Youssef Farrat and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2012] AATA 512
•6 August 2012
[2012] AATA 512
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2011/5283
Re
Youssef Farrat
APPLICANT
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT
DECISION
Tribunal Senior Member J F Toohey
Date 6 August 2012 Place Sydney The decision under review is affirmed.
.............[sgd]...........................................................
Senior Member J F Toohey
CATCHWORDS
SOCIAL SECURITY – lump sum compensation payment – preclusion period applied by Centrelink – whether special circumstances – applicant failed to provide evidence to support claim to special circumstances – applicant declined to attend in person or by telephone to given evidence about his application – decision under review affirmed
LEGISLATION
Social Security Act 1991 ss 17(1)(a), 17(2)(c), 1169(1), 1170, 1171, 1184K and 1237AAD
CASES
Beadle v Director-General of Social Security (1985) 7 ALD 670
Director-General of Social Services v Hales (1983) 78 FLR 373
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Re Davis and Secretary, Department of Families and Community Services (1999) 56 ALD 793
Re Platel and Department of Social Security (1992) 70 SSR 1008Re Telstra and Secretary, Department of Social Security (1989) 17 ALD 702
REASONS FOR DECISION
Senior Member J F Toohey
6 August 2012
BACKGROUND
Mr Youssef Farrat was seriously injured at work in 2003. He received periodic payments until February 2010. His claim for compensation was settled by payment of two lump sums, totalling $381,500, in November 2009 and February 2010. The lump sums included a component for lost earnings.
In June 2011, Mr Farrat applied for a disability support pension (DSP). His doctor supported his application but Centrelink rejected it because his compensation payment included a component for lost earnings and, as a result, a preclusion period applied during which he was not entitled to receive a social security payment. Further, Centrelink considered that there were no special circumstances warranting the reduction or waiver of the preclusion period. The Social Security Appeals Tribunal (SSAT) has affirmed that decision.
Based on the formula in s 1170 the Social Security Act 1991 (the Act), Centrelink calculates the preclusion period to run from 6 February 2010, when Mr Farrat was last paid periodic payments, to 2 January 2015. As it applies to him, the formula involves, in short, dividing the compensation part of the lump sum (being one half of the total lump sums) by the income cut out amount (being the cut-off limit for a single rate pension under the income test at the date of settlement) to arrive at the number of weeks in the preclusion period.
Mr Farrat does not argue with the imposition of a preclusion period. It appears, from file notes made by a Centrelink officer of a conversation with him in June 2011, that he understood from his solicitor that the period would apply until sometime in 2013. It is not clear whether Mr Farrat still contends that the preclusion period should expire in 2013 but I am satisfied it has been correctly calculated by applying ss 17(1)(a) and (2)(c), and ss 1169(1), 1170 and 1171 of the Act.
Mr Farrat asks that the discretion in s 1184K of the Act, by which the preclusion period may be reduced or waived in special circumstances, be exercised in his favour. Section 1184K(1) provides that the Secretary may treat the whole or part of a compensation payment as not having been made if the Secretary thinks it appropriate to do so in the special circumstances of the case.
I have to decide whether there are special circumstances by reason of which some or all of the preclusion period applying to Mr Farrat should be waived.
THE EVIDENCE
A difficulty with Mr Farrat’s application is that he has provided almost no information in support of his application. He gave his application to the Tribunal on 9 December 2011. As to the reasons for his application, he stated only “Preclusion period”.
Mr Farrat’s application was listed for hearing on 12 April 2012. On 30 March 2012, the Tribunal received a letter from him “giving permission” for his Centrelink nominee, Mr Jamal Elali, to do “everything” for him because he could not attend himself due to “my illness and mental health issues”.
According to the SSAT’s statement of reasons dated 15 November 2011, Mr Farrat appeared before that tribunal accompanied by Mr Elali who is a family friend. The SSAT’s decision of 15 November 2011 records that:
The compensation payments were received by Mr Farrat. Some legal fees were paid from the compensation. The money was all spent by about eight months ago. It was used for gambling, alcohol and drugs such as heroin, cocaine, speed and ice. He gave money to his friends that now do not contact him anymore. Some of the money was also given to his family. Mr Farrat does not have any evidence to show how the money was spent or given away.
After using drugs to assist with pain, Mr Farrat became addicted to drugs and also gambling and now has no money left. He gambled at either the casino or in a TAB. Mr Farrat has serious psychological problems that have been made worse due to his use of drugs. He has attempted suicide and sees a psychologist […] each fortnight. The consultations have been ongoing for more than two years. Despite the treatment, Mr Farrat still use drugs whenever he can get them and on occasions takes money from his mother.
After his settlement money ran out Mr Farrat was living on the streets and in public parks. He has now moved back home to live with his mother. She gives him money from her pension because he has no income and is not working.
Mr Elali appeared at the hearing on 12 April 2012. He describes Mr Farrat as mentally ill, and his behaviour as erratic and unpredictable. He has done everything he can to help Mr Farrat, including attending a telephone directions hearing on 26 June and a further hearing by telephone on 1 August 2012. Despite his best efforts, Mr Elali has been unable to persuade Mr Farrat to appear before the Tribunal or to provide further evidence in support of his application.
Although Mr Elali was unable to persuade Mr Farrat to appear before the Tribunal on 12 April 2012, he agreed it might help if Mr Farrat could receive a letter setting out the sort of information that would help the Tribunal. The hearing was adjourned so that Centrelink could prepare that letter.
On 26 April 2012, Centrelink wrote to Mr Elali as Mr Farrat’s nominee, asking for copies of bank statement showing transactions from the time the compensation money was received to the present date and for proof of payment of his visits to his psychologist. As Mr Elali understood that Mr Farrat’s father, who has since died, took or was given some of the compensation money, the letter also asked if Mr Farrat or another family member could explain what had happened to that part of the money.
On 13 June 2011, the Tribunal received a short handwritten letter prepared by Mr Farrat’s mother with Mr Elali’s help. It stated:
I […] had taken money from my son Youssef Farrat the amount was approximately $115,000 – at the time I needed the money to pay for my deceased husband. He had a debt I had to pay and in our religion you must pay it.
At a short hearing by telephone on 26 June 2012, Mr Elali said he was not able to add anything to the letter from Mr Farrat’s mother. The Tribunal was not prepared to accept it as evidence of special circumstances without hearing more from Mr Farrat or his mother.
On 26 June 2010 the Tribunal wrote to Mr Farrat at Mr Elali’s address asking that he or his mother attend a resumed hearing on 1 August 2012 to provide more information about the sum of $115,000. The letter stressed that, on the information presently before the Tribunal, it was very difficult to see how his application could succeed.
Mr Elali appeared by telephone on 1 August 2012. He advised that neither Mr Farrat nor his mother would be attending, in person or by telephone. He said Mr Farrat’s mother is overseas and unwell. He asked that a decision be made on the information already before the Tribunal.
As the medical reports referred to below show, Mr Farrat has serious mental problems. However, he attended the hearing of the SSAT and there does not appear to be any good reason he could not have appeared before this tribunal, even by telephone, or provided the information requested by letter. I am satisfied that he has been given a reasonable opportunity to present evidence and make submissions in support of his application. It has therefore been determined on the documents before the Tribunal.
Medical reports
On 17 August 2007, Elizabeth Cooper, a clinical psychologist, wrote to Mr Farrat’s worker’s compensation insurer. She noted he had Adjustment Disorder with Mixed Anxiety and Depressed Mood, chronic pain, obsessive traits and “difficulty with emotion regulation”. He was taking antidepressants, and undergoing Cognitive Behaviour Therapy which she thought would help with his “ongoing difficulties”.
On 9 June 2011, Dr D’Silva, a clinical social worker and psychologist, wrote in support of Mr Elali’s application for DSP. He stated that Mr Farrat had been attending his clinic since April 2009 and been having treatment for Adjustment Disorder with Mixed Anxiety and Depressed Mood. He wrote that Mr Farrat:
displayed symptoms of poor memory, lack of concentration, high anxiety levels, social phobia, social isolation, inability to cope with stressful situations, low self-esteem, lack of motivation, lack of confidence, excessive consumption of alcohol, excessive gambling, financial stress, broken and insufficient sleep.
Dr D’Silva further stated:
Mr Farhat [sic] reported he has been self-medicating by abusing alcohol and other drugs, and applying himself to excessive gambling in order to [numb] his physical; pain and psychological turmoil. These factors have caused Mr Farhat [sic] to fall into severe financial hardship. [His] psychological condition has been deteriorating as he is finding it extremely difficult to cope with financial stress.
On 12 January 2012, Dr Ishrat Ali, a consultant psychiatrist, wrote to Centrelink in support of Mr Farrat’s application for DSP. He stated that Mr Farrat was still having depressive symptoms and needed treatment including medication and supportive psychotherapy; he had lost all of his money on excessive use of alcohol and compulsive gambling; without a pension his depressive condition was likely to worsen; and he was medically and psychologically unfit to work.
CONSIDERATION
The Secretary may waive recovery of some or all of a debt if satisfied that there are special circumstances (other than financial hardship alone) that make it desirable to do so: s 1237AAD of the Act. In doing so, the Secretary must be satisfied that the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or a false representation, or failing or omitting to comply with a provision of the social security law.
The Act does not define “special circumstances” and gives no guidance as to its meaning in s 1184K. It has been observed many times by the Courts and this tribunal that the expression is “by its very nature incapable of precise or exhaustive definition” and will depend on the particular case. The circumstances need not be unique, but they must have “a particular quality of unusualness that permits them to be described as special”: Re Beadle and Director General of Social Security (1984) 6 ALD 1 at 3.
In Beadlev Director-General of Social Security (1985) 7 ALD 670 the Court said (at 674):
We do not think it is possible to lay down precise limits or precise rules. The matter is one of the Director-General bearing in mind the purpose for which the power is given. The phrase “special circumstances”, although lacking precision, is sufficiently understood in our view not to require judicial gloss.
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J observed:
… it would require something to distinguish Mr Groth’s case from others, to take out of the usual or ordinary case… It would of course follow that if one were to conclude that something unfair, unintended, or on just heard that there must be some feature out of the ordinary.
Financial hardship alone does not constitute special circumstances; something more will be required. As Sheppard J observed in Director-General of Social Services v Hales (1983) 78 FLR 373 at 412:
The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common: they will be impecunious and in straitened circumstances.
It is plain from the medical reports and what Mr Elali says, that Mr Farrat has serious emotional and psychological problems. I have no reason to doubt that he suffers from severe financial difficulty.
The SSAT in its decision referred to Tribunal decisions in which “grossly irresponsible” smoking, drinking and gambling and “reckless spending” were not grounds for special circumstances (Re Davis and Secretary, Department of Families and Community Services (1999) 56 ALD 793) and nor was the “general frittering away of money on non-necessities (Re Telstra and Secretary, Department of Social Security (1989) 17 ALD 702) and giving of gifts (Re Platel and Department of Social Security (1992) 70 SSR 1008).
If Mr Farrat is genuinely unable to control his use of alcohol and drugs, and gambling, because of addictions, or because of serious mental problems, there might be an argument that he is not “grossly irresponsible” or “reckless”. However, even if that argument might be made out, I am not satisfied it applies here. I have almost no information other than that Mr Farrat has gone through a large sum of money in a short time on those activities. There is no evidence that he is in fact addicted to those activities or unable to control his spending because of his mental problems.
Nor is it clear what has happened to the $115,000. Mr Elali initially believed it was taken by Mr Farrat’s father but his mother appears to say otherwise. There may be some misunderstanding here but, without further evidence, I cannot be satisfied as to what happened to that money or that it would be a ground for finding special circumstances.
CONCLUSION
I am not satisfied, on the evidence before me, that there are special circumstances in Mr Farrat’s case that mean that all or any of his compensation payment should be treated as not having been made. It follows that the preclusion period, calculated to run to 2 January 2015, should apply.
I affirm the decision under review.
I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey. ........[sgd]................................................................
Associate to Senior Member J F Toohey
Dated: 6 August 2012
Date(s) of hearing 12 April and 1 August 2012 Applicant In person Solicitors for the Respondent Ms S Forrester, DHS Program Litigation & Review Branch
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