Yell and Secretary, Department of Social Services (Social services second review) - [2023] AATA 2451

Yell and Secretary, Department of Social Services (Social services second review) [2023] AATA 2451 (10 August 2023)
Division: GENERAL DIVISION
File Number: 2022/7880
Re:Bruce Yell
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Mrs J C Kelly, Senior Member
Date:10 August 2023
Place:Sydney

The reviewable decision is affirmed.
...............................[sgd]........................................
Mrs J C Kelly, Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – compensation preclusion period – health care card – whether there are special circumstances so that any or part of the compensation payment can be disregarded, and the preclusion period reduced – whether the health care card claim was correctly rejected on the basis that the applicant’s income was above the allowable limit during the relevant period – reviewable decision affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
CASES
Beadle and Director-General of Social Security [1984] AATA 176
Boscolo v Secretary, Department of Social Security [1999] FCA 106
Dranichnikov v Centrelink [2003] FCAFC 133
Morgan and Secretary, Department of Family and Community Services [1999] AATA 168
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) 1979) 2 ALD 634
Secretary, Department of Education, Employment and Workplace Relations and Morrison [2008] AATA 1017
Secretary to the Department of Family and Community Services v Allan [2001] FCA 1160
Secretary, Department of Social Security v Hales [1998] FCA 219
SECONDARY MATERIALS
Department of Social Services, ‘Social Security Guide’ Guides to Social Policy Law
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
10 August 2023
Introduction

On 26 March 2022, Centrelink decided to impose on Mr Yell, the Applicant, a compensation preclusion period from 24 March 2022 to 30 July 2025 (the preclusion period) because he was entitled to receive a lump sum compensation payment of $325,000.00. He had received a total lump sum compensation payment of $371,982.70 on 21 February 2022 which included a component for the loss of wages. As explained in the decision of the Social Services & Child Support Division of this Tribunal (AAT1), that ‘lump sum’ is the total of multiple lump sum payments made to Mr Yell in 2008, 2020 and 2022, as required by section 1171 of the Social Security Act 1991 (Cth) (the Act). Subsection 17(3) of the Act has the effect that 50 per cent of the lump sum payment is the compensation part of the lump sum payment which is used to calculate the preclusion period pursuant to section 1170 of the Act.
A preclusion period means that a ‘compensation affected payment’ (which includes Disability Support Pension (DSP) is not payable to a person who has received a lump sum compensation payment.[1] Consequently, when Mr Yell lodged an application for DSP on 11 April 2022, it was rejected on 21 April 2022.
[1] Social Security Act 1991 (Cth) ss 17 and 1169.
Mr Yell lodged a claim for a Health Care Card (HCC) on 29 April 2022 which was rejected on 20 May 2022 because his income was above the allowable limit.
Mr Yell asked Centrelink to reduce the preclusion period by at least two years taking into account his special circumstances. He also requested internal review of the decision to reject his claim for HCC.
On 7 July 2022 an internal review affirmed both original decisions. When AAT1 reviewed the matter, AAT1 varied the decision by ending the preclusion period on 3 July 2025. It affirmed the rejection of the HCC claim.
The Respondent in this proceeding is the Secretary, Department of Social Services.
By the time I heard this matter, the HCC had been granted, however, that does not affect my task that is to decide whether Mr Yell qualified for HCC during the period commencing 21 February 2022.
Issues
Mr Yell did not challenge the calculation of the length of the preclusion period by AAT1. In any event, I am satisfied that AAT1’s calculation is correct.
Before proceeding to the substantive issues in this case, I consider a further matter that was raised by the material before me. It was that because DSP (Blind) is free of the income and assets test, a preclusion period should not apply. I can discern no legal basis that supports this contention. The issue has been considered in detail in cases before the Tribunal which have come to the same conclusion.[2]
[2] For example, Morgan and Secretary, Department of Family and Community Services [1999] AATA 168.
The issues I have to decide are:
(a)whether there are special circumstances in the case so that any of the compensation payment can be disregarded and therefore the preclusion period be reduced pursuant to section 1184K of the Act.
(b)Was the Applicant’s HCC claim correctly rejected on the basis that his income was above the allowable limit during the relevant period.
The evidence
Mr Yell and the Respondent provided documentary evidence and Mr Yell gave oral evidence. Mr Yell was represented by his carer, Ms Mundell. Both were honest and credible individuals.
Mr Yell provided reports about his eye condition from a Medical Retina Specialist and Cataract Surgeon, two occupational therapists and an orthoptist from Vision Australia, and a referral to the specialist from an optometrist. He provided reports from his general practitioner of 20 years and from two podiatrists.
Background
Mr Yell received the compensation payments for a work injury to his shoulders in 2004 while he was doing a government job. He underwent a shoulder reconstruction and now suffers from severe osteoarthritis in both shoulders.
Mr Yell claimed that his super was not paid. He would have received $100,000 for loss of trade if it had been. He withdrew the $5,000 super that he did have because of hardship.
His wife died of cancer in 2008. He was diagnosed with cancer and consequently had a liver transplant in 2015, for which he takes medication. Three years later, as a consequence of the medication he had to take because of the liver transplant, he became legally blind. He requires support and a cane when mobilising. He has regular eye injections and daily eye drops. He also suffers from hypertension and cerebrovascular disease.
Mr Yell said that he sold his home because he could not live there as his eyesight deteriorated and after not receiving compensation payments for two years, it became too much for him. All his belongings were put in a container and stored at his cousin’s place in Cobargo, where it was destroyed during the 2019 bushfires. His belongings were not insured.
He has ‘couch surfed’ at a friend’s home for almost four years, having asked for three months’ accommodation. He pays for food, electricity, and maintenance. He has not been directly asked to leave but he has overstayed his welcome. He needs a home in a safe area close to family, carers, and health professionals. It has to be single storey on flat land.
Mr Yell said that he accepted the recent lump sum settlement because he had arranged to buy a home but the sale fell through in March 2022.
He has a carer through the NDIS, seven days a week, 24 hours a day (24/7).
On 21 April 2022, Mr Yell discussed with a Centrelink Advisor the impact that his compensation payment would have on his eligibility for income support.
In November 2022 Mr Yell was suffering from an issue affecting his left forefoot for which the podiatrist recommended particular footwear and in-shoe orthoses. Mr Yell’s walking was limited due to pain.
Special circumstances claimed by Mr Yell
Mr Yell claims the following constitute special circumstances:
·He had to sell his home because of his blindness. He lost his uninsured belongings, including his furniture in the Cobargo bushfire.
·He has spent two years trying to buy a home with the limited funds he has. If he has to live off his funds for another three years, he will not have sufficient funds to purchase and furnish a home.
·A three year preclusion period is very harsh after waiting 18 years to settle the compensation matter.
·It is unfair and puts him in severe financial hardship to take into account the payments he received totalling $28,482.70 in 2008, 15 years ago, and the payment of $16,650 he received in 2020. He spent those funds on living costs, including medical expenses.
·He did not receive his superannuation entitlement for the 2004 government job.
·His medical bills have been high and will be into the future.
Bank balances
Mr Yell provided three one page letters from his bank dated 24 April 2023 relating to three different bank accounts totalling $859,531.48. From his evidence, I understand that he considers that the $600,000 held in a term deposit which matures on 21 July 2023 is for the purchase of a home, the account balance of $200,469.23 is for a home deposit and fees, and the balance of $59,062.25 is for home and living expenses for three years if the preclusion period is not reduced, which will be impossible to live on.
Mr Yell provided a statement to the Tribunal on 13 October 2022, in which he said the balances in the latter two accounts were $236,000 and $68,846.77. He had spent approximately $45,000 in the six months to April 2023.
He also has an account with a different bank for everyday expenses like fuel, food and power with the most recent balance of $10,863.61 on 21 April 2023.
Therefore, about the time of the hearing the Applicant had bank balances of approximately $870,000 credit.
Developments at time of hearing and more recently
At the hearing, Mr Yell gave the following evidence. He had paid a $1,500 holding deposit to purchase a house for $785,000. He would pay the second deposit of $1,500 on 14 May which was not refundable. He had not entered into a contract at that time. The completion date was December and he would be in by Christmas. He said that he would only have $90,000 left to buy furniture. Construction had not begun. Ms Mundell said that the ongoing costs would be $198 per week for power, water and maintenance.
Mr Yell told the Tribunal that he would sell his Holden Rodeo utility. He will retain his Ford Mustang car that was worth about $30,000. He had disclosed in his DSP application that he also has a bike trailer worth $200.
On 14 July 2023, the Tribunal received an email from Ms Mundell in which she advised the following. Mr Yell had sold his Holden Rodeo vehicle and had put a second deposit on his new home. The ‘Frame is up” and he needed to organise furniture which ‘will cost a small fortune’. He was ‘on track’ to move into his new home in December 2023. Between now and then he has his usual doctor and specialist appointments.
On the same day it came to my attention that Ms Mundell had previously emailed the Tribunal on 29 May 2023. Relevantly, she advised that Mr Yell had paid his full deposit for his home, will move in in December, and had sold his Holden Rodeo vehicle.
Both emails were forwarded to the Respondent to find out its position on the material. The Secretary responded that there was no objection if the correspondence was taken as a request for written reasons for the (pending) decision but requested to be given an opportunity to reply if I considered the emails to be evidence.
I have decided to take the evidence into account but not to give the Respondent a further opportunity to respond because I do not consider that the new evidence supports the Applicant’s case and I infer, as the Respondent did not advise that it now accepts that the Applicant satisfies the special circumstances criterion, it maintains its position that he does not. Therefore, time would have been spent for no useful purpose. In deciding to take that course, I have taken into account the objectives of the Administrative Appeals Tribunal Act 1975 (Cth) in section 2A which include providing a mechanism of review that is fair, just, economical, informal and quick and proportionate to the importance to and complexity of the matter.
Before proceeding to consider whether the Applicant’s circumstances are special, I note that in addition to the bank balance of approximately $865,000 (taking into account deposits paid), the Applicant owned a Mustang motor vehicle worth $30,000, a motor bike trailer worth about $200, and had received a payment for the Holden Rodeo utility which he had valued at $2,000. He had no existing liabilities.
Consideration – special circumstances
The provisions of the social security law that address compensation payments are designed to ensure that people who receive compensation for loss of income from one source, for example for a work injury, do not also receive income support for the same loss of earnings from the public purse, that is, that they do not ‘double dip’.[3]
[3] Secretary, Department of Education, Employment and Workplace Relations and Morrison [2008] AATA 1017; Secretary to the Department of Family and Community Services v Allan [2001] FCA 1160, per Heerey J at [1].
There are numerous cases that have considered what is meant by the phrase ‘special circumstances of the case’ in subsection 1184K(1) of the Act which confers a discretion on a decision maker to treat the whole or part of a compensation payment as not having been made if it is appropriate to do so in the ‘special circumstances of the case’. The phrase is not defined but the cases have used various formulations:
·The decision-maker can consider a ‘constellation of factors’ and provide a ‘flexible response to a wide range of situations which could give rise to hardship or unfairness’.[4]
·Circumstances that are ‘unusual, uncommon or exceptional’, which will depend on the context in which they occur.[5]
·The circumstances take the case ‘out of the ordinary’.[6]
·The discretion is ‘not lightly to be enlivened’; there is something ‘unusual or different’ to take the matter out of the ‘ordinary course’.[7]
[4] Secretary, Department of Social Security v Hales [1998] FCA 219.
[5] Beadle and Director-General of Social Security [1984] AATA 176 at [12].
[6] Dranichnikov v Centrelink [2003] FCAFC 133.
[7] Boscolo v Secretary, Department of Social Security [1999] FCA 106.
The Social Security Guide embodies the above statements at 4.13.4.10. It is not binding but I should apply it unless there are cogent reasons in a particular case not to do so.[8]
[8] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) 1979) 2 ALD 634 at 644- 5.
Mr Yell’s claims that a three year preclusion period is very harsh after waiting 18 years to settle the compensation matter and that it is unfair and puts him in severe financial hardship to take into account the payments he received between 2008 and 2020 which he has spent on living costs, including medical expenses, are not special circumstances because they are the intended effect of the law.
His principal claim is that imposing the preclusion period will cause him hardship because he has entered into a contract to purchase a property and he will have insufficient funds to support himself during the preclusion period.
Mr Yell said that he was told by Centrelink to buy a unit and then they would look at it again. I accept that was Mr Yell’s understanding of what he has been told. I have no evidence from the Respondent about such a conversation.
In any event, I am not satisfied that making the decision to pay a deposit on a property a matter of days before the hearing in this matter and proceeding after the hearing but before a decision was made, to pay a further deposit which he described as ‘binding’ and not refundable, results is a special circumstance because he will have limited funds to live on. He made those decisions knowing that he was subject to the preclusion period and that no decision had been made. The contract is not before the Tribunal. The Applicant may or may not proceed to complete the contract at the end of this year.
I have taken into account that Mr Yell had to sell his previous property because of his blindness, he lost his uninsured belongings in the Cobargo bushfire, and has spent two years looking for an appropriate property, that people suffering from blindness have special requirements for accommodation, and that Mr Yell’s blindness is not causally related to his compensable injury. However, the Applicant has been living with a friend for four years and currently has a carer 24/7. He has not been asked to leave his current accommodation.
I am not satisfied that his blindness and other health conditions and claimed consequential high health care costs of $173 a fortnight are a special circumstance. He has access to the public health system. The evidence does not suggest that he is facing immediate substantial health care costs. He is an NDIS participant. It is Mr Yell’s recent decision to buy a property that will result in reduced financial means. His health conditions are not unusual or uncommon for a person who is claiming DSP or DSP (Blind).
Regrettably, unpaid superannuation is not uncommon. Mr Yell’s claim to have been owed superannuation payments is untested. It is not apparent that he has taken any steps to pursue payment. I do not consider that this matter is a special circumstance.
It is not clear that Mr Yell did apply for or would qualify for DSP (Blind). In any event, the Guide states at 3.6.2.40 that recipients of DSP (Permanently blind) are affected by the compensation provisions of the Act. As stated earlier in this decision, I can discern no legal basis to support the contention that those provisions do not apply. There is no cogent reason in this case that I should not apply the Guide.
Considering all Mr Yell’s circumstances, including his assets, I am not satisfied that there are special circumstances to warrant the exercise of the discretion conferred by section 1184K of the Act.
As the Respondent pointed out, Mr Yell can request to have section 1184K of the Act applied at later date if his circumstances change.
Consideration - Health Care Card
The Respondent contends that Mr Yell does not qualify for HCC because during the period commencing 21 February 2022, he does not satisfy the health care card income test as required by section 1061ZO(2)(d) of the Act. It is unnecessary to consider other qualification criteria which are not in issue.
The Social Security (Administration) Act 1999 (Cth) (Administration Act) applies as follows:
·The start date for an HCC is the date of claim (Subclause 3(3) of Schedule 2 Part 2 clause 3);
·A concession card must be granted if the decision-maker is satisfied that the claimant is qualified for that concession card (subsection 37(8)).
The Act applies as follows:
·A ‘concession card’ includes an HCC (subsection 6A(1)).
·Section 1061ZO sets out the qualification criteria for an HCC which are relevant to the Applicant. (Other circumstances in which a person will qualify for an ‘automatic issue health care card’ set out in section 1061ZK do not apply to him.)
·Section 1061ZO(2)(d) requires a person to satisfy the health care card income test.
·Section 1071A-1 sets out the HCC income test (the income test).
The Applicant lodged his claim for an HCC on 29 April 2022.
The first step in the income test is to work out the amount of the person’s ‘ascertained income’ for the period of 8 weeks ending the day on which the person lodged the claim (section 1071A-1 of the Act).
Section 1071A-4 of the Act relevantly defines ‘ascertained income’ in relation to a period, as the income of the person in respect of the period.
The section goes on to define ‘income’ in relation to a person, as ‘ordinary income, and to the extent that it is not ordinary income, includes’ ‘(e) payments of compensation …’.
The concept ‘ordinary income’, defined in subsection 8(1) of the Act, is not relevant in this case.

Subject to other provisions that do not apply to the Applicant, subsection 1073(1) of the Act provides that:
if a person receives, whether before or after the commencement of this section, an amount that:
a) is not income within the meaning of Division 1B or 1C of this Part; and
b) is not:
i)income in the form of periodic payments; or
ii)ordinary income from remunerative work undertaken by the person; or
iii)an exempt lump sum.
The person is … taken to receive one fifty-second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount. (Emphasis added.)
The compensation amount of $325,000 the Applicant became entitled to receive on 21 February 2022 pursuant to the Deed of Release does not fall within section 1073(1)(a) or (b) of the Act. Therefore, the calculation set out in the section applies.
The 12 month period began on 21 February 2022. One fifty-second of that amount is $6,250.
Applying the Method statement in subsection 1071A-1 of the Act:
·The eight week period began on 4 March 2022.
·The Applicant’s ascertained income for the eight week period is $50,000.
·The Applicant’s allowable income for the period is $656.00 per week x 8 = $5248.
·The Applicant’s ascertained income for the period exceeds his allowable income for the period and therefore he does not satisfy the heath care card income test.
In the Respondent’s Statement of Facts, Issues and Contentions, the Respondent went through the Guide’s explanation of the HCC income test in detail. It is only necessary to refer to that detailed explanation to the extent to state that the ‘125%’ limit per week of $820 does not apply to the Applicant because this is not a case of reinstatement of a previously cancelled HCC. Even if it did, his ascertained income would have exceeded his allowable income for the period.
DECISION
For the above reasons, the reviewable decision is affirmed.

I certify that the preceding 60 (sixty) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

................................[sgd].......................................
Associate
Dated: 10 August 2023

Date of hearing:

27 April 2023

Date final submissions received:

14 July 2023

Advocate for the Applicant:

Ms Y Mundell, Carer for the Applicant

Solicitors for the Respondent:

Ms T Balakisnan, Services Australia

Date of hearing:	27 April 2023
Date final submissions received:	14 July 2023
Advocate for the Applicant:	Ms Y Mundell, Carer for the Applicant
Solicitors for the Respondent:	Ms T Balakisnan, Services Australia