Sneddon; Secretary, Department of Social Services and (Social services second review)

[2015] AATA 595

Sneddon; Secretary, Department of Social Services and (Social services second review) [2015] AATA 595 (14 August 2015)

Division	GENERAL DIVISION
File Number	2015/1503
Re	Secretary, Department of Social Services
APPLICANT
And	Daniel Peter Sneddon
RESPONDENT

DECISION

Tribunal	Senior Member Damien Cremean
Date	14 August 2015
Place	Melbourne

The Tribunal sets aside the decision under review and substitutes a decision that a preclusion period from 13 April 2013 to 17 July 2015 applies.

[sgd]........................................................................

Senior Member Damien Cremean

SOCIAL SECURITY — youth allowance — lump sum settlement — preclusion period — no special circumstances — decision set aside

Legislation

Social Security Act 1991(Cth), sections 17, 23, 1169, 1170, 1171, 1184, 1184A, 1184K

Cases

Secretary, Department of Social Security v Smith [1991] FCR 56
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Kertland v Secretary, Department of Family and Community Services (1999)57 ALD 600
Secretary, Department of Family and Community Services v Chamberlain [2002] FCR 348

Clark v Secretary, Department of Employment and Workplace Relations (2007) 96 ALD 129

REASONS FOR DECISION

Senior Member Damien Cremean

1. The Applicant seeks a review of the decision of the Social Security Appeals Tribunal (SSAT) made on 20 February 2015.

2. By that decision the SSAT decided:

   to set aside the decision under review and, in substitution, [decided] pursuant to s 1184K of the Social Security Act 1991 that the part of Mr Sneddon’s compensation payment relating to the period from 13 April 2013 to 27 June 2014 be treated as not having been made.”.

   The SSAT further decided that:

   Mr Sneddon [was] entitled to be paid youth allowance from 13 April 2013 to 27 June 2014.

3. The Applicant submits that the decision of the SSAT should be set aside and that a decision should be substituted that a preclusion period from 13 April 2013 to 17 July 2015 is applicable to Mr Sneddon.

4. The relevant facts are these:

   Mr Sneddon was injured in a motor vehicle accident in Box Hill on 14 December 2011.  He claimed compensation in respect of his injury from the Victorian Transport Accident Commission (TAC) on 22 March 2012.  On 11 February 2013 he applied for youth allowance (YA) and between that date and 18 April 2014 was in receipt of that allowance.  On 16 July 2013 the TAC determined that he was entitled to a lump sum payment of $19,060 arising from an assessment of 20 percent permanent impairment of the whole person.  Then, on 9 April 2014, he settled his entire compensation claim with the TAC and received a lump sum payment of $200,000.

5. On 10 April 2014 the TAC notified the Applicant of the settlement.  Then, on 22 April 2014, the Applicant notified Mr Sneddon that, as a result of the settlement decisions in his case, it had been decided that his YA was to be cancelled.  In addition, an amount of $7178.25 would be recovered from the compensation payment he had received representing YA payments made to him  between 13 April 2013 and 18 April 2014.  Further, he was advised that he was precluded from receiving specified income support payments until 17 July 2015.

6. Mr Sneddon sought a review of this decision on 30 May 2014 which was affirmed by an authorised review officer on 17 September 2014.

7. Following this Mr Sneddon sought review in the SSAT which gave the decision set out above.

8. Lump sum preclusions are provided for in section1169(1) of the Social Security Act1991 (Cth) (the Act):

   1169  Compensation affected payment not payable during lump sum preclusion period

   (1)If:

   (a)a person receives or claims a compensation affected payment; and

   (b)the person receives a lump sum compensation payment;

   the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.

9. There are other provisions of the Act which are relevant to section 1169(1). Thus, a compensation affected payment includes a social security benefit: sections 17 and 23. A lump sum preclusion period is the number of weeks worked out using the formula (rounded down to a whole number) set out is sections 1170(4) and (5). The compensation part of a lump sum—an expression used in that formula—is determined by reference to section 17(3). The income cut-out amount — also referred to in that formula — is calculated by reference to section 17(8) and is $920.80. The start and end days of a preclusion period are set out in section 1170(2).

10. By sections 1184 and 1184A of the Act, the Secretary (which in this case is the Applicant) may give written notice to a compensation payer (such as the TAC) to recover an amount specified in such notice with a view to recovering any social security that was paid during a preclusion period.

11. Relevant also to mention is section 1184K of the Act which provides:

    1184K  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.

    (2)If:

    (a)a person or a person’s partner receives or claims a compensation affected payment; and

    (b)the person receives compensation; and

    (c)the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person’s or the person’s partner’s receipt of, or claim for, the compensation affected payment;

    the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsections (1).

12. At the hearing, at which Mr Sneddon was accompanied by his parents, it became clear that the real issue on review was that of special circumstances.  That is to say of the four issues identified by the Applicant (whether Mr Sneddon, ie the Respondent, was in receipt of a compensation affected payment; whether he received a lump sum compensation payment; the calculation of the preclusion period; and whether a discretion should be exercised in light of special circumstances) the parties focussed on only the last one.

13. In light of this, I am satisfied and find that Mr Sneddon was receiving a compensation affected payment, namely, YA. I am also satisfied and find that he received a lump sum compensation payment (of $219,060 arising from aggregating $19,060 and $200,000 as required by section 1171 of the Act). And I am also satisfied and find that, in accordance with section 1170(2) of the Act, the preclusion period commenced on 13 April 2013 and ended on 17 July 2015.

14. The remaining issue is whether there are special circumstances in this case calling for an exercise of discretion in favour of Mr Sneddon.

15. The Applicant provided me with a number of authorities on the meaning of the expression special circumstances.  They included: Secretary, Department of SocialSecurity v Smith [1991] FCR 56; Groth v Secretary, Department of Social Security (1995) 40 ALD 541; Kertland v Secretary, Department of Family and Community Services (1999) 57 ALD 600; and Secretary, Department of Family and Community Services v Chamberlain [2002] FCR 348. All such cases are to the effect that something out of the ordinary must be evident before special circumstances will exist. Indeed, in the last case mentioned (Chamberlain) Kiefel J even says (at [33]) that the factor identified in that case ... cannot by itself, amount to a special circumstance, one out of the ordinary. This is supported by the decision of Lindgren J in Clark v Secretary, Department of Employment and Workplace Relations (2007) 96 ALD 129.

16. It is clear from that decision of Lindgren J (at [75]) and from other cases that any unfairness arising from the deeming provision in section 17(3) of the Act cannot itself be a special circumstance for the purposes of s 1184K.

17. At the hearing, however, Mr Sneddon, it was carefully explained by his father and mother, relied upon questionable (or erroneous) legal advice he was given when arranging to settle his claim with the TAC.  In effect, his solicitor (and barrister too it seems) advised him to sign the Release without it setting out specific components of the lump sum because they believed it would not affect his receipt of the YA.  It was said that had he been advised differently he would have sought to adjust the wording of the Release to reflect $50,000 for loss of earnings and $150,000 for pain and suffering.  But this was not done.

18. I do accept that Mr Sneddon was given questionable (or erroneous) legal advice and that he relied on it in signing the Release but I am unable, nonetheless, to regard the advice Mr Sneddon was given as something out of the ordinary — as special circumstances.  The advice he was given in the course of his personal injuries matter was advice given in the ordinary course by appropriately qualified persons. There was nothing unusual about the occasion or occasions on which the advice was given.  The advice just happened to be questionable (or erroneous).  But I agree with the Applicant that the giving of such advice should not be the warrant for a payment under the Act as constituting special circumstances.

19. Therefore, I find that special circumstances, justifying an exercise of discretion in favour of Mr Sneddon under the Act, do not exist.

20. In light of all the above, the Tribunal sets aside the decision of the SSAT and substitutes a decision that a preclusion period under the Act applies from 13 April 2013 to 17 July 2015.

I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of:
Senior Member Damien Cremean

[sgd]........................................................................

Administrative Officer

Dated  14 August 2015

Date of hearing	31 July 2015
Advocate for the Applicant	Peta Heffernan, Australian Government Solicitors
Respondent	In person
Advocate for the Respondent	In Person (Assisted by his parents)