The decision under review, that Centrelink recover an amount of $5,444.86 from compensation payment covering the period 18 April 2003 to 31 October 2003, is affirmed

SOCIAL SECURITY - recovery of worker's compensation payments - applicant suffered work place injury - short term worker's compensation payments - granting of sickness allowance - lump sum compensation payment in arrears - recoverable amount in respect of compensation affected social security payments recovered from insurance company - calculation of recoverable amount confirmed - medical condition - special circumstances deemed not to exist - decision under review affirmed.

Social Security Act 1991 - Part 2.14, 6.14, sections 17 (2), 666, 1173, 1174, 1176, 1184K

Beadle v Director-General of Social Security [1984] AATA 176; (1985) 7 ALD 670

Dranichnikov and Another v Centrelink and Another [2003] FCAFC 133; (2003) 75 ALD 134

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690

Re Bolton and Secretary, Department of Social Security ( AAT 5238 of 7 July 1989)

Re Groth and Secretary, Department of Social Security [1995] AATA 121; (1995) 37 ALD 797

Re Mosarevski and Secretary, Department of Social Security (AAT 10714, 2 February 1996)

Re Secretary, Department of Social Security and Hill (1996) 2 (1) SSR 9

Mr Glyn Bradley Hollis ("the Applicant") suffered a work place injury on 13 March 2003 whilst employed by Mini-Crete Pty Ltd. He was subsequently paid two weeks compensation by CGU Workers Compensation Ltd before being granted sickness allowance pursuant to Part 2.14, section 666 of the Social Security Act 1991 ("the Act"). On 8 May 2003, Centrelink wrote to Mr Hollis advising him that if he received weekly compensation or a lump sum compensation payment, some or all of the Centrelink payments made to him since the date of injury may have to be paid back.

On 28 October 2004, the Workers Compensation Commission observed that a settlement had been reached whereby Mr Hollis was to receive compensation payments in the sum of $10,000 in addition to the amounts previously paid (two weeks), to a closed period of 31 October 2003, as well as reasonable medical expenses. In a letter of 12 November, Centrelink advised Mr Hollis that $5,444.86 would have to be paid to Centrelink, this being the recoverable amount under part 3.14 of the Act, and on the same day, Centrelink issued CGU Workers Compensation (NSW) Ltd with a recovery notice for that amount under the provisions of section 1184 of the Act. Such a payment was made.

On 20 January 2005, in a response to Mr Hollis, Centrelink affirmed the decision to recover $5,444.86, this subsequently being affirmed by an Authorised Review Officer ("ARO") and the Social Security Appeals Tribunal ("SSAT"). On 12 August 2005, Mr Hollis made an appeal to this Tribunal.

4. At a hearing on 5 December 2005, Mr Hollis was self-represented. The Secretary, Department of Employment and Workplace Relations ("the Respondent") was represented by Ms Pankaj Sharma. I took into evidence the T documents provide by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, three reports from Dr Maher Milad dated 12 August 2005, 14 November 2005 and 25 November 2005, a discharge report from Royal Prince Alfred Hospital dated 10 June 2004, and two letters from Mr Hollis, the first dated 21 November 2005 with a number of attachments, the second dated 29 November 2005. I also took into evidence the Statement of Facts and Contentions by the Respondent dated 21 November 2005.

5. For the reasons given in the following paragraphs, I affirmed the decision that $5,444.86 from compensation payments was recoverable, there being no special circumstances.

6. Subsection 17 of the Act relatively defines compensation and compensation affected payments thus:

17(1) In this Act, unless the contrary intention appears:

compensation has the meaning given by subsection (2).

(aa) an age pension; or

(a) a disability support pension; or

(b) a parenting payment; or

(c) a social security benefit; or

(e) ...

17(2) Subject to subsection (2B), for the purposes of this Act, compensation means:

(a) a payment of damages; or

(b) a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or

(c) a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or

(d) any other compensation or damages payment;

(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury".

7. Section 1173 refers to the effect of periodic compensation payments on the rate of person's compensation affected payment thus:

(a) a person receives periodic compensation payments; and

(b) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and

(c) the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;

the rate of the person's compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2).

1173(2) The person's daily rate of compensation affected payment is reduced by the amount of the person's daily rate of periodic compensation.

1173(3) The reference in subsection (2) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period".

8. Section 1184 gives the Secretary the authority to send a recovery notice (for payment) to a compensation payer or insurer and section 1184A provides the basis under which an amount may be recovered. Section 1184K provides the authority to consider special circumstances, and states:

"Secretary may disregard some payments

1184K(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:

(a) not having been made; or

(b) not liable to be made;

if the Secretary thinks it is appropriate to do so in the special circumstances of the case".

9. Mr Hollis, aged 46, lives alone in his own home. He has an outstanding mortgage of $20,000.00 which he pays off at $43.00 per week. He has a re-draw facility which he has used to finance car repairs and to cover insurance and some house repairs; this facility presently has a credit of $40,000.00. He left school at 14 years of age, and has since worked in unskilled jobs. He ceased full-time work as a truck driver with Mini Crete on 13 March 2003 when he resigned as he could no longer cope with the demands of the job. He described being constantly harassed over slowness by the owner of the company, and of being given tasks that he was unable to complete in the time allocated. After his resignation, which led to a worker's compensation claim, he felt low and depressed, and incapable of returning to work in any capacity.

10. He was granted Sickness Allowance on 8 May 2003, having received two weeks workers compensation payment. He remained on Sickness Allowance until 23 February 2005, when he was assessed as being unfit for any work or training and granted the Disability Support Pension ("DSP"), which he remains in receipt of to the present.

11. Applying the provisions of sections 17, 1173 and 1184 of the Act, the Respondent recovered $5,444.86 from CGU Workers Compensation (NSW) Ltd, following the receipt by Mr Hollis of the $10,000 lump sum compensation payment. In evidence, Mr Hollis did not dispute the calculation of the recovery amount sought by Centrelink, but felt that he had been "hard done by" in that he suffered a significant reduction in pay on leaving Mini-Crete, which has been exacerbated by the compensation payment being effectively reduced by 50% and because his health has placed him in a position of constrained financial income for the future.

12. Mr Hollis suffered a brain tumour (astrocytoma) at the age of 12, his memory subsequently being affected and he suffering from vertigo. His condition is controlled by medication (rivitrol). A history obtained by Dr Julia Ying of Health Services Australia (""HSA") on examination, indicated that a shunt was fitted, and as confirmed by Mr Hollis, this was later moved from the head to the stomach in 1971 to avoid infection. In 1978, Mr Hollis was further injured in a motor cycle accident, which resulted in significant injury to the spleen, and the loss of the right kidney and gall bladder (Dr Ying report). He has been seeing Dr Ittumani for some 20 years and Dr Milad for 15 years.

13. His depression after ceasing work led to him being referred for further examination. This also followed what he saw as a further loss of memory and a fall off his bike. In hindsight, Mr Hollis believed a deterioration in his medical condition was evident, but not appreciated, in the period leading up to his difficulties with Mini-Crete. In mid 2004 he underwent two major operations, as described in the discharge letter dated 10 June 2004 from Royal Prince Alfred Hospital. Mr Hollis described these operations a "horrific surgery". His subsequent condition he sees as reflecting some restoration of part of his memory, but he suffers from headaches and by exercising "rolling" each morning, he keeps dizziness to a minimum.

14. In his letter of 14 November 2005, Dr Milad refers to brain dysfunction, dizziness and headaches. He further considers Mr Hollis to suffer from low back and neck pain, adhesions of the abdomen, swelling of the right ankle and problems with both hands and wrists. These conditions are identified in the report by Dr Ying. Dr Milad has provided three recent reports; he is consistent in forming the view that Mr Hollis is unfit to return to work. He further considers him to have financial difficulties that warrant consideration.

15. Mr Hollis elaborated his position that he sought some relief from the imposition of the $5,444.86 compensation recovery. He referred to his poor medical conditions and cited a further period in hospital in 2004/2005 with abdominal adhesion problems. He utilises the redraw facility to pay for some house repairs, rates and insurance, but in doing so, he is unable to finalise his mortgage at the rate he anticipated, and planned for, prior to ceasing work. He stated that with his DSP, he can "maybe just cope with mortgage payments". He further uses his redraw facility to maintain credit card payments, his liability at this time being just over $1000.00. He considers his financial situation to be "not very good". He has no wish to sell his home in order to better use financial resources that might result.

16. A significant issue described by Mr Hollis, and referred to in numerous attachments to his letter of 21 November 2005 is an ongoing argument with local government in respect of responsibility for the repair of damage by way of subsidence and major cracking of his home, which he believes results from a broken storm water drain, this being the property of Canterbury City Council. Council has refused to accept responsibility, and the advice received by Mr Hollis is that repairs may involve underpinning of the foundations, a costly remedy which he believes is beyond his financial resources.

17. A further issue that he believes should be considered in the context of his financial situation, is his dispute with his solicitor and in turn his barrister, wherein he was not given the correct advice as to the residual amount of compensation he would receive after any recovery action by Centrelink had been completed. His understanding was that he would receive about $10,000.00 clear, rather than the half approximately of that figure that resulted.

18. As to his daily living, Mr Hollis stated that he had no unforeseen medical expenses, his only cost being for the daily medication of rivitrol. He endeavours to keep busy, and helps a friend a couple of days a week. He does not believe he could return to work, and has not the skills nor education to undertake office work. In concluding his evidence he referred to his financial situation, which when considered in the light of his health and home problems, warranted review of the compensation recovery amount.

19. The Respondent submitted that the compensation recovery process had been correctly applied in accordance with the legislation. Mr Hollis had been advised of the implications relating to recovery of social security payments should he receive compensation payment, and did not dispute receiving such notification. Special circumstances vide section 1184K were not in evidence. It was submitted that the financial position of Mr Hollis was "not too bad and better than most" and drawing on Re Secretary, Department of Social Security and Hill (1996) 2(1) SSR 9, it could not be considered as a prerequisite to special circumstances. The matter of the damage to his home was for him to resolve, whether that was with Council or not, and in general his circumstances were not out of the ordinary. Whether Mr Hollis received inadequate legal advice in respect of compensation payments was a matter for resolution between him and his legal advisor. Again, it did not constitute special circumstances.

20. As to his medical condition, the Respondent submitted that Mr Hollis is in receipt of the DSP which recognises his inability to work because of his disabilities, and his health was "not so unusual, exceptional or uncommon as to set him apart from other income support claimants receiving DSP". The Respondent further noted that Mr Hollis had conceded that he had no unforeseen medical expenditures.

On the evidence before me, I conclude that the recovery of social security payments was undertaken in accordance with the relevant legislation, and the amount so recovered ($5,444.86) was correctly calculated. Mr Hollis did not dispute this figure. The question before me is thus whether there are "special circumstances" that make it appropriate for the whole or part of the compensation payment to be treated as having not been made under the provisions of section 1184K of the Act.

22. "Special circumstances" as referred to in section 1184K is not defined in legislation, but the interpretation put forward by the tribunal with Toohey J presiding in Re Beadle and Director-General of Social Security (1988) 6 ALD 1 has been widely followed, and states:

"An expression such as "special circumstances" is by its very nature capable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."

That tribunal went on to say (at 3) that "the existence of special circumstances is to be determined from all the circumstances ..." .which in the context of the matter before that tribunal related to an application for handicapped child's allowance. That "all the circumstances" should be considered in this matter is supported by the words of the Full Federal Court in dismissing an appeal against the above decision (Beadle v Director-General of Social Security (and others) [1984] AATA 176; (1985) 7 ALD 670), wherein it was stated at 674 in respect of whether special circumstances were evident in the delay in making a claim "More difficult would be questions of ignorance, illiteracy, isolation, illness and the like. It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it possible to lay down precise limits or precise rules". Such a view was subsequently endorsed by the Full Federal Court in Dranichnikov and Another v Centrelink and Another [2003] FCAFC 133; (2003) 75 ALD 134.

24. The tribunal In Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690, considered that factors that should be considered when seeking to ascertain whether special circumstances existed included financial hardship, legislative changes, incorrect legal advice and ill health. In respect of his financial situation, Mr Hollis felt financially disadvantaged, as he stated to me, when his salary as a truck driver was replaced by the lesser workers compensation and then sickness allowance, and thus he has not been able to pay off his home loan at the rate he desired. It has also had a bearing on his ability to undertake the repairs to his home should Council continue to maintain a position of no responsibility for the damage. His position is somewhat similar to many who have left the workforce.

25. But that in itself does not mean that he was placed in a precarious financial situation. He had then and to date still has, the benefit of the re-draw facility, albeit the value of that facility must reduce as he draws upon it; Mr Hollis gave evidence that the redraw facility could "go on for some years". He is in receipt of the DSP, and hence has a regular, if reduced income. He lives in his own home and he stated that the DSP just allows him to cope with mortgage payments. As pointed out in Re SDSS and Hill (supra), financial hardship must go beyond "straightened circumstances". It must in effect be exceptional. By his own admission, he is not yet in a position in which he cannot cope financially.

26. The situation in respect of his ongoing claim against Council for the damage to his home, a claim not accepted by Council, could well lead to financial pressures to undertake the necessary repairs. The issue with Council is of course a matter for him to pursue, and is not one for this Tribunal. However, should he not be successful in reaching a satisfactory arrangement with Council, he undoubtedly will incur repair costs; there is insufficient evidence before me to reach any conclusion as to what degree of financial hardship might result. Suffice that in the matter before me, the evidence as to his financial position is such that special circumstances cannot be considered present.

27. Mr Hollis considers his health situation warrants consideration in reviewing this matter. There is no doubt that he has suffered major trauma on a number of occasions, and has a residual significant health problem, albeit he considers his physical state "not too bad". But his adverse health is recognised by the granting of the DSP. Further, he stated that he has minimal additional health and medication costs.

28. Responsibility for inadequate legal advice as perceived by an applicant, and as claimed by Mr Hollis, has been well addressed in case law. It is generally considered a matter between solicitor and client, Re Bolton and Secretary, Department of Social Security (AAT 5238 of 7 July 1989) and Re Mosarevski and Secretary, Department of Social Security (AAT 10714, 2 February 1996) being illustrative of this widely held view, the latter also stressing that the Australian community should not be responsible for a matter wherein an applicant may take appropriate legal action against a solicitor. Of particular relevance to the issue before me, is that unlike those matters where adequate legal advice may not have been provided in respect of the implications of a preclusion period, a period which would deny certain social security payments for the relevant period, Mr Hollis has been in receipt of social security payments.

28. Finally, I draw on Re Groth and Secretary, Department of Social Security [1995] AATA 121; (1995) 37 ALD 797, wherein the Deputy President stated in part at 41, in a decision subsequently upheld by the Federal Court:

"it seems to me that the purposes of the provisions [or part 3.14] is to ensure that a person is not paid from two sources in respect of the same period of time....Therefore, there will be special circumstances if the circumstances are such that it is unreasonable, unjust or inappropriate not to treat whole or part of a compensation payment as not having been made bearing in mind the provisions are intended to ensure that a person is not paid from two sources in respect of the same period of time".

"...His circumstances are not out of the ordinary when regard is had to those subject to the provisions of Part 3.14. He must be very careful financially and the choices he and his family have are severely curtailed both by their limited finances and their poor health. Difficult as their circumstances are, however, they are not special when considered in the light of others in a similar situation and in light of the object of the Act".

29. Taking account of all the issues put before me in this matter, I am satisfied that the discretion in section 1184K of the Act cannot be exercised. The circumstances of Mr Hollis are such that his situation cannot be seen as unusual, uncommon or exceptional. Certainly, his health and the loss of his employment with the resulting reduction in financial circumstances have presented him with difficulties, but not to the extent that they might be seen as exceptional and hence "special". I take account of his granting of the DSP, his home ownership, and his rather positive statements that he can cope.

30. Accordingly, the decision under review, that an amount of $5,444.86 from compensation payments be recovered, is affirmed.

I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of REAR ADMIRAL A R HORTON AO

Signed: Associate

Date of Hearing 5 December 2005

Date of Decision 4 January 2006

Representative for the Applicant Glyn Hollis, Self-Represented

Advocate for the Respondent Pankaj Sharma, Centrelink Legal