult, it is a situation shared by many others reliant on income support.
After considering all relevant matters and viewing Mr Hakim's case in its entirety, the Tribunal is not satisfied that his circumstances should be considered as special circumstances, which would warrant a shortening of the now expired preclusion period. Therefore, it is not appropriate for the Tribunal to exercise the discretion under section 1184K(1) of the Act to disregard the compensation received in whole or in part. Hence, Mr Hakim was not eligible for DSP or special benefit when he applied in March 2012.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 23 (twenty -three) paragraphs are a true copy of the reasons for the decision of Regina Perton, Member ...............................[sgd].........................................
Associate
Dated 9 July 2013
Date of hearing 6 May 2013 Applicant In person Advocate for the Respondent Mr A Carson Solicitors for the Respondent Legal Services Division, Department of Human Services
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