Sheer and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 256
•1 April 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 256
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/5812
GENERAL ADMINISTRATIVE DIVISION ) Re ANNETTE SHEER Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr S Karas AO, Senior Member Date1 April 2008
PlaceBrisbane
Decision The Tribunal affirms the decision under review. ....................[Sgd]..........................
Senior Member
CATCHWORDS
SOCIAL SECURITY – Administration of the Act – lump sum preclusion period – applicant in receipt of compensation payments - whether the applicant is subject to a lump sum preclusion period – preclusion period correctly calculated – whether the applicant’s circumstances can disregard compensation payments – applicant has no special circumstances – decision under review affirmed.
Social Security Act 1991: s 1184K
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Green and Secretary Department of Social Security (1990) 21 ALD 772
Re Secretary, Department of Social Security and Winterbotham (unreported 11 December 1990)
Re Ivovic and Director-General of Social Services (1981) 3 ALN No. 61REASONS FOR DECISION
1 April 2008 Mr S Karas AO, Senior Member BACKGROUND
1. Annette Sheer (the applicant) sustained a work related injury to her back in April 2000 for which she received compensation payments over a period of time. In March 2005, Centrelink was advised that the applicant had been awarded $30,000 in February 2005 in respect of her injury and in July 2006 she settled her compensation claim for $200,000. Her earlier weekly compensation payments ceased in August 2006.
2. On 8 August 2006 Centrelink calculated that the applicant was precluded from payment for the period 9 August 2006 to 6 October 2009. Centrelink wrote to the applicant and her legal advisers on 8 August 2006 informing them about her being precluded from payment for that time period.
3. On 1 September 2007 the applicant claimed a disability support pension from Centrelink that was refused on the basis that she was still subject to a preclusion period. In September 2007 the applicant requested a review of Centrelink’s decision providing details of various expenditures by her since receiving her compensation settlement monies. The decision to reject her claim for a disability support pension on 18 September 2007 was affirmed by an original decision maker on 3 October 2007, an Authorised Review Officer on 20 October 2007 and the Social Security Appeals Tribunal (SSAT) on 9 November 2007. The applicant applied to this Tribunal for review on 27 November 2007.
ISSUES
4. The issues for the Tribunal in this matter are :
(a)Whether the applicant is subject to a lump sum preclusion period; and if so
(b)Whether the applicant’s circumstances are such as to warrant disregarding all or part of any compensation payments made to her pursuant to s 1184K of the Social Security Act 1991.
EVIDENCE
5. A hearing of this matter was held in Coolangatta on 13 March 2008. The applicant was represented by Mr Muir. Mr McQuinlan appeared for the Respondent. The Tribunal had before it the T documents lodged in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 together with other documents as follows:
·A copy of the Respondent’s letter to the applicant dated 27 December 2007;
·Further documents enclosed under cover of the Respondent’s letter 18 February 2008.
·The Respondent’s Statement of Facts and Contentions enclosed under cover of its letter 6 March 2008;
·A handwritten copy of expenditure signed by the applicant on 13 March 2008 and provided to the Tribunal at the hearing of this matter.
6. At the hearing the applicant gave evidence in a frank and forthright manner to the effect that:
· She is 55 years of age and had four adult children from two relationships.
· She is unable to rely on her children for support and her sons are of no assistance and cannot be relied upon. Indeed, one of her sons owes her money and she is unable to recover any monies as she does not know of his whereabouts.
· Her daughters are unable to help financially although they have repaid or are repaying monies lent to them by their mother.
· She had left school at age 16 and worked in a number of unskilled positions and became a second cook in the hospitality industry. Reference was made to other aspects of her background, her family situations and her places of residence in Sydney and on the Central New South Wales coast.
· She referred to her back injury at work and how she has not worked after surgery. She has been disabled since 2001.
· She confirmed her compensation payments and the receipt of $190,000 and that she had received notice from Centrelink about her preclusion period to October 2009.
· She referred to her banking of the monies and expenditure of it by assisting the family, buying a car for her son and going on holidays including an overseas one, with her companion, for some five weeks.
· She bought a caravan home for $45,000 and moved to Tweed Heads in August 2006. She bought furniture for her home and pays “rent” at the caravan park of some $113 per week that is soon to rise to $119.50 a week. She also pays other outgoings like electricity, gas, telephone and the like.
· She referred to the monies she gave and lent to her children and the repayments.
· After returning from her overseas holiday, she bought a scooter for her personal use. She had invested money in a cosmetics business, Mary Kay and bought stock in it.
· Reference was made to her “mediocre health” and to her medication. She also referred to her expenditures and needs and how the compensation monies were spent.
· She stated that she had never had that amount of money before and knew it was supposed to last her until October 2009.
· She cannot work any more and is unable to rely on her family and others for assistance.
· She was aware of and understood that the compensation payments were to last her for two years and of the preclusion period until October 2009 by Centrelink.
· She stated she had only $4 in the bank stock worth some $27,000 in her business, her caravan, furniture and the like. She had no bookkeeping experience and her essential spending a week was also referred to.
7. The solicitor for the applicant noted the relevant legislation and authorities regarding “special circumstances” and suggested looking at the applicant’s actual circumstances and her lack of sophistication with finances and the like. It was submitted that the Tribunal should take into account her situation and expenditure and find special circumstances applied to the applicant.
8. The Departmental advocate for the Respondent relied on the Statement of Facts and Contentions submitted to the Tribunal. He indicated that she had received substantial compensation monies but had not “budgeted properly”. She had acquired substantial assets and her money had not been managed well. It was submitted that the applicant’s expectations were “unrealistic” and that there are no special circumstances here to shorten the preclusion period. It was not appropriate for the Commonwealth to relieve the applicant of her difficulties in the circumstances and that her discretionary spending, for items such as cigarettes, should be curbed or stopped. He submitted there were ways for the applicant to “get rid of her self inflicted hardships” even though there could be some sympathy for her in the situation for example where her son had “done a runner” leaving her with other debts and bills, like the telephone account that she is fighting. He submitted there were no “special circumstances” in this case.
CONSIDERATION AND FINDINGS
9. The Tribunal finds that the preclusion period has been correctly calculated given the amount of compensation payments to the applicant. The Tribunal finds that some of the compensation money was spent in buying a caravan home and furniture for the applicant to reside in. Other monies were spent on family members, in a business and stock, on a scooter and on a car for her son. Other monies have been spent on living expenses and other outgoings like the overseas trip.
10. The Social Security Act 1991 provides for a scheme whereby a person, who receives compensation containing a component for past or future loss of income, must live off that compensation for a period of time calculated on the amount received (called a lump sum preclusion period) and cannot be paid Centrelink payments during this preclusion period.
11. It is not disputed that the applicant received “compensation” as defined in s 17 of the Social Security Act 1991. Section 1184K of that Act provides so far as is relevant:
“Secretary may disregard some payments”
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.”
12. The Act does not define “special circumstances”. In Groth v Secretary, Department of Social Security[1] the Federal Court noted:
“…. To be special, case law establishes that circumstances must take the matter out of the usual or ordinary case. On the other hand, it is also desirable that the application of the law…. does not create an outcome that is ‘unfair, uncommon or unjust”
[1] (1995) 40 ALD 541
13. Indeed, in that case it was held that mere financial impecuniousness on the part of a social security recipient is not sufficient to attract a finding that special circumstances exist. To qualify as “special circumstances” financial hardship must go beyond straitened circumstances and be truly exceptional.
14. In Re Beadle and Director-General of Social Security[2] the Tribunal stated:
”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 must have a particular quality of unusualness that permits them to be described as special.”
[2] (1984) 6 ALD 1
15. Other cases such as Re Ivovic and Director-General of Social Services[3] and Re Green and Secretary Department of Social Security[4] have also dealt with the words “special circumstances” as referred to in the Social Security legislation. Furthermore in Re Secretary, Department of Social Security and Winterbotham (unreported 11 December 1990) the Tribunal noted in relation to the Social Security Act:
[3] (1981) 3 ALN No. 61
[4] (1990) 21 ALD 772
“This particular piece of legislation…. was aimed specifically at preventing those people receiving compensation for loss of income because of incapacity for work, from being able also to receive benefit from the public purse… Primary responsibility for the payment of such compensation lies at the feet of those responsible for the compensable injury. Once that responsibility has been met, by way of a settlement sum agreed to by both parties, it is inequitable for the recipient to seek supplementary funds from the tax-payer.”
15. Having regard to all of the evidence in this matter the Tribunal finds that the applicant has spent her compensation monies in a manner that was not out of her control. Although the Respondent submits that she spent it in a “reckless manner”, the Tribunal finds that it was spent injudiciously in the circumstances where the applicant was aware of the preclusion period. Although the Tribunal finds the applicant is now experiencing financial hardship it does not find that her circumstances are so exceptional or special as to make it appropriate to regard all or part of the compensation payment as not having been made.
16. It appears that the applicant has been generous to a fault with members of her family and others and has expressed in part her natural love and affection as a mother to help her children financially. While one can sympathise with her position the legislation must be followed and her spending of the compensation monies does not in the circumstances come within the purview of “special circumstances” as referred to in the legislation. The applicant’s representative struggled to find the “special circumstances” as defined in the Act and cited the authorities referred to by the Departmental advocate. Perhaps the applicant experienced some “bad luck” in her business venture and that her expectations of it and some of her family did not come to pass. The Departmental advocate suggested a number of things she could do to alleviate her financial difficulties such as giving up her smoking habit, selling off her business stock and giving up her Austar pay television subscription.
17. On all of the evidence of the case the Tribunal finds that the applicant’s circumstances are not “special” so as to warrant the exercise of the statutory direction to shorten the preclusion period.
CONCLUSION
18. The Tribunal affirms the decision under review.
I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Karas AO, Senior Member.
Signed: .....................................................................................
E. Young, Research AssociateDate of Hearing 13 March 2008
Date of Decision 1 April 2008
Solicitor for the Applicant Mr E Muir
Respondent Mr R McQuinlan, Departmental advocate
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