Silberberg and Secretary to the Department of Family and Communit Y Services

[2003] AATA 687

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 687

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No  V03/274

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		ADRIAN SILBERBERG

Applicant

And SECRETARY TO THE DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr J Handley, Senior Member

Date22 July 2003

PlaceMelbourne

Decision The decision under review as to the imposition of a preclusion period is affirmed save that the duration of the period of preclusion is varied and the application is remitted to the decision maker for calculation of the duration in accordance with these reasons.

...............................................

Senior Member

SOCIAL SECURITY – Applicant accepted a compensation lump sum – preclusion period imposed – applicant subsequently diagnosed with a severe illness – some settlement funds expended upon treatment – whether circumstances special – whether circumstances out of the ordinary - decision varied.

Social Security Act 1991

Beadle v Director-General of Social Security (1985) 7 ALD 670

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

22 July 2003   Mr John Handley, Senior Member

1.      The applicant applies to review a decision of the Social Security Appeals Tribunal (“SSAT”) made on 13 February 2003.  The SSAT then decided to affirm a decision made by a Centrelink Officer made on 18 October 2002.  The decision then made was to reject the applicant’s claim for disability support pension by reason of the imposition of a lump sum preclusion period between 19 January 2002 and 8 October 2004.

2.      The hearing of the application was convened in Bendigo.  Mr Silberberg appeared without representation.  The respondent was represented by Ms Bradley.

3.      The circumstances giving rise to the preclusion period were the receipt by the applicant of a lump sum compensation payment on 18 January 2002 of $163,883.85.  Fifty percent of that sum is taken into account when calculating the preclusion period.  The pension cut off amount at the relevant time was $576.36.  Accordingly the preclusion period of 142 weeks was calculated.

4.      The imposition of a preclusion period was not an issue in these proceedings.

5. The appeal was lodged by Mr Silberberg because he opposed a finding of the respondent that his circumstances were not special so as to permit a finding that the whole or part of his compensation payment had not been made (refer s1184K of the Social Security Act 1991).

6.      Mr Silberberg said in evidence that he lodged an appeal against the decision of the SSAT because he was “unhappy” about the deterioration in his health and his money had “gone down the drain”.  He said that he was unable to obtain assistance from local people and he had been “sick for weeks”..  He said that his medication was “very expensive” and whilst he did have more than $12,000 available to him “at the first hearing” (when he attended the SSAT) he did not presently have any monies available to him.  He said that had he been provided with “help” from “the Department” it was unlikely he would have lodged this appeal.

7.      In answer to some questions from me – and in order to obtain an overview of his circumstances – Mr Silberberg said that he suffered injuries which gave rise to his Workers Compensation entitlements when employed as a maintenance mechanic at a saw mill in Paynesville in eastern Gippsland in 1990.  He said that he suffered crush type injuries to his left arm and shoulder and left knee, when he was caught in some unguarded rollers at the workplace.  Thereafter he received weekly compensation until January 2002 when his Workers Compensation entitlements were eliminated by his acceptance of a lump sum compensation payment.

8.      At the present time, Mr Silberberg permanently wears a plastic or fibreglass type brace around his lower left arm because he said that his bones “were like chalk”.  The brace is used as a precaution against the wrist being bumped or knocked which he said would cause fractures.  He also has “floating bones” in his left knee which causes him to walk with a walking stick.

9.      It was noticed at the hearing that Mr Silberberg also suffers a significant injury to his right arm.  He said that in 1980 when he was working as a motor mechanic in Melbourne he suffered extensive burns when a motor car upon which he was working caught fire.  He said he suffered severe tendon injuries and subsequent surgery which has virtually rendered his right arm useless.  It was noted that his right arm was quite mutilated and the fingers of his right hand have curled into the palm.  He said that he has functional use only of his right thumb.

10.     Mr Silberberg said that at the time of the first injury he was right handed but he subsequently became left handed to compensate for the severe right arm injury.  As a result of the left arm injury, he is unable to perform fine movements and has limited strength and grip in his left hand.

11.     Mr Silberberg said that he agreed to accept a compensation lump sum in settlement of his compensation rights because “the insurer was pushing me and wanting to take me off their books”..  He said that he was fearful that had he not accepted a lump sum payment that his weekly compensation payments would end and had he then resorted to Centrelink benefits he would lose his entitlement to a compensation lump sum.  He said that he was legally represented and he was advised by his solicitor to accept the lump sum.

12.     Immediately prior to settlement of the proceedings Mr Silberberg did execute an agreement with the Workers Compensation insurer (T20 page 60) where the penultimate paragraph records:

Adrian Silberberg fully understands that his acceptance of this offer may preclude or affect the payment or availability to him of Centrelink and other pensions, benefits or concessions for a period which may be substantial.

13.     Mr Silberberg said that he agreed that he had read that document and was aware that he may be precluded from receiving Centrelink benefits after acceptance of the compensation lump sum but thought that he might have an entitlement to benefits if his circumstances were “serious”.  He said that at the time he signed the agreement he did not think that he would “go haywire”.

14.     Mr Silberberg was then asked to consider a letter which appears at T9 page 28/30 forwarded by the respondent to him on 18 January 2002.  The letter records that Centrelink had become aware that he had an entitlement to lump sum compensation and the amount of that lump sum.  The letter records that a preclusion period would be imposed.

15.     Mr Silberberg said that he could not recall that letter, but did recall in February 2002 that he had received a letter from the insurer advising him that a preclusion period had been imposed.  He said he did not understand at that time the effect or consequences of a preclusion period and travelled to the Bairnsdale office of Centrelink to make enquiries.  He said the preclusion period was explained to him but at that time he was not troubled by it because he believed that the settlement funds would be sufficient to permit him to meet day to day expenses until the expiration of the period.

16.     In or about February 2002 Mr Silberberg decided to purchase a home.  He was then renting premises in Paynesville at $160 per week.  He said he did not wish to pay rent and realised that he would be unable to afford housing in Melbourne.  He decided to move to Wedderburn in northern Victoria where housing was available at an affordable price.  He also knew some persons in Wedderburn.  He decided to purchase a home in the sum of $85,000.  He also had a number of associated costs being relocation, insurances and legal, together with costs of fitting a new hot water service, a wood heater, electrical wiring and plumbing.  In total he expended $98,080.

17.     By the time Mr Silberberg had moved to Wedderburn he had approximately $63,000 available to him.  He said that he was confident then that he could maintain himself with those funds until the expiration of the preclusion period.

18.     However, in or about March or April he developed an illness which eventually caused him to have two extensive periods of hospitalisation, initially at the Alfred Hospital in Melbourne and subsequently at the Bendigo Hospital.  Mr Silberberg described being admitted for “open heart surgery” under the care of Mr Grovesnor and subsequently at the Bendigo Hospital because he developed “internal bleeding”..  He said that he had private health insurance at that time which met the costs of the inpatient treatment at the Bendigo Hospital however his private health insurance only met the hospital costs of the Alfred Hospital.  He said that he expended $4,000 being the fees of the surgeon.

19.     Subsequently he has also incurred considerable costs in pharmacy medication and travel to his general practitioner who was initially located in Charlton, being 39 kilometres from Wedderburn.  Mr Silberberg said that the only practising doctor in Wedderburn left the town shortly after he arrived and he was required to travel to Charlton on three occasions per week by taxi at $50 per journey, between March or April 2002 until November 2002 and thereafter on one occasion per week until March 2003 when a doctor took up residence in Wedderburn.

20.     Mr Silberberg said that he had lost his motor car licence in 1992 by reason of the left and right arm injuries.  Thereafter he has been reliant on either taxi’s or other persons to drive him.

21.     Mr Silberberg has subsequently been advised by Mr Grovesnor that he is at risk of blackout and therefore injury.  He said that he has been recommended to use either a wheelchair or a motorised scooter.  In those circumstances he purchased a second-hand utility vehicle which has a wheelchair ramp fitted to it in the sum of $9,000 and a battery operated scooter in the sum of $3,000.  If he now is required to travel he has a friend drive his vehicle for him.  He otherwise travels within Wedderburn by his motorised scooter.

22.     Mr Silberberg said that the medication which has been prescribed to him is not a NHS item and despite having been issued with a health care card by the respondent the medication costs him $90 per fortnight.  He said that he has not been able to afford that medication for the last six weeks because he now has no funds available to him.  He does not attend the doctor in Wedderburn because that doctor does not bulk bill (as opposed to the doctor in Charlton who did bulk bill).

23.     Mr Silberberg said that he is presently dependent on meals on wheels to provide him with one meal per day over which he is not required to pay a fee.  He is also dependent on the Salvation Army to provide him with firewood and a food voucher of $50 on one occasion per month.

24.     Presently the assets of the applicant comprise his home in Wedderburn which he purchased for $85,000 but which he now estimates to have a value of $125,000.  It is a three bedroom home however Mr Silberberg (who lives alone) is reluctant to seek income from a lodger or a boarder because of the risk of damage to the home by such an occupant.  He said that he has had prior experience with lodgers and boarders and premises that he then occupied were damaged.  He also has assets being Telstra and AMP shares which he presently values at $8,000.  Mr Silberberg said he purchased Telstra and AMP shares in early 2002 in the total sum of $22,000 believing that it would provide him with long term security.  He said he purchased Telstra shares at $7.95 and AMP shares at $15 whereas they are now presently valued at $4 and $4.95 respectively.  He said that he has attempted to sell the shares but his broker has advised him that a purchaser cannot be located, his remaining assets comprise his motor vehicle which he now values at $7,000 and his scooter at $2,000 and household contents of approximately $20,000.

Conclusion and Reasons for Decision

25.     For reasons which will follow, I am satisfied that part of the compensation payment that has been made to Mr Silberberg should be regarded as not having been made because of the special circumstances of his case.

26.     The concept of “special circumstances” has been exhaustively considered by this Tribunal and by the Federal Court.  In Beadle v Director-General of Social Security (1985) 7 ALD 670 it was decided that the words “special circumstances” were incapable of precise definition but were in the nature of circumstances which were unusual, uncommon or exceptional.  More recently, Keifel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 was of the view that the words “special circumstances” require something which distinguishes those circumstances from the circumstances of other persons.  Her Honour decided that special circumstances is in the nature of something or event that sets those circumstances apart from the usual or ordinary case.  Additionally, Her Honour decided at page 545:

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.

27.     The expenditure by Mr Silberberg of a major proportion of his settlement funds on the relocation from Paynesville to Wedderburn and the acquisition by him of a home (and the costs associated with it) are not special circumstances.  Persons purchase homes every day of the week and there is nothing unusual, uncommon or exceptional about those circumstances.  Indeed Mr Silberberg said that at the time he purchased the home he was of the belief that the balance of the funds then available to him would be sufficient to meet his day to day expenses until the expiration of the preclusion period.

28.     Additionally Mr Silberberg, invested $22,000 of his compensation lump sum in Telstra and AMP shares.  It is no secret that those shares have performed poorly and their value has declined considerably in recent times.  That of itself is not a special circumstance because Mr Silberberg chose to invest on the sharemarket which must be regarded as being speculative and putting investors at risk.  His initial intention was sound, namely, to provide a long term investment however the reduced value of his shareholding, by reason of the uncertainty of the sharemarket, is not a circumstance of itself which may regarded as being special.

29.     The injuries suffered by Mr Silberberg themselves are cruel and extensive but he has been compensated for those injuries and agreed to accept a lump sum payment.  The amount of the compensation payment and the extent of the injuries cannot in those circumstances be regarded as being “special”.

30.     However, taken as a whole, the circumstances of Mr Silberberg have changed considerably and without prediction subsequent to receipt of his settlement funds.  He has developed a severe, disabling coronary illness which required extensive inpatient treatment in a hospital which exposed him to cost.  He was also required to have extensive treatment with a doctor located 39 kilometres from his home for which he incurred cost in travelling on three occasions per week for many months.  He was also required to purchase a van with a wheelchair platform and a motorised scooter because he is at risk of blackout and has been advised to use either a wheelchair or the scooter to avoid the risk of injury by falling.  The van was acquired to permit other persons to drive it on his behalf when he needs to travel away from Wedderburn.  He is also required to meet the cost of pharmacy medication at $90 per fortnight which is not available on the National Health Scheme.

31.     It is my view that the circumstances subsequent to the receipt of the compensation lump sum are “out of the ordinary” (refer Groth) and may be regarded as being special.  More so in the context of a person who is not working, who does not have an income and has no savings.  Mr Silberberg was entitled to assume that with prudent investment he would be able to manage and meet day to day costs by the settlement funds that he did receive.  He was aware that he was precluded from receiving Social Security benefits at or about the time he agreed to receive the lump sum payment and shortly thereafter when he had a discussion with an officer at the Bairnsdale office of Centrelink.  However, the funds which he reasonably expected would meet his day to day costs until October 2004 when the preclusion period was due to expire have largely been depleted by the costs associated with his coronary illness.  Illness of itself is not a special circumstance, but the costs can be, more so, in the present circumstance where the applicant’s health insurance was apparently deficient, his rural domicile caused him to travel and his prescribed medication is not available as a NHS item.  I am also very concerned that since May this year, Mr Silberberg has not consumed this medication because he cannot afford its cost.  This may cause an exacerbation of his health and therefore expose him to further costs.

32.     I am satisfied that the following costs should be regarded as being special and should be offset against the compensation monies received so as to ultimately (when recalculated) reduce the preclusion period.

·

Taxi costs of $50 per week at 3 trips per week from Wedderburn

to Charlton between April 2002 and November 2002 -   $5,250

·Taxi costs of $50 per week on 1 occasion per week for travel from Wedderburn to Charlton between November 2002 and March 2003 -   $1,000

·Purchase of van with wheelchair ramp -   $9,000

·Purchase of motorised scooter -   $3,000

·Cost of coronary surgeon -   $4,000

·

Cost of pharmacy medication being $45 per week

($90 per fortnight) between June 2002 and May 2003 -   $2,160

Total  $24,410

33.     However I do not accept the evidence of Mr Silberberg that the shares in Telstra and AMP cannot presently be realised.  Despite their reduced value subsequent to the purchase in 2002, those shares do have a value and are capable of being traded.  The price which may be realised may have little appeal to Mr Silberberg and he may be disappointed in the reduction in the value of his investment by reason of the reduction in the share prices.  Nonetheless, he does have assets which are capable of immediately being realised and providing him with a source of income or a source of funds which may meet his day to day costs.

34.     It follows therefore that the sum of $24,410 above should be offset by the sum of $8,000 which Mr Silberberg estimates to be the value of his shareholding.

35.     I am therefore satisfied that part of the compensation payment received by Mr Silberberg should be regarded as not having being made in the sum of $16,410.

36.     The other assets of Mr Silberberg should not be sold to provide him with a means of support.  His van and scooter are necessities.  His home, even if sold, would not provide immediate funds and would cause him to expend monies in a rental property or acquire a freehold property at a lesser cost.  I am satisfied Mr Silberberg could not borrow against the equity of his home because he could not meet repayments.

37.     The decision under review is affirmed save that the duration of the period of preclusion will be varied.

I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J Handley,
Senior Member

Signed:           Elsa Genovese
  Personal Assistant

Date/s of Hearing  2 July 2003
Date of Decision  22 July 2003
Solicitor for the Applicant                 Self Represented
Advocate for the Respondent        Ms R Bradley