Stone and Secretary, Department of Family and Community Services

[2003] AATA 328

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 328

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2001/1130

GENERAL ADMINISTRATIVE DIVISION		)
Re		SHARNA STONE

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr R G Kenny, Member

Date9 April 2003

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

(Sgd) R G Kenny
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – lump sum compensation payment – lump sum preclusion period – special circumstances

Social Security Act 1991 ss 17, 1169, 1170, 1184

Beadle v Director-General of Social Security (1985) 7 ALD 670
Director General of Social Services and Hales (1983) 47 ALR 281
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director-General of Social Security (1984) 1 AAR 362
Re Martin and Secretary Department of Social Security (AAT No 6482, 14 November 1990)
Re Minda and Secretary, Department of Social Security (1995) 2 SSR 641
Re Secretary, Department of Social Security and Ellis (1996) 43 ALD 41
Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681
Re Director General of Social Services and Hales (1983) 47 ALR 281

REASONS FOR DECISION

9 April 2003 Mr R G Kenny, Member     

Application

1.      Sharna Stone (the applicant) received income support payments under the Social Security Act 1991 (the Act) following an injury incurred by her on 13 October 1994. On 10 May 2000, she received a lump sum compensation settlement of $55,000, which included a component for economic loss. On 11 May 2000, a Centrelink officer, on behalf of the Secretary, Department of Family and Community Services (the respondent), determined that the applicant was subject to a preclusion period from the date of her injury until 3 January 1996 and that, as a result, she was required to repay the sum of $10,828.13 that she had received in that period through income support payments. That decision was affirmed by an authorised review officer on 28 May 2001 and then by the Social Security Appeals Tribunal on 21 November 2001. On 7 February 2002, the applicant sought review of that decision by the Administrative Appeals Tribunal (the Tribunal).

2.      At the hearing, the applicant was not represented. Ms H Wallis-Dunn, Advocate from the Advocacy and Administrative Law Team, appeared for the respondent.

3.      In evidence were the T documents (T1–T21) (exhibit 1) as well as the following:

§exhibit 2 – a bundle of documents tendered by the applicant;

§exhibit 3 - a summary of Centrelink payments made by the respondent to the applicant; and

§exhibit 4 - a statement detailing the payment currently being paid to the applicant by the respondent.

Issues for Determination

4.      It is not disputed by the applicant that she received a lump sum compensation settlement of $55,000 on 10 May 2000 or that this included a component for economic loss. Neither is it disputed that she was required to repay to Centrelink the sum of $10,828.13 that she had received after her injury through income support payments or that the preclusion period was correctly calculated.

5.      The only matter that the applicant takes issue with is that relating to whether some part of the compensation payment should be treated as not having been made because of the special circumstances of her situation so that there would be a reduction in the length of the preclusion period.

Applicant’s Case

6.      The applicant said that she had been advised by the solicitor who conducted her compensation case that she would have to repay an amount to Centrelink but was also told that she could appeal the decision on the basis of financial hardship alone. She said that she is now pursuing avenues of redress in relation to what she now believes to have been incorrect advice. She said that she had to settle her compensation case out of court because she had been made aware that, if she went to court and was not successful, she could face the possibility of paying the other party's legal costs as well as her own.

7.      The applicant said that she had some basic qualifications in relation to providing massage services and that she had been trying to establish herself in that business but currently has no clients to treat. She was unable to gain an employed position in that capacity because she doesn’t have the necessary formal qualifications that would enable her to be covered by insurance. Also, the soft tissue injuries that she sustained in her accident continue to affect her and she is only able to work where she is able to maintain control over her hours. She said that she has attempted to work in other capacities, despite the fact that she is not obliged to as a recipient of the disability support pension. However, these attempts have been unsuccessful because of the pain and discomfort she experiences because of her injuries.

8.      The applicant said that she has suffered from depression and had, in the past, been on a course of anti depressant medication prescribed by a medical practitioner. However, she also said that she has faith in alternative therapies rather than traditional medicine and undertakes acupuncture, chiropractic treatments and remedial massages periodically to relieve her pain. She said that she has been told that she has developed lactose and gluten intolerance although she has not consulted a medical practitioner about these conditions and neither condition has been formally diagnosed. She said that the presence of these conditions has imposed higher living expenses on her because of the particular dietary regimen she needs to follow. She also said that she had needed to spend more than $2,000 in 2001 for the surgical extraction of her wisdom teeth.

9.      The applicant said that, since her accident, she has been forced to borrow money in order to live and that much of her lump sum payment was used in repaying debts incurred between the date of the accident and the time of payment. She said that she is in very difficult financial circumstances with her expenses amounting to more than her earnings. She said that her disability support pension varies in accordance to whether she is able to undertake employment but is usually about $505 per fortnight. She said that this is after a deduction of $20 per fortnight to Centrelink because of a repayment that is deducted from her pension. She gave her expenses as comprising:

$185 – rent
$10 – bond loan
$25 – Buyers Edge
$31.60 – MBF health insurance
$25 – motor vehicle insurance
$20 – mobile phone
$20 – home phone
$25 – electricity
$30 – mastercard
$110 – groceries and pet food
$30 – petrol
$15 – internet connection, stationery and office supplies for interviews

$60 – remedial massage

10.     The applicant said, in addition to those expenses, she has a debt of $5,000 to her mother and one of $2,007 to a friend and that each of these people require immediate payment or else they will commence legal proceedings against her. She said that the amount paid to Buyers Edge is a repayment of a loan which she took out to finance new tyres for her car and that this was almost fully repaid. She said that her financial position has forced her to seek food vouchers from charity organisations and that she has taken measures to reduce her spending and has been forced to sell things to try to make ends meet. She said that she needed to borrow shoes to enable her to attend the hearing. The applicant said that her most valuable asset is her car, which she bought with her settlement monies and which she believed to be worth about $9,000. She said that she did not want to sell this because she was still hopeful of establishing a massage business and needed the vehicle for that purpose. However, she also said that she realised that she may be forced to sell it to meet her financial obligations. She said that she commenced a Diploma in Natural Therapies course but has not been able to continue with this because of the costs involved.

11.     In relation to her rent, the applicant said that she lived by herself in a house in an outer suburb and that, for over 12 months, her attempts to find a co-tenant have been unsuccessful. She said that she would be able to occupy a unit at a lower rental but, because she has two cats and a dog, this is not an option for her.

12.     The applicant said that she will probably surrender her membership of the medical benefits fund because of the cost despite the assistance it gives her in undertaking massages and chiropractic treatment.

Respondent’s Submission

13.     Ms Wallis-Dunn submitted that there were no special circumstances in this case such as to justify a reduction in the preclusion period. She referred to Beadle v Director-General of Social Security (1985) 7 ALD 670 and submitted that, on that authority, the circumstances would need to be "unusual, uncommon or exceptional” to be special. She conceded that the applicant was in difficult financial circumstances but submitted that this, alone, was not sufficient to enable the discretion in sub-section 1184(1) to be applied to her.

14.     Ms Wallis-Dunn submitted that the only diagnosed health problems from which the applicant suffered were those associated with her 1994 injuries and that the settlement monies paid to her were compensation for those. She submitted that the applicant is no longer in receipt of antidepressant medication and that her lactose and gluten intolerance had not been formally diagnosed.

15.     In relation to the nature of the legal advice provided to the applicant, Ms Wallis-Dunn submitted that this was not a matter for the Tribunal and she noted that the applicant had taken advice on avenues available to her in relation to that.

16.     Ms Wallis-Dunn also referred to the lapse of time between when the applicant lodged her application for review in February 2002 and when she was finally ready to proceed to a hearing and she submitted that this should be taken into account when deciding whether or not to exercise the discretion in the applicant’s favour.

Applicant’s Submission

17.    The applicant submitted that the preclusion period should be reduced so that she would be able to receive a repayment of at least some of the monies that had been taken by Centrelink. She had believed that this would be the case on the basis of the advice given to her by her solicitor. She submitted that she was experiencing health problems which prevented her from obtaining or remaining in employment and that this had led to loss of self esteem and difficult financial circumstances. She also submitted that the circumstances of a young person in her position having to obtain food vouchers and having to borrow shoes to attend a hearing were uncommon, unusual and exceptional.

Consideration

18.     It is not disputed and I am satisfied that the applicant received a lump sum compensation settlement of $55,000 on 10 May 2000 and that this included a component for economic loss. As a result of the amount and form of the lump sum payment to the applicant, the respondent was obliged to calculate a preclusion period utilising sections 17, 1165 and 1166 of the Act. The application of those provisions is detailed in the reasons published by the Social Security Appeals Tribunal and I am satisfied that this leads to the preclusion period calculated initially and confirmed by that Tribunal as being from 13 October 1994 until 3 January 2000. Again, this was not disputed by the applicant. Neither is it disputed and, again, I am satisfied that she was required to repay to Centrelink the sum of $10,828.13 which equates to the sum of income support payments made to her in the preclusion period.

19.     There is provision for part of a compensation payment to be disregarded where sub-section 1184(1) of the Act applies. It reads:

“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.”

20.    The Act provides no guidance as to the meaning of the term “special circumstances” in that section of the Act. In Beadle v Director-General of Social Security (1985) 7 ALD 670, the Full Court of the Federal Court, in dealing with the phrase, stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 674).  There, the Court affirmed the decision of the Tribunal (Re Beadle and Director-General of Social Security (1984) 1 AAR 362) where (at 364) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances must be “unusual, uncommon or exceptional” and must have a “particular quality of unusualness that permits them to be described as special".

21.    In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle’s case, observed (at 545) that special circumstances:

“would require something to distinguish ... [the] case from others, to take it out of the usual or ordinary case. …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.”

22.    In this case, the applicant has referred to the legal advice that she received as being, in part, responsible for accepting a settlement amount less than she believed she was entitled to and, in that way, as being a special circumstance to justify the shortening of the preclusion period. While it is not certain what the legal advice to the applicant was, there is, nonetheless, authority for the view that failure by a legal adviser to properly advise does not establish a special circumstance because the person may exercise a right to take civil against the solicitor and, in Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681 at 697, the Tribunal said:

“Overall this factor is not persuasive or determinative and the best view is that the matter is one, if at all, as between solicitor and client.”

23.     That approach was also adopted in Re Martin and Secretary Department of Social Security (AAT No 6482, 14 November 1990) and Re Minda and Secretary, Department of Social Security (1995) 2 SSR 641. In this case, the applicant has indicated that she has taken preliminary steps towards pursuing her rights in relation to the solicitor who advised her and I am satisfied that the nature of that advice, whatever it may have been to the applicant, and any reliance by her on it, do not constitute a special circumstance in this matter.

24.     While it is the case that the applicant is living in difficult financial circumstances, I am satisfied that these have been brought about by her inability to engage in full time employment and that this is due to the health problems associated with the injuries she received in 1994.. The lump sum that she received in 2000 was compensation for those conditions. She is also in receipt of disability support pension. She gave evidence that she believed that she suffers from other health problems in the form of lactose and gluten intolerance but has not had this belief confirmed by a medical practitioner. I accept that she has suffered from depression in the past but that she is no longer being treated for this condition.

25.     Where a person’s financial circumstances can be characterised as going beyond being straitened and truly exceptional, there is authority for special circumstances to be found: see Re Secretary, Department of Social Security and Ellis (1996) 43 ALD 41. However, in this case, I am satisfied that the applicant’s financial difficulties do not meet that description and that, in any event, they are related, in large part, to the manner in which she has managed her situation. She has chosen to live in a house which is a more expensive option than other forms of accommodation because she has two cats and a dog which also involve her in additional expenditure. If those additional costs were not incurred by the applicant, she would be in a position not significantly different from that of many other recipients of social security benefits who, as noted in Re Director General of Social Services and Hales(1983) 47 ALR 281 at 283, are not uncommonly in that situation: see also Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681 at 692. Further, the applicant has an available asset in the form of her motor vehicle which she could sell if that became necessary and, perhaps, purchase a more modest vehicle. I accept that she hopes to rely on that vehicle to develop a massage business. However, the extent to which she currently utilises it to assist her in that endeavour is negligible. I am satisfied that the applicant’s financial situation is not a special circumstance for the purposes of the Act. I also consider it to be significant that the preclusion period has been completed and that this is not a case where the shortening of the preclusion period would enable her to qualify for such a payment. As noted above, the applicant is in receipt of income support from the respondent.

26.     Where the discretion in sub-section 1184(1) of the Act is exercised, there is an obvious double benefit to the person in the applicant’s position. The provision requires special circumstances before that outcome can be achieved. In this case, I am satisfied that there is nothing in this case that characterises the applicant’s situation as being unusual, uncommon, exceptional or unfair and I am satisfied that there are no special circumstances in the applicant’s case that would justify the exercise of the discretion under sub-section 1184(1) of the Act.

27.     The decision under review is affirmed.

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  27 March 2003
Date of Decision  9 April 2003

The Applicant Appeared in Person
Solicitor for the Respondent     Ms H Wallis-Dunn, Departmental Advocate