Steel and Secretary, Department of Family and Community Services

[2005] AATA 402

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 402

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/1164

GENERAL ADMINISTRATIVE  DIVISION

Re:         YAN GRAEME STEEL

Applicant

And:       SECRETARY,
  DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             5 May 2005

Place:            Melbourne

Decision: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(1), (2), (3), 1170(1), (4), (5), 1184K

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

5 April 2005  Regina Perton, Member

1.      This is an application by Yan Graeme Steel (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 7 September 2004.  The SSAT affirmed a decision of a delegate of the Secretary to the Department of Family and Community Services (the respondent) dated 29 April 2003 that the applicant was ineligible for disability support pension (DSP) due to a compensation preclusion period of 174 weeks, from 14 June 2000 to 14 October 2003.    

2.      At the hearing on 13 January 2005, the applicant  was represented by his daughter, Ms Rebecca Steel.   Ms Kayren Paul, a Centrelink advocate, represented the respondent. 

3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T55) as well as an expenditure statement and medical report tendered as exhibits by the applicant (Exhibits A1 and A2). 

BACKGROUND

4.      The applicant, who was born on 20 June 1949 and is now aged 55, was injured on 23 July 1999 while working as a truck driver.  As a result of the injuries he sustained when a heavy bale of cotton fell on him as the truck was being unloaded, he was unable to work.  He received weekly compensation payments until 13 June 2000.  On 26 June 2000, he applied for DSP which was granted, with payments backdated to 14 June 2000.   

5. On 12 September 2000, the applicant’s solicitor lodged a compensation claim in the Supreme Court of Queensland. On 14 March 2003, the compensation claim was settled for $230,000. On 24 March 2003, pursuant to s 1184D of the Social Security Act 1991 (the Act), Centrelink directed XI Winterthur Insurance Ltd to make a payment  of $29,832.03 to Centrelink, being recoverable DSP payments received by the applicant from 16 June 2000 to 19 March 2003.  

6.      On 29 April 2003, Centrelink wrote to the applicant advising him that the lump sum compensation payment of $209,644.48 ($20,355.12 being a refund for the weekly compensation payments) rendered him ineligible to receive DSP for 174 weeks, being the preclusion period from 14 June 2000 to 14 October 2003.  He was also informed that his DSP payments had been stopped.

7.      Centrelink had previously informed the applicant, his solicitors and other affected parties about the likely imposition of a preclusion period if the applicant’s compensation claim was settled. In particular, Centrelink wrote to the applicant and separately to his solicitor on 23 December 1999 advising them that, if the applicant received a payment of weekly compensation or a lump sum, some or all of the social security payments made may need to be paid back.  Centrelink also suggested that before any settlement was agreed to, that the applicant or his solicitor contact it to find out about the impact of the settlement amount on past and future social security payments.  On 30 June 2000, Centrelink wrote to the applicant and his solicitor in similar terms to its previous letters.  On the same day, Centrelink also wrote to Workcover Queensland foreshadowing its interest in any compensation payment the  applicant might receive; a process it repeated on 19 March 2002.  On 13 December 2001, in response to the applicant’s solicitor’s request, Centrelink advised him of the impact of three possible lump sum settlement figures on the applicant’s social security payments.  On 20 January 2003, Centrelink prepared and sent fresh calculations on three sets of figures  to the applicant’s new solicitor; a process it repeated on 11 February 2003 for four sets of figures,

8.      On 5 November 2003, the applicant reapplied for DSP.  On 5 December 2003, Centrelink advised the applicant  that DSP had been granted, with payments backdated to 30 October 2003.  The applicant contacted Centrelink on, and after, 11 December 2003 and indicated that he believed he was entitled to arrears  from March 2003.  A Centrelink officer re-examined the applicant’s circumstances and informed him on 16 December 2003 that Centrelink maintained that the preclusion period was from 14 June 2000 to 14 October 2003.   A team leader from Centrelink’s Compensation Recovery Team, further examined the applicant’s situation and on 24 March 2004, provided a comprehensive explanation to the applicant  of Centrelink’s decision of the length of the preclusion period and for raising a charge of $29,832.03.

9.      The applicant subsequently sought review of Centrelink’s decision.  On 21 April 2004, an Authorised Review Officer affirmed the decision. 

10.     On 9 August 2004, the applicant sought further review by the SSAT. The SSAT  affirmed the decision on 7 September 2004.  On 8 October 2004, the applicant lodged an application with the Tribunal for review of the SSAT decision.

11.     The issues before the Tribunal are whether the applicant was subject to a preclusion period; if so, what the length of the preclusion period should have been; and whether there are grounds to waive part or all of that preclusion period due to special circumstances.

EVIDENCE

12.     At the hearing, the applicant told the Tribunal that he migrated to Australia from New Zealand when he was 20 years old.  He has lived in Victoria,  for most of the time, but lived in Queensland for about 5 years. It was there that  the accident that led to the compensation payment occurred.  He said he requires further surgery as a result of the injuries he suffered when the bale of cotton fell on him. He had set aside some of the funds from the payout for that surgery, as he is not be eligible to have it funded under Medicare.  The surgery has been deferred for various reasons, including other medical conditions from which he now suffers, and also because of the need for his condition to settle down.  Due to the financial difficulties he encountered as a result of the preclusion period being imposed, he has now had to use some of the funds set aside.  

13.     The applicant described what happened at the time of settlement of the compensation claim and how unsatisfactory he found the whole process.  The applicant said that he was undergoing treatment for cancer at the time of the settlement and had flown to Queensland for the case.  He said that the settlement negotiations were conducted by legal representatives whom he had never met before and who were not the original solicitors.  He said that they had not briefed him beforehand and neither sought nor gave him much information about the process.  The applicant said that he believed he should have been entitled to a greater award, given the nature of the injuries and the large proportion of the settlement moneys that did not come to him.  The applicant tendered a statement providing details of the expenditure of funds that remained from the settlement (exhibit A2).

14.     The applicant stressed to the Tribunal that he wished to remain as independent as possible.  To that end, he has bought a cheap house in Morwell, but has been unable to live in it all year round, to date, as it had no running water, kitchen or bathroom facilities and still needs extensive renovation.  He intends remodelling it so that it is suitable for someone with his disabilities.  He said that he does not like having to rely on others or on charity, whether it is the hospital assisting him to obtain chemotherapy drugs during the period in which he did not have a health care card, or having to live in his ex-wife’s house as he had no other suitable accommodation.  

15.     A report from Dr Eugene Kalnin dated 31 December 2004 (Exhibit A!) indicated that the applicant has suffered from a number of conditions in recent years including an infection that required hospitalisation following a femoral to femoral graft, a major heart attack in November 2001 requiring stenting, a diagnosis of non-Hodgkin lymphoma in October 2002 with subsequent chemotherapy treatment and gall stones in September 2003.  Dr Kalnin stated that he requires further vascular surgery and a possible knee operation but that his thrombocytopenia needs to improve before surgery can take place.   The applicant and his daughter amplified the details of his illnesses during the hearing.

16.     Ms Paul questioned the applicant about how the compensation moneys had been spent.  The applicant referred to exhibit A2 and said that he does not have an extravagant lifestyle and has not frittered away his compensation payment.   He said that the reason they were pursuing the case before the Tribunal was his need for some additional money to modify his home to suit his disabilities.  Ms Paul also asked what had happened to some of the savings which were in existence at the time of the SSAT hearing but were no longer held.  The applicant said that he had spent the money on medication that was not covered by the public health system, on necessary repairs for the house and on the expensive foods he needed to eat to get his blood count back as close to normal as possible.  He said that the savings had been the amount originally set aside for the knee operation, which he might now have to do without.

17.     Ms Steel submitted that her father’s cancer had impacted greatly on him at the time of settlement of the compensation claim.  She stated that his state of health and the inadequacy of the settlement should be taken into account in looking at whether special circumstances existed to shorten the preclusion period.  She stressed that her father had not been treated well by the legal system.

18. Ms Steel indicated to the Tribunal that her father had seen a social worker in early 2003 and that there was an outstanding request to Centrelink under the Freedom of Information Act for that report. She asked the Tribunal to defer a decision until receipt of that report. Ms Paul undertook to check on the existence of the report and to seek to expedite its release if appropriate. On 19 January 2005, Ms Paul informed the Tribunal and the applicant that there was no written report beyond a reference in the Department’s computerised records of 30 April 2003, which she attached.

CONSIDERATION OF THE ISSUES

19. Section 17(1) of the Act provides that compensation affected payment includes disability support pension.  Section 17(2) of the Act provides:

17.(2)  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.

20.     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 1170 of the Act sets out the method of calculating a compensation preclusion period, which commences on the day following the last day of periodic payments (s 1170(1)(a)).  Section 1170(1)(b) provides that the length of the preclusion period is calculated by dividing the compensation part of the lump sum payment by the income cut-out amount (s 1170(4) and (5)).  Income cut-out amount is defined in s17(1), according to a formula set out in s17(8).

21.     The documentary evidence does not show that the settlement award was for reasons other than compensation for loss of earnings or loss of earning capacity.  The Tribunal finds that the compensation received by the applicant falls within the definition of compensation in s 17(2) of the Act.  Under s 17(3) of the Act, 50 per cent of the lump sum settlement is the compensation part of the payment.  The Tribunal is satisfied that the delegate and previous review bodies correctly calculated the preclusion period, namely from 14 June 2000 to 14 October 2003, during which no DSP was payable to the applicant. The Tribunal notes that the applicant did not challenge that calculation.

22.     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.  It is this provision that the applicant and his daughter seek to rely upon in applying for review to this Tribunal. 

23.     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.  In Re Beadle and Director‑General of Social Security (1984) 6 ALD 1 the Tribunal held that: the special circumstances referred to in the Act, must be unusual, uncommon or exceptional.  The Tribunal accepts that the applicant has multiple medical problems which can be ameliorated through additional medical treatment and particular foods.  It notes his desire for independence and accepts that the house he bought needs further repairs before he can live in it all year round.  

24.     After considering all relevant matters and viewing the applicant’s case in its entirety, the Tribunal is not satisfied that the matters raised by him are such as to make his circumstances unusual, uncommon or exceptional.  His circumstances, while difficult, are not special circumstances.  Therefore, it is not appropriate for the Tribunal to exercise the discretion under s 1184K(1) of the Act, to disregard the compensation received in whole or in part.  As a result, the applicant was prevented from qualifying for DSP for the entire preclusion period as calculated.

DECISION

29.      The Tribunal affirms the decision under review.

I certify that the twenty-nine [29] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Catherine Thomas

Clerk

Date of hearing:  13 January 2005
Date of decision:  5 May 2005
Advocate for applicant:                Ms K Steel, applicant’s daughter
Advocate for respondent:            Ms K Paul, Centrelink