ZWGH and Secretary, Department of Social Services (Social security second review)
[2025] ARTA 602
•23 May 2025
ZWGH and Secretary, Department of Social Services (Social security second review) [2025] ARTA 602 (23 May 2025)
Applicant:ZWGH
Respondent: Secretary, Department of Social Services
Tribunal Number: 2024/11301
Tribunal:Deputy President K Dordevic (second review)
Place:Brisbane
Date:23 May 2025
Decision:Pursuant to section 105(a) of the Administrative Tribunal Act 2024 the Tribunal affirms the decision under review.
.......................[SGD].................................................
Deputy President K Dordevic
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 201(1A) - 201(1B) of the Social Security (Administration) Act 1999.
Catchwords
SOCIAL SECURITY – jobseeker payment – compensation payment for workplace injury – application of relevant preclusion period – whether special circumstances can be demonstrated - Decision under review affirmed
Legislation
Administrative Review Tribunal Act 2024 (Cth)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)Cases
G v MIBP [2018] FCA 1229
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634Secondary Materials
Australian Government, Guides to Social Policy Law, Social Security Guide
Statement of Reasons
This review concerns whether ZWGH (the Applicant)’s claim for jobseeker payment was correctly rejected as he is subject to a lump sum preclusion period.
On 5 August 2018 the Applicant suffered a workplace injury. From the date of injury to 30 April 2024 the Applicant received weekly periodic compensation payments. On 30 October 2020 the Applicant received a permanent impairment payment of $67,330. On 10 April 2024 a lump sum amount of $775,000 was agreed to be paid by way of a consent judgment.
After being advised of the compensation payments Services Australia – Centrelink (Centrelink) imposed a preclusion period from 1 May 2024 to 18 April 2028.
On 21 October 2024 the Applicant lodged a claim for jobseeker payment.
On 23 October 2024 Centrelink rejected the claim on the basis that the Applicant was subject to a preclusion period.
The Applicant sought an internal review of the decision. On 31 October 2024 an authorised review officer affirmed the decision.
The Applicant then lodged a timely application for an independent first review of that decision with the Administrative Review Tribunal (the Tribunal). On 13 December 2024 the decision was affirmed.
Dissatisfied with that decision the Applicant lodged an application for second review with the Tribunal on 17 December 2024.
The hearing took place on 7 April 2025. The Applicant was self-represented. The Respondent was represented by Ms Kasey Popovic. Both the Applicant and Ms Popovic participated in the hearing by MS Teams audio. The Tribunal had before it the Hearing Papers and the Applicant’s documents filed at first review in addition to a Statement of Facts, Issues and Contentions provided by the Respondent.
ISSUES
The statutory provisions relevant to this review are contained in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth) (the Administration Act).
The issues requiring determination in this matter are:
(a)whether the Applicant is subject lump sum preclusion period; and, if so
(b)whether there are special circumstances to treat all or part of the lump sum compensation payment as not having been made in accordance with section 1184K of the Act.
CONSIDERATION
The relevant law
Subsection 1169(1) of the Act provides that where a person receives a compensation affected payment and receives a lump sum compensation payment the compensation affected payment is not payable in relation to any day in the lump sum preclusion period. Subsection 1169(2) of the Act states that a lump sum compensation payment does not include arrears of periodic compensation payments and periodic compensation payments converted into an entitlement to a lump sum.
Paragraph 17(1)(a) of the Act states that the term ‘compensation affected payment’ includes jobseeker payment.
Subsection 17(2) of the Act includes in the definition of ‘compensation’ a payment under an insurance scheme that is made wholly or partly in respect of lost earnings or lost capacity to earn arising from a personal injury.
Subsection 17(3) of the Act sets down what is the ‘compensation part of a lump sum compensation payment.’ It includes 50% of the payment in circumstances where the payment is made in settlement of a claim that is, in whole or in part, a settlement of a claim that relates to the injury and the claim was settled. Subsection 17(4) of the Act states that where that lump sum payment includes a liability to repay any periodic compensation payments received, then the lump sum compensation payment is so much that is remaining after subtracting the repaid periodic payments.
Subsection 1170 of the Act states that where a person receives periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period beings on the day following the last day of the periodic payments. The formula detailed in section 1170 of the Act determines the length of the preclusion period by dividing the compensation part of the lump sum by the income cut-out amount, which is defined at 17(1) of the Act as the amount worked out by application of subsection 17(8) of the Act as in force at the time when the compensation was received.
Section 1171 of the Act deems that where a person receives two or more lump sum payments in relation to the same event and at least one of those payments is made, in whole or in part, in respect of lost earnings or lost capacity to earn the person is taken to receive a lump sum compensation payment in the sum of the multiple payments on the day that the person received the last of those multiple payments provided that any of those payments were not in respect to arrears of a periodic compensation.
Section 1184K of the Act allows for the reduction of the lump sum preclusion period by disregarding all or part of the compensation payment on the grounds of special circumstances. This has the effect of reducing the preclusion period.
There is extensive case law on what constitutes ‘special circumstances’. The Federal Court, the Administrative Appeals Tribunal and this Tribunal have considered the issue of special circumstances on a number of occasions. In every case, the individual circumstances of the case were examined to determine whether the circumstances were such that it would be unjust, unreasonable or inappropriate for all or part of the preclusion period to be served and whether there are circumstances that would distinguish the case from the usual case. In considering this provision, the Tribunal must regard to the purpose of the social security system and is also mindful of whether the exercise of this discretion in a particular case frustrates or achieves the objects of the Act.
The Guides to Social Policy Law – Social Security Guide provides assistance to decision-makers in implementing the law. While I may be guided by this policy, I am not bound to follow it: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634. In the recent case of G v MIBP [2018] FCA 1229 the Federal Court observed that it is clear from earlier authorities, that in the absence of any statutory indication to the contrary, any lawful executive policy enacted to guide the exercise of a statutory power is a relevant factor for the Tribunal to take into account in performing its review task.
Findings of fact
I make the following findings:
·on 5 August 2018 the Applicant sustained a work-related injury;[1]
·the Applicant received periodic compensation payments from 6 August 2018 to 30 March 2024;[2]
·on 30 October 2020 the Applicant’s employer was ordered to pay compensation in the amount of $67,330 pursuant to section 66 of the Workers Compensation Act 1987 (NSW) in respect of a permanent impairment arising from the work-place injury;[3]
·on 10 April 2024 the Applicant, by consent, settled his workplace compensation claim for $775,000, which included a workers compensation payback to the insured of $336,617.22.[4] A gross amount of $77,000 was paid to Medicare Australia;[5]
·on 9 May 2024 Centrelink advised the Applicant that due to the receipt of the compensation payment a lump sum preclusion period applied from 1 May 2024 to 18 April 2028.[6] On the same day a Centrelink officer spoke to the Applicant and confirmed the preclusion period. The Applicant asked what they could do if they cannot live on the settlement funds until the end of the preclusion period if there were unforeseen circumstances;[7]
·At the time that the Applicant received the lump sum payment the applicable divisor was $1,218.30;[8]
·On 21 October 2024 the Applicant lodged a claim for jobseeker payment;[9] and
·The claim for jobseeker payment was rejected on 23 October 2024.[10]
Application of the law to the facts
[1] T-Documents, folio 13.
[2] T-Documents, folios 28, 49 to 59, 80 to 120.
[3] T-Documents, folio 63.
[4] T-Documents, folios 9 and 215.
[5] T-Documents, folios 63, 65 to 68.
[6] T-Documents, folios 231 to 232.
[7] T-Documents, folio 216.
[8] T-Documents, folio 192.
[9] T-Documents, folios 140 to 147.
[10] T-Documents, folio 235.
I am satisfied that the section 66 payment made on 30 October 2020 was in respect of the same work-place injury that was settled on 30 April 2024. As outlined above, section 1171 of the Act requires that if a person receives separate payments arising from a single event their compensation payments are the sum of those multiple payments provided that any of those payments were not in respect to arrears of a periodic compensation.
Therefore, Centrelink was correct to apply section 1171 of the Act and treat the two lump sum compensation payments as a single lump sum when determining the preclusion period.
Application of the applicable divisor to the formula set down in subsection 1170 of Act means that Centrelink correctly imposed a preclusion period of 207 weeks[11] for the period 1 May 2024 to 18 April 2028.[12]
[11] ($67,330 + ($775,000 - $336,617.22 repayment of periodic payments)) x 50% / $1218.30 = 207 weeks.
[12] 1 May 2024 + 207 weeks = 19 April 2028 is the first day the Applicant is claim a social security payment.
The Applicant contends that all or part of the compensation payment should be disregarded pursuant to section 1184K of the Act.
The evidence before me regarding special circumstances
In his jobseeker payment application, the Applicant declared that the workplace accident affected his capacity to work due to post-traumatic-stress disorder (PTSD) and torn shoulder tendons and muscles.[13] He declared nil savings, household and personal effects of $10,000[14] and that he is living in his own home that is subject to a mortgage.[15] He declared that since 22 July 2023 he has lived with his partner who is in receipt of abstudy.[16] He declared in his Statement of Financial circumstances:[17]
My payout was used to pay lawyers and my debts which accumulated over the years while I was out of work. It was also used for my legal obligations to my children.
Because I suffer from PTSD and have physical limitations for work opportunities I can't work therefore I couldn't pay rent. No real estate would accept an application without an income.
I was struggling mentally and physically and needed my family. I used what little money I had left to secure a property in my home town where I have the support of my family.
Now I'm left with nothing in my bank and no income to live or feed myself and I'm asking for help. If I didn't secure this property I would be on the street as no income equals no lease and we are currently experiencing a rental crisis, which makes life even harder.
I had to walk away from my previous property as the weekly rent kept rising, my doctors (sic) bills were adding up and I was drowning in stress.
Having my family close by helps immensely.
[13] T-Documents, folio 143.
[14] T-Documents, folio 145
[15] T-Documents, folio 142.
[16] T-Documents, folios 149 and 152.
[17] T-Documents, folios 165 to 166.
The Applicant also declared that he had paid disbursements totalling $6,213.08 on 24 May 2024, repaid a personal debt of $12,700 on the 19 June 2024, repaid his children $35,000 in respect to loans they have given him on 8 August 2024 and purchased his home for $275,100 on 18 October 2024.[18]
[18] T-Documents, folio 167.
Following the decision to reject his claim for jobseeker payment, the Applicant provided a written statement:[19]
I [the Applicant] declare that all the money recieved (sic) from my compensation payout has been spent and I have nothing left to live off.
The money was spent on bills, my childrens (sic) education, doctors and lawyers as stated in the paperwork attached.
The cost of living plus extra expenses such as doctors (sic) bills were getting too much for me to deal with and I reached a point where I needed my family for my own sanity and I had to secure a house in my [regional Queensland town] where I have family support.
I had to purchase a property of my own as without an income no real estate would accept an application for rental.
I need this decision to be overturned asap as without payments I will not be able to afford my medications or medical treatments for my PTSD and mental health.
[19] T-Documents, folio 174.
The Applicant enclosed a trust account statement from his solicitor who managed his home purchase on 18 October 2024 which indicates total costs associated with the purchase was $230,550.86.[20]
[20] T-Documents, folios 175 to 176.
The Applicant also provided a copy of his NAB transaction account #2602 for the period 18 May to 29 October 2024.[21] The opening balance at 18 May 2024 was $1,580.34. On 28 May 2024 the statement indicates that he transferred from a linked account $380,777 with a further deposit made from his parents in the amount of $14,500. That same amount was then transferred back to his parents, $130 transferred to “Kids Mum”, $2,020 to his partner, $4,050 to “Daniel and Brian”, $6,650 to the Applicant’s sister and $12,600 to “Peter”. On 28 May 2024 a further $12,600 was transferred to the Applicant’s parents, a cash withdrawal of $6,000 was made, a further $130 transferred with the descriptor “Kids Mum,” $20,350 transferred to his partner, $200 to a family member, $2,440 to “Jesse 2” and $2,500 to “Lachlan”.[22] On 29 May 2024 a deposit of $5,000 was made from his parents and then returned to them. On 7 June 2024 a cash withdrawal of $6,000 was made. A total of $9,000 was withdrawn on 22 and 25 July 2024 and $11,000 on 6 August 2024. The closing balance was $270,713.06 on 16 September 2024.[23] The account had an opening balance of $271,862.62 on 30 September 2024, $229,950.86 was used to purchase his property and as at 28 October 2024 the account balance was $0.06.[24]
[21] T-Documents, folios 179 to 185.
[22] T-Documents, folio 180.
[23] Ibid.
[24] T-Documents, folio 179.
The applicant also provided a copy of NAB transaction account #7943 for the period 7 March to 5 July 2024.[25] As at 7 May 2024 the opening balance was $197.21. Cash deposits totalling $2,020 were made into the account on 7 and 17 May 2024. On 27 May 2024, before the settlement funds of $380,739.08 were deposited into the account, the Applicant’s sister deposited $2,500 into the account and various transfers of less than $200 each were made into the account from family members. The Applicant’s partner also made various transfers into the account.
[25] A39 to A64.
The bank statements in evidence do indicate some gambling expenditure. On 20 May 2024 the Applicant attended a casino and spent $1,300.[26] It is evident that on 27 May 2024, the same day the settlement funds were received, the Applicant again attended a casino and spent $2,400.[27] On 3 June 2024 another $8,200 was spent at what appears to be bars and a casino.[28] A further $676 was spent on 10 June 2024 which appears to be related to gambling[29] and $15 spent on 24 June 2024 at a casino.[30] The only evidence of application of his lump sum payment to medical costs were two transfers on 20 June 2024: $273.85 at a Medical Centre and $1,178.79 at a cosmetic doctor.[31]
[26] A40.
[27] A42 (a cash withdrawal was also included in this quantum).
[28] A45.
[29] A47 to A48.
[30] A51.
[31] A50.
At hearing the Applicant provided the following testimony. His compensation payments are all gone. He is currently living on “borrowed money”. He had “gambled it all away”. He “cannot turn back time”. He observed that though the money was meant to “help me get through the PTSD”, he was “mistreated” and “mishandled”. He was “left in the dark” and then “alcohol came and gambling” until he was left with no funds. He cannot afford his medications and so is scratching at his sores. He also cannot afford to attend his therapy (at $150 per month) and had to sell his therapy dogs because he could not afford to feed them. He has no pension card and no discounts and so cannot afford his medications.
When asked to outline the expenditure of the settlement funds, the Applicant declared that he had a SPER debt of $15,000 and a debt to his son of about $20,000 which he repaid. He went on to explain that he started gambling to give himself a “treat”. He would go to the bank and withdraw cash and then go to the pub. He would withdraw the cash in a lump sum to save himself multiple trips. When he first experienced gambling losses he was convinced that he could win the money back. He would also ask the children for gambling money. He would usually gamble on poker machines, usually after imbibing alcohol. It was put to the Applicant that the bank statements in evidence do not indicate that the compensation funds were exhausted solely because of gambling and alcohol purchases. The Applicant stated that this was not the case and all the large withdrawals were made at the casino and pubs.
The Applicant did not dispute receipt of the letter from Centrelink regarding the preclusion period. However, he explained that he is illiterate and so would not be able to understand the contents of the letter. Upon further questioning he did confirm that his lawyer had advised him of the preclusion period. When asked about his recollection of a Centrelink officer also advising him verbally of the preclusion period[32] the Applicant explained that there are only two things that he can focus on, being “breathing” and “getting oxygen to my brain”. I understand this to mean that he could not recall the discussion with the Centrelink officer on 9 May 2024. The Applicant went on to state that his PTSD means that whilst he can be told something he cannot retain the information and it did not “acknowledge in me” that exhausting his compensation funds before the preclusion period ended might mean that he could not be paid income support payments.
[32] T-Documents, folio 216.
When asked to explain the transfers from his accounts the Applicant advised that these were repayments of loans and gifts. His family had supported him over the years and his wages had been garnished. It was always expected that when his sister or parents helped him, he would pay them back upon receipt of the settlement funds. He also stressed that his children still need to go to school and he has a legal obligation towards them. As declared in his Statement of Financial Circumstances his obligation towards the children amounted to $35,000. This apparently was made up of “stuff, excursions, clothing”. There was no written agreement about what he needed to pay the children’s mother; rather it was a verbal arrangement. The children’s mother would then transfer the funds to the children. She would also give him money, and that is why he had to repay her. When asked for the source of the cash deposit on 11 June 2024 the Applicant explained that his adult child gave him the funds.
The Applicant stated that he has six children aged 34, 25, 22, 19, 18 and 15 years. He testified that some years ago he moved away in order to secure work and had to pay the children’s maternal grandmother to meet the children’s costs. There was no agreement per se as to how the children’s costs would be met. Rather the maternal grandmother would call him and ask for funds when needed. He did not repay the $35,000 to the maternal grandmother. Rather, he repaid about $35,000 to the people he borrowed from to pay the maternal grandmother. He also borrowed from his sister, parents and his partner’s brother. It just got “out of control”. He stressed that whilst he was awaiting his settlement he “never got a cent from Centrelink”.
The Applicant confirmed that there are no written agreements as to the loans between him and his family members. They were only ever verbal agreements. When asked how he knew to repay his sister, ex-partner and her family $63,000 (as he contends he did) the Applicant explained that they had written down all the loans and advised him when he received the settlement funds how much he owed: “At the end of the day I had to borrow to live and I trusted them and they trusted me to give it back”.
The Applicant advised that his partner still lives in his home but they are separated under the one roof. In fact, he reported that they have always had a separate bedroom and own space, even separate pantries. They did not even share a bedroom because he is Catholic and did not want the children walking into the bedroom and see them sharing a bed. They did present socially as a couple and he did give her money because he loved her and saw a future with her. He would usually give her money because she asked, not because he owed it to her. He explained that she too ended up with a gambling problem. When asked whether she provided assistance in reading the Centrelink correspondence, he explained that their “relationship was weird in a way” and they “kept businesses apart”. She would simply tell him when a bill needed paying and he would pay it.
The Applicant explained that even when in receipt of the weekly periodic compensation of more than $1,000 per week he was unable to meet his necessary costs. His rent was between $300 to $500 per week and his electricity was about $500 per month because he had to have the electricity on all the time. He also had contents insurance and was making payments for the children to the maternal grandmother. He had to drive to doctor appointments and could not cook and so had to order takeaway. He also is a smoker.
The Applicant explained that he did not seek assistance from his parents in managing his settlement funds because his mother would go gambling with him and his father is illiterate. He did not want them to fall into habits like alcoholism. He also hid his addictions from them. He also does not want his parents to understand the extent of his impairments arising from his mental health condition; his father is “old school” and does not understand mental health and he fears his judgement. He has not engaged with local mental health services also for fear of judgement from his local community. He does not even have the funds to travel out of town to get his medications. He does not fill his prescriptions in the town for fear of being judged.
The Applicant confirmed that his property is valued at about $251,000. He would not consider renting out a room at his home as his PTSD symptoms include believing that people are stealing his oxygen; therefore, he could not share with others. Similarly, though he is close with his parents and sees them every day but he could not live with them and rent out his home because of his belief that they too may steal his oxygen even though they have enough room to accommodate him. He also would feel ashamed if he had to return home and tell them that he had spent all the money.
It was put to the Applicant that he could sell his home and live on the proceeds until such time as the preclusion period ended. He explained that he only “sort of” owns his home, as his son “fixed it up” and does not want him to sell it. In any event, he would have no where to go. With the “rental crisis” no-one would rent to him. He should not be “punished for buying a house”. He was renting before the settlement of his claim and was paying $700 per week. He could not sustain that, “panicked” and returned to his hometown. He confirmed that the day he moved into his own home he lodged the claim for jobseeker payment because he did not think he had any money left.
He explained that in any event he had “thought about it hard” but if he did sell his home he would have no where to sleep. He cannot live in confined spaces and so downsizing is not an option. He also stressed that private rental is not an option available to him, relying on the evidence from a local real estate agent who states that if a person is not employed they would not be offered a rental property.[33] If he had to sell his house he would end up living on the river bank. He has not reached out to a local charity or support agency for emergency or ongoing financial support. He explained that he has not done so because he never even knew about such services until it was mentioned at hearing. He cannot move out of the local area because of his mental health and he returned to his home town “to die” so that his spirit can be with his sister who died before he was born. The only person he trusts are his parents. He stressed that the combination of the COVID-19 lockdowns and his financial circumstances as well as his mental health warrant the exercising of the discretion.
[33] A1.
The Tribunal had regard to the Applicant’s Statement of Financial Circumstances completed on 25 November 2024. The Applicant declared nil savings, that his home is valued at $251,000, that his general expenses are $248.50 per week and his household expenses are $465 per week, including $60 per week in food for his two therapy dogs. This excludes transport costs, which he says are $0.
The Respondent’s submission is that the preclusion period should not be waived. The Applicant has a realisable asset and therefore should use these funds to support himself. His financial circumstances and COVID-19 are not isolated circumstances and so are no special. He was aware of the compensation preclusion period and deliberately spent his funds without regard to the consequences. He has disclosed gifting, gambling and alcohol as being the reasons the compensation funds are exhausted. Social security funds should not be provided in such circumstances. He only served 25 weeks of the preclusion period before application for jobseeker payment.
Should all or part of the compensation payment be disregarded?
I accept the medical evidence before me regarding the Applicant’s severe and chronic PTSD[34] and upper limb disorder.[35]
[34] A6, A23 to A37.
[35] A7 to A22.
The Applicant had difficulty in providing a coherent narrative regarding his expenditure of the settlement funds. He spoke in generalities and was unable to provide a plausible and consistent account of his expenditure. By way of example, he testified that he had repaid $35,000 in child support whereas the bank statements indicate that he transferred $1,600 to “Kids mum” post settlement and his evidence to his treating doctor in November 2019 was that the children were in his sole care for about 10 years.[36] The Applicant testified that a significant portion of the funds were expended on gambling. The bank statements do not support his assertion. Instead, it is apparent only about $10,300 was spent in this way. Apparently, his family have financially supported him since October 2024. On the other hand, he cannot seek assistance from his parents because he is ashamed and concerned that they may discover that he has no funds left. It is apparent that the most of the funds were applied to the purchase of his home, which he shares with his partner, though he claims that they are separated under the one roof. Whilst not a matter before me, his evidence on this point was unconvincing. Additionally, even if I were to accept that he is separated, it is unclear why his former partner does not pay him rent.
[36] A7.
There is no evidence before the Tribunal to suggest that that the Applicant’s partner and family will not continue to support him financially. Taking into account his statements about the historical and current financial support provided by his partner and his extended family I am not satisfied that the Applicant cannot draw of their financial support on an ongoing basis.
Furthermore, the Applicant reports that his home is valued at $250,000. He has referred to a mortgage on the property but has not provided any evidence that the house is encumbered in any way. I am satisfied that this is an asset from which the Applicant can further support himself financially, whether this be by renting out rooms or selling the home. Whilst he considers neither option desirable, it nevertheless is an asset from which he can derive income or, if sold, funds that he can use to meet his living costs. I accept that whilst rental accommodation in his local area is generally only secured by those with paid employment[37] I am not persuaded that if provided evidence of sufficient funds to meet ongoing rental payments, such as would be the case if the Applicant sold his home, an unemployed person would be unable to secure a tenancy.
[37] A1.
I conclude that the Applicant’s current financial, medical and personal circumstances do not give rise to a finding of special circumstances so as to warrant the exercise of the discretion contained in section 1184K of the Act.
This means that the preclusion period remains in place.
DECISION
Pursuant to section 105(a) of the Administrative Tribunal Act 2024 the Tribunal affirms the decision under review.
Date of hearing: 7 April 2025 Solicitors for the Respondent: Ms Kasey Popovic, Services Australia
0
1
0