Talabani and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 64 (1 February 2010)

Last Updated: 4 February 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 64

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/5957

GENERAL ADMINISTRATIVE DIVISION		)
	Re		LAYLA TALABANI

Applicant

And

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal

Ms N Bell, Senior Member

Date 1 February 2010

Place Sydney

Decision

The decision under review is affirmed.

.....................[sgd]....................
Ms N Bell, Senior Member

CATCHWORDS – Social Security – lump sum compensation payment - preclusion period – special circumstances

Social Security Act 1991

REASONS FOR DECISION

Ms N Bell, Senior Member

1. Layla Talabani settled her workplace injury compensation claim in March 2008 for a lump sum of $350,000.00 from which she received $250,000.00 after costs and disbursements. She also received a lump sum payment of $34,500.00 in March 2007.
2. Centrelink imposed a preclusion period from 19 March 2008 until
   19 February 2013 during which Mrs Talabani may not be paid any social security payment.
3. Mrs Talabani does not dispute the calculation of the preclusion period. Nor does she dispute that after her claim was settled and before she received the compensation lump sum she was advised by Centrelink of the preclusion period.
4. There is also no dispute that Mrs Talabani spent her settlement monies largely on the purchase and renovation of her home, a three bedroom house, and on the discharge of some debts. Mrs Talabani paid $327,000 for the house, borrowing $110,000 from the bank. She spent approximately $30,000 on renovations.
5. There being no dispute that the preclusion period has been correctly calculated and properly imposed, the only issue that remains is whether there are, in accordance with section 1184K of the Social Security Act 1991, special circumstances that make it appropriate to treat the whole or part of the compensation lump sum payment as having not been made. The effect of exercising this discretion would be to dispense with or shorten the preclusion period.

ARE THERE SPECIAL CIRCUMSTANCES THAT MAKE IT APPROPRIATE TO SHORTEN THE PRECLUSION PERIOD?

6. Mrs Talabani said that the reason she spent her compensation money on the purchase of a house, even though she knew she would be precluded from receiving a social security payment, was that she considered she would be unable to obtain rental accommodation without a regular income. She also said she was exhausted by having to move whenever a landlord decided to sell or increase her rent.
   Mrs Talabani thought it senseless to spend money on rent when it could be put towards her own home and said that the rent on a house is higher than the amount she pays for her mortgage. When asked how she thought she and her family would survive for the preclusion period without access to her compensation moneys,
   Mrs Talabani replied: “To be honest, I didn’t think at all.”
7. Mrs Talabani said she had not made an application for public housing.
8. When asked why she purchased a house instead of a unit when a unit may have been cheaper, she said her husband would not agree to the purchase of a unit.
9. Mrs Talabani said that she and her family are now suffering financial hardship.
10. I note that the family’s income of carer and other social security payments to Mrs Talabani’s husband is currently $1,457 per fortnight, with an expected drop of $398 per fortnight when baby bonus payments cease in April of this year.
11. Mrs Talabani first said, in a form she completed for Centrelink in August 2008, that her family’s outgoings are some $1,476 per week. However, she said in evidence to the Tribunal that she has made some economies and continues to do so and the shortfall is now considerably less. I note that many of the figures originally included by Mrs Talabani, and some of those revised in a later form completed in September 2009, for items such as car repairs ($50 per week), chemist expenses ($200 per week), clothing ($300 per month), petrol ($150 per week), credit card repayments ($300 per month), electricity ($800 per quarter) and childcare ($82 per week) have, according to her evidence, decreased significantly as have her regular medical expenses. She also said that she has not yet attempted to claim a Medicare rebate on the sums she has paid to medical practitioners even though she placed that expenditure at approximately $1,600 over the last five months. Some of the items of expenditure she claimed were queried with her in the hearing and, for example, she said she would be addressing the $250 per month for phones that she is currently spending. When I asked her why she requires childcare when neither she nor her husband is employed, she said it was to alleviate the stress on her daughter of having to attend her mother’s medical appointments.
12. Mrs Talabani said she had suffered a difficult pregnacy with her now 13 week old son who was born premature. However, he is now doing well. She also said that her four year old daughter who had been in need of a tonsilectomy had had the operation and is now well. Mrs Talabani said her husband, who is Mrs Talabani’s carer, is also well.
13. Mrs Talabani said she had no plans to sell her house because she would simply been thrown back into the rental market and be unable to secure a rental property because of her lack of income.
14. I note that Mrs Talabani suffers from a range of conditions including the psychiatric condition for which she received compensation, a nasal obstruction condition that predates her compensation claim, anaemia and renal pain that is currently being investigated.
15. The aim of the legislation is to avoid the double payment of people who have been compensated for injuries. Mrs Talabani was aware of the preclusion period imposed on her before she received her lump sum compensation and, as the Secretary submitted, the amount she received would have given her an income, over the course of the preclusion period, of some $50,000 per annum. Instead she spent the bulk of the money on the purchase and renovation of a house. Mrs Talabani knew that her family’s income would be restricted to that of her husband’s carer and other payments.
16. Like many people, Mrs Talabani wished to purchase her own home and did not wish to continue to rent. Like many people, she found being in the rental market uncertain and difficult. She said it was impossible to obtain a rental property. I appreciate there may be some difficulties involved in securing rental accommodation but many people in Australia rent their homes and many of those people are social security recipients.
17. I accept that Mrs Talabani’s family’s income is very limited, but it seems that Mrs Talabani is moving towards some economies that will alleviate some of the pressure on that income. There is no doubt that it will be difficult for her to manage on this limited income until the end of her preclusion period, but that will be necessary if she wishes to maintain her home ownership. She has the alternative of selling her property and recovering the funds she says she needs to survive.
18. Fortunately, Mrs Talabani’s husband and children are well. Mrs Talabani continues to suffer from the condition for which she was compensated, the nasal obstruction condition she has suffered for many years and now has anaemia and is undergoing medical investigation of some renal pain. I do not consider this is a circumstance that is extraordinary, unusual or “special”.
19. I do not consider that Mrs Talabani’s circumstances overall are so special as to make it appropriate to exercise the discretion in section 1184K of the Act.

DECISION

20. The decision under review is affirmed.
    

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bell

Signed:..........................[sgd]................................................

Associate: Lloyd Doherty

Date of Hearing 11 December 2009

Date of Decision 1 February 2010

Date of written reasons 1 February 2010

Representative for the Applicant Unrepresented

Representative for the Respondent Ms Raewyn Harlock, Centrelink Legal Services