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

[2017] AATA 1058

Wissing and Secretary, Department of Social Services (Social services second review) [2017] AATA 1058 (15 June 2017)

Division: GENERAL DIVISION 

File Number(s):2016/2605      

Re:Lester Wissing  

APPLICANT

Secretary, Department of Social ServicesAnd  

RESPONDENT

DECISION

Tribunal:Egon Fice, Senior Member 

Date:15 June 2017

Place:Melbourne

The Tribunal affirms the decision under review.

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Egon Fice, Senior Member

SOCIAL SECURITY – special circumstance provision - notice of the provision - liability to recover Centrelink pension – discharge of liability - periodic compensation payments- notice of charge - notice of appeal rights

Legislation

Social Security Act 1947 ss 27, 152, 153, 154, 155, 156
Social Security Act 1991

Cases

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

Egon Fice, Senior Member

15 June 2017

1. This matter has a long history.  Mr Wissing suffered a back injury on 12 October 1976 when he was employed by the Commonwealth Scientific and Industrial Research Organisation (CSIRO).  That injury was severe and it prevented him from undertaking his employment duties.  As there were no suitable duties to which he could be assigned, he was retired.  His employment with the CSIRO ceased on 19 February 1982.

2. Mr Wissing’s back injury was accepted as having been caused by his work.  In his oral evidence, Mr Wissing said that he received a small amount of compensation but then subsequently had further problems which arose out of his injury.  He commenced receiving what was then called the invalid pension (now the disability support pension) on 25 June 1987.  His wife also commenced receiving the wife pension from 8 June 1989.  In 1988 Mr Wissing’s compensation payments ceased.

3. Following cessation of his compensation payments, Mr Wissing disputed Comcare’s decision and that dispute was not resolved until 1990.  Resolution came after Mr Wissing had made an application to the Administrative Appeals Tribunal (AAT).  The dispute was settled resulting in an agreement that Comcare pay Mr Wissing $22,051.52.  That sum was calculated on the basis of weekly rates as follows:

   23/06/55  to  30/11/88     $192.80 per week

   01/12/88  to  12/04/89     $282.09 per week

   13/04/89  to  02/02/90     $289.09 per week

4. In a letter dated 11 April 1990, the then Department of Social Security wrote to Comcare, the insurer, informing the insurer that the Department proposed to recover from Comcare the amount of $13,738.30 which it calculated was the sum of periodic payments made to Mr Wissing between 23 June 1988 and 2 February 1990.

5. In a letter dated 1 May 1990 addressed to Mr Wissing’s lawyers, the Appeals Officer with the then Commission for Safety, Rehabilitation & Compensation of Commonwealth Employees set out the details of the payments to be made to Mr Wissing in accordance with the settlement agreement.  In addition, that letter stated:

   Please note however that as you have received a pension or benefit from the Department of Social Security during some of these periods, Section 154 of the Social Security Act requires me to refund an appropriate amount to that Department from your compensation entitlement.

   The Department of Social Security have [sic] now advised me that the amount refundable to it is $13,738.30.  Consequently the amount of compensation still owing to you is $8,313.23.

6. On 27 March 1992 the Department of Social Security acknowledged receipt from Mr Wissing of the account details to which his payment should be sent and notified him of his rights as follows:

   If you think a Social Security decision is wrong you can come to the Office and talk about it.  We can check that all the facts have been considered and tell you why a decision was made.

   If you still disagree, you can talk to the Authorised Review Officer who can:

   take a fresh look at the case;

   change the decision if it is wrong;

   tell you how you can appeal if you still disagree; and

   tell you about your rights to see your file.

   You can also appeal directly to the Social Security Appeals Tribunal who [sic] will independently review your case.  If you do not apply for a review of the decision or repeal within three months of the date of this letter, you can only receive any arrears from the date you ask for a review or appeal.

7. On 22 April 2015 Mr Wissing contacted Centrelink enquiring about the Age Pension.  The file note of the conversation records the following:

   Cus took employer to AAT and won Comcare back pay from 1990 to 1988, $23,000 was the back pay and Centrelink deducted $14,000 cus was not advised that at the time he could appeal what was taken, cus has involved his MP and is going to lodge supporting information at the csc in the next few days.  I am unable to run the appeals script as it was 25 years ago and I do not have a decision to select.…

8. Upon reviewing Mr Wissing’s case, an Authorised Review Officer (ARO) wrote to Mr Wissing on 11 February 2016 informing him that his review application was unsuccessful.  Mr Wissing then lodged an application with the AAT, Social Services & Child Support Division (AAT 1).  On 29 April 2016 the AAT 1 member affirmed the ARO’s decision.  Mr Wissing then lodged an application with this Tribunal (AAT 2) on 18 May 2016.

9. Although Mr Wissing aired numerous complaints about the way his matter has been handled since his claim for compensation in 1988, the essence of his complaint appeared to be that he would not have settled his claim before the AAT in February 1990 if he had been told that he had to repay the Department of Social Security (now Centrelink) $13,738.30.  Mr Wissing also complained about the fact that social security payments received by his wife between 1988 and 1990 were also taken into account in determining the compensation charge applied against his settlement payment.

   THE INVALID AND WIVES’ PENSIONS UNDER THE 1947 ACT

10. Section 27 of the now repealed Social Security Act 1947 (the 1947 Act) sets out the qualifications for invalid pensions.  It provided as follows:

    27.A person is permanently incapacitated for work for the purposes of this Division if:

    (a)the degree of the person’s permanent incapacity for work is not less than 85%; and

    (b)that permanent incapacity, or at least 50% of that permanent incapacity, is directly caused by a permanent physical or mental impairment of the person.

11. Division 5 of the 1947 Act dealt with what was described as wives’ pensions.  Section 37 relevantly provided:

    (1)Subject to this Part, a woman (not being an age pensioner or an invalid pensioner) who is the wife of –

    (a)an age pensioner or an invalid pensioner; or

    (b)a man who is receiving a rehabilitation allowance under Part XVI and who was, immediately before he became eligible to receive the allowance, eligible to receive an invalid pension, and who is an Australian resident and is in Australia on the day on which she lodges a claim for a wife’s pension is qualified to receive a wife’s pension.

12. It should be immediately apparent that the former wives’ pensions are linked to a husband who is in receipt of the invalid pension.  That is the basis upon which that payment is made.

    EFFECT OF COMPENSATION PAYMENTS ON INVALID PENSION AND WIVES’ PENSIONS

13. Section 152(1) of the 1947 Act sets out a number of definitions. Reference to a pension in Part XVII means, amongst other things, an invalid pension.  Compensation is also defined in the following way:

    (2)In this Part –

    (a)a reference to a payment by way of compensation is a reference to –

    (i)a payment by way of damages;

    (ii)a payment under a scheme of insurance or compensation provided for by a law of the Commonwealth or of a State or Territory, including a payment under a contract entered into pursuant to such a scheme;

    (iii)a payment, whether with or without admission of liability, in settlement of a claim under such a scheme or of a claim for damages; or

    …

14. Section 153, which is concerned with a reduction in the rate of pension, deals with a person who has received either a series of periodical payments by way of compensation or a lump sum payment. In this case, although Mr Wissing received what appears to have been a lump sum, that sum was, in effect, payment for three discrete periods prior to the lump sum being paid. Although the outcome is not different, it is probably more accurate to describe it as a payment forming part of a series of periodical payments made by way of compensation. Accordingly, insofar as it is relevant, s. 153 provides:

    (1)Where a person who is receiving a pension receives –

    (a)a payment forming part of a series of periodical payments by way of compensation; or

    (b)…

    …

    (2)Where –

    (a)a person has received a series of periodical payments by way of compensation;

    (b)the person received payments of pension during the period during which payments in the series of periodical payments were made; and

    (c)sub-section (1) did not apply to the payments referred to in paragraph (a),

    the Secretary may, by notice in writing given to the person, determine that the person is liable to pay to the Commonwealth an amount specified in the notice, being an amount equal to –

    (d)…

    (e)in any other case – the sum of the amount of pension paid to the person during that period and the amount of the spouse’s pension paid to the person’s spouse during that period, or the sum of the amounts of the periodical payments, whichever is the lesser.

15. Section 154 deals with recovery of amounts from a person liable to make compensation payments. Relevantly, that section provided:

    (1)Where a person (in this sub-section referred to as the ‘employer’) is, or may become, liable to make a lump sum payment or a series of periodical payments by way of compensation to another person who was in receipt of a pension at any time during the lump sum payment period or the periodic payments period, the Secretary may, by notice in writing given to the employer –

    (a)in any case – inform the employer that the Secretary may wish to recover from the employer an amount; or

    (b)in a case where the employer is liable to make a payment by way of compensation to another person – inform the employer that the Secretary proposes to recover from the employer an amount specified in the notice, being an amount not exceeding –

    (i)the amount of pension paid to the other person during that period or, if the other person is a married person, the sum of that amount and the amount (if any) of the spouse’s pension paid to the person’s spouse during that period; or

    (ii)so much of the sum of the periodical payments, or so much of the compensation part of the lump sum payment, as is payable by the employer after the receipt by the employer of a notice under this section in relation to the payments or payment;

    whichever is the lesser.

16. Where an insurer was involved, such as Comcare, s. 155 of the 1947 Act provided:

    (1)Where an insurer, under a contract of insurance, is, or may become, liable to indemnify a person (in this section referred to as the ‘client’) in whole or in part against the liability of the client to make a lump sum payment or a series of periodical payments by way of compensation to another person, being another person who was in receipt of pension at any time during the lump sum payment period or the periodic payments period, the Secretary may, by notice in writing given to the insurer –

    (a)in any case – inform the insurer that the Secretary may wish to recover from the insurer an amount; or

    (b)in a case where the insurer is liable to indemnify the client in whole or in part against that liability – inform the insurer that the Secretary proposes to recover from the insurer an amount specified in the notice, being an amount not exceeding –

    (i)the amount of pension paid to the other person during that period or, if the other person is a married person, the sum of that amount and the amount (if any) of spouse’s pension paid to the person’s spouse during that period;

    (ii)the compensation part of the lump sum payment or the sum of the amounts of the periodical payments; or

    (iii)the amount that the insurer is, after the receipt by the insurer of the notice, liable to pay the client in relation to that matter,

    whichever is the least.

    (2)       The Secretary shall not give a notice to an insurer under paragraph (1)(b) if the Secretary has given a notice to a person under sub-section paragraph 154(1)(b) in relation to the same matter.

    COMPLIANCE WITH THE LEGISLATION

17. It was not disputed that Mr Wissing received $22,051.52 by way of a lump sum following settlement of his compensation claim against the CSIRO, or more accurately, the insurer who is subrogated for the employer under the contract of insurance.  That lump sum payment was calculated by reference to three periods: 23 June 1988 – 30 November 1988 (23 weeks); 1 December 1988 – 12 April 1989 (19 weeks); and 13 April 1989 – 2 February 1990 (42.4 weeks).  Mr Wissing appeared not to dispute that the sum of $13,738.30, calculated by the then Department of Social Security, was the correct sum taking into account the amount his spouse received by way of a wife’s pension.  Although Mr Wissing complained about the inclusion of his wife’s pension amount received during the period between 23 June 1988 and 2 February 1990, the legislative provisions to which I have referred above make it plain that it must be included.

18. Given the above, I must find that the notice given to Comcare by the Department of Social Security in its letter of 11 April 1990 was valid notice given under s. 155 of the 1947 Act.

19. Furthermore, although the letter dated 27 March 1992 was sent some two years after the settlement of Mr Wissing’s compensation dispute, it plainly put him on notice that if he considered that a social security decision was incorrect, he should attend an office of the Department of Social Security so that the matter could be resolved.  He appears not to have taken up the suggestion set out in that notice.

    DISREGARDING CERTAIN PAYMENTS

20. It appeared to me that the essence of Mr Wissing’s grievance is that he was not informed of specific provisions which allow the Secretary to disregard compensation payments in special circumstances. Section 156 of the 1947 Act provided:

    The Secretary may, for the purposes of this Part, treat the whole or a part of a payment by way of compensation that has been, or that will be, made as not having been made or as not likely to become liable to be made if the Secretary considers it appropriate to do so in the special circumstances of the case.

21. There are two issues which relate to whether or not the special circumstances provisions apply to Mr Wissing. The first is whether he should have been given notice of the statutory provision regarding special circumstances and the second is whether, if he had notice, s. 156 would have applied to him in his circumstances at that time.

22. At the time Mr Wissing settled his dispute with Comcare which was before the AAT in 1990, Mr Wissing was legally represented by the firm Doyle Considene, Barristers & Solicitors based in Geelong. The letter I have referred to above dated 1 May 1990 from the Appeals Officer regarding approval of the settlement sum of $22,051.52, clearly stated that the Department of Social Security had advised Comcare that the amount refundable to it under s. 154 of the 1947 Act was $13,738.30. Given that Mr Wissing was legally represented, it would have been inappropriate for either the Appeals Officer or anybody from the Department of Social Security to have advised Mr Wissing personally of the outcome. Where parties are in dispute and are legally represented, it is unethical for one of those parties to go behind the other party’s legal representatives unless there is express authority to do so. In this case, proper notice was given to Mr Wissing’s legal representative.

23. Although Mr Wissing was critical of the Department of Social Security for not informing him of the provisions set out in s. 156 of the 1947 Act dealing with special circumstances, there is nothing in the 1947 Act requiring notice to be given of the provisions contained in s. 156. In any event, notice was properly given to Mr Wissing’s legal representatives.

24. If Mr Wissing’s legal representative did not inform him of the special circumstances provision in the 1947 Act, and that failure has resulted in Mr Wissing suffering a financial detriment, that is for Mr Wissing to raise with his legal representative. There was no legal obligation at that time, or even the present time, for the Department of Social Security or Centrelink to provide legal advice to the recipient of a social security payment. In fact, it would probably be regarded as improper and possibly unlawful. Whether or not special circumstances exist in Mr Wissing’s case is a legal question to be decided in light of the provisions in s. 156 and the way in which those provisions have been dealt with by the courts. Even a suggestion by an officer of the Department of Social Security that Mr Wissing may have a ground to claim special circumstances might be construed as giving legal advice. In any event, any competent lawyer taking on a client in Mr Wissing’s circumstances would have been aware of the legislative provisions and should have advised him accordingly.

25. I had in evidence a report prepared by the Commonwealth & Defence Force Ombudsman which is dated 11 September 1990.  It appears Mr Wissing complained about the delay in receiving money from a settlement which he said confirmed a decision made by the AAT on 23 February 1990.  In that letter, the Ombudsman said the following about the reasons Mr Wissing accepted the settlement offer:

    Mr Wissing told us that he accepted Comcare’s offer of payment of compensation until 2 February 1989 plus medical disbursements and legal costs incurred by Mr Wissing, because he was concerned by the possibility that he might have to meet his legal costs of $7000 to $10,000 even if he was successful before the AAT. I have sympathy for Mr Wissing in this situation and I am concerned that the amount of legal costs incurred was a compelling factor in his decision to accept a settlement which clearly did not satisfy his claim.

26. I did not have in evidence any document from which I could establish Mr Wissing’s financial situation at that time. I note that the AAT 1 decision at paragraph 30 refers to Mr Wissing having had more than $75,000 in financial investments but I had no documents substantiating that.

27. The expression special circumstances referred to in s. 156 of the 1947 Act is not defined. Therefore, it is necessary to examine cases decided by the Federal Court of Australia in order to seek guidance and, although not binding on subsequent Tribunals, decisions of the AAT which may provide some guidance as to the way in which the expression has been applied. One of the earliest cases to which reference is frequently directed is a Tribunal decision in Re Beadle and Director-General of Social Security (1984) 6 ALD 1. The Tribunal, comprising Toohey J, IA Wilkins and Dr JG Billings (Members), said at 3:

    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.

1. The Federal Court of Australia (Kiefel J) in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 referred to Beadle’s case and said, at 545:

   The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle’s case (at ALR 229; ALD 674), and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case.  That was, I consider, the only enquiry to be undertaken in this 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.…

2. While Mr M Hester, a lawyer with the FOI and Litigation Branch of the Department of Human Services, who appeared on behalf of the Secretary, referred to a number of other Tribunal decisions regarding the application of the special circumstances provisions in the 1947 Act and the current Social Security Act 1991, they are based on the individual circumstances in each of those cases as considered by the Tribunal.  In any event, Tribunal decisions are not binding on subsequent Tribunals.

3. In the circumstances of Mr Wissing’s case, there was no dispute that he received two payments between 23 June 1988 and 2 February 1990 by reason of the work injury he received in 1976.  He received what was then the invalid pension over that period and, subsequently, received an arrears payment from his insurer, Comcare.  Mr Wissing cannot rely on what he claims was the lack of notice given to him prior to accepting the settlement of his compensation claim.  He had legal representation at that time and his lawyers received a letter on or about 1 May 1990 explaining exactly the amount which the Department of Social Security required to be refunded following Mr Wissing receiving the invalid pension for the same period.

4. Although Mr Wissing now claims, almost 25 years after the settlement took place, that he would not have accepted the settlement knowing that a substantial portion of it would be used to repay the Department of Social Security, it is simply not possible, due to lack of evidence, to determine what Mr Wissing would have done had he known of the true circumstances.  It is not clear why Mr Wissing has sat on this matter for as long as he has.  If, as he claimed, he incurred significant hardship 25 years ago, one would have expected a claim to have been made at or about that time.  Clearly, he must have been aware that a significant part of the settlement moneys were not given to him and were instead refunded to the Department of Social Security. 

5. There was no evidence before me that Mr Wissing made any enquiries about whether he could avoid that repayment. If, as a result of the repayment, Mr Wissing found himself in difficult financial circumstances, I have no doubt he would have made the inquiry he now seeks be heard. In fact it may be, although I had no evidence, that he was told of the circumstances by his solicitors at that time. Centrelink no longer has any relevant hard copy documents and is clearly disadvantaged by Mr Wissing’s decision to contest this matter 25 years late. Without evidence that his solicitors at that time failed to inform him of the special circumstance provisions in s.156 of the 1947 Act, or that he made enquiries at the Department of Social Security regarding the possibility of having the compensation payments disregarded, Mr Wissing’s memory of events some 25 years ago is not a sound foundation upon which to make the decision he seeks. I cannot find that the special circumstances provisions in s. 156 of the 1947 Act apply so that all or part of the compensation payments Mr Wissing received could be disregarded.

6. I accept Mr Hester’s submission that there can be nothing unjust or unfair about preventing Mr Wissing from receiving both compensation payments and the invalid pension for the period in question. That is the very purpose of the provisions set out in s.153 of the 1947 Act. Mr Hester also submitted that Centrelink now has insufficient information regarding the calculations performed in 1990 to be absolutely certain that those calculations were correct. Nevertheless, Mr Wissing appears not to have disputed the calculated amount. Therefore, as Mr Hester submitted, the application of s. 153(3)(e) of the 1947 Act results in a compensation charge being levied against the insurer.

   CONCLUSION

7. The difficulty Mr Wissing faces in having a decision made in his favour is the lapse of time of some 25 years since the original decision was made.  Much of the relevant documentary evidence is no longer in existence and those documents which were in evidence simply support the Secretary’s contention that it had complied with its statutory obligations.  It would be unsound for me to simply rely on Mr Wissing’s memory.  I did not have any objective evidence before me about what he was told by his then solicitors.  Furthermore, I had no objective evidence of Mr Wissing’s financial circumstances at the time he accepted the settlement.  Other than a possible financial hardship claim, I had no other evidence which might point to the special circumstances provision applying to him.

8. Unfortunately for Mr Wissing, I must find that the decision made by AAT 1 on 29 April 2016 affirming the decision under review was the correct decision.  I affirm that decision.

I certify that the preceding 35 (thirty-five) paragraphs are a true copy of the reasons for the decision herein of Egon Fice, Senior Member

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Associate

Dated:   15 June 2017

Date of hearing:	29 November 2016
Applicant:	In person
Advocate for the Respondent:	Mr M Hester
Solicitors for the Respondent:	Department of Human Services, Freedom of Information & Litigation Branch