Boskovski and Secretary, Department of Family and Community Services [1999] AATA 839 (9 November 1999)

Last Updated: 10 November 1999

DECISION AND REASONS FOR DECISION [1999] AATA 839

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V1999/661

GENERAL ADMINISTRATIVE DIVISION )

Re PETAR BOSKOVSKI

Applicant

And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr W.G. McLean, Member

Date 9 November 1999

Place Melbourne

Decision The decision under review is affirmed.

(Sgd.) W.G. McLean

Member

CATCHWORDS

AGE PENSION - debt arising by payment of age pension during a preclusion period - special circumstances - decision affirmed.

Social Security Act 1991 - sections 17, 1165, 1166, 1184, 1237AAD

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

Beadle and the Director-General of Social Security(1985) 60 ALR 225

REASONS FOR DECISION

9 November 1999 Mr W.G. McLean, Member

1. The Tribunal considered an application from Mr Petar Boskovski for the review of a decision of the Social Security Appeals Tribunal ("SSAT") made on 8 April 1999. The SSAT decided to affirm the following decisions made by delegates of the Secretary, Department of Family and Community Services ("the Department"):

* to cancel Mr Boskovski's age pension ("AP") from 25 December 1997;

* to raise and recover a debt of $3,228.60 in respect of age pension paid to Mr Boskovski from 7 August 1997 to 23 December 1997.

2. Mr Boskovski attended the hearing and gave sworn oral evidence with the assistance of an interpreter in the Macedonian language, Ms Pavlinca Georgiev, a Level 3 Interpreter. The respondent was represented by Mr Paul Kanowski, an officer from the Brisbane office of the Administrative Law Section of Centrelink.

3. The Tribunal received into evidence the documents ("the T documents") lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975.

4. On 11 July 1994 the applicant suffered a work-related injury to his back and shoulder whilst in the employment of Apollo General Engineering (Aust) P/L ("Apollo") and lodged a claim for compensation upon Apollo's insurers, NZI Workers Compensation (Victoria) Ltd ("NZI"). NZI paid weekly payments of compensation to the applicant at the rate of $268.00 per week, based upon 70% of his pre-injury average weekly earnings from 28 June 1995 until such time as he recovered from surgery, as he was considered to be totally incapacitated during that time.

5. On 23 September 1997, the applicant executed a release in full settlement of his claims against Apollo arising from his injuries and damages, and received a settlement amount of $75,000 in return for his undertaking that action numbers WC9609177 and 9700371 issued in the County Court of Victoria would be forever stayed and discontinued. Maurice Blackburn & Co., solicitors, who acted for the applicant in respect of this matter, provided Mr Boskovski with the following letter of advice dated 30 September 1997:

" 30 September 1997

Mr P Boskovski

11 Russet Court

LALOR VIC 3075

Dear Sir,

Re Your Claim

We refer to your discussions with our Mr Faltermaier on the 23^rd of September 1997 and confirm the following:

1. That you have been in receipt of an old age pension since the 7th of August 1997.

2. That you received weekly payments of workers compensation up until the 6th of August 1997.

3. As a result of the settlement of your claim which was done on the basis of a full and final settlement of $75,000.00 plus the majority of your legal costs for a common law claim for damages for negligence, we advise that you will be precluded from obtaining Social Security benefits for a period of 93 weeks which commences from the 6th of August 1997. The Department of Social Security takes into consideration your gross settlement that is the $75,000.00 and then takes 50% of that which is $37,500 and divides it by the sum of $403.20.

4. You will be required to repay the Department of Social Security any benefits that you have received from the 7th of August 1997.

5. The settlement of this claim does not effect the social security entitlement of your wife.

6. Your medical expenses will continue for a period of up to 52 weeks after your payments ceased, that is the 6th of August 1997.

7. We now enclose a copy of the Release you have signed and we advise that it is up to you to advise the Department of Social Security of your settlement amount and we suggest that you do this once you receive the settlement monies which will take 10 to 12 weeks.

8. We have forwarded a letter to your former employer enclosing your resignation and requesting that any benefits that you are entitled to be forwarded to us. If you do not hear from us within the next 4 weeks we suggest that you contact us so we may pursue this matter for you further.

9. We have decreased our professional costs to you to the sum of $5,000.00 so that you will now receive $70,000 clear from your settlement.

Should you have any further questions regarding this matter please do not hesitate to contact our office.

Yours faithfully,

Michael Faltermaier

MAURICE BLACKBURN & CO."

6. On 21 July 1997 Mr Boskovski lodged a claim for AP with the Epping Branch of the Department in which he declared that he was born on 6 August 1932 and that he was married to Mrs Mitra Boskovski. Mrs Boskovski was born on 22 October 1931 and has been receiving AP since 1992.

7. Mr Boskovski commenced receiving AP from payday 7 August 1997, which is the day following his 65th birthday and is also the day after the 6 August 1997, the date when he ceased receiving weekly payments of workers' compensation from NZI. It is also clear from the applicant's above letter of advice from his solicitor dated 30 September 1997, that Maurice Blackburn & Co. is of the opinion that Mr Boskovski was precluded from obtaining social security benefits for a period of 93 weeks commencing from 6 August 1997 as the result of receiving the $75,000 compensation settlement from Apollo. It is also apparent that Maurice Blackburn & Co. advised the applicant that he would be required to repay the respondent any benefits that he had received from 7 August 1997 during the preclusion period, and that they had forwarded to Apollo Mr Boskovski's resignation from his employment.

8. Mr Boskovski was provided with a decision of the SSAT made on 8 April 1999 by Mr John Snodgrass, a legal officer of the North Eastern Suburbs Regional Office of Legal Aid on 19 April 1999. It is noted from a letter dated 11 June 1999 from Mr Snodgrass to the Administrative Appeals Tribunal ("AAT") that Mr Snodgrass was then giving advice to the applicant regarding his appeal to the AAT. Mr Snodgrass also indicated in his letter to the AAT that he was not in a position to represent Mr Boskovski in is application for review by the AAT. The Tribunal is disappointed that Mr Boskovski did not have legal assistance to present his case to the Tribunal, as it was clear that he had difficulty understanding both the written and spoken English language, even with the assistance of an interpreter.

9. Mr Boskovski did not endeavour to dispute or refute any of the relevant facts, issues or statutory interpretations adopted and/or relied upon by the SSAT in reaching their decision and associated reasons for decision on 8 April 1999. Mr Boskovski confirmed the fact that he had suffered a work related injury in July 1994 and had received resulting weekly compensation payments until his 65th birthday in August 1997. He also confirmed that he had consented to the $75,000 lump sum compensation payment arranged through his solicitors, Maurice Blackburn & Co.

10. Mr Boskovski said that he believes that he was given poor advice by Maurice Blackburn & Co. at the time that he agreed to accept the $75,000 lump sum compensation settlement. He alleges that his solicitor indicated to him that the settlement would not detrimentally affect his entitlement to receive AP and that his receipt of the $75,000 settlement amount had nothing to do with his rights to social security entitlements. Mr Boskovski's contentions do not appear to accord with the documentary evidence provided by the above letter from Maurice Blackburn & Co. dated 30 September 1997, where they confirm the advice given by Mr Faltermaier of Maurice Blackburn & Co. to the applicant on 23 September 1998 regarding his social security past and future entitlements. Mr Boskovski also signed his abovementioned formal release to permit the payment of his $75,000 lump sum settlement on 23 September 1997.

11. The respondent asked Mr Boskovski if he had adopted the following advice provided to him by the SSAT's Reasons for Decision in relation to his dissatisfaction with the handling of his workers' compensation settlement, and related advice by Maurice Blackburn & Co. Mr Boskovski said that he had not, to this date, made a complaint to the Legal Ombudsman or Legal Practice Board as advised by the SSAT at paragraph 23:

"23. This is not enough to be 'special circumstances'. The Administrative Appeals Tribunal has repeatedly decided that if a person has been affected by bad advice from their lawyer, they should take this up with their lawyer rather than expecting help through social security payments that they would not normally be entitled to. If Mr Boskovski feels he was the victim of bad legal advice, he should take this up with his lawyers or make a complaint to the Legal Ombudsman or the Legal Practice Board."

12. Based upon the documentary evidence it appears to the Tribunal that the applicant may have misunderstood the advice given to him by Maurice Blackburn and Co. at the time that the $75,000 compensation settlement was negotiated and agreed. The Tribunal accepts, however, that Mr Boskovski was appropriately advised by Maurice Blackburn & Co. on 23 September 1997 of the consequences and effects on his past and future entitlements to AP that would result from his receipt of the $75,000 compensation settlement amount.

13. The following relevant legislation is provided by the Social Security Act 1991 ("the Act"):

"Compensation

17(2) 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) that is:

(e) made wholly or partly in respect of lost earnings or lost capacity to earn; and

(f) made either within or outside Australia.

Compensation part of a lump sum

17(3) For the purposes of this Act, the compensation part of a lump sum compensation payment is:

(a) 50% of the payment if the following circumstances apply:

(i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and

(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise, on or after 9 February 1988; or

(ab) 50% of the payment if the following circumstances apply:

(i) the payment represents that part of a person's entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and

(ii) the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and

(iii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise, on or after 9 February 1988; or

(b) if those circumstances do not apply - so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn.

...

Person member of a couple - payment received on or after 20 March 1997

1165 (2AA) Subject to subsection (2B), if:

(a) a person receives or claims a compensation affected payment; and

(b) the person is a member of a couple; and

(c) the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) on or after 20 March1997;

no compensation affected payment is payable to the person for the new lump sum preclusion period.

New lump sum preclusion period

(5) If periodic compensation payments are made in respect of the lost earnings or lost earning capacity, the new lump sum preclusion period is the period that:

(a) begins on the day after the last day of the periodic payment period; and

(b) ends after the number of weeks worked out under subsections (8) and (9).

...

(8) If a compensation lump sum is received on or after 20 March 1997, the number of weeks in the preclusion period is the number worked out under the following formula:

Compensation part of lump sum

Income cut-out amount

Note 1: For compensation part of lump sum, see section 17

Note 2: For income cut-out amount, see section 17.

(9) If the number worked out under subsection (4) or (8) is not a whole number, the number is to be rounded down to the nearest whole number.

...

1184 Secretary may disregard some payments

(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.

...

1237AAD Waiver in special circumstances

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i) making a false statement or a false representation; or

(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt."

14. The applicant did not raise any issues regarding the above relevant legislation, which appears to have been properly considered by the SSAT in reaching their decision, nor did he dispute the SSAT's interpretation of the legislation and their following assessment:

"Subsection 17(3) defines the compensation part of the lump sum as 50%. As the settlement was for $75,000 this becomes $37,500. The "income cut-out amount" is worked out using a formula in subsection 17(1). In this case, it is $403.20. $37,500 divided by $403.20 gives 93.006 weeks, which rounds down to 93 weeks. The 93 weeks starts from 7 August 1997, the day after the last day Mr Boskovski received periodic compensation. It runs until 19 May 1999."

15. The Tribunal considers that it is very probable that the $75,000 compensation settlement amount paid to the applicant in 1997 by Apollo included a claim for pain and suffering and a claim for lost earnings or lost earning capacity. This view is supported by the above letter of advice given by Maurice Blackburn and Co. to the applicant on 30 September 1997 regarding the effects of his compensation settlement upon social security entitlements. The Tribunal therefor concurs with the finding of fact by the SSAT that Mr Boskovski's claims for compensation from Apollo for $75,000 plus costs, included a claim for pain and suffering and a claim for loss of earnings or lost earning capacity.

16. The Tribunal finds that the amounts of AP totalling $3,228.60 paid to the applicant by the respondent from 7 August 1997 to 23 December 1997 are compensation-affected payments made during a lump sum preclusion period. Mr Boskovski received a written notice from the respondent dated 29 January 1998 under Section 1166 of the Act requesting repayment of the $3,228.60 that explains in detail the respondent's reasons for requiring repayment.

17. Maurice Blackburn & Co's above letter to the applicant dated 30 September 1997 indicates that they deducted their professional costs of $5,000 from the applicant's $75,000 settlement amount. A joint bank account at the Commonwealth Bank in the names of the applicant and his wife record a balance of $70,262.20 at 21 January 1998. The applicant lodged a re-claim for AP with Centrelink on 28 April 1999 and declared that the balance remaining at that time in he and his wife's joint account with the Commonwealth Bank was $50,131. The applicant and his wife own their own home.

18. The respondent advised that Mr Boskovski was regranted AP from the completion of the preclusion period at the maximum rate payable from payday 27 May 1999, and that the applicant has fully repaid his overpayment debt to the Commonwealth of $3,228.60. Mrs Boskovski continued to receive AP at the maximum rate during Mr Boskovski'' preclusion period.

19. The expression "special circumstances" was considered by the Tribunal in the matter of Beadle and the Director-General of Social Security (1984) 6 ALD 1, and the Tribunal said:

"An expression such as 'special circumstances' is by its very nature incapable 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."

20. The matter of Beadle v The Director-General of Social Security (1985) 60 ALR 225 was subsequently heard by the Full Federal Court and it was held that:

"It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase 'special circumstances', although lacking precision, is sufficiently understood in our view not to require judicial gloss."

21. Based upon the evidence before both the SSAT and this Tribunal, it is clear that the applicant's debt to the Commonwealth of $3,228.60, arising from the payment of AP during the preclusion period from 7 August 1997 to 19 May 1999, was not attributable solely to an administrative error made by the Commonwealth and that the debt should not be waived pursuant to section 1237A of the Act.

22. The Tribunal also finds on the evidence that no circumstances that are unusual, uncommon or exceptional are to be found in this case that would permit the $75,000 compensation payment to Mr Boskovski to be treated in whole or in part as not having been made pursuant to section 1184(1) of the Act, or that would support a decision to waive the right to recover all or part of the $3,228.60 debt due by Mr Boskovski to the Commonwealth based upon special circumstances pursuant to section 1237AAD of the Act.

23. The decision under review is affirmed.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Mr W.G. McLean, Member

Signed: Judith Holt, Associate

Date of Hearing 28 September 1999

Date of Decision 8 November 1999

Applicant Self-represented

Respondent Mr P. Kanowski, Centrelink