Zalega and Secretary, Department of Social Services [2015] AATA 417 (12 June 2015)

Last Updated: 15 June 2015

[2015] AATA 417

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2015/0184
Re	Anna Zalega
	APPLICANT
And	Secretary, Department of Social Services
	RESPONDENT

DECISION

Tribunal	Senior Member Bernard J McCabe
Date	12 June 2015
Place	Brisbane

The decision under review is affirmed.

........................................................................
Senior Member Bernard J McCabe

CATCHWORDS

SOCIAL SECURITY – disability support pension – compensation for work injury – preclusion period – statutory discretion to disregard payment – no special circumstances – decision under review affirmed.

LEGISLATION

Social Security Act 1991 (Cth) ss 1184K; 1166; 1169; 1170

REASONS FOR DECISION

Senior Member Bernard J McCabe


12 June 2015

1. Ms Anna Zalega wants the Tribunal to exercise the discretion under s 1184K of the Social Security Act 1991 (“the Act”) to shorten the length of a preclusion period which applied to her from 9 December 2013 until 22 February 2015 after she settled a personal injuries claim. As a practical matter, she wants to be paid the amounts of the
   Disability Support Pension (DSP) she would have been paid during the preclusion period. She also wants to recover a compensation charge in the amount of $9217.69 that was deducted from the settlement.
2. It is not appropriate to exercise the discretion under s 1184K. It follows the decision under review must be affirmed. I explain my reasons below.

The legislation

3. Part 3.14 of the Act includes a series of rules that govern what happens to a social security recipient who makes a claim for compensation in respect of personal injuries. The Secretary has an obvious interest in compensation claims. If a person receives compensation in respect of economic loss, that person should be expected to live on those monies rather than look to the public purse for sustenance. To that end, the Secretary is able to require a person with a valid claim for compensation to pursue that
   claim: s 1166 of the Act.
4. A person who receives a lump sum settlement of a compensation claim that includes a component in respect of economic loss is precluded from receiving a range of compensation-affected payments for a period that is calculated in accordance with the Act: ss 1169, 1170. Where a person has already been paid compensation-affected benefits during a period found to be a preclusion period, the Secretary may impose, and recover out of the settlement monies, a charge in an amount equal to the benefits which were paid during the preclusion period.
5. There is no dispute that Ms Zalega received a lump sum compensation payment in settlement of a personal injuries claim. The settlement agreement is dated 24 April 2014 (exhibit one at p 67). It is accepted the settlement amount of $137,154.72 included a component in respect of economic loss. Ms Zalega accepts the preclusion period
   of 63 weeks was correctly calculated.^[1]
6. The proceedings focused on the discretion in s 1184K of the Act to effectively shorten the preclusion period. The discretion to treat part or all of the compensation payment as having not been made – and thus shortening or eliminating the preclusion period – is available where the Secretary (or the Tribunal upon review) is satisfied it is appropriate to do so in the special circumstances of the case.
7. The decision-maker can be satisfied there are special circumstances if he or she is satisfied there is something different or exceptional about the applicant’s case that suggests it should be treated differently from other cases.

What are the special circumstances in this case?

8. During the course of her oral evidence and submissions, Ms Zalega identified a number of circumstances that she argued amounted to special circumstances. I will deal with each of them in turn.
9. The applicant said she was not aware of the implications for her entitlements when she received the lump sum settlement. She said her lawyers and Centrelink should have been clear about what would occur when she commenced the proceedings in respect of the personal injury claim. Ms Zalega said that if she had realised she would be required to repay money (the compensation charge) and lose her health care card, she might not have commenced the proceedings. (I have already noted the respondent had the power to require the applicant to pursue the personal injury proceedings, so her evidence must be seen in that light.)
10. There is no suggestion the applicant was misled by Centrelink – and nor could there be, given there is correspondence on the file recording Centrelink’s advice to the effect that her entitlements could be affected: see, for example, exhibit 2 at p 35. Ms Zalega did not ask Centrelink for advice before she commenced the proceedings. She also had some experience: the applicant had received a settlement sum on a previous occasion and was subject to a compensation preclusion period. Ms Zalega said she had approached Centrelink for help with budgeting but did not receive satisfactory assistance.
    But that does not suggest her case is different or unusual.
11. There was a faint suggestion the applicant had been misled by her lawyers, but the letter of advice from the lawyers dated 14 April 2014 (exhibit two at p 48ff) tends to suggest that was not the case. But even if I were provided with evidence (which I was not) suggesting the applicant was actually mislead, that does not necessarily amount to special circumstances justifying a shortening of the preclusion period.
12. I am not satisfied the state of the applicant’s knowledge about the implications of seeking or accepting a settlement should be regarded as special circumstances.
13. Ms Zalega suggested the government as a whole was also at fault – so that special circumstances existed – because the workplace injury she sustained occurred as a result of unsafe work conditions that she had reported to a number of government agencies that failed to intervene. The evidence on this point was limited, but I do not accept the agencies in question should somehow be made accountable for any shortcomings through this process. In any event, I am not satisfied the circumstances she described could be regarded as special.
14. The applicant said she had a number of health problems apart from the problems caused by the workplace injury. I was provided with evidence from her psychiatrist that referred to Ms Zalega’s depression and anxiety conditions, and some other matters: exhibit three at p 1ff. While health conditions that were not the subject of the compensation claim could amount to special circumstances, I am not persuaded the health conditions impact on the applicant in a way that suggests the preclusion period ought be shortened.
15. Ms Zalega also referred to the fact she expended some of the settlement monies on private health insurance and private medical treatment. She said she took that step because treatment in the public health system was too slow. There may indeed be shortcomings in the public system and it might be preferable to access private assistance, but that does not amount to special circumstances. Most people in Ms Zalega’s position must contend with that reality. Her decision to expend part of her settlement monies in this way was a matter of preference.
16. The applicant also referred to the fact the preclusion period was effectively longer than the finite period calculated by the respondent. Her argument on this point proceeded as follows: she was prevented from reapplying for the DSP until her preclusion period concluded. But even if she had applied for the DSP on the first day after the period concluded, it would still have taken several months before her application could be assessed and accepted. Ms Zalega says she has consequently been prevented from accessing benefits for more than the 63-week preclusion period. That may be so, but there is nothing special or unusual about Ms Zalega’s case in this regard. Everyone in her position faces the same problem.
17. Ms Zalega said she has incurred a number of other expenses that she did not expect, including the cost of replacing appliances and a hot water system following an unexplained electrical fault at her home. But she also added she was not profligate in her expenditures: she has managed her resources very carefully and was able to make it through the preclusion period (although she says she has now run out of money while waiting for her DSP application to be processed). I accept the applicant is in straitened financial circumstances, but that is not unusual: most people in receipt of benefits are in difficulty, and the applicant is better off than most given she owns her home.
    The property is mortgaged, but her children are helping her with repayments
    (the applicant’s daughter lives with her and, I was told, has been receiving a carer’s payment). None of these matters amounts to special circumstances.
18. The applicant said she received a relatively small amount in the hand following the settlement. In fact, she received in the order of $42,000. She was able to make that amount last. It is true there have been cases in the past where an applicant is said to experience special circumstances where he or she receives an exceptionally low payout relative to the total settlement, but this is not one of those extraordinary cases.
19. Ms Zalega also argued the Commonwealth was effectively ‘double dipping’ in the sense that it was able to recover from her a larger amount than it was liable to pay her if the compensation settlement had not occurred. She was unable to demonstrate how that was so. She certainly did not demonstrate how the operation of the preclusion period provisions had an unusual and unfair impact on her.

CONCLUSION

20. I am not satisfied the matters referred to by the applicant – either considered individually or as a whole – are properly regarded as special circumstances that would justify the exercise of the discretion in s 1184K of the Act. I therefore affirm the decision of the Social Security Appeals Tribunal.

I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

........................................................................
Associate

Dated 12 June 2015

Date of hearing	28 May 2015
Applicant	In person
Advocate for the Respondent	Mr R McQuinlan Department of Human Services

---

^[1] The Social Security Appeals Tribunal varied the decision under review slightly: it identified a small error in the figures used to calculate the preclusion period and remitted that aspect of the matter for recalculation. It turns out the error was so small the length of the preclusion period did not change.