Diaco and Department of Family and Community Services

[2000] AATA 570

DECISION AND REASONS FOR DECISION [2000] AATA 570

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V1999/1266

GENERAL ADMINISTRATIVE DIVISION          )          
           Re      ROSS DIACO          
  Applicant
           And    DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal       Mr J. Handley, Senior Member    

Date11 July 2000

PlaceMelbourne

Decision      The decision under review is affirmed.   

…Sgd. Mr J. Handley…
  Senior Member

SPECIAL CIRCUMSTANCES: Social Security – Applicant received Compensation Lump Sum; preclusion period imposed; all monies spent; whether Special Circumstances; whether appropriate to treat whole or part of monies as not having been paid.

Administrative Appeals Tribunal Act s37
Social Security Act 1991

REASONS FOR DECISION

11 July 2000            Mr J. Handley, Senior Member                

1. This application was listed for hearing on 3 July 2000. After the applicant received advice of the date of Hearing, he notified the Tribunal that it was not his intention to attend the Hearing. Following discussion with Registry staff the applicant requested that a review be conducted "on the papers". In requesting this review the applicant relied on the documents filed by the respondent pursuant to s37 of Administrative Appeals Tribunal Act and a letter that he wrote to the Registrar dated 26 June 2000.

2. The decision under review was made by the Social Security Appeals Tribunal on 6 October 1999.  It then decided to affirm a decision made by the respondent on 11 November 1998.  The respondent decided to preclude the applicant from receipt of disability support pension for the period 8 August 1997 to 30 August 2001.

3. The background of the application may be briefly summarised as follows.

4. The applicant suffered injuries in the course of his employment with Wagstaff Cranbourne Pty Limited in October 1996.  Shortly thereafter he commenced to receive weekly compensation payments which were paid until August 1997.  Thereafter he received Newstart Allowance and Disability Support Pension.

5. On 16 November 1998 Mr Diaco entered into an agreement with the employers compensation insurer under the Victorian Workcover Scheme where it was agreed that he would receive the sum of $175,000 in settlement of his legal rights against his former employer.

6. The period of preclusion referred to above has been calculated having regard to this sum, however, despite the date of the Deed of Release the period of preclusion commenced on the date that weekly compensation started.

7. Mr Diaco challenges the decision under review because in his submission (to the Social Security Appeals Tribunal) and by reference also to his letter to the Registrar of 26 June 2000 his circumstances are "special".

8. Section 17(2) of the Social SecurityAct 1991 describes certain payments as "compensation". I am satisfied having regard to the sum received following the settlement of proceedings against the Workcover insurer that the sum of $175,000 is a compensation payment within the meaning of s17(2).

9. Section 1165 prescribes the mechanism for calculation of a preclusion period.  I am satisfied that the respondent has correctly calculated the extent and duration of the preclusion period in the present circumstance.

10. Section 1184 permits the Secretary of the respondent to treat the whole of part of a compensation payment as either not having been made or not liable to be made if it is appropriate in the special circumstances of the case to do so.

11. In Re Beadle and Director General of Social Services (1984 6ALD 1) special circumstances have no strict or inflexible meaning but are understood to be "unusual, uncommon or exceptional".

12. Prior to receipt of the settlement funds but after the release was signed Mr Diaco became aware that he would be precluded from Commonwealth benefits.  He said he was advised by his solicitor that the duration would be two years only.  He was later advised by the respondent that the preclusion period would approximate four years.

13. Nonetheless he was aware that there would be a period of time after receipt of the settlement funds where he would be precluded from receipt of benefits.  The sum of $175,000 has almost wholly been expended.

14. Attached to the letter to the Registrar of 26 June 2000 is a list completed by Mr Diaco, which sets out the expenditure of the settlement sum.  The amounts expended are $75,000 to extinguish a home mortgage, $12,000 in legal costs, elimination of credit card debts at $3,000, $23,000 toward home renovations, purchase of motor car at $22,000, repayment of personal loan of $12,000, repayment of personal loan to applicant's father of $5,000, $4,000 in gifts to his children, $9,000 advanced to his son to establish a business and $20,000 on day-to-day living expenses.

15. It appears from the submissions made to the Social Security Appeals Tribunal that Mr Diaco does not work.  It appears that his wife works as a casual employee at three days per week.  It appears also that both children who live at home also work.

16. The amounts referred to above are at slight variance to the amounts recorded by the Social Security Appeals Tribunal as to expenditure of the settlement funds, however, the amounts expended are essentially for the same purposes as referred to above.
    conclusion and reasons for decisions

17. I am unable to find that any of the circumstances of Mr Diaco are "special".  That is to say the expenditure of the monies and the personal circumstances that he and his family currently endure are not "unusual, uncommon or exceptional".

18. Mr Diaco knew before he expended any of his settlement sum that there would be a period of time from which he would be precluded from receipt of benefit.  I acknowledge that he understood the preclusion period to be lesser than was ultimately imposed, nonetheless, he has expended all of his monies.

19. It would appear that he was in arrears upon home mortgage of $4,000 yet elected to spend $75,000 extinguishing the mortgage.  This was unexplained.  The payment of $12,000 in costs to his solicitor cannot be regarded as a "special circumstance" but is more likely associated with the relationship between solicitor and client and the entitlement of a legal representative to charge and be paid costs for work undertaken.  The sum of $23,000 spent upon home renovations was unexplained and there is nothing on the T documents to suggest that the applicant's home was in need of renovation or for circumstances which could be regarded as being special.  The payment of monies to the applicant's children cannot be regarded as a "special circumstance" but is more likely associated with the intent of a caring parent to provide for the children and/or purchase gifts.  The repayment of personal loans and credit card debts is understood to the extent that it provides peace of mind and elimination of continuing compounding of interest upon monies outstanding, nonetheless that is no more than a normal day-to-day transaction undertaken by many persons and cannot be regarded as special.  The purchase of a motor car at $22,000 was apparently associated with the need to have power steering,     having regard to the injuries incurred in the industrial accident.  It would appear that the applicant's previous motor vehicle did not have power steering.  The Social Security Appeals Tribunal recorded that the applicant's doctor was of the opinion that he (the applicant) would have difficulty driving a motor car without power steering.  It was not put that the applicant did need to have a motor vehicle with power steering.

20. It appears that the only income received presently into the applicant's household is that earned by his wife, who is casually employed at three days per week.  It appears also that the applicant's children are employed.

21. There are a number of references in the T Documents and in the correspondence between the applicant and the Registrar where his principle objective by this review was to reduce the period of preclusion by one year.  This is only permitted if I can be satisfied that it would be appropriate to treat the whole or part of the compensation payment as not having been made.  This is only permitted if the applicant's circumstances can be found to be "special".

22. Having regard to the foregoing I am unable to find that any of the applicant's circumstances are special.

23. The decision under review will be affirmed.

I certify that the twenty three (23) preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member

Signed:    Linda Nemeth    ............................................
                 Secretary

Date of Hearing  7 June 2000
Date of Decision  11 July  2000
Counsel for the Applicant        
Solicitor for the Applicant         
Counsel for the Respondent   
Solicitor for the Respondent