Teuma and Secretary, Department of Family and Community Services

DECISION AND REASONS FOR DECISION [2002] AATA 207

ADMINISTRATIVE APPEALS TRIBUNAL ) No N2001/225
GENERAL ADMINISTRATIVE DIVISION )

Re      Paul Teuma
  Applicant
         And    Secretary, Department of Family and Community Services
  Respondent

No N2001/292
Re Secretary, Department of Family and

Community Services

Applicant

And Paul Teuma

Respondent

DECISION

Tribunal Ms N Isenberg, Member

Date2 April 2002
PlaceSydney

Decision The Tribunal sets aside the decision under review, being the decision of the Social Security Appeals Tribunal dated 31 January 2001, and in substitution therefor determines that the lump sum compensation preclusion period to be imposed on Mr Teuma is from 20 February 1998 to 25 June 2004.

[SGD] N Isenberg, Member
CATCHWORDS
SOCIAL SECURITY – lump sum workers' compensation payment – preclusion period – whether special circumstances exist to justify the exercise of the discretion to disregard all or part of the compensation payment

LEGISLATION
Social Security Act 1991 – sections 17, 1163, 1165 and 1184(1) (as at 30 March 1998)

CASE LAW
Re Department of Social Security and Rodgers (1992) 26 ALD 235
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Re Green and Department of Social Security (1990) 21 ALD 772
Department of Social Security v Hulls (1991) 22 ALD 570
Department of Social Security v Smith (1991) 30 FCR 56
Department of Social Security v Banks (1990) 23 FCR 416
Re Brodley and Secretary, Department of Social Security (1991) 63 SSR 878
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Martin and Secretary, Department of Social Security (AAT 6482, 14 November 1990)
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Re Martin and Secretary, Department of Social Security (AAT 6482, 14 November 1990)
Re Secretary, Department of Social Security and Rodgers (1992) 26 ALD 235

REASONS FOR DECISION

29 March 2001 Ms N Isenberg, Member

DECISION UNDER REVIEW

This is an application for review by Mr Paul Teuma (application N2001/225) and a cross-application by the Secretary, Department of Family and Community Services ("the Department") (application N2001/292) of a decision of the Social Security Appeals Tribunal ("the SSAT") dated 31 January 2001. The SSAT set aside the decision of a Centrelink delegate of the Department dated 30 March 1998, which imposed a compensation preclusion period between 20 February 1998 to 23 December 2005 (T4a), and remitted the matter to the Department for reconsideration in accordance the direction that so much of the compensation payment be disregarded as would impose a lump sum compensation preclusion period beyond 25 June 2002. On 8 August 2000 an authorised review officer had varied the preclusion period to a period of 20 February 1998 to 25 June 2004 (T22).
ISSUES BEFORE THE TRIBUNAL
The calculation of the lump sum compensation preclusion period was not an issue pursued by the Department in this instance. It was agreed between the parties that the central issue in this matter was the application of section 1184 of the Social Security Act 1991 (as at 30 March 1998), that is, whether there are any "special circumstances" in Mr Teuma's case to reduce the length of any preclusion period..
APPEARANCES
At the hearing, Mr Teuma appeared without representation, but was assisted by his partner, Ms Young. The Department was represented by Ms Hannelore Schuster, an advocate from the Advocacy and Administrative Law Team at Centrelink.
LEGISLATION
The relevant legislation in this matter is the Social Security Act 1991 ("the Act"), in particular section 1184 (as at 30 March 1998) which provides as follows:
"Section 1184 Secretary may disregard some payments
1184(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.
1184(2) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person's partner receives compensation; and
(c) the set of circumstances giving rise to the compensation are not related to the set of circumstances that give rise to the person's receipt of or claim for the compensation affected payment;
the fact that those 2 sets of circumstances are unrelated does not in itself constitute special circumstances for the purposes of subsection (1).
Note: Subsection (2) is in response to comments made in the decision of the Administrative Appeals Tribunal in Re Secretary, Department of Social Security and Lee (S92/155) to the effect that the Social Security Act is aimed at reducing pensions in situations where a social security recipient's entitlement is somehow connected with the fact that the recipient's partner is in receipt of compensation payments and not wages."

EVIDENCE: Documents

The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents" marked T1-128, pp 1-67), which the Tribunal took into evidence.
Other documentary evidence was as follows:
Exhibit          Description    Date
R1      Department's Statement of Facts and Contentions      28 November 2001
R2      Department's Supplementary Submission        1 December 2001
R3      Report of Kylie Vidler         27 April 1999
A1      Report of Dr Lim      3 December 2001

EVIDENCE: Mr Teuma

Mr Teuma gave sworn evidence and was cross-examined on behalf of the Department. Questions were also put to Mr Teuma by the Tribunal.
Mr Teuma told the Tribunal that he had been aged 29 at the time of his injury at work and that he could see the following 26 years of not being able to work at an average income of about $30,000 per annum. He received the net sum of $267,000 in settlement monies. At the time of the settlement he was heavily drugged. His solicitor made the arrangements and told him that he would not be able to get social security benefits until "the year such and such". Mr Teuma could not remember which year his solicitor referred to, but thought it was 2004, rather than 2005. He later got "some paperwork" that said it was 2005.
Mr Teuma said that at the time of the settlement he was on excessive medication and had just purchased his house. The week beforehand he had started taking morphine and had been very stressed as he had been unable to withdraw from purchasing the house because the "cooling-off period" had ended. He complained about his conveyancer who had failed, apparently, to identify defects in the property, but his complaint was to no avail. He suffered a nervous breakdown. Following his breakdown he stopped all medication but still occasionally takes marijuana.
After he and his partner, Ms Young, separated, the house was sold and he lived with his grandmother. He was badly depressed at that time. In addition to this he discovered a bank error of $15,000, and so thought he had more money than he actually did.
In May Mr Teuma's brother died and family members came from Malta for the funeral. He arranged and paid for the funeral and his father reimbursed him half those expenses and his mother paid him $6000, with another $5000 to pay. The funeral cost about $22,000 in total.
In May 2001 Mr Teuma took his partner and their children to Malta to visit relatives for nearly four months.
Mr Teuma told the Tribunal that he works occasionally for a mate who has an electrical business, however this has only produced about two jobs in the last six months, for which he has been paid $150. He has several uncles in the motor mechanic business, whom he helps out as much as he can. He receives little pay for this work, which he feels merely compensates him for the pain he suffers when working.
Mr Teuma was asked about his expenses. He said that his rent was about $190 per week and that the Optus link was $20 per week. However, his partner, with whom he has reconciled, pays these bills. Two of his three children attend Catholic schools, which is more expensive than public schooling. He owns two cars, one of which is a 1986 Toyota four-wheel-drive which was his brother's and to which he is attached for sentimental reasons. The other is a 1987 Commodore. In addition he owns an "old bomb" which is unregistered.
The Applicant agreed that he had told the SSAT that at the time of that hearing, in January 2001, he had $68,000 and no debts. Currently, he still has no debts but has no money in his accounts.
With the money which his mother had paid him in reimbursement of his brother's funeral expenses, he had bought a boat for $17,500. Ms Young had lent him $10,000 of that. Another $2500 came from insurance for repairs to his present car.
Mr Teuma had initially bought a Honda for $13,000 after he and Ms Young separated. He then discovered there was the bank error of $15,000 and had to sell the car, trading down to the Commodore which he bought for $6000, and received some cash.
In cross-examination Mr Teuma confirmed that the compensation settlement had occurred in February 1998. His attention was invited to the letter from Centrelink (T4a) but he said he could not recall receiving the letter but conceded that his solicitor had told him about the preclusion period. At the time he had thought that the settlement figure was a good sum and expected to be able to live off that amount.
In October 1998 Mr Teuma bought his house. There was some money left over and he and Ms Young lived off that. He and Ms Young separated in early 2000 and at that time he still had money in the bank. His attention was invited to T15 where it was indicated that in February 2000 he had $21,000 in the bank. The document also shows the bank error to which he had referred. This account showed his only cash. Mr Teuma was shown the terms of the property settlement between he and Ms Young, dated March 2000 (T7), which stated that they had agreed to share the proceeds of the sale of the house, which had been bought in both names.
Mr Teuma was shown the Centrelink notation (T5) wherein he first asked Centrelink for assistance on 8 March 2000. At that stage he had some cash but knew it was not going to last. He said he tried to think about the preclusion period but did not want to look at how long the money might last.
From the proceeds of sale of the house he received about $94,000. He didn't think that that amount would last to the end of the preclusion period, especially if he bought a house in Muswellbrook as he had hoped. He did not calculate how long the money would last if he was renting.
Mr Teuma's attention was invited to the record of his evidence before the SSAT wherein he had said that at the time of the hearing he had approximately $68,000 in his bank account and no debts. He agreed that between the selling of the house and the SSAT hearing there were a couple of months wherein it appeared he had spent about $26,000 as his cash had decreased from $94,000 to $68,000. He did not know how that had occurred. It was possibly because of his payments for his brother's funeral, although he had already received $16,000 back from his parents for the funeral costs.
Mr Teuma was asked to comment upon the fact that he now has no more money, he having spent $68,000 since the SSAT hearing, as well as the $16,000 he had been repaid by his parents. In response to this he stated that he had bought some machinery, for example, a lathe for $3800 and a welder for $1100. Because he had put all their household things into storage while overseas, this cost in excess of $1000. He had also bought the boat, to which he had contributed $7500. He purchased a shed for $742. As far as financing the trip overseas, he paid for the children and himself. As to other substantial assets he said that he had bought an acoustic guitar for $1100 not long after he and his partner had separated.
Mr Teuma said that he and his partner had been separated for about 12 months before they went overseas. They had been together for a total of about 15 or 16 years. They had previously separated in 1994 or 1995 and again in 1996. Each time they had separated they had reconciled. Mr Teuma said that he and his partner started reconciling from about January in 2001.
Ms Schuster asked if Ms Young still had her share of the proceeds of sale of the house. Mr Teuma said that he understood her to have more than half of it left. Ms Schuster invited Mr Teuma to tell the Tribunal if those moneys were still available for the benefit of the family and he said he had not discussed that with his partner. Ms Young's only income is what she gets from Centrelink.
Ms Schuster took Mr Teuma to the report from Kylie Vidler of the Assessment and Acute Mental Health Team (Exhibit R3) wherein Ms Vidler stated that Mr Teuma's mental state is now quite stable. He agreed that he was definitely improving.
EVIDENCE: Ms Young
Donna Marie Young is the partner of Mr Teuma and she gave sworn evidence on his behalf. They have been partners for about 15 years, on off. There have been a number of separations, the most recent of which commenced on Australia Day 2000. Her intention in separating at that time was to get Mr Teuma to realise that he was suffering from depression because he would not realise it himself. At that time she did not want the separation to be permanent.
Ms Young stated that some aspects of the relationship during the separation deteriorated to the point where there was a custody dispute about the children, which was apparently settled by Mr Teuma and Ms Young's respective representatives. Mr Teuma was granted custody of the children every second weekend and in alternate holidays.
Ms Young gave evidence that it was her understanding that Mr Teuma's compensation claim settled in February 1998 for $267,000. A house was purchased with most of the proceeds but she made no contribution to the purchase of the property. An engineer Mr Teuma engaged found many faults with the house and this caused Mr Teuma severe depression. When depressed Mr Teuma took amphetamines and marijuana.
Ms Young stated that when "money became tight" Mr Teuma "hocked" things. It was hard to pay the bills and at the time she left him he had $24,000 in the bank. She had to take him to court in order to get all her belongings because all she had taken with her was a bag of clothes and some portable things for the children.
When they were together her money was used to pay electricity, gas, rates, pool maintenance, medical expenses and school fees. If there were bills and she did not have the money Mr Teuma would pay from invested money, but only ever on maturity. Otherwise she would ask her family. She also became depressed.
As to the overseas trip, Ms Young said she paid for half of the airfares and Mr Teuma paid the other half. While they were overseas she paid the rent and day-to-day expenses and they paid half the cost each if there was an outing. While away he paid for storage of the family's belongings.
Ms Young was invited to comment upon her understanding of Mr Teuma's ability to work and she said that depended upon how his back is and this varies from day-to-day. She thought it unlikely that he would find an employer with such flexible working hours as to accommodate the changes in his back condition.
Ms Young said she pays practically everything including life and accident insurance and the children's school fees. Even if Mr Teuma wants cigarettes or to buy presents she has to pay for it. She added that she lost income because of the reconciliation with Mr Teuma and because of the money she has invested from the proceeds of the sale of the house.
In cross-examination Ms Young said that she currently has about $59,000 left from the proceeds of the sale of the house whereas Mr Teuma has nothing. Mr Teuma has asked her to keep account of what she is paying so that he can pay her back for things such as the cost of the boat ($10,000) and its repairs ($1000). In addition, there was about $5000 cash that she gave Mr Teuma to buy presents. She does not know what happened to Mr Teuma's $94,000 but does know that he purchased the lathe, a welder and some equipment, the boat, and batteries for the vehicles. It was also necessary to pay an extra four weeks rent to secure the premises in which they currently live. Mr Teuma also had significant legal expenses from the property settlement matter, the sale of the home and the court proceedings brought against the driver of the motor vehicle that had damaged Mr Teuma's Commodore.
Ms Young is not working but is about to commence three months training in an accountancy firm. She has no choice but to be the family's breadwinner.
Ms Young thought it was probably right that at the time of the SAAT hearing Mr Teuma would have had about $68,000 in cash and no debts. When asked to speculate where that money might have gone she said that it had probably been spent on the overseas trip, his brother's funeral, living expenses while they were separated, for example petrol and renting a flat, hotel or caravan in which to live while he was not staying with family.
Ms Young stated that when they got back together she paid for everything. Virtually straight away Mr Teuma was out of money. They were going to separate again on the return from overseas but she decided to stay with him.
SUBMISSIONS: Applicant
Mr Teuma personally had little to put to the Tribunal by way of submission. He said that no one should have to live the way he does.
Ms Young made an impassioned plea on behalf of Mr Teuma to the effect that it was clear that the money was all gone and that he had not "stashed it". It had been spent on the funeral, on the overseas trip and on "pot". She said she was concerned that continuing in their present financial situation would destroy the family.
SUBMISSIONS: Department
The Department's case was essentially that there are no special circumstances in Mr Teuma's case which would warrant a further reduction in the preclusion period to a date earlier than 25 June 2004. The Department submitted that the SSAT's decision in reducing the preclusion period to 25 June 2002 was incorrect.
It was submitted that there was no evidence of long-term financial hardship. It was conceded that Mr Teuma did experience financial difficulties between the time of his separation and the sale of the property but this was a cash flow problem only. The sale of the property brought Mr Teuma $94,000 and he is vague about how that money was spent.
In about September 2000 he received $94,000 and Ms Young received a similar amount. All that is left is about $59,000 in Ms Young's account. There was evidence that Mr Teuma had spent some on his personal living expenses, on the overseas trip and on tools. The Tribunal was asked to view his spending as reckless thereby having created self-inflicted hardship.
The Tribunal was referred to the case of Re Secretary, Department of Social Security and Rodgers (1992) 26 ALD 235, where the applicant had gambled away a compensation payment of $300,000. Ms Schuster referred to paragraph 10 of that decision as follows:
"We interpret the Tribunal's comments in Tallon's case to mean what they say, namely, that hardship is hardship even if self-inflicted but we do not read them to mean that self-infliction is not a circumstance to be taken into account in determining the Section 156 test. It is not the law, as we understand it, that by profligate conduct a person who because of an accident which deprives him of capacity to work receives as part of his compensation package a lump sum for future economic loss can escape the effect of Section 153 of the Act in this way. That would make a mockery of the preclusion period provision."

Ms Schuster, for the Department, contended that the financial hardship faced by Mr Teuma was as result of his reckless spending during 2000 and 2001. A further cost to the taxpayer would be contrary to community expectations that one should support oneself after having received compensation for injury.
As to Mr Teuma's mental health it was conceded that he had experienced problems in 1998 and 1999. However, at the time of the SSAT hearing and since, Mr Teuma has been constantly improving. Although there was a risk of relapse, that was a possibility only. A relapse did not occur after Mr Teuma's separation from Ms Young, nor was there a relapse upon his brother's death. It was therefore submitted that the SSAT had erred in reducing the preclusion period because of Mr Teuma's mental health. In addition, it was contended that his other health problems were not unusual, in that compensation cases, by their very nature, involve applicants with health problems.
Marital separation as experienced by Mr Teuma was also something that affected people in general. None of these reasons was the cause of the financial hardship.
Ms Schuster, for the Department, said that the amount of compensation received by Mr Teuma was the equivalent of 360 weeks of pension payment for a single pension, that is, about seven years. Mr Teuma could easily have managed to make ends meet had he chosen to spend his compensation payment as if he were on a pension. The money would have lasted even longer (548 weeks) at the married rate.
The Department submitted that the SSAT had inappropriately focused on the temporary financial disabilities experienced by Mr Teuma and not his ongoing situation. Further, the aim of the legislation had been ignored, that is, to prevent "double dipping".
It was also submitted by the Department that about $59,000 of Mr Teuma's compensation payment was still held by Ms Young to be used for the benefit of the family. Mr Teuma and Ms Young had been living together again since May 2001, and Ms Young regards herself as the breadwinner of the family. The family is not in dire financial straits.
In addition, it was submitted that there was still some capacity for Mr Teuma to earn income.
Ms Schuster repeated her contention that it was Mr Teuma's reckless conduct which brought about his current financial position. The expenditure of the $94,000 cannot be accounted for. Therefore, it was submitted that there was no reason for the Tribunal to exercise its discretion in Mr Teuma's favour and no reason to find that the compensation preclusion period determined by the Department was unfair or unjust.
Ms Schuster submitted that, although the Department does not agree with the method used by the authorised review officer in calculating the preclusion period, it is prepared to accept the length of time fixed by the authorised review officer, namely up to 25 June 2004. To do so produced a generous result, in that it had reduced the preclusion period, initially imposed by the Centrelink officer on 30 March 1998, by one and half years. No further reduction should, in the Department's submission, be contemplated by the Tribunal.
DISCUSSION OF EVIDENCE AND FINDINGS
The Tribunal accepts that there are a number of facts which, essentially, are not in dispute. These are as follows:

On 20 February 1998 Mr Teuma received a gross lump sum compensation payment of $330,000, of which he received a net amount of $267,000. At the time he was advised by his solicitors that there would be a preclusion period, that is a time when he could not receive social security benefits, until, what the understood to be 2004.
In October 1998 Mr Teuma and his partner, Ms Young, purchased a house for $168,000 in joint names with the settlement monies.
On 26 January 2000 Mr Teuma and Ms Young separated. At about that time Mr Teuma had approximately $20,000 in the bank.
On 2 March 2000, as a result of a property settlement between Mr Teuma and Ms Young, the house was sold and the proceeds were distributed 50/50 between them. As a result Mr Teuma received $94,000.
On 31 January 2001 Mr Teuma told the SSAT that he had $68,000 and no debts.
In May 2001 Mr Teuma and Ms Young reconciled and shortly thereafter the family went overseas for nearly four months.
Currently Mr Teuma has no money.

When the matter was before the SSAT there was no challenge of the calculation of the preclusion period on behalf of Mr Teuma. No issue was taken with this before this Tribunal either. Calculations in accordance with the Act produce a preclusion period from 20 February 1998 to 23 December 2005. The Department, however, is prepared to accept a period to 25 June 2004.
Therefore, the only issue for resolution before the Tribunal is whether there are special circumstances in Mr Teuma's case for the whole or part of the compensation payment to be treated as not having been made. The effect is to determine the period during which Mr Teuma is not entitled to receive social security benefits.
In Beadle v Director-General of Social Security (1985) 7 ALR 670, the Federal Court noted at ALR 230 that it was in broad agreement with the decision adopted by the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1, where at ALD 3 the Tribunal stated:
"An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."

The Tribunal in Re Green and Department of Social Security (1990) 21 ALD 772, quoting with approval the Tribunal decision in Re Ivovic and Director-General of Social Security (1981) 3 ALN N95, provided a useful guide to exercising the discretion when dealing with the phrase "special circumstances", in the context of the compensation provisions, in stating:
"In Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 the tribunal identified a number of principles which could be applied in deciding whether special circumstances existed to warrant the exercise of the discretion contained in s 156 of the Act. In that decision, which concerned the liability of the applicant to repay an amount of sickness benefit paid to him, the tribunal commented at N97. The use of the word "special" is "intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case". "Hardship is a relevant consideration" but regard must be had to the way in which the hardship arose. There must exist "factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes". The decision-maker must have regard to whether, by exercising the discretion in a particular case he/she will be "achieving or frustrating ends or objects which are comfortable with the scope and purpose of the Social Security Act". "The decision-maker must be prepared to respond to special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate."."

These general principles are cited with approval by the Federal Court in Department of Social Security v Hulls (1991) 22 ALD 570; Department of Social Security v Smith (1991) 30 FCR 56 and Department of Social Security v Banks (1990) 23 FCR 416.
The Tribunal determined that there were four possible bases, or a combination thereof, upon which Mr Teuma might claim there were special circumstances in his case:
·     Knowledge of the preclusion period.
·     Expenditure of the settlement money.
·     Mr Teuma's current financial circumstances.
·     Mr Teuma's health.

The Tribunal considered each circumstance in turn.

knowledge of preclusion period

Mr Teuma conceded that at the time of the compensation settlement he was informed by his solicitors that the settlement would give rise to a preclusion period which he had thought was to end in 2004. Subsequently, he received 'some paperwork' which said it was to end in 2005. At that time he had thought that the settlement figure was a good sum and expected to be able to live off that amount.
However, by March 2000 (shortly after the property settlement with Ms Young), when he inquired at Centrelink about a reduction in his preclusion period he knew his funds would not last through the preclusion period but did not want to look at how long the money might last.
Further, at the time Mr Teuma inquired at Centrelink about his preclusion period in March 2000 the officer he spoke to noted: "I asked him (Mr Teuma) if he was aware of his p/p [preclusion period] when he disposed this money. He said yes." (T5).
The Tribunal finds that Mr Teuma was aware that his compensation payment was subject to a preclusion period to at least 2004, and probably 2005, and that he understood that his compensation settlement was to last him for that period.
expenditure of the settlement money
From all the available evidence the Tribunal was able to come to a view about the expenditure of Mr Teuma's settlement monies. The bulk of the compensation settlement monies were spent on the house ($168,000). A further sum of $10,000 was spent on repairs, according to information he told a Centrelink officer on 8 March 2000 (T5). At the same time he said there had been expenditure on two cars and a computer, totalling an additional $39,000. Other significant expenses were $22,000 for his brother's funeral (of which $17,000 has now been repaid by his parents), tools totalling $4900, storage costs of about $1100, the boat, for which his contribution was $7500, an acoustic guitar for $1100, and a shed for about $750. This totals $237,350. In addition there were his legal expenses, "pot" and the overseas trip, the cost of each not having been quantified. There were also his living expenses during the period he and his partner were separated (January 2000 to May 2001). Such would, in the Tribunal's view, account for nearly the whole of the settlement monies.
What was less clear, however, was how, by the time Ms Young left Mr Teuma in January 2000, Mr Teuma had only $24,000 in the bank. It was even less clear as to what happened when the house was sold and Mr Teuma's share was liquidated. While half the proceeds of the sale went to Ms Young, Mr Teuma then found himself with $94,000 in cash. Mr Teuma, apart from the expenditure detailed above, was unable to account for those monies.
mr teuma's current financial circumstances
At the time of the SSAT hearing in January 2001 Mr Teuma had $68,000 and no debts. Presently he continues to have no debts as such but now has no money. Since the SSAT hearing two major expenses have occurred. Mr Teuma initially paid for his brother's funeral ($22,000) but $17,000 has been repaid by his parents. His mother still owes him $5000. The other major expenditure was on the overseas trip. However, both these items have been accounted for in the overall accounting of Mr Teuma's settlement monies. What remains in evidence is that between January 2001 and the date of the hearing before the Tribunal, a little over 12 months, Mr Teuma's total cash, taking into account the money owed by his mother, have been depleted by over $60,000. If Mr Teuma were the sole provider for his family this rate of expenditure, while not necessarily indicative of a lavish lifestyle for a family of 5, was also not consistent with a lifestyle of someone managing family funds to stretch the compensation payments over the preclusion period.
However, the situation was not even one where Mr Teuma was the sole provider. Ms Young described herself as the breadwinner of the family. It was her evidence that when they were together her money was used to pay all household expenses. It was only if there were bills and she didn't have the money that Mr Teuma would pay from invested money, but only ever on maturity. Otherwise she would ask her family for assistance. She continues to meet all expenses, dipping into her investment (presently $59,000) as necessary. She said she was concerned that a continuance of their present financial situation would destroy the family.
In respect of the submissions that the imposition would create financial hardship on Mr Teuma, thereby amounting to 'special circumstances', the Tribunal turned to consider the relevant cases. Essentially, to qualify for 'special circumstances', financial hardship must go beyond 'straitened' circumstances and be truly exceptional. The law on this point was summarised in Re Brodley and Secretary, Department of Social Security (1991) 63 SSR 878 where the Tribunal said:
"In Re Colaiacolo and Secretary, Department of Social Security (Decision No 2109, 24 April 1985) it was stated that the factor of financial hardship alone is not sufficient to amount to special circumstances unless it is "exceptional"…"
The Tribunal is also mindful of Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464 where reference was made to Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716 where Mr B McMahon, Senior Member (as he then was) stated at para 43 that:
"Financial hardship had been considered as a possible component of special circumstances in a number of decisions. It is clear, however, that standing by itself, it would not amount to a "special circumstance": Re Beadle (1984) 6 ALD 1 at 4. Furthermore, the financial circumstances must be more than straitened. They must be 'exceptional'..."
Further, in Re Martin and Secretary, Department of Social Security (AAT 6482, 14 November 1990) the Tribunal summarised the matter as follows:
"When the hardship to be caused does not amount to severe hardship, it is not sufficient to establish "special circumstances"."
The Tribunal also reviewed the decision in Rodgers [supra], to which it was referred by the Department. In the present case the Tribunal agreed with the submission of the Department that the financial hardship experienced by Mr Teuma was of his own doing. Mr Teuma could not account for the expenditure of a large portion of the money, particularly, the expenditure of $68,000 in little over a year when he has not been the provider for the family. In these circumstances, the Tribunal finds that Mr Teuma's financial situation does not amount to special circumstances.
mr teuma's health
The SSAT appears to have placed considerable weight on Mr Teuma's medical conditions, in particular his psychiatric health, as being significant in making its finding that special circumstances exist.
Ms Vidler's statement (Exhibit R3) was that Mr Teuma's mental health was stable from about April 1999.
At document T17 Ms Heather Rodriguez, Rehabilitation Consultant for CRS Australia, provided a report dated 12 May 2000. There she indicates that Mr Teuma's then financial hardship was causing him stress and that he was unable to work or participate in his rehabilitation program. This appears to have been written following the separation of Mr Teuma and Ms Young and their resulting property settlement.
This was consistent with Mr Teuma's evidence that after he and Ms Young had separated and the house had been sold, he was badly depressed at that time. At about that time he discovered a bank error of $15,000, so he thought he had more money in his account than he actually did.
However, after Mr Teuma's separation from Ms Young he did not resume the use of medication, which he had ceased in about 1998, except for occasional marijuana. Dr Lim (Exhibit A1) thought he had a 'slight relapse' upon his brother's death. But there was no evidence that he again used heavy medication at that time.
The Tribunal does not accept that Mr Teuma's mental health, of itself, amounted to special circumstances.
As to his other health problems, the Tribunal considers that his condition was not unusual in that compensation cases, by their very nature, involve applicants with health problems.
DECISION
Having considered all of the evidence before it, the Tribunal finds that there are no special circumstances to warrant the exercise of the discretion under section 1184 of the Act (as at 30 March 1998) to reduce the preclusion period imposed on Mr Teuma beyond that determined by the authorised review officer in his decision dated 8 August 2000.
In conclusion, the Tribunal sets aside the decision under review, being the decision of the SSAT dated 31 January 2001, and in substitution therefor determines that the lump sum compensation preclusion period to be imposed on Mr Teuma is from 20 February 1998 to 25 June 2004.

I certify that the 81 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member
Signed: O. Caragianni           .....................................................................................
  Associate
Date of Decision  2 April 2002
Mr Teuma was self-represented
Advocate for the Department: Ms H Schuster

[2002] AATA 207

2 April 2002

Key Legal Topics

Areas of Law

Social Security Law

Legal Concepts

Social Security Benefits

Preclusion Period

Special Circumstances