Spark and Secretary, Department of Social Services (Social services second review)
[2018] AATA 1456
•31 May 2018
Spark and Secretary, Department of Social Services (Social services second review) [2018] AATA 1456 (31 May 2018)
Division:GENERAL DIVISION
File Number: 2017/5168
Re:Laurence Spark
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
Decision
Tribunal:Member D K Grigg
Date:31 May 2018
Place:Brisbane
The Tribunal varies the decision under review and decides that the compensation preclusion period is correctly calculated from 19 November 2013 to 4 May 2021.
........................[Sgd]................................................
Member D K Grigg
Catchwords
SOCIAL SECURITY – compensation preclusion payment – calculation of preclusion period - where no special circumstances – decision under review varied.
Legislation
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
Cases
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Secretary, Department of Employment and Workplace Relations and Homewood (2006) 91 ALD 103
Secondary Materials
Guide to Social Security Law (2016, Cth)
REASONS FOR DECISION
Member D K Grigg
31 May 2018
BACKGROUND AND CLAIM HISTORY
On 13 July 2013 Mr Spark crushed his foot at work and ultimately, as a result of a settlement reached with his former employer, on 1 October 2013, received a gross lump sum compensation payment of $80,000.[1]
[1] Exhibit 1, T Documents, T6, pages 25 – 27, Compensation and damages form completed by Mr Spark dated 13
January 2014.
The Department of Human Services (“Centrelink”) was notified of the Settlement Sum and then wrote to Mr Spark’s solicitors to explain that, if he applied for any Centrelink payments in the future, a preclusion period would apply, because of the lump sum compensation payment.[2] The reason for this is that during a preclusion period, a potential recipient of Centrelink payments is expected to use the lump sum amount to provide for their own income support. Centrelink also wrote to Mr Spark directly on 28 January 2014 advising him that any compensation he may receive may stop him from receiving Centrelink payments in the future.[3]
[2] Exhibit 1, T Documents, T9, page 30, Letter from Centrelink to Shine Lawyers dated 28 January 2014.
[3] Exhibit 1, T Documents, T13, page 36, Letter from Centrelink to Mr Spark dated 28 January 2014.
On 30 January 2014 Mr Spark applied for Newstart Allowance.[4] Centrelink advised
Mr Spark that:[5](a)he would be paid Newstart Allowance from 9 April 2014;
(b)Newstart Allowance could not be paid earlier than 9 April 2014 because of money he had received from his former employer for unused leave entitlements (referred to as “Income Maintenance Period” amounts).
[4] Exhibit 1, T Documents, T15, pages 39-43, Claim for Newstart Allowance dated 30 January 2014.
[5] Exhibit 1, T Documents, T16, pages 44-46, Letter from Centrelink to Mr Spark dated 30 January 2014.
On 10 February 2014 Mr Spark supplied Centrelink with updated information regarding his current financial circumstances and advised that he had spent his money on, among other things:[6]
·a new house - $57,000;
·conveyancing fees - $1,400;
·removal costs - $1,600;
·a car - $7,500;
·car maintenance costs - $2030;
·medical bills - $2,000; and
·new appliances - $4,000.
[6] Exhibit 1, T Documents, T17, page 47, Letter from Mr Spark to Centrelink dated 10 February 2014.
Mr Spark stated that all he had left was $5,000 which he then spent on plumbing and septic repairs.
On 12 February 2014 Mr Spark applied for a review of Centrelink’s decision not to pay him Newstart Allowance earlier than 9 April 2014 by an Authorised Review Officer (“ARO”).[7]
[7] Exhibit 1, T Documents, T18, page 52, Letter from Centrelink to Mr Spark dated 12 February 2014
Then, on 26 March 2014 Centrelink advised Mr Spark that his Newstart Allowance payments had been stopped because he had not provided additional documents to prove his identity as previously requested by Centrelink on 30 January 2014.[8]
[8] Exhibit 1, T Documents, T20, page 55, Letter from Centrelink to Mr Spark dated 26 March 2014.
On 1 May 2014 Centrelink was provided with a compensation advice and a copy of
Mr Spark’s settlement agreement with his former employer and WorkCover Queensland dated 22 April 2014 which indicated that Mr Spark received a gross lump sum settlement of $500,000 (“Settlement Sum”) as compensation for his work related injury and $209,287.92 in statutory benefits.[9][9] Exhibit 1, T Documents, T21, pages 57-63, Compensation advice of lump sum payments and release and
discharge agreement.
Centrelink wrote to Mr Spark, his lawyers and WorkCover on 20 May 2014 confirming that Mr Spark was entitled to a lump sum payment of $717,640.65, and that a preclusion period commencing 19 November 2013 and ending on 23 November 2020 (“Preclusion Period”), would apply.[10] Mr Spark was also informed by Centrelink that because of his lump sum compensation payment, his Newstart Allowance had been cancelled from
6 January 2014.[11][10] Exhibit 1, T Documents, T22-T24, pages 86-89, Letters from Centrelink to Shine Lawyers, WorkCover and Mr
Spark dated 20 May 2014.
[11] Exhibit 1, T Documents, T25, pages 90-91, Letter from Centrelink to Mr Spark dated 20 May 2014.
On 14 December 2016, Mr Spark reapplied for Newstart Allowance[12] and provided information that he owned a property worth $57,000 which was unencumbered and had $50,000 of household contents.[13]
[12] Exhibit 1, T Documents, T27, pages 94-100, Claim for Newstart Allowance dated 14 December 2016.
[13] Exhibit 1, T Documents, T28, pages 101-113, Real estate details supplied by Mr Spark to Centrelink dated 6
January 2017.
On 7 January 2017, Centrelink advised Mr Spark that they could not pay him a Newstart Allowance because they had not received requested documents.[14]
[14] Exhibit 1, T Documents, T29, pages 114-115, Letter from Centrelink to Mr Spark dated 7 January 2017.
On 9 February 2017, Mr Spark contacted Centrelink and told a Centrelink officer that he:[15]
(a)had supported himself and his wife with his compensation payment;
(b)had no money left and was living off his wife’s income support payments; and
(c)could not work because of his crushed foot.
[15] Exhibit 1, T Documents, T34, page 143, Centrelink record.
The review by the ARO was unsuccessful on the grounds that there were no special circumstances to justify reducing or waving the Preclusion Period.[16]
[16] Exhibit 1, T Documents, T31, pages 120-125, Decision of ARO and notes dated 28 February 2017.
On 26 May 2017, Mr Spark lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal.[17] The SSCSD rejected Mr Spark’s claim and affirmed the ARO’s decision on 13 July 2017.[18]
[17] Exhibit 1, T Documents, T32, pages 126-127, Letter from AAT to Centrelink dated 31 May 2017.
[18] Exhibit 1, T Documents, T2, pages 3-6, SSCSD’s Decision and Reasons for Decision dated 13 July 2017.
Mr Spark has sought a review of the SSCSD’s decision by this Tribunal.[19]
[19] Exhibit 1, T Documents, T1, pages 1-2, Mr Spark’s Application for Review dated 24 August 2017.
ISSUES FOR DETERMINATION
The issues for determination are whether:
(d)the Settlement Sum is a lump sum compensation payment; and, if yes,
(e)a preclusion period applied; and, if yes
(f)do any special circumstances exist which would make it appropriate to treat the lump sum compensation payment as not having been made.
LEGISLATIVE BACKGROUND
The legislation relevant to this matter is contained in the Social Security Act 1991 (Cth) (the “Act”).
The amount, or duration, of a preclusion period is determined in accordance with Part 3.14 of the Act.
The preclusion period is determined in accordance with section 1170 of the Act:
(1) Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:
(a)begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and
(b)ends at the end of the number of weeks worked out under subsections (4) and (5).
(2) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:
(a)begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and
(b)ends at the end of the number of weeks worked out under subsections (4) and (5).
(3) If neither of subsections (1) and (2) applies, the lump sum preclusion period is the period that:
(a)begins on the day on which the loss of earnings or loss of capacity to earn began; and
(b)ends at the end of the number of weeks worked out under subsections (4) and (5).
(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number.
A compensation affected payment includes a social security benefit: section 17(1) of the Act.
Pursuant to section 1169(1) of the Act:
(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.
“Compensation” is defined, relevantly, in section 17(2) of the Act to mean:
(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.
Section 17(3)(a) of the Act provides, relevantly here, that the compensation part of a lump sum compensation payment is:
(a)50% of the payment if the following circumstances apply:
(i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise[.]
Section 17(4) of the Act provides:
(4) Where a person:
(a)has received periodic compensation payments; and
(b)after receiving those payments, receives a lump sum compensation payment (in this subsection called the LSP); and
(c)because of receiving the LSP, becomes liable to repay an amount (in this subsection called the Repaid Periodic Compensation Payment - RPCP) equal to the periodic compensation payments received;
then, for the purposes of subsection (3), the amount of the lump sum compensation payment is: LSP - RPCP.
(Emphasis added)
DOES A PRECLUSION PERIOD APPLY TO MR SPARK?
The Settlement Sum received by Mr Spark is a lump sum compensation payment as defined by section 17(2) of the Act.
Therefore, because Mr Spark received a lump sum compensation payment (the Settlement Sum) he is not entitled to receive a compensation affected payment (i.e. Newstart Allowance) during a preclusion period.
What is the Preclusion Period?
Applying section 17(3) of the Act, the compensation part of a lump sum payment is 50% of the compensation payment. The lump sum payment totalled $717,290.85 (which included the $500,000 lump sum, $8,002.93 for legal costs/outlays and $209,287.92 for non-refundable statutory benefits).[20]
[20] Exhibit 1, T Documents, T21, pages 57-63, Compensation advice of lump sum payments and release and
discharge agreement.
The Secretary submits that in accordance with section 1170(4) of the Act, the number of weeks in the preclusion period equals 389 weeks calculated as follows:[21]
$358,645.43[22]/$920.80[23] = 389.493[24]
[21] Secretary’s Supplementary Written Submissions dated 27 April 2018, para 25.
[22] 50% of the compensation part of the lump sum payment: section 17(3) of the Act.
[23] This is the income cut-out amount calculated in accordance with section 17(8) of the Act, see Exhibit 1, T
Documents, T33, page 131, Compensation management summary.
[24] The number is then rounded down in accordance with section 1170(5) of the Act.
The 389 week Preclusion Period commences on the day following the last day of the periodic payments, in this instance 19 November 2013, and ends 389 weeks later on
4 May 2021 and not on 23 November 2020 as found by the ARO and SSCSD.[25][25] See section 1170(1) of the Act.
The reason the ARO and SSCSD found that the preclusion period ended on 23 November 2020 is because they subtracted weekly compensation payments of $42,832.63 that
Mr Spark had received, which resulted in an economic loss component of $337,404.01 instead of $358,645.43. The settlement agreement clearly sets out that those weekly statutory benefits totalling $209,287.92 are not repayable.[26] The question is whether those weekly benefits need to be taken into account in calculating the compensation preclusion period and whether section 17(4) of the Act does not apply.[26] Exhibit 1, T Documents, T21, pages 57-63, Compensation advice of lump sum payments and release and
discharge agreement.
The Tribunal drew the Secretary’s attention to a decision of Senior Member Dr P McDermott RFD (as he then was) in Lucas v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 914 (“Lucas”) and gave the Secretary leave to provide further submissions.
In Lucas the applicant had received a lump sum compensation payment which included periodic compensation payments, as is the case here. The Tribunal in Lucas noted that the settlement agreement provided that Workcover acknowledged that it was not entitled to a refund of statutory benefits, which included the amount of periodic compensation payments. Despite this acknowledgement by Workcover, the Tribunal deducted the amount of periodic compensation payments from the gross settlement amount, pursuant to section 17(4) of the Act, to arrive at the lump sum compensation payment. The Tribunal in Lucas found that amount left after deducting the periodic compensation payments from the total statutory benefits, was also “compensation” as defined in section 17(2)(b) of the Act and is deemed to be part of the lump sum compensation payment.[27]
[27] Lucas v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2010] AATA 914 (“Lucas”), at [21].
Similarly, in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Whitlock [2010] AATA 816 (“Whitlock”) the Tribunal, constituted by Deputy President, the Honourable Dr BH McPherson CBE, and Senior Member MJ Carstairs, stated that, despite Workcover acknowledging that it was not entitled to a refund of statutory benefits paid (which included weekly compensation payments):
34.[8] No question arises that the total of the weekly WorkCover payments…had to be deducted. Section 17(4) of the Act requires this.
In both Lucas and Whitlock there is little to no analysis of section 17(4) of the Act and it was clearly not in contention that section 17(4) should apply.
The Secretary submits that those cases have incorrectly applied section 17(4) of the Act and that where, as here, Workcover has acknowledged in the settlement deed that they were not entitled to a refund of the statutory benefits, section 17(4) of the Act does not apply and the amount of periodic compensation payments should not be deducted from the gross settlement amount.
In the Secretary’s supplementary submissions provided after the hearing, the Secretary submitted that decisions like Lucas and Whitlock are of limited assistance in the interpretation of section 17(4) of the Act and relied on the case of Tavili and Secretary, Department of Social Services [2015] AATA 19 (“Tavili”).
In Tavili the parties had agreed to settle Mr Tavili’s compensation claim for the sum of $85,000.00 and as part of the settlement, the parties acknowledged that Workcover was not entitled to a refund of statutory benefits paid by it in respect of the claim. The Secretary contended that both the ARO and the Tribunal below were incorrect in their calculations of the preclusion period because they mistakenly deducted the amount of the periodic compensation payment received by Mr Tavili ($4,182.24) from the total settlement amount, despite the settlement deed acknowledging Workcover was not entitled to a refund of the statutory benefits. Senior Member Cotter accepted the Secretary’s submission on that point saying that “to do otherwise would be to ignore the express wording of the settlement documentation”.[28]
[28] [2015] AATA 19, at [20].
The Secretary also relies on the Guide to Social Security Law.
Brennan J explained the relevance of an adopted policy to decision-making in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 640 (“Drake”):[29]
Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process.
[29] See also Singh v Minister for Immigration and Citizenship (2012) 199 FCR 404.
The Full Federal Court in Hneidi And Others v Minister For Immigration And Citizenship (2010) 265 ALR 292 set out the four propositions which emerge from Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 (“Drake”) when considering the entitlement of an administrative decision-maker to take into account a statement of governmental policy:
[41]…The first is that the decision-maker is entitled, in the absence of specifically defined criteria for the exercise of the discretion, to take into account “government policy”. Thus, where the tribunal is not under a statutory duty to regard itself as bound by the policy, it is entitled to treat the policy as a relevant consideration.
[42] Second, in the absence of a specific statutory provision (which would no doubt be unusual) the tribunal is not entitled to abdicate its function of determining whether the decision under review was, on the material before the tribunal, the correct or preferable one, to a more passive function of determining whether the decision conformed to the relevant policy.
[43] Third, it is not desirable to frame a general statement of the part which government policy should ordinarily play in the determinations of the tribunal. That is a matter for the tribunal to determine in the context of the particular case, informed by considerations of the desirability of consistency of administrative decisions but balanced against the ideal of justice in the individual case.
[44] Fourth, the borderline between cases in which the tribunal has abdicated its functions to those of an unthinking application of “government or ministerial policy” to the facts may sometimes be blurred. But where the tribunal considers that the correct or preferable decision results from the application of such a policy, it should make it clear that:
… it has considered the propriety of the particular policy and expressly indicates the considerations which have led it to that conclusion.[30]
[30] Drake at [297].
In Drake, Brennan J (as President of the AAT) noted that:
·“…an argument against the policy itself or against its application in the particular case will be considered, but cogent reasons will have to be shown against its application”.[31]
·“The Tribunal’s duty is to make the correct or preferable decision in each case on the material before it, and the Tribunal is at liberty to adopt whatever policy it chooses, or no policy at all, in fulfilling its statutory function”.[32]
·Further, consistency with comparable cases and decisions is “[o]ne of the factors to be considered in arriving at the preferable decision… and one of the most useful aids in achieving consistency is a guiding policy”.[33]
[31] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645.
[32] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 642.
[33] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 643.
The Tribunal is not bound to apply the Guide, but it may, and it should, apply it in exercising its discretion unless it is unlawful or “tends to produce an unjust decision”.[34]
[34] ReDrake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645.
The Guide sets out at 4.13.2.30 that:
The 50% rule is applied to the gross lump sum for the same compensable event. The only allowable deduction is periodic compensation that must be repaid because of the lump sum payment. The gross lump sum depends on the terms of the award or settlement. The following table shows how the 50% rule is applied in various situations.
(My emphasis added).
If the terms specify that the lump sum…
Then the 50% rule…
includes past periodic payments that are liable to be repaid,
Example: Settled for $300,000 with any past periodic payments to be repaid.
applies to the lump sum payment (LSP) less the repaid periodic compensation payments (RPCP), i.e. the amount of the lump sum compensation payment is:
LSP - RPCP.
The Guide clearly contemplates that one needs to consider the settlement terms in determining whether any period of compensation payments needs to be deducted, and in particular “if the terms” of settlement “specify that the lump sum includes…periodic payments…liable to be repaid”.[35]
[35] The Guide, 4.13.2.30.
Section 17(4)(c) requires that the recipient of the lump sum compensation payment has become liable to repay the Repaid Periodic Compensation payments equal to the Period Compensation Payment received before they are deduced from the lump sum payment amount.
In this instance, because of the settlement terms, Mr Spark did not become liable to repay the periodic compensation payments, therefore section 17(4) of the Act has no application. To find otherwise would mean that Mr Spark would not have to repay Workcover and would obtain a shorter preclusion period anyway. This would amount to double dipping which is contrary to the purpose of s 1169(1) of the Act.[36]
[36] Gifford v Secretary, Department of Social Services [2014] AATA 873, at [16].
The Tribunal agrees with the Secretary that the reviewable decision should be varied and finds that the ARO and SSCSD calculated the preclusion period incorrectly in deducting the amount of weekly compensation payments.
Mr Spark made no submissions regarding the calculation of the Preclusion Period.
ARE THERE ANY SPECIAL CIRCUMSTANCES?
The Secretary may, at its discretion, treat whole or part of the lump sum compensation payment as having not been made or not liable to be made if the Secretary thinks it is appropriate to do so in the special circumstances of the case.[37]
[37] Section 1184K of the Act.
If the Tribunal finds that special circumstances exist for the purpose of section 1184K, French J (as he then was) said, in Secretary, Department of Employment and Workplace Relations and Homewood [2006] FCA 779, at [34], that the Tribunal is expected to:
1. Identify the circumstances of the case which it found to be ‘special’ and the reasons for which it arrived at that finding.
2. Explain why, in the special circumstances so found, it thought it appropriate to treat the whole or part of the compensation payment as not having been made.
3. Explain why it selected the particular quantum (ie the whole or part) of the compensation payment as not having been made.
What does “special circumstances” mean?
The Act does not define what constitutes “special circumstances”.
There has been considerable judicial consideration of the phrase in the context of other social security legislation, for example:
·“Special” denotes something different from the usual or ordinary: Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per Kiefel J (as she then was).
·French J (as he then was) said in in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. … It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words... It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
·The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 held, at 450:
Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
·Jacobson J in Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639 explained the effect of the authorities as follows [emphasis added]:
[51] ...the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme: see Smith per von Doussa J at 60, 61–62; Groth per Kiefel J at 545, Kertland v Secretary, Dept of Family and Community Services (1999) 95 FCR 64 per Merkel J at 71, 73; Kirkbright v Secretary, Dept of Family and Community Services (2000) 106 FCR 281 per Mansfield J at [22], [26]–[27] and [31]–[32]; see also Secretary to the Department of Family and Community Services v Allan (2001) 116 FCR 1 per Heerey J at [17].
The AAT has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at 3 (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[38]
[38]See Hunnibell and Secretary, Department of Family and Community Services [2004] AATA 992, at [19]; Papps and Secretary, Department of Family and Community Services [2005] AATA 660, at [37].
In summary, the circumstances relied upon to be “special” must be unusual, different, uncommon or exceptional.[39]
[39]The core requirement for “special reasons” is that there be something “unusual or different”: French J in Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084,Do special circumstances exist?
Mr Spark contends that the compensation payment should be treated as not having been made because as a result of his workplace injury he is unable to work, he has no money and he and his wife support themselves from her income support payments.[40]
[40] Exhibit 1, T Documents, T1, pages 1-2, Mr Spark’s Application for Review dated 24 August 2017; T34, page 143,
Centrelink record.
Mr Spark told the Tribunal that:
·He has no money left from his settlement and is “doing it tough”;
·He looks for work but it is difficult because he cannot pass medical tests because of his foot;
·He bought some land for $18,000 near his house in 2011 and he has someone ready to lease this land for their cattle for $300/fortnight;
·He has spent money on new fridge, televisions, mowers, a freezer, a dirt bike (he valued at $18,000 and sold for $8,000), a motorbike (he valued at $9,500 and sold for $4,000); and,
·He and his wife had spent money on themselves.
Mr Spark argues that he has no money left and there is no employment available where he lives.
When asked where the bulk of the money went Mr Spark provided no detail and often answered that he was “not too sure”. The Tribunal finds this difficult to accept. $500,000 or even $300,000 is a considerable sum of money to have received. There is no accounting for that money.
Centrelink informed Mr Spark in advance of his decision to buy a house that a preclusion period was applicable as a result of his Settlement Sum.
The Secretary submits that no special circumstances exist and that the discretion in section 1184K cannot be invoked.[41]
[41] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 21 March 2018, para 68.
The Secretary referred to the Guide which provides in paragraph 4.13.4.10 that “as a general rule, special circumstances would NOT usually be applied where:
· the person has sufficient liquid assets to support themselves, and their family if applicable, for the duration of the preclusion period”.
Does Mr Spark have sufficient liquid assets to support himself and his family during the Preclusion Period?
Mr Spark provided the following information regarding his income and assets:[42]
·The value of his house and contents is $107,000, with no mortgage;
·He has household effects worth $2,000 (of which he has a 50% share);
·He has a car worth $3,000; and
·He has a van worth $2,500.
[42] Exhibit 1, T Documents, T27, pages 94-100, Income and Assets form completed by Mr Spark dated 9 August
2016; T28, pages 101-113, Real estate details form dated 6 January 2017.
Mr Spark gave evidence to the SSCSD that he thought, out of the total of $500,000, he received $300,000 clear (after legal and other costs), from his settlement. However, there is no evidence of this, there are no bank statements or other corroborating evidence provided by Mr Spark.[43] The Secretary also highlighted that the total legal costs payable was only $8,002.93.
[43] Exhibit 1, T Documents, T2, page 5, SSCSD’s Decision and Reasons for Decision dated 13 July 2017.
Mr Spark is the owner with his partner of an asset, namely a home and some land, which could be sold or against which a loan could be obtained to provide any necessary funds, at least until such time as the preclusion period has expired in 3 years’ time. Mr Spark said he had tried to sell the land and had listed it with an agent, but there is no corroborating evidence of this. Mr Spark admitted at the hearing that he had made no attempt to sell his home. There is no evidence that the state of the property market is such that he could not realise his asset.
The Tribunal cannot be satisfied regarding what Mr Spark did with the bulk of his Settlement Sum. This significantly weighs against the exercise of the discretion in section 1184K of the Act. Mr Spark has been vague in his responses and has not provided the Tribunal with any documents to substantiate his economic position. These facts, together with the fact that Mr Spark has potentially realisable unencumbered assets, means that the Tribunal cannot find that Mr Spark is suffering from significant financial hardship.
Further, there is no medical evidence before the Tribunal that allows it to ascertain whether or not Mr Spark has medical circumstances which are special. The Secretary notes:[44]
…if the Applicant suffers from ongoing health issues this is not unusual or out of the ordinary for someone who has received compensation as a result of a compensable injury. Again, the requirement to undergo further treatment or receive ongoing care is not unusual or out of the ordinary for someone who has received compensation as a result of a compensable injury.
[44] Exhibit 2, Secretary’s Statement of Facts and Contentions dated 21 March 2018, para 66.
DECISION
The decision under review is varied to the extent that the compensation preclusion period is correctly calculated from 19 November 2013 to 4 May 2021.
I certify that the preceding 68 (sixty-eight) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg
..........................[Sgd]..............................................
Associate
Dated: 31 May 2018
Date of hearing:
Date of final submission:
9 April 2018
27 April 2018
Applicant: By Telephone Advocate for the Respondent: Jacky Vetter Solicitors for the Respondent: Department of Human Services
at [37].
3
17
0