Zuzul and Secretary, Department of Social Services (Social services second review) - [2020] AATA 3681

Zuzul and Secretary, Department of Social Services (Social services second review) [2020] AATA 3681 (18 September 2020)
Division:GENERAL DIVISION
File Number(s): 2020/1210
Re:Antica Zuzul
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Dr I Alexander, Senior Member
Date:18 September 2020
Place:Sydney

The decision under review is affirmed.
................................[sgd]........................................
Dr I Alexander, Senior Member
CATCHWORDS
SOCIAL SECURITY – Carer Payment – application for payment – eligibility – lump sum compensation preclusion period – whether special circumstances exist to reduce preclusion period – meaning of special circumstances – financial hardship – decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 1169, 1170, 1184K
CASES
Director-General of Social Services v Hales (1983) 78 FLR 373; 47 ALR 281
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Secretary to the Department of Family and Community Services v Allan [2001] FCA 1160
REASONS FOR DECISION
Dr I Alexander, Senior Member
18 September 2020
BACKGROUND

Mrs Zuzul, who is now 64 years old, is married to Mr Marcetic, who is 70 years old.
On 4 March 2013, Mrs Zuzul was injured at work. In March 2017, Centrelink was advised that she had agreed to settle a worker’s compensation claim for $37,537.50.
On 12 March 2018, Centrelink was advised that Mrs Zuzul had received a lump sum settlement of $270,000.
On 26 March 2018, Mrs Zuzul’s lawyer contacted Centrelink requesting a letter of charge/release. The lawyer was advised that the future preclusion period will be determined once the final payment date was confirmed.[1]
[1] Section 37 documents, 151.
On 27 March 2018, Centrelink wrote to Mrs Zuzul notifying her that due to her lump sum compensation payments she was subject to a preclusion period starting on 28 March 2018 and ending on 30 March 2021 (the preclusion period). The letter informed Mrs Zuzul that during this period she was not able to receive income support from Centrelink.[2]
[2] Calculation based on total lump sum payments of $307,537.50.
On 24 April 2018, Mrs Zuzul contacted Centrelink with respect to a claim for Disability Support Pension (DSP). The Centrelink contact file note records that Mrs Zuzul understood and accepted that there was a preclusion period in place until March 2021 but “is insisting wants to test eligibility to dsp”.[3]
[3] Section 37 documents, 153.
The contact note also records that “Customer is in the process of buying a home at Taree for cash ….customer stated she may not go ahead with the purchase as has only paid a refundable deposit so far/ discussed FIS referral to maximise use of the funds of 270000/declined offer …also discussed the letter sent by the compo team to advise of preclusion and offer of phone IV”.
On the same day, Mrs Zuzul contacted Compensation WA regarding Compensation Action for Compensation Management System and gave permission for the customer service officer (CSO) to speak to her husband, who then informed the CSO that “they have purchased a house with the lump sum settlement”.[4]
[4] Ibid 154.
The contact note records that the CSO advised Mr Marcetic “that the lump sum amount was for the customer to live on until 30 March 2021 as per the future preclusion period letter that was sent on 28 March 2018”. Despite the preclusion period, Mr Marcetic informed the CSO that Mrs Zuzul intends to lodge a claim for DSP and will request a review of the decision.
On 25 June 2018, Mrs Zuzul travelled to Croatia and returned to Australia on 30 September 2018.
On 18 December 2018, Mrs Zuzul and Mr Marcetic travelled to Croatia and did not return to Australia until 2 October 2019.
On 10 October 2019, Mrs Zuzul contacted Centrelink to lodge a claim for Carer Allowance which was subsequently granted on 18 October 2019.[5]
[5] Mrs Zuzul currently continues to receive Carer Allowance.
On 18 October 2019, Mrs Zuzul contacted Centrelink to lodge a claim for Carer Payment.
On 22 October 2019, Mrs Zuzul was contacted by Centrelink and advised that her claim for Carer Payment had been rejected due to the preclusion period.
On 20 November 2019, an Authorised Review Officer (ARO) contacted Mrs Zuzul and informed her that, because of the preclusion period, she was not eligible to receive Carer Payment.
In a letter dated 21 November 2019, the ARO affirmed the decision to reject Mrs Zuzul’s claim for Carer Payment and indicated that there were no “special circumstances” which allow for any part of the lump sum payment to be disregarded.
On 10 February 2020, the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) affirmed the internal review decision of the ARO, by finding “special circumstances do not exist within the meaning of section 1184K of the Act that justifies waiving the compensation preclusion period applied to Mrs Zuzul from 28 March 2018 to 30 March 2021”.
In these proceedings, in which Mrs Zuzul seeks review of the decision of the AAT1, she was represented by her husband, Mr Marcetic, who also gave sworn oral evidence on her behalf.
In view of the temporary changes with regard to the suspension of face-to-face Tribunal hearings during the COVID-19 crisis, the parties appeared at the hearing by telephone.
LEGISLATION
The statutory provisions relevant to this review are set out in Part 3.14 of the Social Security Act 1991 (Cth) (the Act), which provides that a person who receives a lump sum compensation payment for personal injury will be subject to a preclusion period if the settlement amount includes a component in respect of income loss. The rationale is that a person should not be entitled to receive income support payments during the preclusion period because they are expected to rely on the compensation payment instead of receiving assistance from the social security system.
Section 1169 of the Act provides that a preclusion period applies when a person receives a lump sum compensation payment. The length of the preclusion period is calculated in accordance with section 1170 of the Act, which identifies the start date and the end date of the preclusion period.
Section 1184K of the Act provides the Secretary, therefore the Tribunal, with the discretion to treat the whole or part of a compensation payment as not having been made or liable to be made “if the Secretary thinks it is appropriate to do so in the special circumstances of the case”.
ISSUES
There is no dispute that Mrs Zuzul is subject to a preclusion period with respect to her lump sum compensation payments, and that the preclusion period has been correctly calculated to be from 28 March 2018 to 30 March 2021.
Mrs Zuzul submits that on their return to Australia in October 2019, she and her husband had almost no money left and that they are currently suffering severe financial hardship.
Therefore, the determinative issue in this matter is whether there are “special circumstances” in this case which would allow the Tribunal to treat the whole or part of Mrs Zuzul’s compensation payment as not having been made.
AAT1 Decision
At the AAT1 hearing, Mrs Zuzul and Mr Marcetic submitted that they had spent the whole of the balance of the compensation settlement money of $217,600[6] and are now “solely relying on Mr Marcetic’s age pension, a fortnightly payment of $736, to cover all their living expenses”.
[6] Section 37 documents, 6 - Letter from Frisina Lawyers dated 4 April 2018.
A summary of the expenditure was noted as follows:
A deposit on a house in Taree in the amount of $20,000. After this house was vandalised, Mrs Zuzul and Mr Marcetic did not proceed with the purchase of this property and were only able to recover $6,000 of their deposit.
Rent in the amount of $510 per week for the period from 1 March 2018 to 20 December 2018, a period of approximately 43 weeks.
Weekly expenses of electricity $50, petrol $50, medication (tablets) $50, phone $40, food $270; totalling $460 over a period of approximately 92 weeks (from March 2018 to November 2019).
Rent in Gosford in the amount of $340 per week for the period from October 2019 to December 2019; a period of eight weeks.
Mrs Zuzul’s travel to Croatia, where she owns a unit, from June 2018 to September 2018. This included the costs of a car rental $4,623, petrol $1,000, spending $7,000 and plane ticket $2,500.
Mrs Zuzul’s dental costs of $22,123.
Mrs Zuzul’s and Mr Marcetic’s travel to Croatia from December 2018 to October 2019. This included the cost of a car for $13,000, which they later sold for $10,000 and plane tickets of $4,260.
The couple also told the AAT1 that they had “repaid a loan to Mr Marcetic’s son in the amount of $20,000, gifted money to Mrs Zuzul’s nephew in Croatia and purchased a new car in Australia for $30,000 (which they still own)”.
Mr Marcetic’s evidence
At the hearing, Mr Marcetic confirmed that both he and his wife were aware of and understood that, as a result of her lump sum compensation payments, Mrs Zuzul was subject to a three-year preclusion period and that, during that time, she was not entitled to receive income support from Centrelink.
Mr Marcetic stated that Mrs Zuzul applied for Carer Payment because they were experiencing financial hardship and she could not seek employment because he needed her to be his full-time carer. He explained that on return from Croatia in October 2019, they had spent almost all of their money and that their only source of income was his age pension.
Mr Marcetic confirmed that the summary of expenditure set in the decision of the AAT1 was essentially correct but added some additional comments. He said that they had spent another $10,000 during the attempt to purchase the house in Taree for a survey, legal fees, agent fees as well as some travel and accommodation.
Mr Marcetic explained that the new car, which was purchased in about June 2018, was placed in storage for 10 months while they were in Croatia, at a cost of about $5,000. He confirmed that currently they still own the car.
Mr Marcetic also explained that the undisclosed amount of money given to Mrs Zuzul’s nephew was not a “gift”. He said that Mrs Zuzul paid for some of her nephew’s medical treatment for a brain tumour.
When asked by the Tribunal about the ownership of the Mrs Zuzul’s unit in Croatia, Mr Marcetic was unable to provide a clear explanation but said it was a “family unit” and that the family members who lived there did not pay any rent.
When asked by the Tribunal why he required full-time constant care, Mr Marcetic said that he suffered a number of medical conditions which included intermittent episodes of “vertigo”. He said that Mrs Zuzul needed to be available all the time in case he had a sudden unexpected episode. He clarified that over a three-year period he had suffered an episode about every three months and that the symptoms lasted for about half a day and generally responded to special medication.
Mr Marcetic explained that in about 2010/2011 he suffered “heart attacks” and needed “stents” and that currently he continues on treatment with “tablets”. He also said that he has suffered from “diabetes” for 20 years which is currently managed with oral medication and “daily walks”.
Mr Marcetic told the Tribunal that he believes he needs a full-time carer and that Mrs Zuzul is “the only person who can look after him”.
Current family income
The current family income of Mr Marcetic and Mrs Zuzul is as follows:
Mr Marcetic’s Age Pension - $843.40 (gross) - $770.40 (net) per 2 weeks.[7]
Mrs Zuzul’s Carer Allowance - $131.90 per 2 weeks.[8]
Mrs Zuzul’s Foreign Pension from Croatia – approximately $220 per month.[9]
[7] Respondent’s Statement of Facts, Issues and Contentions - Annexure 4.
[8] Ibid Annexure 2.
[9] Ibid Annexure 3.
CONSIDERATION
Mrs Zuzul contends that her preclusion period should be reduced because her circumstances are “special” in that she is Mr Marcetic’s full-time carer and that they are suffering significant financial hardship.
The meaning of “special circumstances” has not been defined in the Act, however, the meaning for the purposes of social security law has been considered by this Tribunal and the courts on many occasions. It is an expression “by its very nature incapable of precise or exhaustive definition” and its meaning will depend on the context in which the circumstances occur.[10] The circumstances need not be unique “but they must have a particular quality of unusualness that permits them to be described as special”.[11] It would require something to distinguish Mrs Zuzul’s case “from others, to take it out of the usual or ordinary case”.[12]
[10] Re Beadle and Director-General of Social Security (1984) 6 ALD 1.
[11] Ibid.
[12] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541.
The intent of the compensation recovery provisions of social security law “are designed to ensure that people who receive compensation for a loss of income do not also receive income support from the Australian Government in respect of the same period of time”.[13]
[13] Social Security Guide at 4.13.4.10; also see Secretary to the Department of Family and Community Services v Allan [2001] FCA 1160.
In my view, section 1184K of the Act is not meant to override the legislative intention of the compensation recovery provisions but is meant to provide for a situation in which the circumstances in a particular case are “out of the ordinary”.
Therefore, the issue for the Tribunal is whether Mrs Zuzul’s circumstances are such that an exception should be made and the usual rule should not apply. It is also relevant that financial hardship alone is not sufficient to make a finding of special circumstances[14] as it is not uncommon for social security recipients to experience some level of financial hardship.[15]
[14] Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716 at 719.
[15] Director-General of Social Services v Hales (1983) 78 FLR 373; 47 ALR 281.
Notwithstanding Centrelink’s advice, with respect to the purpose of the lump sum compensation payment and the preclusion period, the available evidence suggests that Mrs Zuzul intended to spend most of the lump sum payment on the purchase of the house in Taree. When the purchase did not proceed, the evidence suggests she spent her money generously with no apparent consideration of her future needs during the three-year preclusion period.
Furthermore, it is not clear to the Tribunal why Mr Marcetic needs a full-time carer.
Carer Payment is an “income support payment if you give constant care to someone who has a severe disability, illness or an adult who is frail aged”.[16] A medical report from a health professional, who is treating the person who needs care, must be provided in order to determine whether Carer Payment can be paid.[17]
[16] Services Australia website.
[17] Ibid.
There is no medical evidence before the Tribunal to support a conclusion that Mr Marcetic has a severe disability, illness or is frail. Also, his own evidence, in my view, does not support his claimed need for 24-hour constant care. I note that there is no evidence before the Tribunal that he required a full-time carer when his wife was in Croatia for 3 months in 2018.
I note that currently Mr Marcetic receives the full benefits of a single age pension and Mrs Zuzul receives regular Carer Allowance payments as well as a small monthly foreign pension. I also note that the preclusion period will end in about seven months and that the couple own a relatively new car that had been purchased for $30,000.
I accept that Mrs Zuzul’s financial situation is currently difficult, however, on consideration of the available evidence I am not persuaded that her circumstances are “out of the ordinary” and therefore not “special circumstances” within the meaning of section 1184K of the Act.
This means that it is not appropriate for the Tribunal to treat the whole or part of Mrs Zuzul’s compensation payment as not having been made.
DECISION
For the reasons set out above, the Tribunal is satisfied that there are no “special circumstances” to treat the whole or part Mrs Zuzul’s compensation payment as not having been made.
The decision under review is affirmed.

I certify that the preceding 52 (fifty-two) paragraphs are a true copy of the reasons for the decision herein of Dr I Alexander, Senior Member

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Associate
Dated: 18 September 2020

Date of hearing: 31 August 2020

Advocate for the Applicant: Mr O Marcetic

Solicitors for the Respondent: Ms R Alam, Services Australia

Date of hearing:	31 August 2020
Advocate for the Applicant:	Mr O Marcetic
Solicitors for the Respondent:	Ms R Alam, Services Australia